Alcatel Lucent let us down - Telecom CEO

It's taken four outages but Telecom CEO Paul Reynolds has finally come out swinging today at Alcatel Lucent - the company that built and maintains the XT Network.

Reynolds told a packed media conference this afternoon that he was on the phone to Alcatel Lucent’s CEO Ben Verwaayen in Paris last night and warned him the company was “on notice.”

Reynolds said Alcatel Lucent has built mobile networks in the US, France and Italy which have not experienced the number of outages that have plagued XT in the past three months. It appears Alcatel Lucent is footing the bill to repair the damage to the network, and Telecom-employed engineers are taking a more hands-on approach to the ongoing maintenance.

Reynolds says that Alcatel Lucent never warned Telecom that going out for 97% population coverage at launch could result in failures of the magnitude of XT. He denied they had “built it on the cheap” and he defended the decision to choose Alcatel Lucent to build a XT. He repeated his belief that having only two Radio Network Controllers hadn’t contributed to the outages, although he mentioned the company intend to install six new RNCs - the same number as Vodafone – by the end of the year.

But even with the global resources of Alcatel Lucent being ploughed into fixing XT, Reynolds still could give no guarantees that it would not fail again.

What the company have done is provide another compensation package that will cost Telecom a further $10 million on top of the $5 million it promised earlier this month. For those customers in the affected areas, on account SME and Gen-i customers will receive a “loyalty credit” of 50% off their monthly plan charges. Postpaid consumer customers will receive a 33% credit for the next three months and prepay customers will get a 33% bonus every time they top up. Compensation begins on 1 March.

Two high profile telecommunications executives have already quit this week – Alcatel Lucent NZ CEO Steve Lowe and Telecom CTO Frank Mount. Reynolds made it clear that Mount had fallen on his sword today, as it was Mount that had been responsible for commissioning the XT Network.

Reynolds batted away a question on whether his own job was on the line. But judging by appearances today, he's in fighting form. Two heads have been offered up this week, his position is probably safe, for now.

Seasoned telco watchers know the writing will be on the wall for Reynolds when Telecom Chair Wayne Boyd starts appearing alongside him at press conferences and analyst briefings. Boyd is notoriously publicity shy but he hates a plummeting share price even more than he hates the TV cameras – which, by the way, were out in force today with eight cameras filming the press conference.