Telecom shareholders have voted to carve the company in two, hitching its network business to a billion-dollar subsidy to build a national broadband network.
The proposal needed 75 percent to get over the line.
"A massive year of change for Telecom culminates today," chief executive Paul Reynolds told shareholders. "We're more in charge of our own destiny than we have been for some time."
Telecom put forward the demerger proposal as a means to tap the Government's $1.35 billion subsidy to roll out a nationwide broadband network, and its Chorus unit was successful in winning about 70 percent of the contract.
If shareholders approve the split, Telecom's Chorus network unit will become a standalone listed entity, at a benefit of some $500 million to shareholders based on the Crown subsidy, according to independent adviser Grant Samuel's report.
Mr Reynolds said both companies will be well-placed in the new environment, with Chorus holding a near-monopoly of fixed line services, and new Telecom having strong market share in the retail space, as well as owning infrastructure such as the stake in the Southern Cross cable and the national backhaul network.
New Zealand Shareholders' Association chairman John Hawkins thanked Mr Boyd for his contribution to Telecom's board, saying there had been a "sea-change in the attitude and focus of Telecom for the better".
Communications Minister Steven Joyce welcomed the demerger, saying it is "the most significant telecommunications industry change in the past 20 years".
“This has been a very successful process, which will result in ultra fast broadband services for New Zealanders at very competitive prices,” says Mr Joyce.
Ultra-fast broadband has already begun rolling out in parts of Auckland and Wellington.
3 News / NZN