New phones for the deaf will open up the world for the hearing-impaired, deaf advocates say.
The new technology almost instantly allows deaf people to see words spoken at the other end of the line on specially designed phones, with screens showing text.
It means they can pick up words they miss, while also hearing tone, pauses and laughter that are important in conversations.
New Zealand follows the United States in introducing the CapTel Service. The phone works on broadband internet and also has a voicemail system that captions messages when replayed.
More than 200 people have signed up for a CapTel phone, which was available from March 1.
The number of users is expected to grow to 1200 in the next four years, a Ministry of Business, Innovation and Employment spokeswoman said.
"This means that, for the first time, a hearing-impaired person will be able to take part in a telephone conversation at almost the same speed as ordinary conversations."
The Government has set aside $200,000 to subsidise the one-off hire fee of $323 - about half the cost of buying one of the phones.
The country's first profoundly deaf MP, Mojo Mathers, said CapTel would complement the existing relay service, which involves a call-taker sending messages.
However, she was concerned the hire cost would be a barrier for people on benefits and low incomes.
National Foundation for the Deaf chief executive Louise Carroll said the service was "absolutely vital", as it opened up the world for people who might have shunned society because of their hearing loss.
"You become socially isolated, you stop going out as much, and you lose the ability to comfortably use the telephone, or in fact use it at all."
Mrs Carroll was the first person in the country to receive a call using the service, at a parliamentary launch last month. She is one of more than 700,000 New Zealanders who are hearing-impaired.
"It's been 15 years since I've been able to use a phone properly; it's amazingly exciting," Ms Carroll said.
"I didn't realise how much it would mean to me before that call. You get used to functioning at a certain level because that's the way it is."
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