Vodafone has won a $25 million federal government contract to provide continuous mobile phone coverage along major highways and will extend its GSM network to provide the coverage, promised as part of the proceeds from the second partial sale of Telstra.
The contract covers 9425km of highway; there are about 10 million GSM users in Australia and 500,000 CDMA users.
Communications Minister Senator Richard Alston said the selection of Vodafone as the successful tenderer will spur Telstra to match the Vodafone coverage, although this was not a factor in the evaluation process.
"This will result in two high-quality mobile phone networks providing greater service and choice," he said.
"The government recognises that access to mobile phones is an increasingly important social, economic and personal safety facility for all Australians," he said.
"Our encouragement of a free, open and competitive telecommunications market is having a beneficial effect on mobile services, with 97 per cent of Australians having mobile coverage."