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The head of Alcatel-Lucent's New Zealand business, Steve Lowe, has also resigned and has been replaced by Jyoti Mahurkar-Thombre.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

Gabriel Brown 12/5/2012 | 4:42:14 PM
re: New Zealand's 3G Network Nightmare

A Kiwi tech site is reporting that Telecom New Zealand had only two RNCs deployed to support a network claimed to have 97% population coverage.




jya 12/5/2012 | 4:42:08 PM
re: New Zealand's 3G Network Nightmare This could not have come at worst time for AlcaLu - difficult to comment without knowing the service agreement details for scope of work between AlcaLu and TNZ, but I would suspect the plan - network plan as well as the rollout vis-a-vis subscriber population. Would be interesting to see what Analysys Mason come up with.
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