It will soon be cheaper for some Telecom customers to call Europe from their mobile phones than to ring a friend in another town in New Zealand.
Telecom is raising the cost of off-peak national calls from June from 19 cents a minute to 24c a minute, an increase of 25%.
The company's toll call revenue has been dropping rapidly with competition from internet phone services, discount calling cards and cheap mobile phone deals.
Consumer advocates say Telecom risks losing customers to cheaper providers.
However, a spokesperson for Telecom, Emma-Kate Greer, says the increase only applies to the Homeline plan, which is not designed for making lots of national calls.
Overall, Telecom's calling rates are 20% lower than five years ago, she says.
