VHA will market its products and services under the Vodafone brand, but will retain exclusive rights to use the 3 brand in Australia “during a transition period and thereafter”, according to the companies.

Vodafone will receive a deferred payment of A$500 million (US$336 million) from VHA to “equalise the value difference between the respective businesses”.

The new company is expected to provide mobile coverage to around 95 percent of population.

Vodafone chief executive Vittorio Colao said the transaction will benefit customers in Australia as it creates a company with the “necessary scale to compete strongly” in the mobile market.

“Customers can look forward to a wider portfolio of voice and data services,” Colao said. “This is an important step in the transformation of the Australian mobile industry.”