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Telecom says the complexity of modern phones will make network switching difficult, not anti-competitive practices such as handset locking.
Chief operating officer of technology and enterprises Mark Ratcliffe said switching between Vodafone and Telecom's 3G networks would not be as simple as just replacing the SIM card - the small microchip holding network authentication information - despite the fact both would use the same technology.
Next year Telecom plans to start building a $300 million mobile network using GSM technology - similar to that used by competitor Vodafone - to handle mobile calling, video and high-speed broadband.
The Telecommunications Users Association of New Zealand had warned Telecom and Vodafone could block competition in the mobile market by deliberately making its handset unusable on rival networks. It asked both companies to commit to not using "anti-competitive dirty tricks".
But Ratcliffe said it was about "80 times more complicated" to introduce a new phone to the mobile network compared to three to four years ago because phones are no longer just used for calling and texting.
He compared it to switching between an Apple Mac and a Microsoft PC, saying phones are now like mini-computers filled with applications and services, such as ringtones, music and video downloads, customised to individual service providers.
"You'll probably have to have a phone rebuild as well [as switching SIM cards] going forward because the devices themselves are so bloody complicated."
Ratcliffe said as networks started to use the same network technology consumers would be making choices based on the quality of the offering.
"I guess it's the same as the fights that used to go on between Apple Mac and a Windows PC," he said.
"They both use the same power company but it was the applications and content on one device, and the user experience ... some people were prepared to pay a massive premium for an Apple even if they knew it couldn't do some things."
Industry analyst Tim Shepheard of IDC said mobile phone companies preferred customers to use phones sold to them by the company so that they could earn revenue from extra services. If a customer supplied their own phone, it might not be possible to access these extra services.
"Operators may even be reluctant to take on a customer with a competitor's handset, because it limits the services they can offer. Voice is becoming less profitable." Shares in Telecom fell 5c to $4.63.
