Telco giant Telstra looks set to boost its presence in the Android smartphone market with the upcoming release of the LG Optimus GT540. What’s more, Telstra will get the new phone on an exclusive for the first few weeks its on sale in Australia.

The compact unit weights 116grams (21grams light than Apple’s iPhone 4) and features a three-inch LCD panel with 320×480-pixel resolution.

There’s a three-megapixel (3MP) image sensor capable of capturing video at VGA (640×480-pixel) resolution but only at a maximum of 17fps. The image sensor supports face detection and geo-tagging.

Media playback support is good with DivX, H.264, Xvid, MPEG-4 SP and WMV video formats supported at up to 30fps. Audio codec support includes MP3, AAC, WMA and WAV and AMP formats.

The phone itself has 130MB of on-board storage but also has a MicroSD flash card slot. Telstra will bundle the phone with a 2GB card but it will handle up to 32GB capacity cards.

Connectivity includes Class-10 GPRS and EDGE data rates as well as up to 7.2Mbps using HSDPA on 3G (although even Telstra admits the actual rate will be less than this). The phone also features 802.11b/g Wi-Fi and Bluetooth 2.1 wireless connectivity.

The only downside to the Optimus is that it will be shipped with Android 1.6. Telstra says the phone will be upgradable to 2.1 (Eclair) but doesn’t give any details on how or when this will be made available. Given that Google has made considerable strides in performance and features with version 2.1, it’s a surprise that Telstra will go into the market aiming to grow its Android market share with such an old version of the OS.

It will be running on a 600MHz Qualcomm MSM7227 processor, the same chip used in HTC Aria and Legend smartphones along with Sony Ericsson Xperia X8a and X10a phones. The 1500mAh removable Lithium-ion battery is rated for up to 500 hours on standby and 5.5hrs/7.3hrs on 2G/3G talk respectively.

It’ll become available on July 1 on Telstra’s $49 Cap plan for $0 upfront. The 24-month plan includes 200MB of data, up to $400 worth of calls, SMS and MMSs. Consumers will also be able to purchase the phone outright for $504.

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