Telecom will trial new mobile technology to cash in on the government's plan to sell high-frequency spectrum when it switches off the analogue television network.

The phone company will conduct live customer trials of long-term evolution (LTE) mobile technology as it shifts its network to 4G capability, which will provide faster data connections and allow for more applications, Telecom said in a statement.

The move comes in anticipation of the government's auction of 700 megahertz spectrum which will become available as the analogue TV services are turned off, and a digital platform is put in place.

"We are currently conducting a technology selection process, with the aim to have the trial service operational with selected business and consumer customers before the end of 2012," chief executive Paul Reynolds said.

"It opens up opportunities for our business customers to harness 4G's capabilities to deliver new applications in areas such as cloud computing, mobility, video and collaboration tools."

The use of 4G technology would put mobile internet connections on par with landline broadband services, allowing for cheaper and better services.

The government's radio spectrum auction is forecast to boost the economy by between $1.1 billion and $2.4b over two decades through lower costs of mobile network deployment, according to Ministry of Economic Development estimates.

In March, Telecom renewed its existing radio spectrum licences, locking in the 850Mhz bandwidth it uses for its XT network until 2031.

The company's shares fell 3 per cent to $2.59 on Friday, and have climbed by more than a third since its Chorus network unit was spun out in November.