Energis halved its loss over the past year as its internet activities and investment in metropolitan area infrastructure started to pay off.
The operator said it plans to continue the aggressive expansion of its network within the UK's main cities and hinted that it will use broadband wireless technology to avoid leasing capacity from BT.
Energis reported a pre-tax loss of £31.1 million for the 12 months ended 31 March, compared with a loss of £62 million in the last financial year.
Turnover for the period was up to £263 million, compared with £167 million a year earlier.
During the year, Energis gained customers for its telecoms business including Ernst & Young, Renault and Whitbread. The acquisition of ISP Planet Online in August also boosted the company's performance. Planet Online hosts Freeserve, the free internet access service provided by Dixons. Energis also hosts the free business access portal launched by Sage this month.
Metroholdings, the joint venture between Deutsche Telekom, France Telecom and Energis, has completed six fibre rings in London and expects completion of metropolitan networks in Manchester and Birmingham in September, followed by Bristol and Leeds.
Energis said it has 500 2Mbps circuits allocated to customers, 40 per cent of which replace circuits leased from other carriers.
The company plans further savings by creating its own connections to the customer's doorstep, rather than leasing lines from carriers such as BT or laying its own fibre. It said it will use broadband radio wave technology in the local loop, but would not give any details about when a service would be ready to launch.
Mike Grabiner, chief executive of Energis, said: 'We will continue to extend our state-of-the-art network, leverage our low marginal operating cost base and enhance our service capabilities, exploiting technologies such as internet protocol and broadband radio.'
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