‘Naked’ refers to the absence of home phone line rental in what's required to connect to a broadband internet plan. Usually, you need an active phone line to run any ADSL service, but with 'Naked' you strip away this commitment.
Typical ADSL connection / Broadband bundle
For a typical ADSL connection, the normal copper telephone wire to your house is activated for broadband use at the central telephone exchange by a technician, allowing for broadband internet service to your home. You then plug an ADSL modem into your wall to connect to the network, plus you can still make regular phone calls through your landline phone.
The difference of going Naked
You can still make and receive calls with a Naked service, but you’ll be using something called Voice Over Internet Protocol (VOIP).
These VOIP phones look and act just like a normal wireless home phone. You dial out to any number and you’ll connect. You are provided with a number for people to dial in. The only difference is that your phone number will probably start with a different digit than numbers you've had in the past.