The poor sentiment after the Orange float continued to play havoc with telecom share prices.

Orange itself fell another 6.3 per cent to €8.81 in Paris and 7.5 per cent to 558.5p in London, following its damp start on Tuesday. Parent group France Telecom retreated 8.5 per cent to €72, an 18 month low.

Mr Mark James of Nomura drew attention to the surprisingly high levels of trading in Orange, the vast bulk of it in Paris which has the prime listing. About 60 per cent of the shares changed hands in the first two days, a total that normally takes several months to clock up.

Mr George Hodgson, European equity strategist at ABN Amro, said Orange seemed to indicate that there were "profound problems with institutional appetite" for telecoms. Although institutions do not lack cash to spend, and prices have come down a lot, "`there is still some concern about valuations".

Deutsche Telekom was equally on the ropes yesterday, falling more than 5 per cent to €28.84, another two-year low. In addition to the Orange problem which is throwing doubt on its plans to float T-Mobile, it has been knocked by Moody's downgrading its rating outlook and worries about the VoiceStream takeover. Deutsche Telekom's share price is now well below the €33 at which VoiceStream shareholders could demand a renegotiation of the takeover terms.

The deal says that if the share price is below €33 for seven of the 15 trading days before the deal is completed, VoiceStream's shareholders can demand a renegotiation.

The smaller German telecom MobilCom, owner of a UMTS licence, also kept falling, losing another 10.5 per cent to add to the 8 per cent of Tuesday as investors worried about its poor results earlier this week.

Finland's Sonera, having touched almost €100 last year, closed yesterday below €15, its lowest since March 1999. KPN and BT were both down 7 per cent and Telefonica down 6 per cent, as was its mobile unit Telefonica Moviles.

There were big falls in tech stocks too. Ericsson fell 6.7 per cent to 90 Swedish krona, Nokia fell 7.6 per cent to €29.02 and Alcatel [RO ]7.3 per cent to €52.45.