Telecom NZ investigated for separation breach

New Zealand's Commerce Commission has decided to launch an investigation into an alleged breach of Telecom New Zealand's separation undertakings by its Wholesale business unit.

The investigation followed a decision last week by the independent oversight group in charge of keeping an eye on the telco's separation undertakings. The group upheld complaints by Vodafone and Kordia that Telecom Wholesale was breaching clauses of its parent's separation agreement.

Vodafone and Kordia believed that loyalty offers which rewarded customers whose entire customer base were serviced through Telecom Wholesale, and would be for the next two years, were breaching the agreement. The Commerce Commission said it had also received complaints on the same matter.

Telecom NZ's separation came into force on 31 March last year, following government led reforms which prompted separation of the company into network, wholesale and retail parts to improve market conditions by avoiding discrimination and improving transparency.

The first breach of the company's separation undertakings occurred in July last year. The unintentional "technical breach" was remedied in September.