Company Ltd. will raise domestic telephone rates, the company's latest letter to shareholders revealed.

"In order to provide service as a monopoly, there were a number of services priced below cost, subsidised by more profitable services provided to the business community,'' Telco said. "As these profitable services are eroded by competition, there will be a need to continue the process of rebalancing of rates as the commission seeks to ensure that all services and rates reflect the true cost.'' Cable & Wireless (Bermuda) has been the lone provider of international telecommunications and under an agreement with Telco, subsidises local domestic telephone services. That agreement is expected to end with the entry of TeleBermuda International Ltd. into the market.