Vodafone, Telecom reach deal

GOOD CALL: Vodafone and Telecom have resolved their differences over the imminent launch of Telecom's XT network.  Vodafone CEO Russell Stanners (L) and Telecom CEO Paul Reynolds (R) pictured.
GOOD CALL: Vodafone and Telecom have resolved their differences over the imminent launch of Telecom's XT network. Vodafone CEO Russell Stanners (L) and Telecom CEO Paul Reynolds (R) pictured.

Telecom's embattled $574 million XT mobile network is now expected to launch around May 29 after Vodafone and Telecom reached an out of court settlement today.

In a statement the two companies said they had resolved their differences over Telecom's new XT network.

"Vodafone and Telecom have worked together over the last 48 hours to reach a solution to resolve the issues between them, which have been identified by both parties," the two said.

"Telecom has agreed to extend its network filter installation programme, in order to help resolve the interference issues identified as impacting Vodafone mobile customers. Vodafone has agreed to discontinue the injunction proceedings."

When asked who would be footing the bill for the filters, Telecom spokesman Mark Watts told BusinessDay that it was a "shared commitment" but would not give details.

He said the installation filters had been stepped up and Telecom was hoping to open the network around 29 May. Telecom had planned to launch the network on May 13.

"You can assume it has been a distraction for us.  It has been frustrating in that it has consumed a considerable quantity of midnight oil," said Watts.

However, he said Telecom was very pleased to have reached a settlement out of court.

Telecom's new network, based around similar technology to what Vodafone uses rather than the CDMA technology of Telecom's existing network,  is expected to ramp up competition in the $2 billion annual mobile phone market where Vodafone currently enjoys 69 percent of revenue to Telecom's 31 percent.

Telecom has been heavily promoting the $574 million third-generation XT network with advertising featuring Top Gear presenter Richard Hammond. Telecom's new network means customers will no longer need to change phones to switch service providers. Telecom's customers will also have better roaming services available when they go overseas.

The two telecommunications giants squared off in the High Court at Auckland yesterday after Vodafone sought an injunction to delay the launch of the Telecom network, which it said was causing interference with, and problems on, Vodafone's network.

High Court Justice Geoffrey Venning had been due to deliver his ruling at midday today. 

Telecommunications Users Association of New Zealand chief executive Ernie Newman welcomed the settlement, but said the matter should never have reached court to begin with. 

"This court action was a flashback to the nineteen nineties when the telecommunications companies were constantly in court against one another," said Newman.

"Perhaps Vodafone CEO Russell Stanners, with Telecom's Paul Reynolds, should spend a weekend on a desert island and not return until they have restored lines of communication and re-learned each other's phone numbers?"

Yesterday in court both Vodafone and Telecom admitted some culpability for the interference affecting Vodafone's network.

Vodafone contended that despite the over-sensitivity of some of its receivers to interference, Telecom was purposely trying to push ahead with a filter-less network despite knowing it would eventually have to install filters. 

Vodafone was seeking an injunction to block the official opening of the XT network until it was satisfied the interference was sorted out.

Telecom did not deny knowing it was causing interference to Vodafone's network but said an injunction was inappropriate because Vodafone had known about the issue for months, suggesting Vodafone was trying disrupt the public launch of the XT network.

*See also: Bill Ralston's blog - Telecom 4 Vodafone 0