The physicists have developed a revolutionary optical chip that could improve internet speeds to up to 100 times faster than Australia's networks.

"The most exciting thing is that it is just a piece of scratched glass. It is very simple, so it is potentially cheap," said Ben Eggleton, the director of the university's Centre for Ultrahigh bandwidth Devices for Optical Systems, CUDOS.

He said the thumbnail-sized device could be commercialised within five years and used in countries such as Japan, which is "way ahead of Australia" in installing high speed fibre networks.

"As they build the next generation of networks, they're going to be looking for new breakthrough technologies."

The device, a photonic integrated circuit, could overcome the gridlock that occurs when information travelling along optical fibres at the speed of light has to be processed by slow, old-fashioned electronic components.

This would make almost instantaneous, error-free and unlimited access to the internet possible anywhere in the world, Professor Eggleton said.

The market would ultimately decide which technologies were introduced to meet the skyrocketing demand for faster and cheaper downloads.

"But our job at CUDOS is to go out to the absolute limit, and demonstrate in the lab what is possible," he said.

The chip, which his Australian team developed with Danish and Chinese colleagues, is made from chalcogenide, with tiny channels etched into the surface by lithographic techniques like those used by the electronics industry.

Results on its performance were presented last night at the Opto-Electronics and Communications Conference in Sydney.

Professor Eggleton said the scratches on the surface of the glass acted as a guide or switch for incoming data, akin to a train changing tracks, only rapidly.

Consumers here would have to wait longer for any commercial product, he said. "It won't be deployed in Australia first," he said.