Shares in high-speed network outfit Fibernet collapsed by more than a third this morning after it reported that first half revenues are expected to be down on last year.

In a statement the company said that it has "not been immune to the current economic environment and has, in the first quarter, seen sales cycles in its UK business lengthen considerably.

However, it expects full year revenues to grow, although at a rate that is "significantly below market expectation".

And it warned that a fall in revenues was likely to have a "negative affect" on the company's operating performance.

This grim news sent investors scurrying to their brokers ordering them to sell. By Late morning Fibernet's shares were down 137.5p (37.67 per cent) at 227.5p.

Despite the slump Fibernet maintains that its balance sheet remains strong and that the business is fully funded.

And it maintains that demand for its wholesale DSL products 'augurs well'.

However, this was not enough to convince investors to hold their nerve and sparked a period of panic selling that mirrored the run on Energis' shares yesterday.

Fibernet is one of the few remaining telcos to be actively involved in local loop unbundling in the UK. So far only around 150 lines in total have been unbundled. ®

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