investment in Bermuda's market. Bermudians will be invited to become shareholders, reports David Fox .

The new deal between Government and Cable & Wireless clears the way for the Telecommunications Minister to tackle a number of outstanding issues, including the urgent issue of interconnection rates paid by international carriers to local carriers.

The Minister, Senator E.T. "Bob'' Richards said, "This agreement makes it easier to deal with the interconnection issue, because it involves other parties, apart from Cable & Wireless and the Bermuda Government.

"We have identified this as an issue that urgently needs to be solved. The FCC has mandated some incredibly large cuts in interconnection rates from the US that take place December 31st this year.

"So we have this deadline staring us in the face and we have to work it out.

But I didn't want to get into that discussion before we got this squared away.'' C&W executive director Don Reed said, "This is one of the crucial areas which needs to be addressed and is essential to reducing the cost of international telephone calls for our customers. We are looking for a speedy resolution.'' Meanwhile, London-based Mr. Reed confirmed that at no time during the lengthy squabble with Government did C&W consider pulling up stakes and leaving the $100-million Bermuda market. He did describe the negotiations as difficult.

He said, "We have always believed in Bermuda and, with the new changes, new areas of growth have been created. We look forward to becoming `despecified' on November 1st, 1998. In the meantime, we will introduce new pricing packages, incentives and rates for customers.'' Mr. Reed said, "Previously, we had to receive prior Telecommunications Commission approval for every rate change. From November 1st, we will become a despecified carrier with the ability to introduce rate changes as, and when necessary, following the same procedures as our competitors.

"Additionally, the new licence enables Cable & Wireless to become a locally incorporated company. We anticipate this happening early next year.

"Ultimately, we will be looking to invite Bermudians to become shareholders of the new company. This will further lay the groundwork for continued investment in the local market and build the framework for the company's success for the next 100 years.'' The pact wipes away the old agreement between Cable & Wireless and Government, meaning that new legislation will have to be introduced in Parliament.

The Minister said, "There will be legislative changes required as an outcome of our agreement. Because this agreement has been reached during the recess of our Parliament -- it could have been done in another way at another time -- there will be consequential legislation retiring the Cable & Wireless Act.

"The real important legal document will be their licence, which is just like TBI's licence.'' Continued to Page 38 Optimism over C&W deal Mr. Reed conceded that C&W lost more business to TBI than the firm first anticipated. He added, "That's why we pressed hard with Senator Richard's office to bring this agreement to closure, so that we would be able to compete with a company that was doing very well in the marketplace.

"This was never about a lawsuit. This was about finding a way to come up with the kind of agreement that we have now signed. We've had excellent relationships in the past with the Government of Bermuda. We've gone through some rough times. And today we have a new beginning. This is an opportunity to renew the relationship and strengthening it going forward.'' "We've been here for a long time and a part of the culture for over 100 years,'' he added. "Our objective was to seek an agreement that would allow us to continue for the next 100 years. We think this agreement is in the best interest of Bermuda and will provide a lot of opportunity for growth going forward.'' He said Bermuda will benefit directly from Cable & Wireless' global network as new technology is introduced at "cost effective'' prices and the company continues to invest in telecommunications infrastructure for the Island.

Talks to hammer out the new 15 year licence included Solicitor General William A. Pearce QC and Government's telecommunications consultant Don Donovan. Cable & Wireless Bermuda general manager Colin Little led the company delegation.

Mr. Little said, "We had a number of applications for rate reductions before the Telecommunications Commission last year. They are still being dealt with and therefore we will be implementing various new rates from now to November 1st. But from that date, we will be able to work on the same playing field as our competitor. There will be different prices for different markets. We'll be rolling out different packages, choices for customers to pick from that will allow them to reduce their rates.'' Senator Richards said, "This agreement was worked out in the full knowledge of the position that TBI has gained in the time that they have been in business. We're comfortable that meaningful competition can take place now.'' The Minister said the Cable & Wireless issue has been the principle matter he has dealt with since taking over the Telecommunications portfolio. He wouldn't say how much of the market his ministry determined had been captured by TBI, but Cable & Wireless had previously estimated it at about 25 percent.

But he said, "The only people who really know what the market share is, is in our department.''