PIPE Networks on Monday announced the approval of a $200m undersea cable system stretching from Sydney to Guam which it claims will inject much needed competition into Australia's broadband market.

The cable system, known as PPC-1, will be capable of delivering data at 1.92 terabits per second and will significantly boost Australia's international broadband capacity.

"Although we have a whole range of ISPs you can buy from, most of the data comes from one or two locations. It's about bringing competition for international connectivity to Australia," said PIPE executive director Lloyd Ernst.

Approximately 6,900km of cable will be laid from Sydney, via Brisbane, through Papua New Guinea and up into Guam, where it will hook into around 12 different cable systems.

"Which means that we can bring data into Australia for around about 50 per cent of the cost some of the other providers are charging at the moment," Ernst said.

"One of the problems we have in Australia is that we want to make the Internet go faster and faster, but you've got to get the data from somewhere. At the moment there are these chokepoints and we're trying to open these up," he added.

Telecommunications analyst Paul Budde called the proposed cable a fantastic initiative.

"We do need an enormous amount of extra infrastructure capacity over the next 5-10 years, so its great to see PIPE networks doing that because that will deliver competition," Budde said.

"In the past this is typically something Telstra or Optus would do and you end up in a monopoly or duopoloy."

"PIPE coming on board means more competition, better prices and in the end it's good for all of us because a lot of the Internet traffic is international, it's not just Australian, so we need that level of international capacity," he added.

PIPE claims the system is vital to breaking the stranglehold the 'gang-of-four' (Telstra, Optus, Verizon, Telecom NZ) have on broadband connectivity in Australia.

Ernst likened Australia's current two cable system to the days of Qantas and Ansett, where there was very little airline competition.

"What we're about is bringing in this discount carrier to try and open up the local market so that broadband in Australia becomes a lot more accessible and a lot faster."

PIPE has already announced foundation customers such as iiNet, Internode, Primus and Telikom PNG as businesses who will make use of the PPC-1 system.

The cable itself will be manufactured by Alcatel in France, and survey vessels will soon be running sonar up and down the proposed path to find the best location for the cable.

Special ships will begin laying the cable in February 2009, and the system is expected to go live six months later.