(adds quote from company spokesman, broker comment, stock price reaction)
WELLINGTON -(Dow Jones)- Vodafone Group Plc's (VOD) local unit and Telecom Corp. of New Zealand (TEL.NZ) said Thursday they have resolved a dispute that could have halted the launch of Telecom's new mobile network, XT.
Late last week, Vodafone said it was seeking an injunction, claiming Telecom's new third-generation network would interfere with its mobile network.
According to the statement Vodafone has agreed to discontinue the injunction procedures.
In return, Telecom said it will extend its network filter installation program to help resolve the interference identified as affecting Vodafone mobile customers.
It will also push back the launch of the XT mobile network to the end of this month. It had been planning to launch May 13.
Barry Lindsay, research director at First NZ Capital, said avoiding the injunction was viewed as positive by the market.
"The net effect has got to be positive for Telecom. Litigation can be a drag and a costly affair."
The stock was up 0.7% at NZ$2.85 at 0025 GMT, compared with the benchmark NZX-50's 1.2% gain.
Telecom spokesman Mark Watts also said the move was positive and in the best interests of Telecom customers as the injunction "would have had the effect of stopping the network in its tracks."
Watts said the new date isn't a huge delay as the "system will be turned on for customers by the end of May."
The delay will incur some costs but "given that the network build itself has cost well over half a billion dollars, it is not in any way a significantly material cost," said Watts.
The total cost of the network build is around NZ$574 billion.
The new network is key for Telecom, a former state-owned monopoly and the country's biggest telecom operator by revenue and subscribers, as it seeks to increase its mobile market share to 60% from around 41%.
The company has seen its margins and market share hurt by new regulations forcing it to split into wholesale, retail and network arms, with rival operators allowed access to its copper loop.
-By Rebecca Howard, Dow Jones Newswires; 64-4-471-5990; rebecca.howard@dowjones.com