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KeyTech’s Fray raises concern over cost of telecoms regulation

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KeyTech’s CEO-in-waiting Lloyd Fray has raised concerns over the cost burden on carriers to support the new regime brought about by regulatory reform, some of which would be passed on to customers.

In an interview with

The Royal Gazette, Mr Fray, who will take over the new role at the end of July next year, said that it was important that any new regulation implemented afforded an equal and fair opportunity to all providers.

He also talked about his vision for the future of the company, the current state of the market, including the fallout from the recent legal cases involving Digicel, TeleBermuda International and CellOne, and the challenges going forward such as the impact of the recession and the number of people leaving the Island on business.

“Our concern continues to be that the proposed changes will have a direct negative impact on carriers by way of costs required to support the new regime,” said Mr Fray.

“This has the knock-on effect of stifling the ability of service providers to reinvest in their business.

“Unfortunately some of those costs will be transferred onto consumers.

“Nevertheless, we believe that the need to change from facilities-based competition where providers can offer services purchased on a wholesale arrangement from carriers is ideal as consumers benefit from better pricing and carriers would be able to expand on their investments.”

Mr Fray, who is currently CEO of the Bermuda Telephone Company (BTC) and has previously been CEO of Logic Communications and before that M3 Wireless, said that having working in all parts of the group of companies he had a better knowledge, experience and understanding of the business.

Having worked closely with the present KeyTech CEO Sheila Lines during his eight years at the company, Mr Fray said that she had laid the foundation for success by building the company’s reputation as a reliable service provider and positioned it to meet the challenges that lie ahead.

During her tenure, Ms Lines was instrumental in the installation of the undersea Challenger cable system by KeyTech’s subsidiary Cable Co Ltd which links Bermuda to the mainland US and which it is expected to deliver cheaper and faster Internet services, as well as redundancy for data, voice and video services for businesses, as well as overseeing the recent merger between M3 Wireless and CellOne.

Mr Fray said that the company would continue to seek out opportunities for growth with a more data-centric focus, starting with the implementation of its new multi-million dollar Metro Ethernet network to improve the fibre infrastructure of the City of Hamilton at the same time as building out its fibre core across the Island in order to deliver high-speed data and multimedia services in the future.

But it has not been without its challenges chiefly the shift towards Voice Over Internet Protocol (VOIP) services, the downturn in the economy over the past two years and the onset of regulatory reform anticipated within the next year, he admitted.

“The telecommunications market is in a state of flux with uncertainty and challenges related to the economy, competitive challenges, and in particular the proposed new changes to the industries regulatory structure,” said Mr Fray.

“However, we remain focused on improving our products and services to customers with KeyTech investing over $100 million in the past five years towards improving Bermuda’s infrastructure.”

Mr Fray said that there was a still a lot of uncertainty around the regulatory reform, what form it would take exactly and what it would mean for both providers and customers alike.

He said that ultimately though every company would be judged on the quality of its service and it was imperative to keep up with the latest developments in technology in order to provide that at the top level.

Acknowledging that Bermuda had been shrinking as a market place over the past 18 months, not only in the telecommunications sector, Mr Fray said that the key was retention of resources and customer base and maintaining its place in the order of things.

Welcoming both reform, provided it is cost effective, and competition with the opening up of the market, he said that KeyTech embraced the change and the need to adapt its personnel’s skills to the new technologies.

More specifically, Mr Fray said that a balance needed to be struck between BTC’s future prosperity and meeting customer demand given the rapid changes in the telecoms industry through enhancing its infrastructure and developing more cutting edge products.

In terms of Logic, he said the company needed to maintain its position as the leading Internet Service Provider (ISP) in the residential market, continue to evolve its business solutions for long-distance voice, data connectivity and professional services, and to develop its new cloud computing and managed services.

The company is also set to expand its international footprint as regards data connectivity for businesses in Bermuda and the Cayman Islands, it invested around $2 million to extend its fibre optic network following the acquisition ISP WestTel Ltd last year, according to Mr Fray.

Asked about the issue of Digicel’s takeover of Transact and the launch of its new long-distance service and the legal battles that ensued with the other carriers, he said that he was not surprised to see companies jockeying for position ahead of reform and said that so long as the process was introduced properly he saw it more as an opportunity than a threat.

Budgeting accordingly for the loss of business due to the volume of people leaving the Island over the past 18 months and the greater use of Internet based communication tools such as Skype versus a decline in the land line usage, Mr Fray said that he planned to market Keytech more proactively as the face of the company in the community.

KeyTech CEO-in-waiting Lloyd Fray (Photo by Mark Tatem)
KeyTech CEO-in-waiting Lloyd Fray (Photo by Mark Tatem)

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Published November 07, 2011 at 1:00 am (Updated November 14, 2011 at 8:37 am)

KeyTech’s Fray raises concern over cost of telecoms regulation

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