KEY POINTS:
Mobile users will have at least three phone companies to choose from soon, as TelstraClear takes on Telecom and Vodafone.
By the end of the year another three companies are expected to offer mobile services too, potentially leading to better deals on price and service.
Analysts predict that larger businesses, which can negotiate special deals, are likely to get the most benefit.
TelstraClear head of wholesale Raymond O'Brien said yesterday that his company was looking to capture a significant market share with solid, value-for-money services.
"In the next few months we're going to be the third entrant and the second full service provider, so we're pretty stoked about it."
The Australian-owned phone company indicated early last month it was eyeing a deal with Telecom after its split with former partner Vodafone.
TelstraClear had an agency agreement with Vodafone - signed in 2000 - that allowed it to resell mobile services on the 029 number to an estimated 30,000 customers.
Under the arrangement, TelstraClear customers received mobile services from Vodafone but TelstraClear managed the customer and billing services.
Mr O'Brien said the old deal meant the company was restricted to selling Vodafone's retail packages and handsets.
"This is entirely different," he said. "This is us providing a TelstraClear mobile service - our own handsets, structuring our own pricing packages and our own products to provide to our customers."
O'Brien said the company would initially have a limited range of handsets on offer but would use its relationship with its parent, Australian giant Telstra, to offer the "best phones in the market".
Telecom acting chief executive Simon Moutter said he expected TelstraClear to offer something different to customers and create a space in the market for itself.
"There's nothing in our arrangement with them that constrains them in any way as to how they would price or bundle [services]."
Vodafone spokesman Paul Brislen said TelstraClear's mobile users signed to Vodafone contracts would move into Vodafone management over the few weeks.
Telecommunications analyst Darian Bird of IDC said TelstraClear was likely to focus on large business and Government accounts where the company's strength lay, rather than competing in the consumer space.
"It's not necessarily something they'd aimed to make a profit from, but it does give them the ability to offer a full telco package," said Bird.
In April TelstraClear dumped plans to build its own mobile network after a $50 million trial in Tauranga. It blamed a last-minute change to a roaming agreement with Vodafone for dismantling the pilot network, a claim denied by Vodafone.
Getting a roaming agreement was necessary for TelstraClear to offer customers nationwide coverage while it built its own network.
Brislen said the deal between TelstraClear and Telecom demonstrated there was a vibrant and active wholesale market in New Zealand.
"We've been trying hard to win TelstraClear but they've chosen Telecom and that demonstrates there is choice in the marketplace."
In May Vodafone signed wholesale deals with junior players Compass, Orcon and M2, which are expected to begin offering mobile services late in the year.
Can I keep my number?
* The Government introduced number portability in April. It allows consumers to keep their fixed-line and mobile numbers when they change phone companies.
* TelstraClear's new mobile customers have the choice of retaining their old Telecom or Vodafone number or they can get an 029 TelstraClear number.
* However, Vodafone handsets and SIM cards can not be used with TelstraClear's mobile service and anyone switching will need to buy a new phone.
