The December 2006 amendments to the Telecommunications Act 2001 (the Act) introduced new information disclosure requirements which include the accounting separation of Telecom. These regulatory reporting requirements are different to and in addition to the statutory financial reporting requirements and cover the reporting of many financial aspects of the operational separation of Telecom.

Under Part 2B of the Act, Telecom is required to prepare and disclose such information which the Commission requires as if any of its network, wholesale and retail activities were operated as independant or unrelated companies. The Act grants the Commission discretion to determine what information Telecom will be required to provide and the methodologies to be used in preparing it. This includes the discretion to request other forms of information such as cost information, asset valuations, non-financial information and information about certain other business activities.

This information, which will be publicly available, is intended to inform a wide audience about the relevant Telecom business activities and it will provide improved transparency. Under the requirements, Telecom must publish financial and other information about its retail, wholesale and network business activities. This information will be publicly available and is designed to inform a wide audience about the operation and behaviour of Telecom's business activities.

This information will support non-discrimination between Telecom's wholesale customers and its own retail group and also complement the non- financial reporting required by the operational separation undertakings.

The first set of financial information will be released by Telecom in December 2009 for the financial year ending 30 June 2009. Information for the year ending June 2010 will include additional reporting on individual products. The Commission will monitor the implementation of these requirements and may issue additional or revised requirements as required.

The Commission will publish summaries and analyses of the information disclosed by Telecom to promote a greater understanding of Telecom's operation and behaviour.

On 6 March 2009 the Commission issued the final requirements paper, which sets out the information that Telecom must publicly disclose for Telecom's financial years ending 2009 and 2010. A separate companion paper explains the Commission's reasoning behind the requirements. A copy of each paper can be dowloaded from the links below and copies of the Commissions draft papers and the submissions received during the consultation process can be found by clicking here:

http://www.comcom.govt.nz/IndustryRegulation/Telecommunications/AccSepofTelecom/documents.aspx

The operational separation undertakings also require Telecom to prepare a Statement of Assets controlled by Chorus as at 1 July 2008 which is a separate requirement to the Accounting Separation requirements.

For details on the operational separation of Telecom click here: http:/www.comcom.govt.nz/IndustryRegulation/Telecommunications/OperationalSeparationofTelecom/Overview.aspx