Phone and internet users can look forward to ditching their landline rental next year in favour of broadband only and phone calls made using internet technology.
The Telecommunications Commissioner has set the terms and prices Telecom must offer all its wholesale customers who purchase broadband services - a part of wide-ranging reforms aimed at introducing greater competition in the telecoms market.
Included is an option to get only broadband without the need to pay for a phone line - known as naked DSL.
Prices to be paid by internet and phone companies to use Telecom's broadband service without phone-line rental range from $47.28 for urban users to $84.62 for rural users.
The new broadband prices and services will be phased in from the middle of next year.
Commissioner, Dr Patterson said the combination of local loop unbundling - Telecom's competitors accessing the copper phone lines which run from houses to Telecom phone exchanges - would create more competition in terms of the services, products and speed and quality of service offered.
"The fact that you will no longer need to buy a phone line will mean that quite innovative offers are going to be in the market through the course of next year," said Dr Patterson.
He said this time next year consumers would have greater choice and greater quality of telecommunications services than they do today.
Phone and internet company WorldxChange has been offering voice via internet (VoIP) for several years, with its "basic" VoIP service including call forwarding to a different number, email notification of calls to your phone, voicemail forwarded to email and three-way calling, as well as the traditional phone services.
Director Cecil Alexander said the company was already testing naked DSL on staff and customers under a commercial deal with Telecom.
"It's going to be a huge year. We've got some great stuff happening in both the residential and business sectors," said Mr Alexander.
He said small businesses would benefit from the ability to run voice and broadband over the higher specification broadband services.
TelstraClear's Wendy Dodd said it too was aiming to take advantage of opportunities in the small and medium-sized business market available with a high-quality product.
"What this service is about is enabling you to deliver services over IP including voice. There's features that you can get over IP that you can't get over standard voice," said Ms Dodd.
She said the advantage of bitstream access was it would be quick to deploy nationally, where as local loop unbundling would focus on specific, mainly urban, areas.
Mr Alexander said more competitors active in the voice over IP space would be key to a wider variety of services for consumers.
WHAT IS NAKED DSL?
* Naked DSL allows customers to get broadband via a phone line without having to pay Telecom for line rental.
* Broadband customers will be able to use Voice over internet Protocol (VoIP) without duplicating the service offered via the traditional phone line.
* A basic naked DSL service will be available from the middle of next year, with high-quality versions aimed at small businesses available from September 2008.