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TelstraClear is set to offer mobile services via Vodafone, ending the possibility of a move to Telecom's new XT network.

The Australian-owned telco has signed a three-year deal with Vodafone saying it would begin offering 3G mobile services over its rivals network in the last quarter of this year.

The agreement heals an acrimonious rift between the telco giants over a mobile reseller deal which turned sour in 2007.

TelstraClear previously had an agency agreement with Vodafone - originally 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.

When the deal fell apart, Vodafone retained the customers and TelstraClear signed up to Telecom's CDMA mobile network.

TelstraClear's head of business Brenda Stonestreet said the new agreement with Vodafone gave them a "next generation" network capability and the ability to offer more mobile services to customers.

Stonestreet said Telecom's inability to offer TelstraClear "complete and timely access" to the new XT network was a stumbling block for continuing the relationship with Telecom.

Telecom has said it would delay wholesale access to XT until 2011.

Stonestreet said TelstraClear will continue to sell and service customers on Telecom's CDMA network and wouldn't be closing down access to that network when it launched on Vodafone.

Telecom Wholesale spokesperson Steve Pettigrew said it was disappointed TelstraClear didn't opt to accept the timetable on offer for access to XT but pleased the company would carry on offering services on Telecom's CDMA network.

Vodafone general manager of wholesale and new business Steve Rieger said the TelstraClear deal was for bulk minutes and data.

"It will enable TelstraClear to build their own proposition, to do their own thing without any reference to us," he said.

He said negotiations on this wholesale deal have concluded faster than previously announced contracts - discussions with TelstraClear began last October - because Vodafone have "tuned" the offer based on the experience of earlier deals.

Rieger said Vodafone hope to benefit from TelstraClear's share of the New Zealand telecommunications market.

"I'd much rather have them with us than against us," said Rieger. "They'll win some business and win it against us but it's much better that way than if they were using someone else's network against us."

Stonestreet said the Vodafone deal gave it access to a greater range of devices and data services.

"Also there is a real opportunity to leverage off Telstra's NextG application services," she said.

She saw potential to offer the business market mobile payment, navigation and mobile sales applications.

While the focus would initially be on offers to business customers, a general retail offer would also be available.

TelstraClear will use the same roaming agreement as Vodafone which will see customers roaming on to Vodafone's Australian network rather than that of its parent Telstra.

Stonestreet said roaming was a "limitation" of the Telecom deal.

Customers going to Australia in particular were required to either buy or borrow a phone that would work across a number of different network frequencies but the number of devices that could do this was limited.