The Telecommunications Users Association says the competition provided by a new trans-Tasman cable will keep prices under control.
Spark, Vodafone and Telstra said they will jointly invest $90 million in the Tasman Global Access Cable, and building would start early next year.
The 2,300 km cable will run between the Waikato town of Raglan, and Sydney.
It was expected to be operating by mid-2016.
Telecommunications Users Association of New Zealand chief executive, Craig Young, said although it would not mean lower prices for consumers, another player should ensure prices would not rise.
Mr Young said he would watch closely to make sure smaller internet companies had fair access to the cable.
