That's correct, the law applies specifically to mobile phones, not radios or anything else. It's not illegal for anyone to use a CB radio hand microphone, for instance.
Well, at least, the police would have to prove in such cases that you were driving without due care and attention due to using the item. The mobile phone law was enacted to remove that difficulty in prosecuting what had become a big problem.
The laws apply just the same to police as to the rest of us mere mortals.
Same as the knife law prohibiting the carrying of locking blade folders, which coppers seem to ignore completely and carry leathermans etc.