Telecoms firm Thus has reported a sharp rise in losses as a result of increased spending on expanding its network.

The group, formerly known as Scottish Telecom, was also driven further into the red by a one-off charge after pulling out of radio telecoms technology.

In the year to 31 March pre-tax losses at the company, best known for Demon Internet, were �63.1m, up from �9.3m.

The one off charge of �43.5m was incurred after the group decided to abandon so-called fixed radio access technology for its services.

Demon sacrifices quantity

William Allan, chief executive at Thus, said the group was on track to achieve the fastest ever roll-out of a national telecoms business after extending its network by 40% to 5,200 km last year and spending �161m on capital investment.

Its internet service provider business, Demon, saw subscriber numbers fall to 207,000, which it said was due to low-use subscribers moving to free internet services.

The remaining customers increased their use of Demon with an average subscriber now surfing the internet for more than 20 hours a month, the highest reported use in the industry.

The group said the figures were evidence its business was attracting professional and business customers.

Thus also announced plans to offer voice telephone services using internet technology - known as Internet Protocol (IP) - to its small and corporate business customers.

Turnover rises

Thus, which targets business customers, has a presence in areas such as Manchester, Warrington, Liverpool, Chester and Newcastle as well as its longer standing networks in Scotland and London.

"Over the coming year we will launch services in a further 11 cities and are on course to complete one of the most comprehensive and advanced national network," Mr Allan said.

Turnover at Thus jumped ahead on the back of its larger network, rising to �216.9m, up from �166m last year.