Bermuda's telecommunications field is becoming “increasingly competitive and challenging”, according to KeyTech chief executive officer Sheila Manderson.

KeyTech, the parent company of the group which includes Mobility, BTC and Logic Communications and also has a large stake in Bermuda Cablevision, announced its results for the first six months of the year yesterday. It reported an increase in consolidated net income of $5,774,321 as compared to $4,983,239 for the same period last year. The results include a one-time increase in equity earnings of $1,370,670 which derive from a reduction in the estimated liability for programming fees and royalties of Bermuda Cablevision which had been accrued over a period of fifteen years. However both operating revenues and net operating income were down and the company suffered a drop in investment income.

Investment income for the period was $289,633 compared to $620,397 for the same period last year and the loss attributable to minority interests for the period was $31,044. Operating revenues for the period were $43,758,467 as compared to $44,589,928 for the same period last year.

Overall net operating income for the period was $4,101,430 as compared to $4,364,822 for the same period last year. Mrs. Manderson attributed the reduced revenues to lower interconnection settlement rates and domestic wireless revenue as the cellular market has increasingly moved towards customer plans that include periods of free airtime use. She also said that high levels of capital investment had cut into profit margins. The company invested $16.6 million in capital assets, principally the GSM system for Mobility, and BTC plant and facilities

But diversification of product lines is essential and with this expenditure now completed, Mobility is positioned to strengthen its position in the market as the Bermuda's largest wireless solutions provider. She pointed to the full integration of NexGen, the consulting firm acquired by Logic Ltd., encouraging professional services revenues and enhanced hardware and voice service revenues at Logic Ltd as other positive developments for the group.