In the 'olden days' military aircraft were allocated radio callsigns in the blocks with the prefixes 'VL' and 'VM' as dogcharlietree indicated.
To summarise, the International Radiotelegraph Convention in Washington, USA, in 1927 produced a revised table of Nationality and Registration markings for aircraft and other radio call-signs. These recommendations were duly adopted by ICAN in June 1928.
The Commonwealth of Australia was allocated the prefixes VH, VI, VJ, VK, VL and VM. Since the Dominions and Colonies did not have a vote at ICAN until about 1929, the allocation of 'VH' was probably made arbitrarily.
These prefixes were allocated as follows:
VH - civil aircraft
VI and VJ - Coastal Radio Stations, which communicated with ships at sea and, in the early days, with aircraft
VK - Amateur Radio
VL and VM - military aircraft post WWII
You can read more at
Airways Museum / Civil Aviation Historical Society - do a site search for 'registration markings of Australian aircraft'.
Down at the Museum we have the Tower logs for Avalon for about 5 years in the '60s - makes very interesting reading as all the callsigns and types of every aircraft are listed, including some
very unusual visitors from overseas!
Cheers,
Philthy