Cable & Wireless for its planned investments in local telephone carriers.

BTC president Lorraine Lyle charged in the company's six-month letter to shareholders that C&W's application to invest in Quantum Ltd. and Bermuda Digital Communications, which plan to compete with BTC on the domestic market, is "contrary to the intent of the Telecommunications Act''.

"Cable & Wireless' investment in Quantum (formerly North Atlantic Telecommunications) and their current application before the Bermuda Monetary Authority to purchase shares in Bermuda dollars, appears to be in contradiction of the original licence applications submitted to the Telecommunications Commission,'' Ms Lyle said.

Her comments came as BTC released its unaudited results for the first half of the 1997-1998 financial year, in which the company enjoyed a 31.6 percent increase in net earnings to $7.04 million.

Total operating revenues rose eight percent to $33.9 million in the six months to September 30, 1997.

The increase was almost entirely due to increased revenues from domestic service, which jumped 15 percent to $20.7 million. International service revenue inched up $10,000 to $13.1 million.

Operating expenses increased 15 percent to $26.45 million while rental and other income jumped 159 percent to $446,964.

In her letter, which echoed concerns she made late last year in a speech to a service club, Ms Lyle questioned whether the deregulation of the local telecommunications was being carried out fairly.

"Where is the regulatory form, structure and conviction necessary to disallow players with the global mass of Cable & Wireless to advantage themselves,'' she asked.

"How is it that Cable & Wireless can effectively compete for the local market while BTC's request for entry in the local market is denied? These are questions that need to be answered.

"While we recognise that Bermuda's current regulatory framework was created to protect and facilitate new entrants into the marketplace, we question why protection would be needed for a global player entering the local market.'' In other financial results, BTC said total assets rose 7.2 percent to $114.2 million while current liabilities rose from $12.1 million to $13.1 million.

The company also entered long term debt of $29.3 million on its balance sheet as a result of its bond issue last year and paid out $1.1 million in interest.

But it cut restructuring costs from $1.04 million last year to $79,000 in the current period.

CRITICAL -- BTC president Lorraine Lyle