Nortel claims it has developed new optical networking technology that can quadruple the capacity on telecommunications networks, from 10Gbps to 40Gbps.

The new technology is designed to help network operators deal with bandwidth-gobbling applications like high-definition Internet video.

Nortel, the largest supplier of telephony gear in the US, plans to announce it has developed gear that can shuttle traffic across the Internet backbone at speeds of 40 Gbps, according to Reuters.

Today's high-capacity fibre optic networks support speeds of 10Gbps, which is enough bandwidth to transfer about 1,000 high-definition television channels simultaneously.

Nortel says the technology has the ability to provide a tenfold increase in network speeds, giving operators the ability to transfer data at 100Gbps. Denmark's TDC and the UK's Neos Networks will be named as Nortel's first customers, Reuters said. Trials with other carriers around the world are ongoing.

A new upgrade cycle for faster-speed optical networking technology couldn't come too soon for Nortel. The company has been struggling to regain its footing after it was shaken by scandal and poor financial performance over the last few years.

The company recently announced poor financial results and said it would cut 2,100 jobs, mostly in the US. It also has plans to move another 1,000 jobs to lower-cost locations such as China and India. However Australian Nortel jobs will be safe, despite the international cuts.