Telecom launches campaign to win back XT users

CEO to head push for revival of network

Telecom will ask for a second chance for its beleaguered XT network with an advertising blitz starting tonight after angering mobile customers. The campaign will offer customers a "money-back guarantee" when they join the network. However, Telecom will not cut prices to match rivals, including newcomer 2degrees. It is understood Telecom's new deal will let customers who sign up to an eligible plan return their phone within 30 days if they are not satisfied — with a refund for the machine and any calls made. The new TV commercials will not include celebrities, unlike the adverts featuring Top Gear co-star Richard Hammond that launched XT a year ago. Instead, a senior Telecom staff member will appear in front of the camera. Spokesman Nick Brown said its recent marketing activity had been restricted to direct communications to customers and online or retail channels. "You can expect to see more marketing coming through other media channels soon." Telecom chief executive Paul Reynolds said last month that XT was now providing a "bloody good service" and the time was right to start marketing it again. Almost three-quarters of Telecom mobile customers remain on its CDMA network, which the company intends to switch off in 2012. Temporary discounts offered to XT customers by Telecom in February were withdrawn last week. They were offered in the wake of four network failures that sapped customer confidence. Industry sources estimated that up to 20,000 customers deserted Telecom for Vodafone in the months following the XT failures. District health boards, including Capital and Coast, publicly considered cancelling their contracts with Telecom. Telecom has since spent tens of millions of dollars improving the resilience and coverage of XT by modifying software that appears to have been partially responsible for the faults. Pressure for permanent price cuts has grown during the pit stop. Last month, Vodafone launched a new prepay plan to match 2degrees' standard 49-cent call charges. But Telecom appears intent on trying to hold back the tide a little longer. Mr Reynolds told analysts in Sydney last week he was quite surprised by price cuts imposed by Vodafone in response to 2degrees' market entry. "There's a little bit of jitteriness — price jitteriness — in the mobile market in New Zealand that we hope will settle down." Chief financial officer Russ Houlden said Telecom aimed to increase its share of the $2 billion mobile market — now believed to stand at 39 per cent — to 43 per cent by 2013. Customers using XT to access the internet could expect average download speeds of 4 megabits per second, after an upgrade this year to HSPA+ technology. There were very few places in the world you could do that, Mr Reynolds said.

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