Telecom is to delay launching a new mobile phone network until the end of May, in a last-minute settlement to end a legal row over mobile services.
Vodafone took its rival to the High Court to stop the launch of Telecom's new network next week, claiming interference was cutting calls off and its customers were leaving.
A ruling was expected at midday on Thursday, but an out-of-court settlement has been reached.
As part of the settlement, Telecom said it will install more filters to its transmitters to help prevent noise spilling onto Vodafone's network.
The new network will now go live by the end of May instead of next week.
Telecom says the delay in the launch will make no difference in the long term.
Vodafone chief executive Russell Stanners says he is confident that interference on the network will be resolved by the time of the launch.
The Telecommunications Users Association says the case should never have gone to court and it hopes Telecom and Vodafone have learned lessons.
It says customers do not like seeing industry squabbling and the images of Telecom and Vodafone have been tarnished.