Cross-ownership review by telecoms watchdog ‘surprises, concerns’ KeyTech
KeyTech says it’s “surprised and concerned” that the telecoms Regulatory Authority plans to launch a review of what it termed “cross-ownership” by the company.
CEO Lloyd Fray said KeyTech was not the only telecoms group with multiple carrier subsidiaries.
And he noted the substantial investments made by its subsidiaries totalling more than $100 million in Bermuda telecoms infrastructure.
The RA, in announcing the review, had noted that KeyTech’s holdings now include 100-percent control of one of Bermuda’s largest fixed wireline providers, BTC, as well as board control of Bermuda CableVision, the largest cable TV network, a significant shareholding of one of the two mobile networks, BDC (CellOne), and full control of the two largest ISPs, Logic and North Rock. In addition KeyTech has 100-percent control of an international cable providing service between Bermuda and other jurisdictions.
But Mr Fray said yesterday: “KeyTech Limited was surprised and concerned to learn that the Regulatory Authority is proposing to conduct a separate consultation of the KeyTech Group when it received the ‘Consultation: Obligations for Operators with Significant Market Power’, given the lack of communication with KeyTech Limited beforehand and the fact that the KeyTech Group is not the only telecommunications group with multiple carrier subsidiaries.
“KeyTech Limited understands the need for a level playing field in the telecommunications industry and our subsidiaries are in favour of supporting competition. The KeyTech Group is, however, concerned by the approach being taken by the Regulator in the Consultation Paper as the Regulator appears to be attempting to regulate beyond the individual carrier level. KeyTech Limited is, accordingly, taking legal advice.”
Mr Fray said KeyTech was a non-regulated entity.
“KeyTech Limited is an investment holding company which, in addition to its wholly owned subsidiaries, owns non-controlling interests with no management control of BDC/CellOne and Bermuda CableVision,” the KeyTech CEO said.
“As the owner of Bermuda’s original telecommunications company, BTC, which invested in and created Bermuda’s first cellphone company, BTC Mobility, KeyTech Limited has continued to develop and invest in Bermuda’s telecommunications industry for over 125 years. KeyTech Limited created or purchased separate companies because this was a requirement under the old regulatory regime that made it mandatory that we have a separate license for each company.
“In 2008, KeyTech Limited invested $27 million and built a submarine high-capacity cable system linking the US and Bermuda, which enabled Bermuda to diversify its previous reliance on international cable companies (Cable & Wireless and GlobeNet/Brasil Telecom). This cable system has also allowed all Bermuda telecommunications entities to manage the cost of their off-island links.
“Over the last six years, through KeyTech Limited’s three wholly owned subsidiaries (BTC, Logic and Cable Co), KeyTech Limited has made a substantial investment of over $100 million into the Bermuda telecommunications infrastructure. Telecommunications is the backbone of international business and the high-quality infrastructure in this area is one of the key reasons that international companies continue to be attracted to doing business in Bermuda.”
Mr Fray said KeyTech’s subsidiaries have always worked to maintain a good relationship with the Regulator and will continue to work through the consultation process in good faith.
“Furthermore, we reiterate our understanding that the objective of the new Regulatory Authority is to provide a light touch with a view to regulating to the minimum extent necessary to promote and encourage continued investment in Bermuda’s telecommunications infrastructure,” he said.