Microsoft has followed through with its long-awaited plan of increasing Hotmail users’ storage capacity to 250MB.

Hotmail users were this week pleasantly surprised to find the increase in free e-mail storage limits from 2MB to 250MB finally start to kick in. Microsoft announced its massive expansion plan last June but did not specify when it would become available.

A spokesperson for the Microsoft/Publishing and Broadcasting Ltd (PBL) joint venture in Australia, ninemsn, told ZDNet Australia that the roll out for the storage upgrade in Australia will be finalised in two weeks. She clarified that there was “no delay” in the roll out for the storage increase since its announcement in June. She added that ninemsn simply prioritised first the upgrade of its anti-virus feature, which was the top service requested by majority of their 4.1 million customers.

The spokesperson added that Hotmail US has started increasing their users’ storage capacity a couple of months back but has staggered the roll out.

The storage giant admitted that the move was geared towards competing with Yahoo’s increased storage capacity as well as Google’s one gigabyte Gmail service.

Ninemsn’s Hotmail Plus previously charged customers AU$37.95 a year for a 10MB inbox. The package has been made redundant with the new free offering and is now changed to a 2GB total storage capacity for the same price, with “no graphical advertisements”.