Telecom moves on home-mobile merger

Telecom took the first step to merging home and mobile phones yesterday with a combined pricing offer on the two services.

The "Freedom" plan, available in early April, allows Telecom home phone customers to call one Telecom mobile number as much as they want for $10 a month.

Customers must designate the number. They can choose up to five different mobile numbers which will cost $10 each.

The chosen mobile customer has unlimited call back facility to the home number for no extra fee.

Vodafone mobiles are not covered by the deal.

Telecom is the only phone company in New Zealand with a fixed and mobile network and the deal appears to be an attempt to seize the initiative from Vodafone, which has a slim lead over Telecom in the mobile market.

The pricing offer is the first step in Telecom's move towards combined mobile-home phones.

Phone operators in other countries, such as British Telecom, are offering so-called fixed-mobile convergence where a customer's mobile phone transforms into a fixed line at home.

Customers use dual-mode handsets and are billed accordingly.

Telecom said it would, ultimately, offer dual-mode handsets, but the move was not expected this year.

Vodafone is also looking to offer dual-mode phones, but must first sign an interconnection deal with Telecom. Vodafone applied for a Commerce Commission ruling to force such a deal after failing to reach one through commercial negotiations.

Vodafone also plans to roll out broadband internet by the end of the year, over which it could offer home phone services as well.

Telecom shares closed up 6c at $5.33.