The firm was founded by Scottish Power in 1994

Chief executive William Allan warned that rivals were resorting to discounts and rebates in a bid to win business from its corporate customers.

"We're seeing effects that we haven't seen since the (telecoms) bubble," Mr Allan said.

Shares in Thus ended 4 pence lower, down 23.53%, at 13 pence on Friday.

Cut-throat

The company blamed cut-throat competition for corporate accounts, switched voice and leased lines for the profit warning.

"The markets have been much tougher than we forecast this year and we expect the second half to be tough," Mr Allan added.

The gloomy statement from Thus was the latest in a series of downbeat comments from UK telecoms providers.

Rivals such as Cable & Wireless, Colt Telecom, Energis and MCI are using increasingly aggressive tactics in their battle for market share.

"This only goes to confirm the view the market for UK corporate telecoms continues to be tough with no hopes of a recovery in sight," said Francois Pierre-Arth, an Exane BNP-Paribas analyst.

Thus was founded by Scottish Power in 1994, and floated in 1999 before being fully demerged in 2002.