Cable & Wireless Bermuda Limited (C&W) says it is likely to drop its plans to acquire the parent company of Bermuda Telephone, but has announced it will invest US$22 million over the next two years on a fibre optic telecommunications cable linking the island and the United States.

In a statement, C&W said it was likely to drop its plans to buy KeyTech Limited because of uncertainty over imminent telecommunications reforms by the government.

The international telecommunications giant attempted a US$205 million takeover last July, but the offer was considered too low by KeyTech and the government also opposed the deal.

The new 800-mile cable is to be operational by the end of October and has 700 times more capacity than the ageing submarine cable it will replace, C&W said.

The company already has two undersea cables, both of which are outdated and near their capacity-carrying limit. Bermuda is also served by the more advanced, higher-capacity Brasil Telecom cable.

The company has also decided to dismantle its Earth Station antenna this month. The antenna was built in 1984 and C&W said "its purpose had been replaced by fibre-optic technology".

"The new undersea cable will satisfy the growing demand for diverse, reliable high-speed data and broadband services, both domestically and internationally," said Eddie Saints, CEO of C&W Bermuda.

Undersea cable

C&W's proposed cable has not halted the government's search for a company to install another undersea cable for the island.

A government statement "acknowledge d Cable and Wire-less' commitment to up-grading their existing international com-munications link, showing their continued commitment to the business and residential sectors in Bermuda",but said the tendering of its project would proceed.

"The public will be aware of the minister's intent to tender for a new submarine cable. A draft of the tender was recently issued to existing licensed carriers who provide domestic services."

The statement by the Ministry of the Environment said Minister Neletha Butterfield "intends for the tender process to proceed" as long as there is continued interest by other telecom carriers.

- CMC