The Island?s remaining telecommunications carriers would have to consider consolidating if Cable and Wireless plc receives shareholder and regulatory approval to buy local telecom giant KeyTech Holdings, said Greg Swan Chief Operating Officer and Executive vice president of TeleBermuda International.

Mr. Swan spoke to this newspaper one week after UK-based Cable and Wireless plc proposed acquiring KeyTech Holdings Ltd for $205 million cash or what amounts to $15.48 per share after KeyTech gave stockholders a one for ten share dividend on Monday.

The global telecom, which is the parent company of Cable and Wireless Bermuda, is seeking to use the acquisition to position itself in the local marketplace as a one-stop-shop for telecommunications customers. Cable & Wireless? proposal is entwined with its bid to grow internationally now that growth in the UK is constrained by increased competition and falling demand for traditional voice services.

Save for the international connectivity component of Cable and Wireless Bermuda, KeyTech Holdings Ltd. already has a full suite of telecom services as the parent company of BTC, M3 Wireless, Logic Communications and part-owner of QuoVadis and Cablevision.

The joining of the two companies would effectively put every medium that touches the home under the Cable and Wireless portfolio, according to Mr. Swan.

?Cable and Wireless is basically positioning themselves to provide a complete end-to-end solution for every customer and any competitor would be dependent on Cable and Wireless for the provisioning of services in Bermuda,? said Mr. Swan.

?[The acquisition would clearly force the remaining carriers to reassess how services are provisioned locally and at least consider that possibility of consolidation,? he added.

Mr. Swan, who is ?not by any stretch of imagination a proponent of monopolistic conditions in small jurisdictions?, said that TBI would prefer to see the telecom sector segmented as it presently is.

?It has been clearly demonstrated in Bermuda that competition brings out the best in all of us,? he said adding that acquisitions of the magnitude of the Cable and Wireless proposal bring a risk of vertical integration and cost subsidisation.

?With the level of competition we currently see in the marketplace right now and with the discounted rates that are currently being offered for both voice and data services, the proposed acquisition is clearly for the sole purpose of product and service expansion and consolidation,? said Mr. Swan.

Cable and Wireless Bermuda head Eddie Saints has said that the acquisition would help return Bermuda to a world class communications structure as it had fallen behind its competition in the telecommunications field.

Mr. Swan views the Island?s current infrastructure as world class and adds that he is not alone. International business would not set up on the Island if it did not have a world class infrastructure plus a recent e-readiness survey by the Economist Intelligence Unit ranked Bermuda as the 20th most e-ready jurisdiction in the world.

?It seems clear to me that the regulatory regime in Bermuda isn?t as broken as some people would imply that It might be. Quite frankly, I would view this more as corporate posturing by Cable and Wireless rather than a true assessment of Bermuda telecommunications infrastructure,? Mr. Swan said.

During the past few years many regions in the Caribbean, where Cable and Wireless had a monopoly ? have gone through regulatory reform for the purpose of allowing competition. As a result, Mr. Swan said Cable and Wireless has clearly lowered its rates based on either competition or the threat of competition in those jurisdictions.

?To turn around and have Bermuda be the model for reconsolidating telecommunications services makes one question the direction our regulatory framework would be heading under those circumstances,? he said. He adds that consolidating the two large would potentially result in one carrier operating as a monopoly in Bermuda.

Cable and Wireless has said that the acquisition is not however about a reduction in competition but rather about increasing it. Mr. Saints said the current hodge podge of technology arrangements that the Island has now merely delivers less value than should be realised.