The company wants to go ahead with third generation mobile phones

Despite a 12.5% rise in revenue to almost �78m, the company's 2003 profit dropped by about 2%.

The fall is being blamed on the cost of starting a new mobile phone service in Guernsey called Wave Telecom.

It should have begun in April but is still not on air because of a dispute between Wave and existing mobile network provider Cable and Wireless.

We should behave like a PLC because those are the disciplines that will drive the business in the right way John Henwood, Jersey Telecom

The two companies are to share masts when Wave's service goes into operation.

But Wave said Cable and Wireless (C&W) was refusing to continue testing a link between the two companies' systems because it found errors on the network.

C&W said it had worked hard to assist in resolving technical difficulties.

Guernsey's Office of Utility Regulation (OUR) has given Wave a new date of 1 July to set up its mobile phone service after it failed to make a launch date of 30 April.

However, back in Jersey, the company said it was doing well.

About 90% of the population owns a mobile and 5,000 homes have broadband internet access.

Now the company is keen to combine those assets and press ahead with a third generation multimedia mobile phone network.

The chairman of Jersey Telecom, John Henwood, said he believed the fact that the company could act as a more independent organisation had been a benefit.

He said: "Things have gone very much as we hoped they would go.

"This is very much a business that is acting as though it is a PLC, even though the sole shareholder is the Finance and Economics Committee of the States of Jersey.

"I think that's the proper order, we should behave like a PLC because those are the disciplines that will drive the business in the right way."