Telecom is defending its decision to award Alcatel Lucent a multimillion-dollar contract to upgrade its core fibre network across the length of New Zealand, saying the company was awarded the work based on merit.
The French-Anglo company built Telecom's troubled XT network, which resulted in several outages in 2011 and compensation payments to the telecommunications company worth millions of dollars.
Telecom says valuable lessons have been learnt from its XT experience.
It says it has retained a working relationship with Alcatel since then and Alcatel provides a range of services and products to Telecom, including running its network operation centre.
Telecom says Alcatel won the three-year contract based on merit following a tender process involving multiple vendors.
It says the risk of problems occurring is small, because the work being done will overlay the existing equipment, not replace it.
Neither Telecom nor Alcatel will say how much the deal is worth.
Meanwhile, Alcatel Lucent's global chief executive Ben Verwaaye is stepping down amid declining reviews and losses.
The company has reported a fourth quarter loss of $US1.81 billion.