Enough is enough

Apologies to the recently deceased author of Love Story, Erich Segal, but heading a new bells-and-whistles mobile phone network should mean never having to say you are sorry.

Particularly when you have made such a song and dance at its launch about all the things it will be able to do and the frankly - even at the time - far-fetched situations and conditions under which it would be designed to operate.

After the fourth significant outage in recent weeks it has dawned on Telecom CEO Paul Reynolds that even to its most hardcore supporters the XT network's promises are beginning to resemble so much science fiction.

And now he cannot say sorry enough.

Further, he acknowledges that even "sorry" does not cut the mustard.

Well he might, for the XT launch and subsequent performance are bound to go down in the annals of New Zealand technology initiatives as a case study in "how not to do it".

More than that, he, and the rest of the country including Telecom investors, will be wanting to gauge the damage done to the hitherto blue chip brand by the XT fiasco, as well as acquire some solid, not to say meaningful, answers to what went wrong and how, as well as receive concrete assurances that the issues have been resolved.

Some are calling for the head of the generously "packaged" chief executive - $7 million for the year to June 30, 2009 - but it is not at all clear that this would help matters.

While it is the CEO's responsibility to employ the crew, and steer the ship, the course of the enterprise, along with governance and strategic direction are more matters for the board: for example, to what extent has it presided over the company's alliances, which is where, it now appears, some of the blame is being sheeted home.

This much was evident in the abrupt departure this week of Steve Lowe, the New Zealand head of operations of Telecom's strategic partner Alcatel-Lucent, the French firm responsible for the installation of the troubled phone network.

This was followed two days later with the announcement of the resignation of Telecom's chief transformation officer Frank Mount, an event directly related to the XT problems, acknowledged Dr Reynolds.

Specifically, questions must be addressed on the decision to award the design and installation of the XT network to Alcatel-Lucent, with whom Telecom enjoys a "special" relationship.

With the benefit of hindsight it does not seem overly wise that major players in the wireless mobile network market, such as Ericsson and Nokia Siemens, were sidestepped in that choice.

It raises questions as to whether the process was open and fair and sufficiently robust to ensure - or at least safeguard - optimal value for Telecom shareholders.

One commentator has suggested that Alcatel-Lucent's selection in deference to the "special relationship" raises issues of due diligence - and in as much as the relationship falls under strategic direction, this points back to the board, rather than to senior management.

Be that as it may, shareholders will be dismayed and looking for prompt action, and customers for something a little more reassuring than yet further apologies.

Dr Reynolds is an apparently urbane CEO whose approachable manner and fluency under fire have served him well as the company has grappled with a number of challenges put before it, not least the Crown undertakings of operational separation - ironically spearheaded by Mr Mount.

But he will now need all the experience and corporate steel he can muster to sort out the problems once and for all.

The board of directors certainly need to take a long look at themselves and the decisions they have taken with respect to the company's long-heralded digital mobile upgrade.

But it is Dr Reynolds who must drive the network, and thus the company, back towards reliability and respectability.

And if he cannot, at some point not too far down the track exasperated shareholders and customers will be within their rights to demand his termination.