Telstra shares have plunged nearly 7 per cent to the lowest in nearly five years after rival, TPG Telecom, said it would spent around $1.9 billion (£1.52 billion) on a building a new 4G mobile phone network after winning a government tender.

TPG told the Australian stock exchange that it successfully bid for 700MHz mobile spectrum at a recent auction conducted by the Australian Communications and Media Authority (ACMA).

TPG said it plans to spend $600 million (£480 million) on rolling out a new 4G mobile network over three years, which will reach around 80 per cent of the population.