AlcaLu is in the hot seat as Telecom New Zealand CEO Paul Reynolds puts the 3G network supplier on notice over major network outages

Michelle Donegan

February 24, 2010

2 Min Read
New Zealand's 3G Network Nightmare

The recent 3G network outages in New Zealand are the stuff of nightmares for carriers and their suppliers, and after yet another network failure Tuesday the mobile woes deepened for Telecom New Zealand Ltd. (NYSE: NZT; New Zealand: TEL) and its 3G supplier, Alcatel-Lucent (NYSE: ALU).

After suffering major outages on its new "XT" 3G network during the past month that have affected some 200,000 customers, Telecom New Zealand CEO Paul Reynolds says he has put AlcaLu on notice, according to reports. (See Telecom New Zealand Apologizes.)

This morning, Alcatel-Lucent CEO Ben Verwaayen apologized to Telecom New Zealand customers in an interview on Radio New Zealand. "We have to take a responsibility," he said. "We have way too many issues in the network, and we have to fix them."

Verwaayen said AlcaLu is sending the "best experts we have from around the world" to work on the problems in New Zealand.

The cause of yesterday's network failure has not yet been identified. But the outage occurred just days after Telecom New Zealand announced what caused the XT outage at the end of January and the measures it was taking to resolve the network problems.

According to the operator's statement, the January outage was due to "traffic surges in the network overloading the radio network controller in Christchurch. During the outage on 27 January, the traffic surge was caused by thousands of users suddenly re-registering after a separate network routing fault took down some cell sites."

The 3G network calamity has resulted in senior executive resignations at the operator and its supplier. Yesterday, Telecom New Zealand's CTO, Frank Mount, resigned. CIO David Havercroft has taken on the responsibility for all network and IT operations at the operator, and CFO Russ Houlden has interim responsibility for the operator's shared services operations and technology strategy. (See Telecom New Zealand CTO Resigns.)

The head of Alcatel-Lucent's New Zealand business, Steve Lowe, has also resigned and has been replaced by Jyoti Mahurkar-Thombre. (See AlcaLu Replaces Kiwi Chief, Telecom NZ Launches 3G, AlcaLu Expands Telecom NZ, and AlcaLu Backhauls New Zealand.)

To compensate customers, Telecom New Zealand has pledged to knock off a third from the affected consumers' phone bills and half from business customers' bills for the next three months, a move that will cost the carrier NZ$10 million (US$6.8 million).

That $6.8 million is in addition to the NZ$5 million (US$3.4 million) that the operator offered earlier this month as a goodwill gesture to the communities most affected by the XT outages at the end of January. The carrier's compensation tab to date is NZ$15 million (US$10.3 million).

— Michelle Donegan, European Editor, Light Reading Mobile

About the Author(s)

Michelle Donegan

Michelle Donegan is an independent technology writer who has covered the communications industry for the last 20 years on both sides of the Pond. Her career began in Chicago in 1993 when Telephony magazine launched an international title, aptly named Global Telephony. Since then, she has upped sticks (as they say) to the UK and has written for various publications including Communications Week International, Total Telecom and, most recently, Light Reading.  

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