The Victorian Government has contracted Telstra to enhance the national Emergency Alert telephone warning system with geo-location technology for mobile users.
Under the current national system, SMS alerts can be sent to users only based on their registered residential address with the carrier.
Recent emergencies such as a toxic chemical leak in Canberra saw users with residential addresses in the vicinity of the leak warned of danger, even if they were overseas.
At the same time, phone users whose registered address was outside the emergency area - but who found themselves in the area that day - failed to receive a warning and risked chemical exposure.
Telstra group managing director Paul Geason said geo-location technology is to be added to the emergency warning system in Victoria.
"New technology introduced by Telstra pinpoints the location of mobile handsets making it possible for emergency services to quickly send text messages directly to Telstra mobiles irrespective of their service address," he said.
"The ability to provide a more accurate prediction of the physical location of a mobile handset via this new location based technology will significantly enhance the capabilities of the emergency alert service."
It is expected to be operating nationally for Telstra customers by the end of the year.
The Federal Government is hopeful of similar agreements with Optus and Vodafone that would allow their respective customers to also receive location-based alerts.
A spokesman for the Federal Minister for Emergency Management, Robert McClelland, said the carriers were "at the [negotiating] table".
The spokesman declined to put a total figure on how much it would cost to introduce geo-location across all networks.
In operation since 2009, the Emergency Alert system has been used more than 300 times and sent over seven million warning messages nationally to Australians at times of disaster.
Funded substantially by the Federal Government, the $26.5 million system has been criticised in some quarters over its performance; charges that Telstra and the Government deny.
A Senate Committee [pdf] has been exploring alleged shortcomings of the current warning system, including its inability to determine the location of mobile handsets in the alert area.
The Senate inquiry has led to consideration of other systems and technologies to issue emergency alerts.
Terms of Telstra's deal with the Victorian Government were not disclosed.