The structural separation of Telecom into stand-alone retail and network companies is a step closer, with the Government approving Telecom's plan to split up its assets.
The company's plan is to split in two so it can participate in the Government's $1.3 billion ultra-fast broadband initiative.
The Government has signed-off on the company's proposal to split its assets and liabilities, although the de-merger still has to be approved by shareholders.
The Minister for Communications, Steven Joyce, says if that happens, Telecom will be the first telecommunications company of its size to undergo such a split-up.
Under structural separation, Telecom will compete with other retailers while the new Chorus company will be the main telecommunications infrastructure provider.