XT wounds healed, Telecom renews Alcatel-Lucent contract

Telecom and Alcatel-Lucent signed a strategic supplier agreement and three-year managed services agreement, the two companies said today.

Under the renewed agreement Alcatel-Lucent, - Telecom's long-time network partner - will provide network operations, maintenance and support and a range of project services. A Telecom spokeswoman told NBR the agreement covered elements of both landline and mobile networks.

"As the demerger has yet to take place, the agreements are with Telecom as it currently stands," the Telecom spokeswoman said.

In a statement, Telecom CTO David Havercroft said the new agreement had "flexibility" to cope with changes ahead. Telecom - or "New Telecom" - will handle most of the company's mobile operation if the split goes ahead as scheduled late November. A spokesman for the soon-to-be-spun-off Chorus (Telecom's network division) declined to define "flexibility", citing commercial sensitivity.
 

ABOVE: A lower point in the relationship - Telecom chief executive Paul Reynolds (with Gen-i boss Chris Quin, left and Telecom Retail head Alan Gourdie, right), puts Alcatel-Lucent "on notice" after the third major XT outage in February 2010.

On notice
Alcatel-Lucent gained notoriety after Telecom's XT mobile network launch, which was followed by a series of multi-day outages in late 2009 and early 2010. Telecom chief executive Paul Reynolds put the Franco-American company on notice on February 23, 2010 after the third major XT outage, saying "enough is enough,"

The new mobile network was designed, engineered and managed by Alcatel-Lucent.

New guard
Today's deal was announced by fresh faces: Telecom's Mr Havercroft, who became chief technology officer after his predecessor, Frank Mount, was pointed toward the door after the XT debacle, and Alcatel-Lucent's recently-appointed country manager Andrew Miller.

Mr Miller replaces Jyoti Mahurkar-Thombre, who in turn replaced incumbent Alcatel-Lucent NZ country manager Steve Lowe, who abruptly departed in the immediate wake of the XT issues.

Coming right ...
Beyond it's initial problems, XT has proved a solid performer according to independent tester TrueNet.

Using network testing methodology based on that of UK regulator OffCom, TrueNet has found XT the fastest mobile network, in most circumstances and places, in Auckland and Wellington - a result that gels with NBR's anecdotal experience (though has been disputed by Vodafone).

... and making things right
Since the XT woes of late 2009/early 2010, Telecom has received a series of "supplier compensation payments" from an un-named party, widely assumed to be Alcatel -Lucent.

By the time of Telecom's first-half 2011 result, the payments totalled $41 million.

An Alcatel-Lucent spokeswoman told NBR the company now has 750 staff in New Zealand, and more engineers than any competitor (competitors include Nokia-Siemens, Vodafone NZ's primary network partner; 2degres partner Huawei, and Ericsson). At the time of Mr Lowe's departure, the company said it had 700 local staff.