Improved broadband access will come to the Faroe Islands after a deal was agreed between BT and local telephony provider Faroe Telecom.

The agreement will result in the construction of a 760km undersea fibre optic cable that will link the mainland to the Faroe Islands, Orkney and Shetland with use to be shared by the two firms.

The cable is expected to be operational by next spring, as part of BT's 21st century network plan, which also includes provisions to revamp equipment in 1000 exchanges in Scotland.

BT Wholesale Markets managing director Brian Fitzpatrick said: "This is really good news for Orkney and Shetland as it will be a key part of BT's plans to bring the benefits of its 21st century network to the islands.

"Over the next five years 21CN will represent one of the biggest-ever investments in the economic infrastructure of the UK by a private company."