French technology company Alcatel-Lucent (ALU, ALU.FR) said Wednesday it takes responsibility for malfunctions at a high-speed mobile network it built for Telecom Corp. of New Zealand Ltd. (TEL.NZ).

"It is not acceptable and I take responsibility," Ben Verwaayen, global chief executive of Alcatel-Lucent, told Radio New Zealand.

Speaking from New York, Verwaayen said: "In the case of Telecom we have to take responsibility. This is proven technology, this is stuff that is running around the world very satisfactorily and if there are things happening in New Zealand, of course we take responsibility."

The network, costing NZ$574 million, suffered its fourth major outage this week since December, causing Telecom to fire its top chief network officer, Frank Mount, Tuesday. Alcatel's New Zealand head, Steve Lowe, resigned on Monday.

Alcatel-Lucent has flown dozens of experts to New Zealand to try to rectify the problems, which caused Telecom's share price to fall 2.5% on Tuesday.

The bellwether stock was down 0.4% at NZ$2.29 early Wednesday against a weak market where the benchmark index was down 0.3% at 3,117.60.

Verwaayen said Alcatel-Lucent had used the same technology in other countries successfully.

"I apologize to the customers of the network. They have the right to expect a flawless service--that is what they are paying for. We have let Telecom ... down on that and we are going to make sure we rectify it," he said.

Telecom Chief Executive Paul Reynolds said Tuesday he had put Alcatel-Lucent on notice to perform or he would turn to other providers that were queuing up for business.

Verwaayen declined to comment on what being put on notice meant, but added there had been too many issues with the network "and we need to fix them." Some problems were human while others were technical, he added.

Telecom said there had been serious hardware failures.

Verwaayen said he is confident of rectifying the problem and Alcatel-Lucent was well on the way to making the network reliable.

"We will make every effort humanly possible to make this a thing of the past," he said.

Asked to discuss whether New Zealand manager Lowe was to blame, Verwaayen said it wasn't fair to blame one person. Lowe couldn't be contacted for comment.

-By Simon Louisson, Dow Jones Newswires; 64-4-471-5990; simon.louisson@dowjones.com
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