A long-running legal battle between Telecom New Zealand and Vodafone has been settled out of court.

After seven years of protracted wrangling, the settlement puts an end to three cases before the Supreme Court, two High Court actions and a further two disputes before the Commerce Commission.

The disputes related to levies for rural telephone services under the now defunct Telecommunications Service Obligations by Vodafone to Telecom, which Vodafone argued were higher than they should be.

Terms of the settlement are confidential.

The pair are now collaborating jointly on the government-subsidised rural broadband roll-out.

"This settlement draws a line under a long-running, protracted legal process," said Telecom group general counsel Tristan Gilbertson in a statement.

"Time has moved on. We''ve agreed it is time to put the disputes of the past behind us so we can focus on the future."