Launched last week, the 10-year strategy, entitled Broadband Wales, is expected to bring broadband services to 310,000 more homes and 67,000 businesses by 2007.
He explained, "This £100m plan is the biggest public sector investment of its kind in the UK, and it will push Wales ahead of the rest in public broadband access."
Welsh Assembly officials believe that the plan, which is jointly financed by the assembly, the Welsh Development Agency and European Objective One funding, will place the cost of broadband services in Wales on a par with London.
From September there will be a try-before-you-buy scheme for businesses, and a subsidised satellite broadband service for small and medium-sized enterprises.
Davies said, "From a business point of view we think that this will help to make them more effective and efficient in terms of both internal and external communications, and trading electronically."
Davies also believes that the unique nature of the Welsh government, founded in 1999, enables a greater degree of IT innovation than its counterpart in London.