Preliminary Announcement of KeyTech Six Month Interim Results

Hamilton, Bermuda - 10 December, 2008 - KeyTech Ltd's (KEY.BH) consolidated net income for the six month period ended 30th September, 2008 is $5,373,712 compared to a net income of $9,461,838 for the same period last year.

"The first six months of this fiscal year presented both challenges and opportunities," said KeyTech CEO Sheila Lines.  "We are challenged with continuing decreases in local voice services coupled with increases in salary, health care, and fuel-related maintenance costs.  Over the period, however, we also moved forward on a number of major capital projects that are key to the Company's future service offerings."

Consistent with global telecommunications trends, local voice revenue for The Bermuda Telephone Company Limited ("BTC") continued to decline as customers increasingly turned to cellular services and data messaging for local and long distance communications. However, unlike prior periods, growth of data services in the current period did not offset the reductions in local voice revenue.

According to Ms. Lines, "We have entered a challenging economic period which will likely continue to affect the Company in the near term.  The investments we have made over the past year in network infrastructure, however, position us favorably to provide customers new and enhanced telecommunications services going forward.  We believe that the demand for these services will remain healthy over the longer term and will grow as wireless and data technologies become more essential to our businesses and day to day lives, not less." 

Operating revenues for the period were $56,802,710 compared to $57,732,939 for the six month period ending September 30^th 2007, a decline of 1.6%, as decreases in local voice fixed line revenue exceeded revenue growth in wireless and Internet services. Operating revenues remained 3.9% ahead of the six month period ending September 30^th 2006. 

Operating expenses for the period were $42,690,050 compared to $39,656,510 for the same period last year.  Although general and administrative expenses declined compared to the prior period, increases in salary, health care and fuel-related maintenance costs drove total operating expenses up over the prior period.  Amortisation expenses for the period were $9,510,864 compared to $9,257,116 for the same period last year.

Ms. Lines commented that "We will continue to manage expenses carefully and to identify operational efficiencies while improving our service levels, one of the best ways we know to retain our customers and keep our customers happy."

During the six month period, KeyTech invested $27,362,519 in capital assets compared to $8,447,923 during the prior period.  According to Ms. Lines, "Capital investments in the Challenger submarine cable, BTC's Internet protocol-based Next Generation Network and M3 Wireless's WCDMA/3G network are all evidence of the Company's ongoing strategy to grow the business with data centric technologies on both wireline and wireless platforms.  Our rate of capital investment will fall off significantly in the next fiscal year as we complete these important projects." 

BTC's Next Generation Network installation progressed during the period in readiness for internal product trials to begin shortly after the New Year.  The company increased customers' DSL speeds to 4 and 6 Mbps in November and plans to launch new business data services before the end of the fiscal year. 

On the wireless side, M3 Wireless expanded its list of roaming partners during the period to reach 84 countries for data and 122 countries for voice roaming.  When M3 completes its WCDMA/3G network later this fiscal year, customers will enjoy mobile data speeds 10 times faster than current capabilities. 

Logic increased customers' data speeds in November, introducing Premium and Ultimate Internet data services while rolling out a newly redesigned retail store and putting a fresh face on all its advertising. 

Equity earnings in affiliates for the six month period were $748,503 compared to $386,741 in the prior period.  Net income for the period includes $1,928,592 of annual profit from Bermuda Yellow Pages's print directory, which was distributed during the first six months of the fiscal year.

Basic and fully diluted earnings per share for the six month period ended 30^th September 2008 were $0.37 compared to $0.65 for the same period last year. 

Investment income and realized gains and losses from marketable securities for the period was a loss of $10,587 for the period compared to a gain of $218,614 for the same period last year due to the change in general market conditions.  Income from Non-controlling interests for the period was $34,000 compared to $37,168 for the same period last year.

The Company declared a dividend of $0.15 per share for the quarters ending June 30th 2008, September 30th 2008 and December 31^st 2008, and a one for ten stock dividend effective July 24^th 2008.