Money brought in from local telephone calls by Bermuda's oldest local carrier BTC shot up nearly 30 percent in one year.

In contrast international call revenue fell nearly 35 percent in the same period even though volumne increased, according to figures just published in BTC owner KeyTech's annual report for the year ended March 31, 2000. The fall in revenue was the result of reduced interconnection fees received from the Island's international carriers.

The figures show revenue brought in by the local service rose to an all-time high of $64.5 million, up 27.8 percent from the $50.4 recorded last year.

International service revenue fell by over $11 million or 34.5 percent from $32 million last year to just $21 million.

Local service accounted for 75.4 percent of the total revenue, with international just taking 24.6 percent.

Nearly ten years ago, in 1991, local calls accounted for only 55.7 percent of the total revenue, with international taking 44.3 percent.

The details of KeyTech operating results were published this week in the company's annual report. In June the company issued its year-end statements up to 31 March, 2000, but the report contains more information on the day-to-day running of the business.

The report shows that while the number of full time employees has risen from 411 to 442 since 1991, the cost has shot up by over 80 percent or $13.3 million from $16.5 million in 1991 to $29.8 million in 2000.

However, the rise in cost must take into account the takeover of Internet service provider Logic Communications and its highly qualified -- and paid -- staff.

The detailed breakdown shows that Logic made a net loss of $2.1 million this year, compared to a net loss of $106,298 last year.

Revenue, however, rose 2.5 percent from $7.8 million to $8 million. Operating expenses also went up by 34 percent from $5.9 million to $7.9 million.

BTC made a net profit of $16.3 million, up nearly 15 percent from $14.1 million.

Revenues rose slightly from $74.5 million to $77.6 million, an increase of four percent.

Operating expenses fell marginally from $44.7 million to $43.9 million.

The report also gives details of KeyTech's bid to buy up part of Bermuda Cablevision Ltd.

It shows details of the deal made in the battle for Cablevision. In 1997 BTC went to the Privy Council as part of its fight against Cablevision and the US-based McDonald group.

BTC claimed that the Birmingham, Alabama-based McDonald Group, despite owning just 28 percent of the cable company's stock, controlled the business in breach of Bermuda's ownership rules which restrict foreign ownership of local companies to 40 percent. BTC won the case.

The report states KeyTech has a total of $11 million -- 40 percent -- of Cablevision shares with a promissory note of $4 million on top of the $7 million in cash for shares.

The document also reveals that the deal was done to give KeyTech more say in the day-to-day running of Cablevision.

The report states: "This... agreement resulted in the company (KeyTech) gaining significant influence over Cablevision. In prior years, this investment was carried on the cost basis, as the company was unable to exert significant influence due to a minority representation on the Board of Directors and a legal dispute with a minority shareholder.'' The minority shareholder referred to is the McDonald group. The report goes on to state that KeyTech exchanged the shares for Cablevision for 40 percent of the outstanding shares of a new company Cablevision Holdings.

It states that the promissory note is unsecured, has not set terms for repayment and bears an interest at nine percent per annum.

It also said that the cost of the deal would be spread over the next seven years and noted that it was paid $1.2 million in dividends due which were not paid during the dispute with the `minority shareholder'.

The annual report shows a small rise in KeyTech's net income by 1.5 percent from $14 million to $14.2 million.

In total revenue rose 3 percent from $82.5 million last year to $85 million in 2000.

KeyTech Ltd. yesterday advised the BSX that effective immeidately it intends to start a repurchasing plan of its own issued shares and will buy back five percent (about 100,000) of the the outstanding shares.

The company said the plan will operate for an indefinite period and "purchases would be made at values that produce favourable investment returns'.

CHART KEYTECH REVENUE AND EXPANSES 1991-2000 KEYTECH NET EARNINGS 1991-2000