Optus is spending $1 billion building 500 new mobile base stations around regional Australia to compete better against Telstra and Vodafone.
The money will be spent within one year and includes upgrading 1,800 existing 3G sites to 4G technology. The $1 billion spend includes the cost of spectrum licenses in regional areas and 114 towers built with funding from the federal government's Regional Mobile Blackspots Program.
"This represents one of the single largest investments in regional mobile infrastructure in Australia's history," Optus chief executive Allen Lew said on Friday.
"Optus is building out its mobile network in the places where people live, work and travel...Importantly, we are densifying the mobile network to provide better download speeds for data-hungry applications such as video streaming."
The competition watchdog recently decided it will not declare regional mobile networks as share infrastructure, which means Optus will not be forced to sell access to competitors.
Both Telstra and Optus argued publicly to the Australian Competition and Consumer Commission they were unlikely to keep investing in regional areas if they were going to be forced to grant competitors access at regulated prices.
Mr Lee made the announcement in Tamworth, NSW, where Optus will build 16 new mobile towers, of which nine are shared with another mobile carrier.
Deputy Prime Minister Barnaby Joyce, whose electorate includes Tamworth, said "it is great to see this investment by Optus and I look forward to working with them and other telcos to improve local mobile coverage."
During the debate about regional roaming Telstra confirmed it invested in regional areas not because each tower is commercially viable, but because it gives them an overall marketing advantage. Analysts estimate this network advantage allows Telstra to charge about 15 per cent more than other telcos.