Telecom 'may not be able to stem exodus'

Both Vodafone and 2degrees have ramped up advertising and reported a surge in new customer interest after Telecom's hyped XT network broke down four times in two months — most recently on Monday.

A consumer law specialist said Telecom customers were covered under the Consumer Guarantees Act, regardless of personal contracts. If there was a major problem meaning services were not "fit for purpose" and conducted with "reasonable care and skill", customers could cancel their contracts.

"It's a major problem if a reasonable consumer would not have entered into the contract if they thought this was going to happen.

"If Telecom had said they were going to advertise the service but it's going to fail every now and then, would we enter?"

The lawyer said the outages were handing Telecom's competitors customers "on a plate".

But Telecom spokeswoman Rebecca Earl said the number of customers leaving XT "entirely" was relatively small.

Those wanting to leave would be assessed and if they had been "significantly impacted" may have the disconnection fee waived, she said.

2degrees mobile sales and marketing officer Larrie Moore said the company had a 550 per cent increase in sales through its website on Tuesday compared to an average day in February.

2degrees celebrated its six-month anniversary this month by announcing it had 206,000 customers.

It had launched an advertising campaign, which went live at 4pm on Tuesday, increasing sales "four-fold" in 24 hours. In that time, almost 3000 people called to ask about "porting", where they changed provider but kept their number.

Vodafone spokesman Paul Brislen could not provide details of how many customers had switched from Telecom but said the numbers were significant, especially in the South Island, where extra sales support teams were being flown in.

Businesses were inquiring about joining Vodafone, and, in Wellington, some government departments were discussing switching, he said.

"For some companies we have been knocking on the door for years. Now they are calling us."

Consumer New Zealand spokeswoman Maggie Edwards said she had tried investigating yesterday how customers could break their contracts with Telecom but no such advice was available on its website, "which I think is very, very poor".

The Consumer Guarantees Act did not apply to businesses which had their own contract with Telecom. Each contract tended to have its own limited liability clause.

"The people it's going to badly affect is small businesses because they don't have the same business clout as large businesses," she said.

Meanwhile, in Nelson, about 40 on-call hospital staff were reportedly going back to old Telecom phones and pagers due to the XT disruption.

What is Telecom offering?

Account customers affected by the outage will get a credit of 33 percent on their monthly plan for the next three months. For example, on a One Rate 100 plan for $49.95 per month, a monthly plan will cost $33.

For affected pre-paid customers, Telecom will apply a 33 percent bonus every time they top up over the next three months.

Affected Business On Account SME customers, Gen-i enterprise, and corporate clients will get a 50 percent credit on monthly plan charges for the next three months.