Preliminary Announcement of KeyTech Six Month Interim Results

Operating revenues for the period were $48,840,165 as compared to $44,393,946 for the same period last year, an increase of $4,446,219. Of this increase $2,753,582 can be attributed to the publication of Bermuda Yellow Pages Directory by a subsidiary of the Company for the first time, with gross operating revenue now being recorded as compared to net fee income received from the outsourced publisher in the prior period. Additional contributors to the increase included the improved performance of cellular, asymmetric digital subscriber line ("ADSL"), consulting and long distance voice services.

Operating expenses increased $3,695,879, the majority of which is attributable to the costs of publishing the directory for the first time and the cost to Mobility of the operations of two networks, the GSM and TDMA networks. In addition, incremental costs were incurred in the provision of service in other areas of revenue growth noted above.

Basic and fully diluted earnings per share for the six month period ended 30th September 2003 were $0.36 compared to basic and fully diluted earnings per share of $0.61 for the same period last year. After adjusting for the excess storm damage expense resulting from Hurricane Fabian and the one-off gain in equity earnings from affiliates in the prior period, basic and fully diluted earnings per share for the current six-month period were $0.51 compared to basic and fully diluted earnings per share for the prior six month period of $0.47, an increase of 8.5%.

"Overall the Company has performed well during the first half of the financial year and in line with its strategic direction, notwithstanding the temporary setback caused by Hurricane Fabian. Excluding the impact of Fabian, the Company performed ahead of plan financially. With the full excess storm damage expense for Fabian included in the six month period ended 30th September 2003 we currently expect earnings for the next six months to increase compared to the first six months of this fiscal year." says CEO Sheila Manderson.

The revenue gains that BTC experienced during the earlier months of the fiscal year from the steady growth in ADSL revenues were offset by the high costs associated with restoration work of some 16,000 faults following Hurricane Fabian and the decrease in revenue experienced as a result of lost installation time. The total value of expenditures in restoring service to customers included in this six month period are $2,017,458 of which $1,640,676 is separately classified as storm damage expense in excess of that historically experienced over a period of several years and also includes the accrued costs for excess storm damage expenses incurred after the end of the six month period. Nevertheless, as significant as this impact was to the Company, it is less costly than if the Company had maintained catastrophic insurance coverage for such events.

"It is important to note that the financial impact of Hurricane Fabian has been absorbed by BTC with no resulting increase in rates to our customers." says CEO Sheila Manderson.

During the spring and summer months, BTC undertook several initiatives designed to improve service provisioning through reduced repair and installation times. The events following Hurricane Fabian have impeded progress temporarily, however it is expected that measurable gains will be achieved once operations have returned to pre-restoration activities.

In spite of the intense competition from alternate cellular carriers, Mobility has seen steady growth in the take-up of the GSM service. The increase in access and airtime has resulted in an 11% increase in cellular revenue compared to the prior six months. Roaming agreements with some 98 countries are now in place and work on enhancing island wide coverage will be completed in January 2004.

Logic Communications has continued a strong financial performance with growth in revenues and net income. This result has been achieved through a combination of better than expected performance of hardware and software sales, and planned growth in international long distance voice and consulting services. Not to be overlooked in Logic's success, is Logic's focus on providing exemplary service and support to its clients.

The decision to publish the Bermuda Yellow Pages Directory in-house increased contribution from the directory products to consolidated net income by 49% and KeyTech is pleased with the outcome of this strategy. The new subsidiary has been successful operationally and provides opportunities to further develop the services offered by Bermuda Yellow Pages. On-line listings on www.bermudayp.com are now being included in the current advertising sales campaign and have generated a new source of revenue for Bermuda Yellow Pages.

"We remain focused on achieving our targets of exemplary service and profitable growth and in the months ahead will work diligently to that end "says KeyTech CEO, Sheila Manderson.

During the six month period, KeyTech invested $7.3 million in capital assets as compared to $16.6M in the same period last year. A significant portion of the prior year capital expenditure was incurred by Mobility for the GSM cellular network.

Equity losses from affiliates and other investments were $312,341 for the six month period as compared to earnings of $1,352,214 in the prior period. In the prior period Bermuda Cablevision reduced the estimated liability for programming fees which had been accrued over a period of fifteen years giving rise to a one time increase in equity earnings in affiliates of $1,370,670.

Investment income from marketable securities for the period was $217,974 compared to a loss of $413,257 for the same period last year reflecting the improvement in general market conditions.

Genespidernet, the international voice calling business in Curacao has not been able to increase market share to a level sufficient to support profitability and the business is being discontinued. Losses attributable to the minority interests in Genespidernet were nil for the current six month period and $31,044 for the prior six month period. Consolidated net income before discontinued operations for the current six month period is $4,425,454 as compared to $6,337,837 for the prior six month period.

The KeyTech share price has remained relatively stable over the last six months, trading between $9.10 and $10.50 per share. The Company declared a common share dividend of $0.14 per share for the quarter ended 30th June 2003 and increased the common share dividend to $0.15 per share for the quarter ended 30th September 2003. In addition, a one for ten common share dividend was issued on 30th April 2003.

During the six month period holders of 1,013,328 KeyTech 8% Cumulative Redeemable Convertible Preferred Shares ("Preferred Shares") chose to convert their Preferred Shares to Common Shares on the basis of one Preferred Share for one Common Share.

Subsequent to the end of the six month period KeyTech exercised its right to redeem the outstanding Preferred Shares in issue and holders of 397,991 Preferred Shares chose to convert their Preferred Shares to Common Shares on the basis of one Preferred Share for one Common Share prior to the date of redemption.