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Telecom CEO Paul Reynolds has offered disgruntled XT customers a major compensation package, as his company battles to fix the problematic network.
Dr Reynolds offered compensation to contract, pre-pay and business customers south of Taupo after the network's fourth outage since Christmas.
For consumer on account customers this will amount to 33 per cent of the customer's monthly plan charge, including their Telecom Extras such as texting and mobile broadband plans.
For pre-paid customers Telecom would apply a 33 per cent bonus every time they topped up over the next three months.
For business On Account SME customers and Gen-i enterprise and corporate clients this loyalty credit would amount to 50 per cent of their monthly plan charges over the next three months.
In a press conference this afternoon Dr Reynolds said Telecom had broken promises with its customers over the continual failure of its XT network, and would take urgent action to set it right.
And he said Alcatel, its XT technology partner, had been put on notice that "enough is enough".
"The time has come for a serious review," he told a media conference this afternoon in Auckland.
He says that "sorry is not good enough anymore."
He said the problems with the XT network, the latest of which impacted on its 220,000 customers south of Taupo, cost the company about $10 million to date.
Dr Reynolds said Telecom is also putting its own house "in order" with management changes announced earlier today.
Four XT outages since Christmas have led to the resignations of Telecom's chief transformation officer, Frank Mount, and Alcatel-Lucent's New Zealand head, Steve Lowe.
Dr Reynolds said Alcatel had given Telecom no warning prior to the XT failures.
But he said Alcatel was involved with similar networks in the United States, France, and Italy and dismissed suggestions of incompetence as "utter bunkum."
However Dr Reynolds admitted Alcatel "let us down here."
"Both organisations are contrite," he said. "We know it hasn't delivered the right experience."
Dr Reynolds would not immediately speculate on the future of Telecom's relationship with Alcatel, stressing that the network needed to be repaired first. He said Telecom would take up contractual matters later.
This morning Dr Reynolds accepted Mr Mount's resignation, which would be effective immediately.
"I am pleased to announce that CIO David Havercroft will assume the responsibility for all network and IT operations from today and CFO Russ Houlden will carry interim responsibility for our Shared Services operations and Technology Strategy.
"I want to acknowledge with personal gratitude Frank Mount's enormous contribution to Telecom over the past 18 months. He has worked tirelessly and selflessly for our customers and for Telecom people.
"The successful delivery of Telecom's Crown Undertakings schedule on Operational Separation represents one of the most significant operational and IT programmes in the company's history and is re-shaping the industry. I wish Frank well for the future," he said.
But Dr Reynolds was not as friendly in an irate email to Telecom employees this morning, where he talks of being "extremely disappointed" with the current situation.
"Outages are not acceptable, and I simply won't put up with them," he wrote in the internal email.
Telecom's own publicity material describes outgoing Mr Mount as the company's "Chief Transformation Officer".
"Frank is responsible for driving the company's transformation for long-term growth and delivering Telecom's new generation of world-class services to our customers in new and innovative ways," the Telecom website states.
"He's well equipped to do this with an impressive track record in senior leadership roles at some of the world's leading telecommunications companies. After starting his career at AT&T, where he stayed for 20 years, Frank has since worked for T-Mobile, Cable & Wireless, US Cable, Primus Communications and Viatel Inc.
The Government today said there was little it could do to help customers frustrated with Telecom's XT network failures.
The network failed again for up to 12 hours last night, its fourth outage since Christmas, sparking calls for Government action as consumers expressed their growing dissatisfaction.
Labour leader Phil Goff is accusing the Government of sitting on its hands over Telecom's XT mobile phone network failure as a second head rolls over the ongoing issue.
"I think it is remarkable that a minister is sitting on his hands while a major infrastructure network has collapsed four times. He has got to get in there, demand explanations and demand remedies. He owes that to the country, the security issues around 111 and also to the customers who are being deprived of what they should reasonably expect," Mr Goff said.
Mr Joyce said he spoke to Paul Reynolds about the problems yesterday, but because the company was a private one the Government had no power to act or intervene.
"But I've made it clear to Dr Reynolds that the Government is very concerned with the recent spate of outages," said Mr Joyce.
"I am also seeking assurances from the company that arrangements will be urgently made to ensure that emergency 111 calls are answered."
The Dominion-Post website reported calls to 111 to help a student who was attacked at a Christchurch mall failed to get through.
Witnesses said an Asian student was left beaten and bloodied after the assault by four skinhead youths at a bus stop outside the Palms Mall in Shirley about 6.30pm yesterday.
Mr Joyce said he had not been told about the incident when he spoke to Dr Reynolds.
"I am concerned and that is why I asked last night without any knowledge of that situation if Telecom could provide assurances that people could call 111 from their XT phones... Officials are following that up today and will seek further assurances."
Yesterday, clients from Taupo south experienced difficulties with voice services from 4pm. 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.
The XT network, launched by Telecom earlier in the year, in December 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.
- with NZPA and NZ Herald staff