Australians in 4G coverage areas are being promised download speeds from 2Mbps to 40Mbps with this week’s launch of Australia’s first 4G smartphone –  the HTC Velocity 4G on the Telstra network.

Telstra launched a 4GT USB data card in September 2011. The new 4G phone features a 4.5 inch touch screen, a 1.5 GHz dual core processor for multi-tasking and an 8 megapixel camera. It comes with 16GB memory and the ability to add an microSD card.

Telstra is promising upload speeds of 1Mbps to 10Mbps – up to three times faster than speeds available on the fastest 3G handsets in Australia.

The 4G service area extends 5km from the GPO in capital cities. At a launch function in Sydney's eastern suburbs this week, tests showed download speeds of around 10Mbps. This was blamed on the large number of simultaneous connections in the service area.

4G coverage is currently offered in Australia’s eight capital city CBDs plus more than 80 regional and metropolitan centres ( 3km from the regional town centre). Outside 4G coverage areas the Velocity 4G phone switches onto Telstra’s 3G mobile network.

The phone is available for $0 upfront on a range of Telstra phone plans. It will also be available to be bought outright for around $1100.

Telstra has announced it is looking to enhance the 4G roadmap with three addititional mobile phones, a tablet and two additional broadband devices. Data allowances with the telstra 4G plans will be on par with existing 3G plans.

The phones are able to be used a wireless hotspots. An upgrade to the Android "Ice Cream Sandwich" operating system for the HTC Velocity 4G is scheduled over the next few months.