Telecom New Zealand subsidiary AAPT will resell PowerTel's ADSL2+ offering, joining fellow Internet service providers Westnet and likely Netspace in getting access to the broadband network substantially owned by iiNet.
AAPT had previously only offered ADSL1 download speeds of up to 1.5Mbps, based on Telstra's network. ADSL2+ allows speeds of up to 24Mbps.
"PowerTel's network, and its strategic alliance with iiNet provides a high-quality, national access network with competitive rates," Telecom's chief financial officer, Marko Bogoievski, said in a statement issued this morning announcing the deal.
Bogoievski also revealed AAPT had reached a new 24-month supply agreement with Telstra for network and carrier services.
But it was the fledgling PowerTel relationship that AAPT was most keen to emphasise, with Bogoievski stating the deal was the start of a broader relationship between the two telcos. AAPT will also resell other PowerTel services than just ADSL2+.
"Both AAPT and PowerTel believe there is significant merit in developing options to collaborate in the Australian market, and there is a commitment on both sides to examine deeper levels of integration between our network and service layers," AAPT's statement said.
"We have an open mind about how those options might look. The obvious extension to the wholesale arrangements would be the implementation of a full virtual network operator model and an examination of options to rationalise network infrastructure."
"The proposed alliance would reinforce the capabilities of each entity and enable both AAPT and PowerTel to continue to invest in services and network capability respectively."
In a separate statement, PowerTel managing director Paul Broad said today's move was seen by many as "the beginning of rationalisation in the Australian telecommunications industry".
Earlier this year, Telecom conducted a review into the future of AAPT, with merger, divestiture or retention options being on the cards. However in May, Telecom said the process had ended with a decision to retain the telco.