The new mobile base stations are in addition to the 70 sites Vodafone is building as part of the federal government's mobile black spot program across NSW, Queensland, Victoria, Western Australia and Tasmania.

As part of the black spots program to bring greater mobile coverage to regional areas, Vodafone committed an additional $20 million, while Telstra will spend $165 million on 429 base stations.

Monday's announcement will see Vodafone build 19 sites in NSW, seven in Queensland, two in Western Australia and four in Tasmania. Vodafone said the majority will be operational by the end of this year, and all complete by the end of 2017.

"They're possible because of the black spots investment," Vodafone Australia chief strategy officer Dan Lloyd said.

"We've got a number of [black spot] sites going up around New England, and then some of these 32 are sites on the highway between Armidale and Tamworth, for example, where those sites now make sense because we've got the black spot sites coming. There is a cumulative incentive to investing as your coverage improves, the possibilities expand as well."

Changing perceptions

Telstra, as Australia's incumbent telecommunications company, has an advantage over its rivals with larger network extending out into regional Australia. For many populations in remote areas, Telstra is the only available network and it is ingrained in people's thinking about mobile coverage.

"It's going to take a long time to really compete against Telstra on network and coverage, then put in our retail stores and change the perception," Mr Lloyd said.

"For Vodafone Australia, this is a pretty significant announcement. We are usually seen as largely a metro only player, but there have been a number of significant, particularly policy, wins that we've had that have enabled us to invest in regional Australia."

Earlier this year, the Australia Competition and Consumer Commission cut the price of network transmissions on regional mobile towers that Telstra can charge its rivals to use its infrastructure.

Asked why Vodafone was investing in regional mobile coverage rather than metropolitan areas, Mr Lloyd said building a larger network would not only help gain customers in more remote areas, but would change the perception about its network and help with city customers.

"Undeniably you're reaching areas of smaller population and often lower spending power, but if you can find the right model to invest, and again black spots has significantly changed the game, then you're significantly reducing your cost as well. So although the revenue opportunity is smaller and your cost, if you get the model right, can be lower and so there is a significant opportunity," Mr Lloyd said.

"But also, our ability to win customers in Newcastle, for example, is influenced by the extent to which we have coverage in the Hunter Valley. Because we're operating a mobile network, there's what we call a network effect that coverage as you expand it, and particularly the perception of the network as you improve it, not only enhances your ability to directly win customers when you're building a new network, but to win even more customers in the major centres and top flight cities."

Telstra group managing director of networks Mike Wright told Fairfax Media: "Telstra continues to make a substantial investment in rural Australia with over 1 million square kilometres more coverage than any other network. We continue to invest strongly in both fixed and mobile networks to keep up with internet traffic growth and deliver our customers the best possible experience in and out of their home."

"Telstra has deployed over 8,300 base stations nationally with half of those in regional and rural/remote areas."

Mr Wright said Telstra has committed to investing $5 billion in its mobile network in the three years to June 2017 in regional and metro areas.

"At the completion of this $5 billion investment and phase 1 mobile blackspot rollout we will have further extended our regional footprint to reach 2.5 million square kilometre of the Australian landmass, an area we believe is around 1 million square kilometre more than our nearest competitor."