14 Oct 2011

Telecom to settle dispute out of court

5:51 pm on 14 October 2011

Telecom will pay $31.6 million dollars to settle a network access dispute so legal proceedings do not hinder its plans to split the company into two.

The Commerce Commission took legal action against Telecom in May, arguing the telecommunications company had failed to allow its competitors equal access to its network, giving Telecom a significant commercial gain.

New Zealand's largest company still denies it breached the rules but it wants to settle the issue before it splits off its network arm, Chorus, into a separately listed company so it can take part in the Government's ultra-fast broadband initiative.

The Telecommunications Users Association's chief executive, Paul Brislen, says Telecom's decision to settle the dispute is a sensible approach since it could have dragged on for years in the courts.

He says expects there will be a considerable sum in compensation to the ISP's involved, although perhaps not as much as they had been asking for, and he describes it a win for everyone concerned.