Another cabinet in North East Valley is scheduled to be switched on in two weeks.
The cabinets are part of Telecom's commitment to introducing the faster ADSL2+ broadband, which should give customers up to 20 megbytes per second (MBps) broadband, although it depends on several factors.
Those factors include living within 2km of a cabinet and having: an ADSL2+ modem, an uncapped data plan, plus suitable home or business wiring.
Telecom's network access business Chorus is installing the cabinets.
Chorus product management general manager Chris Dyhrberg said if customers were not experiencing faster broadband after the installation of the cabinets their first stop should be with their Internet service provider (ISP).
About 90% of Internet users in New Zealand had ADSL1 modems and although there would be some benefit for them by having shorter distances between their homes and the cabinets, they would still have restricted speeds.
Some ISPs were still selling rate limited data plans and that also would stop faster speeds.
Often the house wiring was not up to standard and that too could reduce performance, he said in an interview.
Chorus was installing about 3600 New Zealand-made Whisper cabinets and 2500km of fibre optic cable around New Zealand to deliver faster broadband to towns with 500 lines or more by 2012.
Dunedin's roll-out would be completed by 2010.
Each cabinet was the equivalent of a mini telephone exchange, Mr Dyhrberg said.
"Previously, this equipment would have been housed in the local telephone exchange. The whole reason we're bringing it closer to people is because the further you are from the equipment, the slower your broadband speed is."
Cabinets were being installed progressively and would be switched on at different times.
Customers who lived near an exchange would continue to have their service delivered from there as Dunedin exchanges had already been upgraded to the new technology.
Otago towns with 500 lines or more which will receive the new broadband are: Dunedin, Mosgiel, Queenstown, Oamaru, Brighton, Wanaka, Alexandra, Balclutha, Cromwell, Arrowtown, Milton, Waikouaiti, Ranfurly, Palmerston and Roxburgh.
In some towns cabinets are not needed because the new technology can be delivered through the exchange.
