http://aminet.net/package/comm/tcp/DCTelnet_16 may work better, from what I know it should support Extended IBM ANSI.
The Amiga usually butchers ANSI art and the colors are all over the place. The Amiga is terrible for telnet BBSs. Well for full ANSI anyway.
In the end when I ran a BBS and connected it via telnet ended up using ftelnet which is a webpage front end to get the colors and ANSI to display correctly for all users so they didn't have to look for a telnet client.
