One of the illegal overseas telephone callback companies banned by Government from operating on the Island has defiantly stepped up its recruitment campaign.

GlobalTel, which claims it has thousands of customers in Bermuda, has hit back at Government's threat of legal action by lowering its prices and randomly calling homes touting for new business.

At the start of December it contacted many of its customers promoting a reduction in international telephone rates by up to 15 percent every month, and promising that once prices went down, they would never go back up.

And at the weekend, private telephone numbers across Bermuda were called by a voicemail message from GlobalTel urging residents to sign up.

The message said GlobalTel was licensed by the Federal Communications Commission (FCC) and charged only 19 cents a minute to the US and 20 cents a minute to the UK and Canada.

It said since 1996 it had provided people in Bermuda with a service, adding it had more than 20,000 customers worldwide from 185 different countries.

And it said that calling overseas with GlobalTel would cost half of some of the rates offered by the Island's legal providers Cable and Wireless and TeleBermuda.

The message said: "Our unique system allows everyone in Bermuda to have the right and freedom to make high quality faxes and telephone calls anywhere in the world.'' At the end of November MPs voted to ban all illegal overseas callback companies who tap into telephone lines on the Island to offer residents a cheaper service.

Telecommunications Minister Renee Webb has worked hard to bring about new legislation that would clamp down on unlicensed companies operating here, but also worked to get cheaper legal rates for local consumers.

Legal overseas calls for people in Bermuda have now gone down from about $1.10 a minute to 26 cents a minute.

It is estimated that the three main illegal providers, which are GlobalTel, Call Save and Fiber Tel, cost the Island's two local providers about $3 million in lost calls last year.

Ms Webb said it was time to ensure that illegal carriers did not operate in Bermuda and that Cable and Wireless and TeleBermuda were given some assistance from Government in return for investing in the country.

Callback company She said the call-back companies were not paying for the infrastructure in Bermuda, but were basically in the business of undercutting the service provider.

As a result, any unlicensed overseas telephone carrier found operating in Bermuda could land up in court and face huge fines.

The Telecommunications Amendment Act 2000 has been passed in the House of Assembly and is up for discussion in the Senate today.

Last night, Ms Webb was not on the Island to respond to GlobalTel's recruitment drive.

Home Affairs Minister Paula Cox, who stood in for Ms Webb in November when the amendments were passed, said then: "The FCC now has Bermuda on its list of countries that prohibits call-back companies.

"The FCC clearly states that call-back providers are not authorised to provide a service to countries that have expressly banned them. They are prohibited in Bermuda.'' Ms Cox said any illegal overseas company, which is operating in Bermuda without a licence, could be fined up to $50,000.

The United Bermuda Bermuda supported Government's move to outlaw the illegal carriers, but asked how prosecutions would be brought when they were not even based on the Island.

Last night, Shadow Finance Minister Grant Gibbons said it would be interesting to see how the legislation is enforced.

He said: "It's unfortunate that, in spite of the fact that the legislation has gone through the lower House, apparently GlobalTel continues to try to recruit customers here.

"But I think it does underscore, perhaps, the challenges the Department of Telecommunications will have in enforcing the legislation once it does go through.'' GOVERNMENT GVT