Vodafone will be upgrading its core network with Ericsson, to allow the company to offer voice-over-LTE services in 2015.
The agreement will see Vodafone virtualise its core network over the next five years, with Ericsson to replace the entire core network with Evolved Packet Core (EPC) and IP Multimedia Subsystem (IMS), policy control and circuit-switched core.
The IMS will allow Vodafone to use voice over 4G and HD voice calling, Ericsson said.
The value of the deal has not been disclosed, but Vodafone has spent AU$1 billion annually upgrading its network for the past three years.
Speaking at the Trans-Tasman Business Circle lunch in Sydney today, Vodafone Australia CEO Inaki Berroeta said that the company's network had come a long way since 2010, but said more needed to be done.
"We see how our network is performing well. We hear from our customers how they like the network [but] we're not going to stop there. We're still working on making this an even better network."
Vodafone CTO Benoit Hanssen said that the upgrade would allow Vodafone to significantly improve voice calls.
"The current 4G networks primarily focus on providing faster data services. Customers have rapidly adopted 4G smartphones, which offer very fast data speeds. But no Australian network is offering voice calls on its 4G network, and our new core network will enable us to do that," Hanssen said in a statement.
"With our enhanced indoor 4G coverage and voice calls on the same network, our customers will feel the difference. The call audio quality will be high definition, and call connection times will be significantly shorter. In other words, there will be virtually no time lag between the customer pressing the call button and the call being connected when they are using 4G."
The virtualisation of Vodafone's core network would reduce costs and would make the company's mobile network "one of the most advance networks in the world", according to Hanssen.
Berroeta said that Vodafone was seeking to claim back the underdog title as it competes in a market with "imbalance" due to the dominance of the incumbent, Telstra.
"Australia needs to have a strong Vodafone because it is good to have strong players in the market to promote competition. Strong competition will bring good value," he said.
Berroeta slammed the "outrageous" payments to Telstra by NBN Co as part of the shift from the legacy copper network to the new "multi-technology mix" model for the NBN including fibre, VDSL, and HFC.
He said that it was a "paradox" that Telstra was one of the most profitable telecommunications companies in the world, and yet there was a large public investment in telecommunications networks through the NBN.
"It is a little bit of a paradox, and I wonder why this investment has not come from the private side. My reading is that the reason why this probably happened is because there is not really a competition."