Thus said on Monday it remained on the look-out for acquisitions amid a flurry of takeover activity in the telecommunications sector.

This came as the company reported a sharp reduction in interim losses, which helped lift the stock almost 9 per cent.

The alternative network operator signalled its ambitions earlier this year when it made an unexpected, and ultimately futile, £800m bid for Energis, its much larger rival. It lost out to Cable and Wireless but, at the time, the move surprised shareholders, who had not thought such large deals – funded with shares and a rights issue – were part of Thus’s strategy.

However, on Monday Bill Allan, Thus chief executive, refused to rule out attempting an even larger deal in the future. “Who knows, if we come out with the right business plan and the banks support us,” he said. “But we won’t be wayward with shareholder funds.”

Thus has a market capitalisation of about £212m, following Monday’s rally that saw the share price rise 1¼p to 15¾p.

Mr Allan insisted there was more takeover activity to come as companies struggle to make money amid overcapacity and, at the same time, deal with technological change, which is seeing traditional switching technology replaced by more efficient and flexible networks based on Internet Protocol technology.

The switch in technology has put pressure on all telecoms operators as they are forced to alter their business models.

Thus on Monday reported that first-half pre-tax losses, excluding gains from disposals, fell to £8.2m down from £29m for the same period last year, helped by a halving of the depreciation and amortisation charges.

Revenues were down slightly at £176.8m following the sale of a call centre. The loss per share narrowed from 2.21p to 0.63p.

FT comment

■ Unlike most of its rivals Thus has not written off the £500m investment in its modern network so it has a relatively large ongoing depreciation charge of about £47m a year. Analysts are forecasting earnings before interest, tax, depreciation and amortisation of about £40m for the current year and between £45m and £49m next year, so operating profitability is coming into view. But price competition is intense and could get worse any time. It would take a brave investor to place a bet here.

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