Report: AlcaLu to compensate Telecom New Zealand over poor 3G performance

Reports from New Zealand indicate that Alcatel-Lucent will compensate Telecom New Zealand some $73 million over the poor performance of its XT 3G network that it built and operates on behalf of the operator.

Earlier this year, TNZ experienced several network outages, prompting the operator to compensate users. That move was estimated to cost TNZ $10.2 million total. In February, CTO Frank Mount and AlcaLu's head of New Zealand Stevel Lowe both resigned over the network problems.

A report from Analysys Mason that TMZ commissioned concluded the network and support systems were not adequate to support customer demand born from customers migrating from the operator's CDMA network. The Radio Network Controller was the the biggest problem, Analysys Mason said. However, the firm said the number of subscribers loading onto the network were within subscriber forecasts. Analysys Mason recommended that TMZ slow customer acquisition as AlcaLu and TMZ improve the network.

Analysys Mason recommended that customer acquisition activities be slowed as the firms work to improve the network's performance. It also said that ALU and Telecom had already made improvements to the network.

"The review has been both chastening and heartening at the same time," said TNZ CEO Paul Reynolds.  "Clearly some serious errors were made but the report shows that XT is fundamentally sound, that Telecom, and our partner Alcatel Lucent are now on the right track. Significant progress in improving the robustness and reliability of XT has been made."

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