C/O Royal Gazette
By Alex Wright
KeyTech’s profits plunged by more than $4 million for the six months ending on September 30 due to a fall in local voice revenue for the Bermuda Telephone Co.Ltd. (BTC)and an increase in expenses.
The company saw its net income slide 43 percent to $5.4 million from $9.5 million for the same period last year as customers turned to cellular services and data messaging for local and long distance communications, with the growth of data services failing to offset the drop in local voice takings
Meanwhile operating revenues for the period were also down at $56.8 million from $57.7 million in 2007, a decline of 1.6 percent, as decreases in local voice fixed line revenue exceeded revenue growth in wireless and Internet services. But operating revenues remained 3.6 percent ahead of the six-month period ending September 30, 2006.
Operating expenses for the period were $42.7 million compared to $39.7 million for the same period last year, contributed to by rises in salary, health care and fuel-related maintenance costs, despite general and administrative expenses being down from the previous period.
KeyTech’s CEO Sheila Lines said the first six months of the fiscal year presented both challenges and opportunities.
“We are challenged with continuing decreases in local voice services coupled with increases in salary, health care and fuel-related maintenance costs,”she said.
“Over the period, however, we also moved forward on a number of major capital projects that are key to the company’s future service offerings. We have entered a challenging economic period which will likely continue to affect the company in the near term.
“The investments we have made over the past year in network infrastructure, however, position us favourably to provide customers new and enhanced telecommunications services going forward.
“We believe that the demand for these services will remain healthy over the longer term and will grow as wireless and data technologies become more essential to our businesses and day-to-day lives, not less.”During the six-month period, KeyTech invested $27.4 million in capital assets versus $8.4 million during the prior period, ranging from the Challenger submarine cable to BTC’s Internet protocol-based Next GenerationNetwork and M3 Wireless’s WCDMA/3G network.
The rate of spending is set to drop off in the next fiscal year on the completion of the projects.BTC’s NextGeneration Network installation progressed during the period to prepare for the internal product trials in the New Year, while the company increased customers’ DSL speeds to 4Mbps and 6Mbps last month and plans to launch new business and data services before the end of the fiscal year.
On the wireless side, M3 Wireless expanded its list of roaming partners during the period to reach 84 countries for data and 122 countries for voice roaming.
On finishing its WCDMA/3G network later this fiscal year, M3 clients will be able to enjoy mobile data speeds ten times faster than current capabilitie
Meanwhile Logic increased customers’ data speeds in November, introducing premium and ultimate Internet data services while rolling out a newly-redesigned retail store in Burnaby Street.Earnings per share were also down at 37 cents for the six months ended September 30, compared to 65 cents for the same period last year, while investment income and realised gains and losses from marketable securities was a loss of $10,587 versus a gain of $218,614 over the respective periods.