Damage to Telecom brand compared with Woods

Telecom CEO Paul Reynolds. Photo / Dean Purcell

Bad publicity over Telecom's fault-ridden XT network is on a par with the fallout from Tiger Woods' extra-marital affairs, an advertising and marketing expert says.

Others in the public relations industry contacted by the Herald yesterday had mixed views on Telecom's reaction to a disastrous series of major faults on the highly-anticipated network which, between December and this week have at times left up to 220,000 customers without service.

All the experts agreed the company still had time to bounce back and praised chief executive Dr Paul Reynolds for fronting up and apologising for the problems.

Dave Bibby, a senior lecturer in advertising and marketing at Auckland University of Technology, likened the public fallout from the network's four outages to golfer Tiger Woods' scandalous affairs.

"It's on a scale I think which gets close," he said.

"How will the Tiger Woods brand survive? It's that serious for Telecom's XT, I believe. The next 12 months will be fairly determinate for Tiger in terms of whether he can pull back public support for his brand and I think there's a parallel there for Telecom. It's a pretty big disaster."

Mr Bibby commended Dr Reynolds for apologising. "I think in terms of damage control for a catastrophic situation he's done pretty well but it doesn't take away from the fact that this product has failed or is failing.

"It's a catastrophic situation for them ... they've just about worn out their credibility with this latest failure and it's incredibly serious.

"A fundamental commitment that anybody in the marketplace has to do is have a product that performs and if your product doesn't perform, you're dog tucker."

If Vodafone's 3G network fails, it reverts to 2G and Mr Bibby was surprised Telecom had no back-up network for XT. "It's a bit like trapeze artists without a net."

Mr Bibby said chocolate brand Cadbury had its own public relations disaster for adding, and then removing controversial palm oil in its products last year but this was more serious for businesses relying on a service.

"I think it's a debacle of a huge scale - it's far worse than the Cadbury situation," he said.

"The next 12 months will be critical and there might be a sea change of loyalties."

But Mr Bibby said most people were as reluctant to change their telecommunications provider as they were their bank. Public relations practitioners yesterday noted the increasing reliance society has on technology and said power companies, Sky TV and other organisations would come under fire when outages occurred.

Graeme Purchas, president of the Public Relations Institute of New Zealand, said if Telecom fixed the network, continued to appear genuinely contrite and compensated customers adequately, "long term, the brand will be fine".

Pead PR managing director Deborah Pead said Telecom could have better helped its reputation by holding daily press conferences to manage media interest and to keep customers informed.