A legal move by Vodafone could block the launch of Telecom's new high-speed mobile network.
Mobile giant Vodafone has started legal proceedings against Telecom, claiming its new network is causing widespread interference to its own.
Telecom is 11 days from launching its XT Network in a TV campaign fronted by Top Gear presenter Richard Hammond.
The change would mean the two rival mobile networks would be using the same technology, and almost all the country would be covered by the global system for mobile communication.
Telecom's existing mobile network uses much older CDMA technology, which is falling from favour worldwide.
Vodafone said it had taken legal steps to stop the launch after a big increase in customer complaints about network interference.
A company representative said that because the issue was before the courts it would not comment on the nature of the complaints or how widespread the issues were.
Telecom chief executive Paul Reynolds said Vodafone's aggressive behaviour showed its insecurities about competition from the XT Network.
He said the first he heard of Vodafone's problem was on Wednesday - days after Telecom announced the mid-May launch date.
Since then he had spoken to Vodafone New Zealand chief executive Russell Stanners, offering to fix any network problems.
Dr Reynolds said the timing of the complaint was curious because the XT Network had been live for testing since November.
"As Vodafone has such a stronghold in the mobile market in New Zealand ... it just seems like over-the-top tactics," said Dr Reynolds.
He said network interference problems were usually sorted out between the mobile operators.
Engineers for both companies had been working on the issues for weeks.
"I was disappointed because I think our relationship is normally very professional," Dr Reynolds said.
Interference problems were "a fact of life" in all radio networks.
Telecommunications Users Association head Ernie Newman said it was impossible for anyone outside the two companies to judge which was in the right.
"What is important here is that it is resolved very quickly indeed by the court," he said.
"As far as users are concerned, it's always disappointing when this sort of thing ends up in a legal wrangle."
Interference would always be an engineering issue associated with running mobile networks.
"We would expect the suppliers of these services to sort it out between themselves in a civilised way."
Dr Reynolds said any technical problems Vodafone was experiencing were of its own making.
"They are now reaping the cost of this and other poor technical decisions, and trying to lay them at the feet of Telecom."
Any interference issues traced back to Telecom would be fixed.
Dr Reynolds said the legal proceedings would not have any effect on the expected mobile network launch on May 13.
* Vodafone has a 53 per cent share of NZ mobile phone subscribers to Telecom's 47 per cent.
* Vodafone's share of revenue is 69 per cent to Telecom's 31 per cent.
* A survey of three Auckland secondary schools found Vodafone had 90 per cent of the traffic.
* Telecom's wider coverage makes it popular in rural areas.