TPG will roll out 4000km of new fibre to more than 3000 Vodafone Australia mobile sites under a deal unveiled this morning by the companies.
The agreement covers the majority of Vodafone's existing mobile sites.
The company will provide dark fibre services to each Vodafone site for 15 years.
Construction will begin immediately, with the majority of mobile sites expected to be completed in 2018.
TPG has previously rolled out some 900km of fibre to the mobile operator's cell sites.
TPG expects to incur capital expenditure of $300 million to $400 million to expand its network. Minimum revenue over the life of the agreement is expected to exceed $900 million.
Construction will begin immediately, with the rollout to the majority of mobile sites expected to be completed in 2018.
The agreement will help Vodafone's network be ready for the demands of future services including 5G, Vodafone Australia CEO Iñaki Berroeta said.
"Why dark fibre? Well you know that in the last year we have invested over $3 billion to upgrade our network to make our network what it is today, but also we have also said that we want to continue — we are committed to continuing this investment and to continuing to move our network forward," Berroeta said.
Earlier this year Vodafone completed the rollout of carrier aggregation on its network, the CEO noted. Then in July it switched 4G data over to its new Ericsson-designed core network.
Vodafone will soon begin delivering new mobile services such as voice over LTE (VoLTE — a service Telstra begun switching on this month for its network) and the telco is also "looking to 5G and what is needed for that future," Berroeta said.
"5G will bring customers the benefits of the Internet of Things, much faster speeds, lower latencies — and all that requires a fast... transmission network between our antennas," the CEO said.
A year and a half ago Vodafone began engaging with companies that could deliver the infrastructure that the telco needs, the CEO said. TPG was the victor in a competitive tender process.Read more: TPG boosts profit 31%
TPG to migrate mobile customersIn a separate deal, TPG has agreed to shift its mobile customers to Vodafone's network.
TPG's plans in the market over the last two years haven't been as aggressive as the company would like them to be said the company's COO, Craig Levy.
"This MVNO opportunity really gives us the chance now to really take aggressive plans to the market," the COO said.
The migration will involve a shift to a real-time billing system that is going to allow company to tightly control its mobile business and prevent customer exposure to bill shock, Levy said.
TPG's mobile customers will be migrated to the network in batches. The deal doesn't cover iiNet customers, with negotiations between Vodafone and TPG starting before the latter's acquisition of the ISP was completed.
Announcing its FY15 results earlier this month, TPG said that it had 320,000 mobile subscribers.