Shares in Atlantic Telecom continued their modest revival yesterday and may rise further next week when its deal with First Telecom is finalised.

Atlantic stock has been submerged since March, when investors lost faith in the media and telcoms sector.

The small but fast growing company saw its shares plunge from £12 to almost a third of that value. Last night they ended the day up 10p at 465p, moving in line with the rest of the sector.

Graham Duncan, Atlantic's executive chairman, hopes to allay sceptics' fears on June 7. He will explain how the First Telecom deal will enable it to become a leading provider of broadband data services in Germany, Europe's largest telecoms market.

Mr Duncan's entrepreneurial style has brought the Aberdeen-based company an army of supporters. But its rapid expansion makes the more cautious nervous.

The £520m takeover of First Telecom also entails increasing financial commitments and management issues which have led some analysts to recommend selling the stock.

Atlantic uses wireless technology to bypass BT's loop network and has access to Marconi's national network. Marconi holds a 27% stake in Atlantic but that will be reduced to 18.9% when the First Telecom deal goes through.

In July Atlantic will be opening in Frankfurt, thanks to First Telecom, and will spend a further £100m rolling out the services to small businesses in other major German cities.

There are also plans to open up competition against BT in the provision of asymmetric digital subscriber lines.

Jim Ross, analyst with ABN Amro, is one of the enthusiasts for Atlantic. He is impressed with Mr Duncan's drive and rates it a "buy".

Almost everyone agrees, the telecoms sell-off has been overdone with some investors linking the sector with internet start-ups. So it might take the inevitable rerating of the telecom sector for the bears to finally ride any wave in favour of Atlantic.