Communications and Information Technology Minister Steven Joyce has approved a variation to Telecom's operational separation undertakings, but not as originally sought by the company.
However, the variation approval left analysts wondering what the fuss was all about.
The undertakings, which set out the requirements for splitting Telecom into three separate business units, came into effect in March 2008.
In May, Telecom sought changes in three areas, saying the Government's ultra-fast broadband (UFB) initiative would fundamentally reshape the structure of the telecommunications industry.
A large proportion of the projects it was required by law to deploy this year were envisaged for a pre-fibre world, so it asked for a variation on three components of its undertakings that it believed would no longer be relevant in a fibre future.
Forsyth Barr broker Suzanne Kinnaird said she did not see it as anything major.
"Essentially, a number of these undertakings were set back in 2006, well before the Government became involved in the broadband provision, and four years is a long time in the telco sector," she said.
"Telecom asked for complete relief on a number of these undertakings for a variety of reasons.
The Government essentially declined but has given them longer deadlines."
Craigs Investment Partners broker Chris Timms said the Telecom share price went up 2c on the news, indicating that the decision by Mr Joyce was good for the company.
"Anything the Government and Telecom can agree on has to be regarded as positive, as it removes uncertainty for shareholders and the company.
"Every time they clip a little more away, it becomes less of an issue in the future."
There were still hurdles for Telecom to overcome to be part of the UFB project but that work continued, he said.
Telecom chief executive Paul Reynolds said the approved variations gave Telecom investment certainty and the time it needed to deliver the milestones without creating unacceptable risk for customers, or to the company's systems.
Telecom remained committed to delivering its undertakings, and had already delivered more than 150 milestones.
It was one of just two incumbent telcos in the world that provided access to its fixed line infrastructure to all industry participants, including its own retail business, on equivalent technical and commercial terms.
Mr Joyce said he believed the changes he had approved would serve the best interests of consumers and allow Telecom to develop services and systems that were consistent with changes being brought about by the UFB initiative.
Previously, he had said he was not prepared to accept the variations as originally proposed by Telecom, but was prepared to approve some changes subject to the company accepting certain conditions.
Mr Joyce said Telecom's original proposal had not met the purposes of operational separation as set out in legislation, but the variation he approved largely addressed the issues raised by Telecom.
In a letter to Mr Joyce on Monday, Dr Reynolds said he was disappointed with Mr Joyce's conclusion about compatibility of the company's application with the law.
At the same time, he appreciated the pragmatic approach Mr Joyce proposed.
