Telecom chief executive Paul Reynolds will address ongoing failures of its XT network this afternoon in Auckland after a 12-hour disruption hit customers yesterday.

The head of the company that built Telecom's XT network has also announced he is leaving the company.

Clients from Taupo south experienced difficulties with voice services from 4pm yesterday and text messages and data services were also affected, but to a lesser degree.

Telecom said all services had been restored by 4am this morning.

The network would remain "under close observation", the company said.

Mr Reynolds will speak publicly about the outage this afternoon.

Alcatel-Lucent said yesterday that Steve Lowe, a senior technology manager with years of international experience, was being replaced as its New Zealand manager, a role he has held since February 2008.

The news came as customers expressed mounting frustrations with the network.

Fed-up user Melissa Brenzinger said the $10 compensation package the company offered the last time the network was compromised didn't cut it. Telecom had sold XT users a lemon.

"I want a reliable network," Ms Brenzinger said. "The idea of having a cellphone is so that I can be reached at all times. I appear unreliable at work because of the network I'm on.

"Purchasing an XT phone was a mistake. I want a refund. We've all bought a faulty product in purchasing XT as our network."

Last night, there was no indication from Telecom about when the problems would be fixed.

Alcatel-Lucent, which has its headquarters in France, said Mr Lowe would be replaced from March 8 by Jyoti Mahurkar-Thombre, a senior US-based manager.

Mr Lowe, a New Zealander, was AT&T's Singapore-based vice-president for Asia Pacific, overseeing the company's operations in 13 countries, before he returned to New Zealand to lead Alcatel-Lucent NZ.

At the time, he said being closer to his family was one of the attractions of taking the Wellington-based job.

Alcatel-Lucent NZ has expanded its staff numbers and its revenue under Mr Lowe's leadership - in part through its success in winning the contract to build Telecom's $574 million XT network, but also as a result of winning other technology business for large corporate customers.

Last year, Mr Lowe's role was expanded to include responsibility for the Pacific, where Alcatel-Lucent has been building telecommunications networks and bidding for new work.

The company's New Zealand nightmare began in December when the XT network, launched by Telecom earlier in the year, suffered the first of a series of faults which have prevented users south of Taupo from being able to make or receive calls.

The outages have been blamed on an Alcatel-Lucent radio network controller (RNC), a complex piece of equipment in Christchurch which was overloaded after the failure of another part of the network caused a surge in traffic.

Plans to introduce a second Christchurch RNC to reduce the risk of overloading are on hold after attempts last week to bring it online were not successful.

Telecom spokesman Mark Watts said yesterday that engineers were working through the issues and hoped to have the second RNC fully operational by the middle of next month.

Another RNC is also due to be installed in Auckland by the end of next month to prevent similar overloading issues hitting XT customers in the upper North Island.

Mr Watts would not comment on whether Telecom had asked for Mr Lowe to be replaced. "He was not one of our employees. He does have his own reasons [for leaving], and so will Alcatel."

Alcatel-Lucent last week apologised to Telecom customers and described the resolution of XT's issues as "the single most important operational matter in the world" for the company.

Mr Watts said the global chief executive of Alcatel-Lucent, Ben Verwaayen, had been in regular contact with Telecom's chief executive, Paul Reynolds. He denied a report that Mr Verwaayen had flown to NZ.

- With NZHERALD STAFF