XT failures grounds for customers to leave network

Telecom CEO Paul Reynolds goes public, telling unhappy customers to 'come, talk to us'. Photo / Dean Purcell

Customers wanting to get out of Telecom XT contracts may have grounds to do so - but only if they have been the victim of repeated faults in the network.

"It depends on how many outages they've suffered," Consumer NZ chief executive Sue Chetwin said last night.

"If you're one of those customers who has suffered from their third or fourth outage, then under the Consumer Guarantees Act you can probably say that this is a service that's not basically fit for purpose and you could argue that you wanted to break your contract and you could probably talk to Telecom about some compensation for that."

Ms Chetwin said the Consumer Guarantees Act covered replacing, repairing or refunding a product or service if something went wrong.

"A different situation would be a toaster," she said.

"After the fourth or fifth time it breaks down you're not really interested in the fact that they can repair it, you just want a toaster that works."

Ms Chetwin said North Island customers, who had been affected by fewer outages, did not have the same grounds for refunds because Telecom had offered goodwill packages and the service had been more consistent.

Telecom chief executive Paul Reynolds yesterday urged upset customers to contact the company.

"Look at what we're putting forward," he said.

"Bear with us in our massive investment that we are making, and if you need to talk to us, come talk to us."

Dr Reynolds said Telecom had about 450,000 XT customers nationwide.

About 220,000 customers south of Taupo had again been affected by the latest in a series of failures since December.

Dr Reynolds announced a $10 million compensation package for customers, on top of a $5 million package offered earlier this month.

"XT was engineered, launched, marketed and sold as a world class network," he said.

"That is what we promised, but for far too many of our customers we haven't delivered on that promise and we recognise that.

"There's no hiding the series of major outages and disruptions we've had over the past two months. One major disruption is enough. Several is intolerable."

Asked whether yesterday's resignation of chief technology officer Frank Mount made him the "fall guy" for the network's problems, Dr Reynolds said:

"He was responsible ... for the design and operation of the network and clearly that has not been effective in recent months, so I accepted his resignation."

The resignation followed that of Steve Lowe, head of Alcatel-Lucent New Zealand, which built the network.

Dr Reynolds was asked if he was prepared to resign if the network had more problems. He replied: "I'm not looking for more problems, I'm looking to fix this. That would be up to the board, of course."

Dr Reynolds said Alcatel-Lucent was "on notice", but would not be drawn on who could take over should the company fail to fix the network, saying only he was confident the company would remedy the situation.

WHO GETS WHAT

220,000 XT customers south of Taupo who stay with the service will receive credits for the next three months.

* Post-paid/on-account customers will get a 33 per cent discount on their monthly plan charges.
* Pre-pay customers will get a 33 per cent bonus every time they top up.
* Business customers will be given 50 per cent off their monthly fees.