Reliant is now trying to secure J$100 million to finance its islandwide layout, having already raised $100 million for the project via venture capital.

But yesterday, Twomey told the Business Observer that recently there had been a reluctance on the part of both overseas and local banks to lend money at "favourable rates" to Jamaica's telecoms businesses, including his own.

"We are trying to get 50 per cent to finance the local layout," said Twomey, who is chief executive officer and a minority partner in the venture with Terrelonge. "There just seems to be a general shifting away from funding telecoms," he lamented.

Twomey said that a confluence of negative factors had created a hostile environment for business borrowing within the telecoms industry - for which his company and others were being penalised.

"A number of things happened," he said. "When the Jamaican dollar began to slide, we had to re-negotiate, plus the current economic climate makes it difficult, that is on the international side. On the local side, there is the reluctance of banks to invest in telecoms. They do not recognise the potential."

Terrelonge, the principal of InfoChannel, Jamaica's second largest Internet services provider, teamed up with Twomey last year to form Reliant, to focus on the telecommunications needs of business clients. InfoChannel would continue to provide mass market, individual services.

Currently Reliant terminates onto its network, international traffic that it routes via InfoChannel satellite - a service for which it says it now has a competitive advantage.

But as conceived, the plan was to - with adequate funding - create an infrastructure that could facilitate a range of business to business transactions.

"In the area of virtual private networks - that is connecting various branches of a business onto one seamless network - there is virtually no competition," remarked Twomey, stressing that this was intended to be a primary area of focus for his company.

Moreover, when complete, Reliant's network is supposed to offer Jamaicans Internet services, in addition to domestic and international voice data services.

The plan, as explained by Twomey last year, was for the company to use a Lucent Technologies switch and a 4.5 megabit satellite antenna to link Jamaica with the rest of the world. The cutting-edge system would allow Reliant to deliver a range of telecommunications services at a more economic rate than was now deliverable by Cable & Wireless.

Twomey stressed that even without its core services, Reliant was breaking even, but added that the government's budgetary deficit and the unpredictable exchange rate - especially during the first quarter of last year - made international banks hesitant to lend his company money.

Twomey also charged that local banks were hesitant to lend as they did not understand the potential of the telecoms industry.

The $100 million now needed by Reliant would be invested over the next two years.

"The real tragedy is that businesses are not getting the true benefit of real competition and reduced prices," bemoaned Twomey.

Reliant is one of more than 20 active telecommunications companies fighting to get a toe-hold in the competitive Jamaican market.

http://www.jamaicaobserver.com/magazines/Business/html/20040127T210000-0500_54958_OBS_TELECOMS_FIRM_SAYS_FACING_CHALLENGES_RAISING______M_FROM_BANKS_RAISING______M_FROM_BANKS.asp