XT review should air Friday - the deals that hang on it
Well-connected equity analyst Guy Hallwright has told clients that Telecom has been handed a draft copy of Analysys Mason’s report on the string of XT failures between December and February.
Telecom has promised to share some details of the review by the end of this month. Some analysts have picked a May 27 briefing for its initial airing.
Mr Hallwright is picking that headline results will be shared at Telecom’s quarterly results briefing tomorrow (May 7).
Big deals in the balance
It is not incumbent on Telecom to share any details of the Analysys’ review of its mobile problems.
PR 101 dictates it will share some headline findings with the general public, to help it gain some degree of closure.
And it should be able to do this with some degree of credibility, given the scope of XT infrastructure upgrades carried out since the first failure hit (measures including bumping its number of radio network controllers from two to six, matching Vodafone, erecting at least 20 new XT celltowers, and upgrading around 400 cellsites with tower-mounted amplifiers to reduce the number of dropped calls).
But Telecom also has commercial motive to spill.
As first reported by NBR, Fonterra put a massive upgrade to XT on hold in the wake of the network failures. So did Capital and Coast Health, a key DHB.
A spokeswoman for Gen-i chief executive Chris Quin said both deals are still hold, with both the giant diary co-operative and the DHB awaiting details of Analysis Mason’s findings.
Mr Quin has been carpet-bombing clients with in-depth technical details of the effort to make XT more robust, sharing an unprecedented level of information.
Nevertheless, cautious customers are waiting for the independent verdict, which the Gen-i boss has already promised to share with them.
Technical, not political
Telecom chief executive Paul Reynolds personally ordered the review at the height of XT problems.
The company ultimately chose UK-based consultancy Analysys Mason (also an advisor to Vodafone NZ on the vexed MTR issue) as the third-party inspector.
Soon after, Dr Reynolds said he had personally called Alcatel-Lucent chief executive Ben Verwaayen to put the Franco-American company “on notice” - indicating that Telecom’s networking partner would be a key focus of the inquiry.
Dr Reynolds said there were only two or three companies in the world capable of carrying out such a review.
At least one of Alcatel-Lucent’s rivals has called for a review of the way Telecom’s network partner was selected, and leading analyst Geoff Zame has raised the possibility that governance issues could come into play.
Mr Verwaayen, infamously, was Dr Reynolds boss when both worked at British Telecom. But by the same token, Alcatel-Lucent’s close relationship with Telecom pre-dates Dr Reynolds by a decade, and the network builder has established a solid track record with 3G roll-outs in the US and Europe.
The governance issue is racy board room stuff, but it’s likely Telecom can satisfy much of the public, and wavering corporate customers, by outlining any technical problems found by Analysys Mason, and an outline of the steps taken so far to enhance XT’s infrastructure, which have been comprehensive by any measure.