The impact of the XT problems, and Telecom's mounting costs associated with compensating customers are beginning to have an effect on the company's bottom line. Photo / Jason Dorday
Telecom admits it has still not determined the exact cause of its crippling XT network outages.
Telecom and engineers from Alcatel-Lucent, which built the $567 million network, are still struggling to find the root cause of the four major outages, which have all been linked to a major piece of
equipment within the network, a radio network controller in Christchurch involved in directing calls to XT's 220,000 phone users from Taupo south.
A second RNC in Auckland, handling a similar number of customers in the upper North Island, has not suffered similar glitches.
Chief Executive Paul Reynolds rejected suggestions the fault lay with Telecom's decision to launch XT with only two RNCs. Competitor Vodafone's network has six RNCs across the country.
Reynolds said there had been no attempt to skimp on costs when building the network - the two RNCs were designed to have had more than ample capacity to handle the network with the number of customers currently using it, he said.
The company had also delayed last year's launch of the network to ensure adequate pre-launch testing was carried out.
He also rejects some critics' suggestions Alcatel-Lucent was the wrong company to build the network because of lack of experience in designing networks similar to XT.
Reynolds said Alcatel-Lucent was a vastly experienced telecommunications company responsible for building the two largest networks in the US and numerous others around the world.
"Alcatel-Lucent technology is operating successfully and at real scale across the USA, in France and Italy - why not in New Zealand?"
The impact of the XT problems, and Telecom's mounting costs associated with compensating customers - a previously announced $5 million plus $10 million announced yesterday - are beginning to have an effect on the company's bottom line. The company said yesterday its net earnings for the year would be at the lower end of a previously forecast range of $400 to $440 million.
