Telecom has admitted a "serious hardware failure" was responsible for a widespread outage in its much-vaunted XT mobile network.

In a statement yesterday, the company said January's widespread loss of service was because of traffic surges in the network that subsequently overloaded a radio network controller in Christchurch.

Spokesman Mark Watts last night told the Herald a serious hardware failure had been the initial cause of trouble, but the rush of thousands of Telecom phones automatically "re-registering" as the system came back on line compounded the problem.

While most of the Christchurch-controlled XT users - those below Taupo - had their service restored quickly, some users south of Timaru were without cellphone cover for days.

The company has been working to improve the service, though other, smaller, outages have been reported from Hawkes Bay to Invercargill, New Plymouth to the Hutt Valley.

Chief executive Paul Reynolds said capacity, resilience and coverage improvements were under way.

"Improving the quality and reliability of service on the XT network is our absolute number-one priority and the entire team is focused on this."

Other improvements include building new cell sites in various parts of the country, adding signal amplification technology and installing two new radio network controllers - one in Auckland, the other in Christchurch - by the middle of next month.

Last month's South Island XT outage was triggered by a hardware failure at the Christchurch network controller.

Telecom also announced that an independent review of the XT mobile network is to start next week and take about eight weeks.

The review - by telecommunications, technology and media company Analysys Mason Group (AMG) - will focus on the design, build and operation of the mobile network.

AMG is assembling a multi-discipline team of up to seven specialists with in-depth knowledge of the design, planning and operation of 3G and IP networks from a range of suppliers.

Telecom "technology partner" Alcatel/Lucent has been helping with the system upgrades and will be involved with the review.

Its Asia-Pacific president, Rajeev Singh-Molares, said resolving Telecom's XT problems was "the single most important operational matter in the world for Alcatel/Lucent right now. The full resources of our global business are available ... We will do whatever it takes."