Bermuda has fallen behind its competition in the telecommunications field, says Cable & Wireless Bermuda Chief Executive Officer Eddie Saints, and will become increasingly uncompetitive unless changes are made to the Island?s infrastructure.

?We hear that in Bermuda we have world-class communications. I beg to differ,? Mr. Saints said. ?We once had world-class communications, and we set the standard for modern-day technologies, but that is no longer true. We want to return Bermuda to that position, but only under the right operating structure.?

Mr. Saints said he was ?embarrassed? by the levels of Internet connectivity that Bermuda currently offers. ?We talk about 256K upload and 512K download. Many of our competitors in other jurisdictions are offering eight megabits to people?s homes. Others are talking about 20 megabits, even 40 megabits, to the household.? Eight megabits is about 16 times faster than 512K.

?Bermuda is losing its competitive edge,? Mr. Saints said. ?In other comparable jurisdictions that Bermuda competes with, (such as) Guernsey, Jersey, Cayman, Monaco ? any of these jurisdictions have more sophisticated telecommunications systems than we do. We lag.?

Speaking to about his company?s bid to acquire Keytech, Mr. Saints said: ?The acquisition is not about reducing competition, but is in fact about increasing it. We currently have a hodge-podge of technology arrangements, the end result of which delivers less value than should be realised.?

In answer to the question on everyone?s mind, whether telephone charges to the consumer would rise if the acquisition of Keytech went through, Mr. Saints said, unequivocally: ?I can?t see long distance calls costing more as a result of this transaction. That?s not what this is about.? Were significantly faster Internet connectivity introduced, it would cost more than connectivity at slower speeds, as would be expected, but the cost of comparable services would not increase, barring non-related changes in the development of technology.

?True broadband connectivity in the Bermuda market should be 60 to 70 percent, but the current structure does not allow that,? said Richard Dodd, the company?s chief executive for the Middle East & Islands, who was visiting Bermuda, which falls under his management. ?We want to move to a situation where my Blackberry would work at the airport, for example, which it does not now. That?s the level of connectivity our customers want and cannot have, and the level that other jurisdictions are achieving. Our absolute aspiration is to provide the same, or better, level of quality of service than is available in markets such as Europe and some other offshore jurisdictions and to have prices driven down as far as we can.?

The principal force behind Cable & Wireless?s bid for Keytech ?is the sustainability of our operations in the current industry and market? in Bermuda, Mr. Saints said. The restructuring of the Bermuda telecommunications industry to a class licensing arrangement has outlived its useful life and become counterproductive, he said. ?That system worked well 10 years ago, when the demarcation of responsibilities was clearly defined,? he said. ?Now, we find, with the convergence of the boundaries and blurring of the services, that working in narrow bands of service, servicing limited numbers of customers, has really challenged our sustainability.?

Considerable new investment is needed in the Island?s telecommunication infrastructure if Bermuda is to continue to compete as an offshore financial jurisdiction, Mr. Saints said, but Cable & Wireless, in simple terms, cannot see how it would earn an acceptable return on its investment, and so views a merger with Keytech as the way forward.

A review carried out after last summer revealed that ?the whole Bermuda telecommunications industry is not sustainable in its present format,? Mr. Saints said. ?It is paramount that we make key investments, but in the present narrow environment in which we operate,? such investments would not yield a satisfactory return. Were Cable & Wireless to merge with Keytech, it would have broader ability to earn returns and provide the ?one-stop? service that customers are demanding. The only way the economics of operation would work for Cable & Wireless, Mr. Saints said, would be if the company were allowed to become a full-service provider.

?Bermuda is important to Cable & Wireless?, said Mr. Dodd. ?We understand and love serving the islands. We are in 17 offshore jurisdictions, and believe we understand that business very well.

?We find the Bermuda market attractive because of its sophisticated enterprises and consumers, and its global importance. And, as Eddie said, the market is very under-served, which is inappropriate for an island that depends on its connectivity - and that disadvantages the economy. We want to improve the level of service.?

Of the proposed Keytech acquisition, Mr. Dodd said: ?We have been engaged for seven or eight months in a conversation with Keytech.

?We have been extremely persistent and committed to having those discussions reach a sensible conclusion. We believe that the right solution is a suitable combination of our business with that of Keytech. We remain hopeful and optimistic that we can find a route to engagement with Keytech.?

The management and Board of Keytech have been resistant throughout, Mr. Dodd said, ?but we are hopeful that we can find a way to engage them over the coming days and weeks.?

In conclusion, Mr. Saints said: ?We see this opportunity as a way to put Bermuda back on the right track towards infrastructure investment and economic and social development.?