1990s
In 1990, Telecom was sold to two United States–based telecommunications companies, Verizon Communications (formerly Bell Atlantic) and Ameritech, for NZ$4.25 billion.[9] After Telecom was privatized, the Kiwi Share agreement was drawn up, which included a provision that the company retained free local calling for residential customers.[10]
In 1991, Telecom listed on the New Zealand, Australian and New York stock exchanges. The following year Telecom implemented a NZ$200 million fibre-optic cable connection between Australia and New Zealand. Also in 1991, Roderick Deane was appointed CEO of the company. Then in 1993 Ameritech and Bell Atlantic reduced their share in Telecom to a combined 49.6% and BellSouth New Zealand Limited (BellSouth), subsequently acquired by Vodafone, set up the first mobile network to compete with Telecom.
Clear Communications reached an agreement with Telecom in 1995 on local service interconnection. Also in 1995, Telecom created First Media Ltd to develop a cable television network across Auckland and Wellington, called First TV. In 1996 Telecom established a telephone exchange in the United States for international traffic, and launched Xtra.
1997 saw Telecom buy back NZ$1 billion of its shares. The following year, Ameritech sold down its 24.8% shareholding in an international public offering, and Bell Atlantic issued exchangeable notes that were convertible into the Telecom shares that it owned.
In December 1997[11] Patricia Reddy was appointed to the Telecom board. She remained on it until 2008.[12] In September 2016 as Dame Patsy Reddy she became the Governor General of New Zealand.
In 1998, Southern Cross Cables Limited (half owned by Telecom) announced plans to build a fibre-optic cable linking New Zealand with Australia and North America. Vodafone Group bought BellSouth and started a campaign to attract Telecom customers to its network.[13]
In 1999, Telecom established a presence in Australia, buying 78% of AAPT, Australia's third-largest telecommunications company. Telecom upgraded its nationwide payphone network to smart card technology. Telecom's broadband Internet service based on ADSL technology, called JetStream, was launched and rolled-out progressively in local exchanges. Also at this time, Telecom began charging customers who connected to the Internet using a local dial up number, forcing all ISPs in New Zealand to change to an 0867 dial up number. This resulted in complaints that this was in breach of Telecom's Kiwishare Agreement where residential customers are allowed free local calling. The decade was rounded off with Theresa Gattung being appointed new CEO of Telecom, with Rod Deane moving to the position of chairman.
2000s
In 2000, Xtra signed up its 300,000th customer. Telecom also raised its shareholding in AAPT to 100%.
Evidence emerged in early 2002 of Telecom having exploited an ill-considered, or fraudulently made to order, accounting standard (FRS38) to inflate its year 2001 reported profit by some $263 million.[14] This standard required holding companies to incorporate profits and losses of associate companies into their group accounts by way of "equity accounting" except when the associate is insolvent. Being insolvent has been wrongly taken as substantial evidence that the holding company will no longer share in the associates profits and losses. The associate company Southern Cross Cables paid Telecom $263 million in dividends as per (note 2 of) Telecom's 2001 annual accounts,[15] $US200m as per Southern Cross's annual accounts.[16] Southern Cross opened for (limited) business in November 2000 and its income from operations to 30 June 2001 was only $US13 million ($US55 million for the 2002 year). Southern Cross were insolvent to the extent of $US24 million as at 30 June 2000 and this increased to $US280 million as at June 2001 as a result of the dividends and other (net) expenses ($328 million in 2002). The dividends were treated as income in Telecom's accounts there being nothing in FRS 28 to say that they should not be although such inclusion did breach an overall requirement that the accounts present a fair view.
2010s
- 2010
- November: Telecom moves into its newly built world HQ on Victoria St in the Auckland CBD. Costing the developer $280 million, it will consist of 2700 staff and be the largest corporate move in New Zealand history.[32]
- 2011
- 24 May: Crown Fibre Holdings announced that Telecom had been successful in partnering with the Government to build a fibre network.
- 9 June: The National Business Review reveals that in OIA documents that the Department of Internal Affairs considered at least one text message sent by Telecom to be in breach of the Unsolicited Electronic Messages Act 2007.[33]
- 1 December: Telecom divests itself of Chorus, the Network Infrastructure division, in a one for five share deal, with Chorus becoming a separately listed company.
2020s
- 2023
- 4 April: Spark announced that it would invest between NZ$250 million and NZ$300 million into building data centres over the next three years, and between NZ$40 million and NZ$60 million into its 5G business over the next three years.[45]
Mobile network
Telecom started the first cellular network service using AMPS in 1987. This transitioned to D-AMPS TDMA digital services in the early 1990s. The service in the 800 MHz band gave great geographic coverage.
In 1996 Telecom introduced an innovative and first-to-market wireless data cellular network known as CDPD (Cellular Digital Packet Data) that provided IP connections with mobility. Introduced to the market by the product manager, David Beale, they succeeded in the very first IoT-device connections in the region connecting, amongst other things, Coke's vending machines, NZ Post's couriers and parcel tracking, and telemetry data from the Americas Cup yacht races in Auckland to feed a realtime TV graphics service.
Telecom Mobile, the mobile division of Telecom, reached 500,000 mobile customers connected to its network in 1998, which doubled to one million customers by 2000.
In 2005, a phreaker exposed a vulnerability with the mobile network, allowing public access to almost anyone's voicemail; in response to concerns over privacy and security, this network issue was resolved.[46]
On 31 March 2007, the 025 D-AMPS ("TDMA") cellular network was closed down.[47] Then on 8 June of that year, Telecom Mobile announced plans to build a hybrid W-CDMA/UMTS-CDMA 850 MHz network,[48]
Industry regulation and company restructuring
In 2000, the New Zealand Government conducted a comprehensive review of the regulatory regime in the telecommunications industry. Subsequently, in 2001 the Telecommunications Act was passed, which among other things established the role of a Telecommunications Commissioner.
In a decision by the Government on 3 May 2006, Telecom was forced to unbundle the local loop, to provide "access to fast, competitively priced broadband internet".[58] The decision significantly affected the company's market share,[59] and allowed competitors (such as TelstraClear, Orcon and ihug) to offer broadband and other communications services throughout New Zealand by installing their own equipment in exchanges.[60][61] The announcement of this decision was rushed ahead of schedule, as the documents were leaked to Telecom who advised the government of the leak. It was widely reported that the government had intended to make the announcement during the 2006 Budget.
