The network, to be built with equipment from Nortel Networks Corp., will be the first in Australia to use Nortel's Common Photonic Layer (CPL) technology to help deliver high bandwidth service to regional areas, according to the company.

With 720Gbit per sec transmission capacity, the network will deliver data and voice services over Ethernet, and will also support grey and dark fiber to ensure it meets future capacity demands.

Silk Telecom's chief executive officer, Simon Perkins, said the company needed to "rapidly ramp up" the capacity of its Victorian regional network to bridge the digital divide between customers in metropolitan and regional areas.

"With its CPL platform, Nortel has provided us with the flexibility to do this cost-effectively, enabling us to balance the cost of transmission with the bandwidth we need for our regional customers," Perkins said.

The Nortel CPL platform has been deployed in more than 25 networks around the world, according to the company, and can be deployed alongside any of Nortel's optical network products.