Commerce Commission thinks Telecom New Zealand has inflated its network's value

Telecom New Zealand has come under fire by the country's Commerce Commission under charges that it has overstated its last mile network's value and that its financial statements aren't reliable.

As is the common practice in other countries, Telecom New Zealand is required publish financial statements and other information about its network, wholesale and retail business activities and services.

According to the commission, TNZ last mile network is overvalued by over NZD 1 billion (USD 795.4 million). In particular, the Commission argues that because of a number of 2009/10 trenching discount factors its rural phone line costs are higher than they should be.

Among the many solutions the Commission is considering is changing its reporting requirements for 2010/2011 and also if TNZ should have to republish its 2009/10 regulatory financial statements to correct the overestimation issue.

For more:
- Telecompaper has this article

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New Zealand government to study Telecom New Zealand's breakup proposal

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