Telecoms firms bid for cable

By Scott Neil – Royal Gazette

A consortium of three Bermuda communication companies has entered a bid to win the right to install a new undersea telecoms cable linking the Island with the US. A key member of the consortium said that, should it be given the right to go into direct competition with the current international carrier market monopoly of Cable & Wireless/TeleBermuda International, it would result in faster Internet connections and cheaper rates for household customers.

North Rock has linked with Transact Ltd. and KeyTech, parent company of Bermuda Telephone Company, to form a Bermuda consortium that has entered Government’s tender process for a licence to provide a new submarine telecommunications cable carrying voice and internet traffic between the Island and the US.

There are presently three such cables, the two oldest ones are owned by C&W and have limited carrying capacity compared to the third cable, owned by Brasil Telecom.

Under current Bermuda regulations only C&W and TBI can sell the submarine services from the three cables to Bermuda-based telecoms companies.

However, a reform of the Bermuda’s telecommunications market is currently under consideration by Government that would open up the market and do away with restrictive operating practices that for the past 11 years have prevented the likes of North Rock, KeyTech and Transact from either operating their own undersea cable or buying cable capacity directly from anyone other than C&W and TBI.

In tandem with the reform review Government has also asked for bids for a licence to install a fourth undersea telecommunications cable, arguing that it is necessary for Bermuda to have a further cable to safeguard crucial connections between the Island the the rest of the world should there be disruption to existing links.

In April, C&W announced it plans to replace one of its ageing undersea cable with a new $22 million high-capacity cable by October.

A joint statement has been issued by North Rock, Transact and KeyTech announcing their intention to apply for a licence to build and operate an international telecommunications cable.

Vicki Coelho, general manager at North Rock Communications, told the Royal Gazette: “We believe the communications market here should be Bermuda owned and operated. It should be first and foremost for Bermuda.

“Part of the challenge that we have had is buying bandwidth from C&W and TBI. We have to pay higher rates than business customers for bandwidth. If we were our own supplier it would allow us to get the larger ‘pipes’ (bandwidth) at a fair price,” she said.

The consortium represents all three of Bermuda’s major Internet service providers as KeyTech is the sole owner of Logic Communications.

The group has a business model, has identified efficiencies that would result from owning and operating its own cable and believes that, depending on what time of year the licence is granted, could have the new link installed within a few short months.

Bill Dickinson, senior vice-president, sales and marketing for Transact, said: “Bermuda requires a redundant offshore cable system and additional capacity and the opportunity to build this as a Bermudian-owned venture is the right thing to do.”

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