The Telecommunications Users Association predicts Telecom will go ahead and split its retail and network divisions into two separate companies.
Telecom says it is considering the move so it can take part in bidding for the Government's $1.6 billion fibre broadband network.
Companies like Telecom which function as retailers, are banned from bidding for the project.
Telecom also wants changes to the rules it agreed to as part of its operational separation in 2008, saying the new network means they are obsolete.
TUANZ chief executive Ernie Newman says Telecom's only other choice is to find a majority partner with whom it could lodge a bid to participate in the fibre project.
Standard & Poor's has flagged a possible downgrade of Telecom's single long-term credit rating in future.
Telecom shares declined in price by 3 cents to $1.96 per share, after falling by 7c at one stage.
