One of Canada's largest alternative providers of long distance telephone service has incorporated here and launched a new service connecting Canadians to non-North American countries at rock-bottom rates.

Based in Oakville, Ontario, The London Telecom Group Inc. established a city office at Dorchester House in June after a scouting mission headed by company founder and chairman, Robert Freeman last November.

The group is expected to announce today the provision of the new service to seven countries including Australia (at 30-32 cents per minute), France (30-32 cents), Germany (30-32 cents), Hong Kong (30 cents), Italy (35-37 cents), Japan (40-42 cents) and the UK (14-16 cents), through subsidiaries London Telecom Network Inc. and WinTel Communications Inc.

It is the group's first foray into the overseas long distance market, after terminating Canadian calls across North America for the last ten years.

The new service signals a company need to add more staff to the 250 people already employed, mostly in Oakville.

Chief operating officer Jim Weisz said, "We have planned this internally for some time now, and have always believed that international calling would bring the group to the next level.

"We are pleased to see it come together as well as it has, and are confident that our international programme will be well received by the market.'' The company gained considerable experience in facilitating international calling through its American subsidiary.

The company is a low cost, reseller to the retail market, creating an extended local calling area, selling long distance sometimes at a flat rate.

Said chief financial officer Colin Wood, "The current rates for calling across Canada is seven cents a minute Canadian, which works out to be just over four cents a minute in US dollars.

"And it's 13 cents a minute to the US, which is nine cents a minute in US dollars. That is our appeal.'' Mr. Wood commented that the Bermuda Government's move to bring competition to the local telecommunications industry was unusual.

He said, "Most jurisdictions of any similar size to Bermuda would not even contemplate opening their markets up like this. Even the fact that it is in play, is quite remarkable. It is a very progressive move.

"And I think it probably really surprised the incumbent substantially, which was evident from their reaction.'' With the anticipated increase in Canadian competition, coincident with the divestiture of Teleglobe's Canadian monopoly in overseas calling, London Telecom is confident it can make a mark in an increasingly competitive marketplace.

Mr. Weisz said, "Our rates have always been competitive. With the introduction of international calling, we feel it is important to be a price leader.

"More importantly, we remain committed to providing consistent value within our pricing across all segments of our plans.'' The Canadian Radio-television and Telecommunications Commission (CRTC) is expected to rule this month on a competitive framework which will include a licensing regime.

Mr. Weisz noted, "Our new 14 cent rate for Canadian calling to the UK is at least six cents better than anybody else in Canada. It is the same with the other new rates. They are generally two to five cents cheaper than the competition. We are finally in the international calling business as of September 1, offering the service to our customer base and moving on from there.'' Mr. Wood stated, "We had done nothing outside of North America previously.

When we came to Bermuda, it was really the first step toward setting this all in motion.

"When we first came here last year, TeleBermuda International was completing its start-up and we thought that we would be among a group of telecommunications companies doing exactly what we are doing: looking at international deployment as a reseller, establishing our contracts with the various companies that we have international settlements with, from here.'' London Telecom has achieved sales growth of more than 10,000 percent since it began aggressive expansion in 1992.

Its growth has parallelled Canada's reform of its former monopoly long distance service -- reform which began in earnest in 1990. And much like in the US, Canadian long distance rates have fallen dramatically, driving usage up equally dramatically.

The company was started by real estate broker Robert Freeman in 1988 from his London, Ontario basement home because of his expensive long distance charges.

He felt he was unable to provide the service to real estate clients because of high long distance rates. But he noticed that a community between his and the one he called most frequently could place `local calls' to both areas. Mr.

Freeman checked with Bell Canada regarding the legality of forwarding calls through the common area and found that although it had never been done before, there were no restrictions prohibiting it.

He took out a small ventures loan of $10,000 and gathered a coalition of customers who covered the cost of an extended area, local calling network. For a flat fee, the coalition shared ten lines and switching equipment to call between the two cities without incurring long distance charges. It was the start of London Telecom.

With a rapidly expanding customer base, he established in 1990 a new network in the Toronto and Burlington areas. By the summer of 1993, the firm was linking several networks in Southern Ontario.

The flat rate service offered 40 hours of calling within the network area at less than four cents a minute. The service grew across Canada and opened to the US market in 1996.

James (Jim) Weisz Colin Wood