Telecom's XT mobile network was unable to cope with the number of customers wanting to switch to the ultra-fast service, the company said yesterday.
Telecom ordered an independent review, by Analysys Mason, of the network's design, build and operation, following several failures during which many customers were without service for some days over summer.
Most of the affected customers were south of Taupo, and in particular from Christchurch south.
Telecom offered affected customers $5 million in compensation for the problems, and had since added 27 new mobile sites and 115 tower-mounted amplifiers. The amplifiers were being added at the rate of 30 a week to bring the network, which was launched in May last year, up to capacity.
"The review has been both chastening and heartening at the same time," Telecom chief executive Paul Reynolds said at the company's financial briefing in Auckland.
"Clearly, some serious errors were made but the report shows that XT is fundamentally sound, that Telecom, and our partner Alcatel Lucent are now on the right track. Significant progress in improving the robustness and reliability of XT has been made."
The report said that despite being within Telecom's traffic forecasts, the rate of customer acquisition was too fast for the network in the early stages of its deployment.
That created compounding issues which contributed to the reliability and performance issues experienced and the partial network outages.
"The fundamental problem was that the network and its operational processes were not able to adapt quickly enough during our ambitious launch programme; we acknowledge this and accept the findings of the report."
Together Telecom and Alcatel-Lucent had already completed an extensive programme of improvements and the network was now performing well, he said.
The report identified several problems:
• The network failed because the network and supporting operations were not ready to manage the levels of traffic it experienced.
• Software issues contributed to network instability.
• Although the XT network was designed to initially provide planned coverage that matched the CDMA network the initial configuration of the XT network and, some network build issues, led to coverage variability.
• Some aspects of the network architecture were overly complex meaning that any faults were difficult to find and rectify.
• Immature operational management systems and process failures contributed to the impact of network issues.
Telecom said it had acted on the report's recommendations.
Telecommunications Users Association of New Zealand chief executive Ernie Newman said the XT report should give users confidence.
"Analysys Mason found that the network was launched too early and with insufficient resources to accommodate the traffic that eventuated.
"The outcome was a huge dislocation for many customers' businesses and everyday lives."
It was to Telecom's credit it had accepted responsibility and communicated liberally, he said. The association accepted that Telecom and Alcatel Lucent had done everything necessary to remedy the situation.
