More mergers and acquisitions are likely in the telecommunications sector, driven by fierce competition in a liberalised marketplace.That is the view of co-founders of Bermuda Digital Communications Ltd, Kurt Eve and Michael Leverock, who are adamant that their company will be one of the survivors as the consolidation plays out.This month, the company, which operates under the CellOne name, is celebrating 15 years since it first acquired a licence to provide wireless services, a development that injected much-needed competition into the sector in a very different time.“There has been some consolidation in the market already and there will probably be more,” Mr Eve said in an interview at CellOne’s Reid Street offices.The combination of the expense of investing in new networks to keep pace with advances in technology, and competitors broadening their range of services after Government lifted licensing restrictions on who could offer what service will apply pressure on the smaller players to merge with larger ones.In recent years, Transact has merged with Digicel, North Rock Communications has combined with Logic Communications and CellOne itself merged with KeyTech’s M3 Wireless. “We’ve seen pricing go down rapidly, but at some point that will end, as people need to make a return on their network investments,” BDC Chairman Mr Eve said.Mr Leverock, a BDC director who was for many years the chief operating officer, added: “I have no doubt that we will be one of the survivors. This company has a strong foundation and I think people have an admiration and respect for what we do, how we brought competition into the market and how we raised the level of customer service.”It’s a very different world from the one in which BDC was first awarded its licence on July 17, 1998. Mr Eve was the applicant for a wireless licence and he teamed up with Mr Leverock, after the latter’s separate application for an international long-distance licence had been turned down.The need to build a fully functioning network before the first customer can be signed up makes wireless services a capital-intensive business to start up — so the two entrepreneurs needed seven-figure funding. Mr Leverock recalled that investors were hard to find in Bermuda. “There was a lot of scepticism. Many people thought we were crazy and said ‘they’re going to squash you’.” As Mr Eve recalled, they were in a “Catch-22 situation”, as they could not get the licence without the funding — but they could not get the $4 million funding from US backers, Atlantic Tele-Network, Inc (ATNI), without the licence.The solution was getting the three parties in a room together to close the deal. The Minister then responsible for telecommunications, Bob Richards, gave Mr Eve and Mr Leverock the licence, and then ATNI immediately provided the funds.It was another year or so before CellularOne, as the brand was then known, was able to start operating. Interconnection was an irksome issue, as the Bermuda Telephone Company (BTC) was apparently less than keen to smooth the path for its new competitor. Another challenge was selling phones as the existing retailers did not want to jeopardise their relationship with BTC.So they found a retail space on Reid Street (in the location currently occupied by iClick) and set about designing their own store.“We did not want to be a retailer, but that’s what we had to do,” Mr Leverock said. “We wanted to make the store look cool and hi-tech, and provide a high level of customer service, so people could look at the phones, then sit down with a representative who would explain how it worked.”The first CellularOne store opened before the interconnectivity issue with BTC had been resolved. “We had to make it clear to customers at first that the only other people they could call were other CellularOne customers,” Mr Eve recalled.A few days later, after something of a brouhaha, interconnection was finally achieved.The new company got off to a flying start, signing up 600 customers in the first month. The momentum continued and the new company was cash-flow positive within months, way ahead of the schedule envisaged in Mr Eve’s business plan.Mr Leverock felt that a major attraction for the new company was the fact that customers would leave the store with a working phone, while BTC customers had to wait a day or more for their phones to become operational after buying them.Another big selling point — and a sign of how much things have changed in a short time — was that CellularOne customers could send texts.“I think we also established a new level of customer service, not only in our industry, but also for Bermuda,” Mr Leverock said.There were numerous promotions as the company tried to gain traction in the market. Advertising received a free boost from the use of the CellularOne name. “I think the name gave us credibility, because some American carriers used the same name and advertised on network TV,” Mr Eve recalled.Mr Leverock reflected on the huge leaps forward made by the Bermuda telecoms sector over the past 15 years and how it might develop in the future.“Now it’s a more mature, competitive market that’s reached a fairly high level of saturation,” Mr Leverock said. “The public is a lot more tech-savvy and their expectations are a lot higher. All the talk used to about convergence of telecoms and media — and that’s happened.“I think it’s reached its adolescence and now it will be about what it’s going to be when it grows up. Services will become more integrated and data-centric, we’ll see smart homes and intelligent vehicles. “The way we watch TV is changing, as more people get it through internet-based services like Apple TV, Netflix and Hulu. And there will also be business supply chain applications and the financial services industry will also see change.”