Telecom business The Phone Co-op has increased its profits ten-fold, as the global market leaders struggle to maintain profitability.

Despite increased competition and widespread price deflation, The Phone Co-op's turnover more than trebled in the year to August 31, 2000, to £640,000.

The Phone Co-op, the UK's only telecom co-operative, based in Chipping Norton, is owned by its members, many of whom are charities, not-for-profit organisations and other co-operatives.

Profits rose from £2,009 to £20,257. Some of this will be reinvested and the rest goes to members, who will receive a dividend of 1.5 per cent a total of £2,530. A similar amount will go to the co-op's development trust fund, intended to help similar organisations. Membership increased from 71 to 362 over the year, and members invested 64,700 of share capital. This allowed the Phone Co-op to finance expansion without borrowing and to repay a £10,000 loan from a co-operative fund.

Executive director Vivian Woodall said: "The expanding interest in The Phone Co-op from other organisations in the co-operative and mutual sectors and from those interested in co-operation and ethical trading, means that we are well placed to build on the growth achieved during the year.

"The Phone Co-op's rapid growth has also given us critical mass, which is enabling us to obtain highly-competitive rates from carriers, as well as a platform for further growth."

Its 3,000 customers include the British Trust for Conservation Volunteers, the Centre for Alternative Technology, Leeds Co-operative Society and Relate. The service is also available to individuals.