A year after purchasing a majority stake in local start up Quantum Communications Ltd., electric utility Belco Holdings Ltd. is considering whether to sell its share of the telephone company.

Belco president and chief executive officer Garry Madeiros said that Quantum had "strong financial problems'' due to not getting a good share of the voice telephone market.

He blamed the inability of Bermuda's telecommunications' regulations to allow for competition and the legal battles to get interconnected with the Bermuda Telephone Co. Ltd. (BTC).

"Quantum has strong financial problems due to inadequate regulatory policies regarding competition and legal battles throughout the past 12 months with BTC,'' he said. "We have not made inroads in the voice telephone market.'' He denied rumours that Belco was negotiating to sell Quantum to Cable & Wireless, which has a minority stake in the company.

"We haven't talked to any potential buyers yet,'' he said.

Belco was currently reviewing its position with regard to Quantum and hadn't made a decision on whether to sell the company or not.

"We are not presently negotiating with Cable & Wireless or anybody but we are evaluating our position,'' Mr. Madeiros said.

Cable & Wireless' general manager Eddie Saints said the company had no intention of increasing its shareholding in Quantum.

Quantum has been battling to get connected to the BTC so it can provide local voice service on the Island. Last year a court ordered BTC to provide the interconnection, and earlier this year the company began providing voice service in the Hamilton market. Quantum has 16 employees.

Quantum needed the connection so it can compete in the local market with incumbent BTC. The connection is necessary for both companies' customers to talk to each other.

On February 26 this year Supreme Court Puisne Judge Vincent Meerabux ruled that Government did not have the authority in a ministerial order made last year forcing BTC to connect Quantum to its network.

Frustrated Belco may sell stake in Quantum BTC claimed that was a victory and lawyers claimed that it had the right to disconnect Quantum from its network.

But in a second judgment over the same issue brought in as a writ by BTC over Constitutional law, Mr. Justice Meerabux ruled that BTC also had a duty as a licensed telecommunications' carrier to connect Quantum.

Mr. Madeiros said the two judgments had confused potential customers and had kept them from switching from BTC.

Belco paid $577,125 for a 47 percent majority stake in Quantum as part of a diversification strategy. At the time of the judgment Quantum's lawyer Tim Marshall said even though Justice Meerabux upheld BTC's appeal of the August 1998 order to interconnect, therefore nullifying it, practically the Minister of Telecommunications could use other sections of the Act to achieve the same end. On Monday Minister of Telecommunications Renee Webb stated that after reviewing the report by the Telecommunications' Commission, BTC is still obliged to provide a connection for competitor Quantum Communications Ltd.

Ms Webb also stated that if BTC made any such move to disconnect Quantum without her consent, she was giving an advance order that it must immediately connect the company back again to its network.

In a separate development another BTC writ against the Minister of Telecommunications will be heard before Mr. Justice Meerabux beginning March 31. BTC is appealing the Minister's decision in December to lower the interconnection rate it charges international telephone companies for connecting calls.

BTC has said it was losing $1 million a month since January 1, when Ms Webb ordered the revenue cut on advice from the Telecommunications' Commission. The company applied to the Telecommunications' Commission to raise local rates to recoup the revenue but only received a partial increase.

Government has claimed the company had deliberately stalled the process of rebalancing the rate structure so revenues were in line with costs. In the past BTC used long distance revenue from the international companies to subsidise local rates.

Frustrated Belco may sell stake in Quantum BTC claimed that was a victory and lawyers claimed that it had the right to disconnect Quantum from its network.

But in a second judgment over the same issue brought in as a writ by BTC over Constitutional law, Mr. Justice Meerabux ruled that BTC also had a duty as a licensed telecommunications' carrier to connect Quantum.

Mr. Madeiros said the two judgments had confused potential customers and had kept them from switching from BTC.

Belco paid $577,125 for a 47 percent majority stake in Quantum as part of a diversification strategy. At the time of the judgment Quantum's lawyer Tim Marshall said even though Justice Meerabux upheld BTC's appeal of the August 1998 order to interconnect, therefore nullifying it, practically the Minister of Telecommunications could use other sections of the Act to achieve the same end. On Monday Minister of Telecommunications Renee Webb stated that after reviewing the report by the Telecommunications' Commission, BTC is still obliged to provide a connection for competitor Quantum Communications Ltd.

Ms Webb also stated that if BTC made any such move to disconnect Quantum without her consent, she was giving an advance order that it must immediately connect the company back again to its network.

In a separate development another BTC writ against the Minister of Telecommunications will be heard before Mr. Justice Meerabux beginning March 31. BTC is appealing the Minister's decision in December to lower the interconnection rate it charges international telephone companies for connecting calls.

BTC has said it was losing $1 million a month since January 1, when Ms Webb ordered the revenue cut on advice from the Telecommunications' Commission. The company applied to the Telecommunications' Commission to raise local rates to recoup the revenue but only received a partial increase.

Government has claimed the company had deliberately stalled the process of rebalancing the rate structure so revenues were in line with costs. In the past BTC used long distance revenue from the international companies to subsidise local rates.

Renee Webb