Telecommunications providers in Bermuda are deeply split over whether industry reforms announced in Parliament last Friday will improve competition and services on Island or spell the death knell for smaller providers.

Bermuda is set to abandon its current licensing system — with three different licences which dictate which services can be offered by various providers — in favour of a universal telecommunications licence. A Regulatory Authority will also be created to oversee the industry.

Smaller providers like North Rock and Igility fear the reforms will force small providers out of business by allowing larger and even international providers to offer the same services they do, eventually leading to a tiny concentration of providers with limited competition, limited service and substantial industry job losses to boot.

"By definition this will reduce choice and competition," said North Rock general manager Vicki Coelho. "There are those who believe that is acceptable and positive. North Rock, however, believes that with less competition Bermuda will eventually return to the bad old days of duopoly control, higher prices and poor service. Potentially, it could also spell an end of Bermudian ownership and control of this key industry. We therefore are deeply concerned about the proposed changes. We also believe that the current loss of entry level technology jobs to overseas companies will potentially be made worse by this policy."

Even if the new policy has potential to please customers in the short-term — by bringing down prices and allowing the bundling of services from one provider — the long-term potential fallout could be job losses and control of the market by two or three large providers, warned Igility chief innovation officer Jamie Thain. "As you see bundled services, you will see reduced prices and reduced revenue which will lead to reduced ability to employ people," he said.

Bermuda Telephone Company, however, welcomed the changes and said market conditions will always dictate staffing levels. Reform will enhance competition, said BTC president and CEO Francis R. Mussenden, because it "tears down the walls that restrict operators to a limited set of services".

"BTC, for example, can only provide local wireline services. We cannot provide long distance, ISP, wireless or video services," he said. "Yet, most Bermuda customers buy all these services. Why can't they buy them from one provider as a package deal like their friends and family in the States?"

And Lloyd Fray, CEO of M3 Wireless — which along with BTC is owned by parent company KeyTech — said that company is "chomping at the bit" to be able to introduce more services. "Reform can only enhance competition," he said. "It will make competitors work harder to gain customers' attention and to keep them happy. That can only be a good thing, right?"

One thing all the providers do seem to agree on is that the actual role of the Regulatory Authority has yet to be sufficiently defined. "We don't know whether the Regulatory Authority will be effective because we haven't been told how the Regulatory Authority is going to act yet," said Mr. Thain. "This has gone before Parliament and we have not been told how it will act or how dominant it will be."

BTC too has concerns. "Our one concern about the reform proposal pertains to the issue of dominance — Government's way of holding back players that they believe have too much power in the market," said Mr. Mussenden. "BTC wants to ensure that it has the same opportunity to serve customers when reform is put in place as all other operators on the Island."

BTC would like to see this addressed as Government fine-tunes the policy. "We can't afford to get this wrong because Bermuda's telecom industry provides a critical infrastructure for commerce and economic growth as well as a means to enhance people's lives and the communities in which they live," he said.

Executives at North Rock and Igility Group questioned the core need for the reform itself, however, and suggested that the industry had already been well on the way to addressing its shortcomings before the Government's reform process started.

"The word 'reform' typically indicates that something is significantly wrong, where in actuality Bermuda's telecoms infrastructure (technology and connectivity) was ranked 13th in the world by The Economist," said Ms Coelho. "Bermuda has one of the most competitive telecoms markets in the world and, per capita, almost certainly has more carriers than any other country. We should have looked to retain the aspects of our system that work and not replacing it wholesale."