Telecom's $5 million package to compensate customers affected by last week's XT network outage, including a $250,000 donation to local charities, should be applauded, a telecommunications watchdog says.
The network crashed for thousands of Telecom clients south of Taupo on Wednesday morning and was not fully operational until late Friday night.
Under a compensation package announced by Telecom chief executive Paul Reynolds in Dunedin this afternoon, customers will have their cellphones automatically credited different amounts depending on how long their service was affected.
Charities across the lower South Island will also benefit to the tune of a more than $250,000 donation.
Telecommunications Users of New Zealand (Tuanz) chief executive Ernie Newman said while Telecom could never fully compensate their customers for the personal disruption and inconvenience and loss of business during the outage, it was a good gesture.
"My feeling is this is pretty good.
"It's enough so that most people who have been seriously affected will say 'At least they gave me back a little bit of money'."
Mr Newman said the money would not satisfy everyone.
"But as an across the board gesture I think this is at the upper end of what might have been done and they should be applauded."
The donation was also a good way to give something back to the communities which had been most disrupted, Mr Newman said.
Dr Reynolds said the company had aimed to make the package as comprehensive as possible, while being "fair, transparent and equitable".
Both prepaid and postpaid consumer customers would receive a text message advising that they qualify for the credit.
Prepaid customers would have the credit applied to their account automatically by the end of February and postpaid customers would receive their credit on their next month's billing.
Telecom's earnings announcement is in two weeks. However, Dr Reynolds said sales related to its XT network and products continued to be strong.
"XT has been a strong seller for Telecom and our indications in recent days are that it continues to sell well in our stores and corporate world."
He denied the outage had anything to do with not spending enough on setting up the infrastructure.
"XT has been built to a very high standard. We have actually spent large on building this network there is no doubt about it. We put off the launch until May to do further testing.
"Faults sometimes happen and this time it happened twice. It was nothing to do with under-resourcing."
The outage affected just over 200,000 customers including 70-80,000 in the Otago and Southland regions, Dr Reynolds said.
Telecom had been working hard to examine every aspect of the network and would be commissioning an independent review into the incident, he said.
Payment details for customers whose service was affected on Wednesday:
* Prepaid consumer customers - $10 credit.
* Postpaid consumer customers - one week's worth of plan charges, including extras such as texting or data packages.
* Telecom Retail SME customers and Gen-i corporate customers - two weeks' worth of plan charges, including extras, such as texting or data packages.
Payment details for customers whose service was severely affected for up to three days between Wednesday and 10pm Friday:
* Prepaid consumer customers - $20 credit.
* Postpaid consumer customers - two weeks' worth of plan charges, including extras, such as texting or data packages.
* Telecom Retail SME customers and Gen-i corporate customers - four weeks' worth of plan charges, including extras, such as texting or data packages.
