Telecommunications company Cable & Wireless has teamed up with French telecommunications equipment maker Alcatel to build a high capacity IP (Internet Protocol) transatlantic cable.

The cable system, called Apollo, is due to be in operational form by the third quarter of 2002 and is receiving an investment of £300 million from C&W, the companies said in a joint statement.

Apollo, for which work has already begun, will consist of four fibre pairs and will run from Long Island and New Jersey in the US to Cornwall and Brittany.

The cable network will boost bandwidth with a capacity of 3.2 terabits per second over each of two submarine legs and is expected to have a third more capacity than current transatlantic cable systems.

C&W has already signed a letter of intent for to sell a quarter of Apollo's capacity to an undisclosed US communications company, C&W and Alcatel said.