Telecom NZ users get compo for outage

CEO Paul Reynolds today announced that Telecom NZ will compensate the 200,000 customers south of Taupo who had been affected by the company's recent mobile outage.
Written by Juha Saarinen, Contributor on

CEO Paul Reynolds today announced that Telecom NZ will compensate the 200,000 customers south of Taupo who had been affected by the company's recent mobile outage.

Telecom NZ CEO Paul Reynolds

Telecom NZ CEO
Paul Reynolds

(Credit: Telecom NZ)

The package was worth almost NZ$5 million, Telecom claimed, and comprised credits to customers as well as a donation of over NZ$250,000 to community projects in the lower South Island. Reynolds said the latter gesture is in recognition of the particular disruption the outage caused for the area.

Prepaid retail customers who experienced degraded service on 27 January will be given a NZ$10 credit. Post-paid customers will receive one week's worth credit for plan charges.

Customers who suffered a three-day outage until 29 January will get more. Prepaid retail customers will receive a NZ$20 credit, and post-paid ones, two weeks' worth of plan charges.

SME and Gen-i corporate customers can expect two weeks' worth of plan charges that include SMS and 3G data Telecom Extras if their service was affected for a day on 27 January; those whose service was degraded for three days get a four-week credit on their plan charges.

Asked if the compensation package is fair and equitable, IDC New Zealand's research manager of Telecommunications, Rosalie Nelson, noted that the average revenue per user (ARPU) on Telecom's prepaid service for XT is NZ$8.87. "That means the $10 credit is over a month's worth of service for customers that saw degraded performance on XT for a day," Nelson said, and points out that others get even greater compensation.

Nelson added that Telecom is compensating customers for the outage, unlike the power companies that did not do so after big areas of Auckland experienced power cuts recently. "While I can appreciate that mobile telephony service is important for people, it needs to be put in context — without power, a business simply doesn't function," Nelson said.

It was not yet known how much in total the outage will cost Telecom. Nelson said she has seen various estimates for the cost of adding additional resilience for its new XT network, such as further radio network controllers, but there were no firm figures yet.

Reynolds said the compensation package will be funded entirely by Telecom, with no contribution from Telecom's technology partner, Alcatel-Lucent, which built XT.

The outage was caused by backhaul to and from Telecom's southern radio network controller failing due to a hardware problem, according to Chris Quin the CEO of the incumbent's IT Services division, Gen-i Australasia, in a webcast to customers and media last Friday.

It was the second large-scale outage for customers south of Taupo, including the capital Wellington and the entire South Island, after Telecom's radio network controller for the area in Christchurch failed on 14 December.

An independent inquiry by a yet unnamed global auditor without ties to Telecom or any of its technology partners will attempt to establish the exact cause of the XT outage. The company said that recommendations of the inquiry will be made public.

To help customers who needed mobile service, Quin confirmed that Telecom has handed out CDMA handsets and devices. Telecom's CDMA network is run in parallel with the WCDMA XT service, but due to be phased out in 2012.

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