Ihug and Vodafone say they are ready to take on Telecom.

Vodafone has bought Ihug for $41 million, signalling its intentions to strengthen its broadband market position.

Ihug CEO Mark Rushworth says, as yet, they do not have an idea of the sort of prices they will be offering consumers but will be competing aggressively.

He thinks, as result of the acquisition, there will be further consolidation in the ISP market as both companies need that consolidation to take advantage of local loop unbundling. Mark Rushworth says they are also happy with the number of people who are moving from Telecom to their proposed fixed line plans which were unveiled last week.

Ihug says it was already aware of Vodafone's intentions to buy it last week when it announced those new talk plans.

Ihug CEO Mark Rushworth says Ihug will still continue to operate as a stand alone company - and will continue to follow its own strategy to take advantage of the local loop being unbundled.

Mr Rushworth's opposite number at Vodafone, meanwhile, says customers will be the big winners in their multi-million-dollar purchase of Ihug.

CEO Russell Stanners says this move will allow them to move more into mobile broadband as well as fixed-line calling - something which he is confident customers will love.

He says consumers tell them they love what Vodafone delivers in a mobile context, they love the service and they love who they are.