The details of the package were announced in Dunedin yesterday.
Otago Chamber of Commerce chief executive John Christie described it as "not bad".
The package was also praised by Telecommunications Users of New Zealand (Tuanz) chief executive Ernie Newman.
Mr Christie said, however, he did not know whether it would be enough to retain customer confidence in the system.
"The compensation package addresses the outage and reflects the damage done and its impact on businesses, but the important question for business is, will it happen again."
Mr Newman said: "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'," NZPA reported.
Telecom chief executive Paul Reynolds said he came to Dunedin to announce what he called a goodwill gesture, and to apologise to the 70,000 and 80,000 Otago and Southland customers who were hit the hardest by last week's outage.
"I'm in Dunedin to say sorry," he said at the start of a meeting with media and Telecom staff but which was closed to the public.
Mr Reynolds said he was determined to be "fair and reasonable".
The compensation package was designed to exceed what customers had told the company they considered to be adequate.
Claims by customers who felt the package did not meet their costs would be dealt with on a case-by-case basis.
Telecom's head of retail, Alan Gourdie, said XT sales were still "strong", but customers would have to look at their contracts if they wanted to shift to another communications company.
Mr Reynolds said he would wait for the outcome of the independent review of the network before deciding if compensation would be sought from its partner in the network, Alcatel-Lucent.
The XT network was built to a high standard.
Its launch in May last year was delayed five months to allow for extra testing, he said.
"Faults sometimes happen and it [the failure] had nothing to do with under-investment or under resourcing."
In an interview, Mr Reynolds said he retained confidence in the XT network and would not install a backup system or extend the life of the old CDMA network, which was due to be shut down within the next couple of years.
Claims that overloading caused the outage were also dismissed by Mr Reynolds, who said capacity had been tracking ahead of demand.
A caller to the Otago Daily Times claimed Mr Reynolds was relaxing at the Blanket Bay resort near Queenstown during the outage, an accusation Mr Reynolds also rejected.
He said he worked "24-7" during the crisis before visiting the resort on Saturday.
He also rejected claims he should resign given the XT network had failed twice in six weeks, saying his role was to oversee the company in good times and bad, and when things went wrong "to act responsibly, positively, swiftly and openly".
Making amends
For customers south of Taupo affected on Wednesday January 27
• Prepaid - $10 credit.
• Monthly account paying customers - credit of one week of call plan charges, including extras such as texting or data.
• Retail small to medium enterprises and Gen-i corporate customers - credit of two weeks of call plan charges, including extras such as texting or data.
For those affected from Wednesday January 27 to Friday January 29
• Prepaid - $20 credit.
• Monthly account paying customers - credit of two weeks of call plan charges, including extras such as texting or data.
• Retail small to medium enterprises and Gen-i corporate customers - credit of four weeks of call plan charges, including extras such as texting or data.
• Telecom to work with local bodies and community leaders to distribute more than $250,000 for community projects across the lower South Island.
