Vodafone and Telecom have reached a settlement in their mobile broadband stoush after their first day in court.

Telecom has agreed to put off the launch of its new XT Network until "the end of May," says spokesman Mark Watts.

The settlement follows the telcos facing off in Auckland High Court yesterday after Vodafone attempted to block the new 850MHz 3G network, alleging that it was causing serious interference to customers on its own network.

Both companies were also negotiating behind closed doors as the Vodafone injunction case was heard in court.

The result is that Telecom says will fast-track the installation of network filters on its transmitters, which will work towards resolve the interference issues Vodafone claimed its customers were suffering.

Watts was unsure how many filters were yet to be installed and how long the process would take.

Under the agreement, Vodafone will discontinue injunction proceedings.

Court action

In court, the arguments from both sides hinged on a technical examination of radio transmission and a dissection of legislation and regulations governing the mobile operators.

In a hearing presided over by Justice Geoffrey Venning, Vodafone's lawyer Julian Miles, QC, said the company sought to delay the planned launch of Telecom's network until it had sorted out serious interference problems experienced by Vodafone customers.

Mr Miles said the problems started when the XT Network began operating earlier this year. Both parties agree some "spilling" of transmission signals outside of an allotted mobile frequency is normal - it is the extent of the spillage that is in question.

Mr Miles described Telecom's strategy to run a high-profile advertising campaign while degrading its rival's network as a "gamble" which was commercially "utterly unacceptable".

Vodafone said that since the XT Network went live its customers had experienced an increased number of dropped or poor-quality calls.

Mr Miles said Vodafone had had a 31 per cent increase in complaints about network coverage and more than 300 people leaving for Telecom as a result of the network interference.

Representing Telecom, Pheroze Jagose described Vodafone as the "comfortable incumbent", saying Telecom was operating within the boundaries of its radio spectrum licence.

Mr Jagose said there was no way to check the problems claimed by Vodafone were solely Telecom's fault.

He said any interference issues needed to be addressed by both the transmitter, in this case Telecom, as well as the receiving network.

Mr Jagose said the transmission filters suggested by Vodafone as a solution would reduce coverage rather than interference.