KeyTech Ltd’s profits fell to $5.9 million for the fiscal year 2010/11, as early retirement and redundancy expenses cost the telecommunications group $4.4 million.The profit fell from $6.3 million a year earlier, as the company’s CEO Sheila Lines reported a “substantial drop in demand for residential services due to lower levels of economic activity and population”.“We anticipated these conditions would continue from the prior year and we have continued to adjust our business model to reduce costs and focus on core products that have strong margin and future viability, specifically in the area of data services,” Ms Lines said in a statement released this afternoon.Total revenues for 2010/11 decreased $9 million to $98 million, as all revenue lines except data services fell in Bermuda. In the Cayman Islands, total revenue was similar to the prior year with increases in corporate revenue offsetting residential revenue decline.Total expenses declined $6.1 million to $94.7 million. Excluding the impact of early retirement and staff separation costs in both years, total expenses declined $9.7 million year over year.KeyTech, owner of the Bermuda Telephone Company and Logic Communications, executed the merger of M3 Wireless unit with CellularOne to form CellOne in May, after the end of the financial year.“The shareholders of CellularOne and we recognised that we could be in a more competitive position and deliver greater value for our customers as a combined business,” Ms Lines said.Total capital asset expenditure in the current year was $14.1 million compared to $11.3 million in the prior year. Significant individual capital items in the year were $5.5 million on network and premises in BTC to improve service and maintain existing assets, $3.8 million in M3 Wireless on additional cellular sites to increase network coverage and capacity and $2 million on construction of fibre plant in the business district of George Town in the Cayman Islands.Total cash dividends paid to shareholders for the year were 48 cents per common share. At the end of the year, net assets per common share were $9.64, compared to $9.80 in the prior year.