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Feb. 25, 2010

Alcatel Lucent still says it can't exactly pinpoint the cause of four service outages to Telecom's XT mobile network since last Christmas. The cause of the network outage remain unknown as Telecom and its partners try to convince wireless customers to stay with the service.

Alcatel Lucent's CEO Ben Verwaayen, the company which won the contract to install the X network, said he would not give technical reasons for the outages, simply because Alcatel still hasn't identified the root cause of the problem.

Verwaayen says that fixing the XT network was the company's "number one priority in the world". "At the end of the day, the only thing that matters is if people have a reliable network," he added.

Asked if other networks had suffered similar failures, Verwaayen said "it's not acceptable, it needs to be more reliable and that's why we are bringing in network experts".

Verwaayen also defended former Alcatel-Lucent's CEO Steve Lowe who has since resigned in New Zealand.

He said the issues with the network were not down to one man and there was no point in finding someone to blame for the network outages.

"Every layer of technology has some issues and lets deal with them," Mr Verwaayen said. Telecom has also admitted it has still not determined the exact cause of its crippling XT network outages.

Wireless 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, hasn't suffered similar glitches, at least not yet.

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 New Zealand.

Reynolds said there had been no attempts to cut 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.

He also rejects critics' suggestions that Alcatel-Lucent was the wrong company to build the network because of lack of expertise in designing networks similar to the XT.

Reynolds said Alcatel-Lucent was a vastly experienced telecommunications and wireless company responsible for building the two largest networks in the U.S. and numerous others around the world.

Alcatel had also delayed last year's launch of the network to ensure adequate pre-launch testing was carried out. People are now asking, Alcatel-Lucent technology is operating successfully and at real scale across the U.S., in France and Italy - but why not in New Zealand?

The impact of the XT network 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.

Some of that can be directly attributed to the X network's four outages in December, some wireless industry analysts are now saying.

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Source: Alcatel Lucent.