KeyTech Ltd.'s net income rose 8.3 percent or $526,165 to $6.83 million in the first half of its financial year as revenue grew in its rebranded M3 cellular service and in Bermuda Yellow Pages.

KeyTech, the Island's leading telecommunication provider as the full owner of BTC, Logic Communications, M3 and a significant shareholder in CableVision, said operating revenues for the six months to September 30 were $52.2 million compared to $51.3 million in the same period in 2005, an increase of $891,855.

The company said operating expenses for the period were $36.3 million, up $1.35 million, and included $880,143 in redundancy costs as part of a management restructuring at BTC.

Other increased expenses include inflation-adjusted salary costs, higher electricity rates and higher product-marketing expenses.

In the first half of 2005, the company booked a $1,314,497 adjustment to cash balances due to banking irregularities discovered in October, 2005.

Equity loss in affiliates for the six month period is $245,293 as compared to $881,914 in the prior period, a decrease of $636,621. The decrease was due to improved operating performance by affiliates, the company said.

Basic and fully diluted earnings per share for the six months to September 30, 2006 were $0.52 compared to $0.48 for the same period last year.

BTC noted it had introduced a faster performing DSL service and a new corporate data product, gigabit Ethernet, during the period.

KeyTech also invested $8.5 million in capital assets to improve current infrastructure and to launch the wireless easyConnect wireless broadband access service for M3.

"This wireless network, separate from the cellular network, provides higher speed and more reliable broadband access than cellular networks. easyConnect has proven to be popular with residential broadband users. Initial take up was strong and continues to grow steadily." the company said.

Logic revenue remained in line with the prior period due to growth in data and long distance voice services revenue offsetting a decline in professional services revenue.

Investment income from marketable securities for the period was $431,948 compared to $299,590 for the same period in 205.

Consolidated net income before discontinued operations for the current six month period was $6.8 million compared to $7.88 million for the prior six month period. Excluding the redundancy costs for BTC income from continuing operations for the current six month period was $7,711,424.

Excluding the one time gain made on the sale of the investment in Packet Exchange and the adjustment made to reflect the cumulative impact of the banking and cashiering irregularities, income from continuing operations for the prior period was $7,464,124.

Losses from discontinued operations of $1,579,786 in the prior six month arose on the discontinuance of BD&M, a directory business in the Bahamas. There was no loss from discontinued operations in the current period.