Colt Telecom has defied sceptics over the future of the new generation of telecom carriers by announcing a doubling in profits.

Colt said that underlying profits hit �9.8m in the first three months of the year, 111% more than the same period last year.

The announcement sent Colt shares soaring 14p, or 42%, to 42p by the close of trading on Thursday.

And, following well-received figures on Monday from new-generation telecoms services provider Thus, the data raised confidence in the hard-pressed alterative carrier sector.

Thus shares ended up 8.6% at 19p, while Kingston Communications shares ended up 8.3% at 84.5p.

New business

Colt credited its "better than expected" results largely to its success in winning fresh clients, as well as wrenching additional revenues from existing customers.

"Customer confidence in Colt remains high," chief executive Peter Manning said.

"We are encouraged by the number and size of orders from both new and current customers."

Firms including Deutsche Bank, financial news agency Bloomberg and drinks maker Pernod Ricard signed up to Colt's network services business during the quarter.

The Berlin Stock Exchange was among new clients to Colt's e-business unit, which saw its customer roll increase by more than 90% to 1,628 names.

Colt last month won the contract to provide the technology which will see motorists charged a �5 "congestion" fee for entering central London.

Jobs cut

Colt's performance was also helped by the completion of the bulk of the firm's construction programme, which saw levels of capital expenditure fall to �139.1m, from �219.1m during the previous three months.

About 230 posts have gone of 500 identified by the firm earlier this year for elimination.