Optus announced today that it would embark on an investment program to expand its nationwide mobile network beyond 96 per cent population coverage to reach 98 per cent at a cost of $315 million.

The program's completion date is set for December, 2009, with the telco's CEO, Paul O'Sullivan, describing it as the dawn of a new era for mobile competition in Australia.

"With this significant expansion we will be the only mobile carrier capable of challenging the incumbent's network reach," O'Sullivan said.

"We will deliver superior coverage and wireless services across the country and drive increased market share for Optus."

Optus invests over $1 billion annually in improving Australia's telecoms networks, products and services.

Only last year, the telco announced a $500 million investment to upgrade its mobile network to bring 3G and high speed wireless broadband to reach 96 per cent of the population.

"Now we will bring wireless, voice and broadband services to a further two per cent of the population along with greater choice, better service and sensational value," O'Sullivan said.

"Optus' 3G mobile network is currently being upgraded to deliver broadband speeds of up to 7.2 Megabits per second (Mbps).

"We have plans in place to increase to speeds of up to 28 Mbps from late 2009. In addition, Optus will also work with its strategic partners to make the network capable of up to 42 Mbps by mid 2010."

At least 750 new base stations will be added, O' Sullivan said, extending Optus' mobile network coverage by 400,000 square kilometres to a total network coverage of more than one million square kilometres.

He said this network expansion will be achieved using 900 Megahertz (MHz) spectrum, utilising High Speed Packet Access (HSPA) wireless broadband technology.

The network will extend the footprint to reach areas including Fitzroy Crossing in Western Australia and Tumby in South Australia, through to Weipa in Far North Queensland.

O'Sullivan said the Australian landscape is perfectly suited to using the 900MHz spectrum band to deliver high speed mobile broadband.

Utilising this frequency, he said radio signals have a greater reach enabling better quality and wider coverage across sparsely populated rural and remote areas as well as an enhanced depth of coverage.

"This also translates into cost efficiencies, with fewer base stations required to cover the land mass between locations," he added.

As at December 31 2007, Optus has more than seven million mobile subscribers.