Telecom was sold to the Fay Richwhite led Bell Atlantic/Ameritech/Tappenden consortium for a price which blew all the other bidders (including BIL & Fletcher Group) out the window.
They saw the huge potential of the mobile market at that time.
The regulations came in after Telecom squandered billions of dollars in Australia (AAPT for eg was a $3 billion disaster) and did not invest in upgrading its broadband infrastructure in NZ.
The removal & breakup of Telecom into Chorus & Spark came after Helen Clark went on a trip to Seoul . She was horrified and embarrassed that NZ was still on dial-up while South Korea was already on UFB.