The PowerTel board said on Tuesday that it had agreed to spend between AU$6 million and AU$8 million over the next year to increase its ability to provide broadband Internet services.
According to PowerTel's managing director Paul Broad the company will have 120 DSLAMs in place by February 2005 and an additional 150 by the end of next year.
A DSLAM (Digital Subscriber Line Access Multiplexer) enables telecommunications companies to connect a large number of individual DSL customers to its backbone network.
Broad expects the investment in new technology to show a financial return within 18 months.
PowerTel's announcement will increase the pressure on Telstra, which is already being challenged by a number of smaller players including its biggest rival, Optus, which is expected to announce its own broadband expansion plans in the near future.