Unfazed by Telstra's high-profile national Next G mobile network, competing carrier Optus has announced plans to build a nationwide 3G network to cover 95 percent of the population.

Optus' existing 3G network claims to cover 55 percent of the population but an investment of between $500 and $800 million over the next three years will expand the reach to an estimated 650,000 square kilometers.

Services are expected to commence early next year with WCDMA 900MHz technology.

Optus chief executive Paul O'Sullivan said the company is taking a "bold step" to bring competitive third-generation mobile communications technology to the vast majority of Australians.

"The incumbent thought that it could lock up regional Australia under a 3G monopoly," O'Sullivan said. "Today, competition in rural and regional Australia is weak, with the incumbent having substantial excess market share. With the investment Optus is announcing today, we are well positioned to grow share in non-metropolitan Australia."

The new 3G network is designed to allow a natural upgrade path through the installation of additional software to enable High Speed Downlink Packet Access (HSDPA).

Network peak broadband speeds of up to 3.6Mbps are expected, with the potential for 14.4Mbps.

O'Sullivan said that construction of the new network would begin as soon as possible with the first phase addressing large regional centres including Newcastle, Bendigo, Ballarat and Wollongong.

The new network will comprise an estimated 2000 to 2500 base stations.