Telecom New Zealand has partnered with Yahoo!7 to form a joint venture.
The venture will be called Yahoo! Xtra, and will provide an enhanced suite of online content and application services for New Zealanders.
Telecom Chief Executive Theresa Gattung says it will provide New Zealanders with access to the world's best online services in a "localised way".
"Not only does Yahoo! provide global reach in the online arena, it also has a proven track record of partnering with other leading telecommunications companies including BT in the United Kingdom, Rogers in Canada and Verizon in the USA," she said.
Telecom will have a 49% equity stake, with Yahoo! Inc and the Seven Network in Australia, holding 51%.
"All online New Zealanders will be able to benefit from the enhanced range of news, sport, weather, and messaging services available from Yahoo! Xtra," said Telecom's chief operating officer consumer business Kevin Kenrick.
Kenrick says other mail services, such as enhanced spam and virus protection management, online photo sharing, localised news and internet radio properties, will progressively become available after the initial launch.
Yahoo!7 chief executive, Ian Smith said Yahoo! Xtra will also provide a powerful online advertising portal for customers and advertisers.
When the joint venture company is formed Yahoo!7 and Telecom New Zealand will each have three board members, with Yahoo!7 appointing the Chairman.
Yahoo! Xtra will contact Xtra customers early in the New Year to provide details about the transition to the new services, and a team is already working to ensure the upgrade will be as seamless as possible.
Xtra customers will not need to change their email address or face increased subscription costs as part of this service upgrade.
The Yahoo! Xtra joint venture will replace the existing XtraMSN
site in the portal space with the initial raft of Yahoo! Xtra
services due to go live around 1 March 2007.