Telecom will offer flat-rate data roaming prices from Friday next week that will let customers with post-paid smartphones surf the web in Australia for $6 day.
A flat rate of $10 a day will apply in eight other countries, including Britain, the United States and China.
Elsewhere, Telecom will slash its post-paid data roaming pricing by between 83 per cent and 92 per cent but charges will remain based on the amount of data customers consume, rather than a flat rate.
Telecom said it would review its "specially reduced" $6 Australian flat rate in the middle of next year, implying that it might be a short-term offer.
Telecom will also slash its data roaming charges for pre-pay customers by up to 88 per cent - the rate falls from $4 per megabyte to $1 per megabyte in Australia - and cut the cost of making phone calls from its phones overseas by up to 45 per cent. The price of pre-pay mobile phone calls in Australia will fall from 89 cents per minute to 49c.
However, Vodafone still offers a cheaper casual rate to pre-pay customers roaming in Australia- at 50 cents a megabyte - while 2degrees' pricing is 95c.
Telecom chief executive Simon Moutter says offering flat-rate prices for internet access overseas carried some financial risks for the company, but he thought it a risk worth taking.
"Currently, around two-thirds of our business customers switch off their data when in Australia. A flat fee provides 'certainty' and puts an end to concerns about nasty bill shocks on your return home.
“We know data roaming charges have been a pain-point for customers. Personally, it was a real bugbear of mine as a customer before I joined Telecom earlier this year," he says.
The new rates also apply to people who surf the web overseas using Telecom data sticks connected to their laptops.
Xero founder Rod Drury endorsed Telecom's pricing strategy.
"Flat rate pricing takes the cost of connecting back to New Zealand and all over the world out of the equation – and that's just great for business," he says.