The telecommunications industry world-wide is undergoing a process of transformation, evident in the mobile telephone sector, where exciting technology is coming to the fore and companies are jockeying for position in a lucrative and growing market.

Bets are being placed on the next stage of the mobile phone market. In one arena, companies are putting place satellite systems making roaming with a mobile phone more practical.

As a corollary to those efforts, hardware and technology companies are making ever smaller and cheaper phones that make it more practical for the ordinary consumer to own a mobile phone. Companies have developed hand-sized dual cellular and satellite phones for use with the new systems. The phones being developed now will have video, data and Internet capabilities.

The Bermuda Telephone Co. Ltd. (BTC) and soon-to-be competitor Bermuda Digital Communications, have lined themselves up behind two satellite system companies to provide the kinds of services about to come on line over the next year.

BTC is linked with Globalstar. Bermuda Digital has tied itself to Iridium.

Globalstar and Iridium are currently lofting satellites into low level orbits around the Earth. Other companies are also setting up similar networks.

The companies are making a multi-billion dollar gamble that everyone will soon be talking and roaming instead of being tied to a line in the ground.

Globalstar is setting up a system of satellites that act as simple relays, bouncing a call initiated from someone back down to one of 60 ground stations which will then reroute it though the regular phone system. Iridium is building intelligent satellites that route calls among themselves to get the call connected.

The newcomers are attempting to mass-market satellite communications, an area of business previously held mostly by the Immarsat system for ships, oil platforms at sea and other high-end commercial users.

The Iridium system is already in start up, while Globestar is due to come into place later this year, delayed by the crash a Ukrainian-built Zenit-2 carrying 12 satellites in September.

While the military, underdeveloped nations without phone service in many areas and remote outposts all stand to benefit from the systems, it's business travellers and industrial users who'll be the marketing target.

Forecasters at the Strategis Group project the number of nomadic elite will grow to be about 15 million by 2000. Meanwhile TeleStrategies Inc. and the Yankee Group forecast that there will be a market worth $100 billion up for grabs by 2007 in the whole mobile phone market.

Bermuda, with more businesses than golf courses, has a high concentration of users. Firoz Kassam, BTC's product manager in the wireless marketing department, said the Island has about 13,600 cell phone users.

When you divide that number by the population you get an place with the fifth or sixth highest penetration level in the world, about 23 percent. Compared to the top of the pile, there's still room for large growth in the Bermuda market.

Number one is Finland, with a 53 penetration level. I guess every Finlander gets a cell phone at birth. Norway has a penetration level of 47 percent and Sweden 44 percent.

However according to an article in Time magazine a Globalstar handset is expected to cost about $1,000, one third of the cost of an Iridium phone. BTC estimates local retailers will charge about $1,500 here.

Subscribers will pay a higher standing charge to their normal cellular operator and a premium on satellite calls. Numbering will not change and unified billing will be standard. Time magazine estimates on average satellite phone users will pay monthly charges of perhaps $50 and rates that may start at $1.79 a minute and rise much higher, depending on call location.

This is very affordable compared to previous prices of satellite phones when Immarsat had a monopoly on the space call. Marc Newman, general manager of Globalstar's Washington operations, said in 1990 a satellite phone cost about $42,000 each and needed a couple of briefcases to carry around. The price has fallen to about $18,000.

Mr. Newman said the business customer who currently uses his cellular phone in other countries when travelling, who roams, will probably find he's paying about the same after the initial cost of the combination cellular and satellite phone, and the additional monthly service charge.

These phones will operate like other mobiles, relaying calls through the available cellular network. However, when the conventional cellular network is unavailable the phones will automatically go to the satellite to get you connected.

The consumer here who shells out $1,500 or more for a new hand-held mobile phone with satellite capabilities won't find much advantage on the Island. Mr.

Kassam said there are a few "grey'' areas on the Island where cell phone calling is difficult. Those problems are being sorted out, he said.

You have to be a real roamer, one who travels frequently, to get the advantage of these phones. The real problem these days is not in the technology but in the difference in mobile telephone standards between North America and Europe.

Cell phones in Bermuda comply with the North American NADC standard , which means they don't work in Europe, which goes by the GSM standard. Companies are attempting to sort out the compatibility problem so everyone can roam at will with an ordinary cellular. Iridium's satellite phone will have plug in modules for an extra $500 cost to allow switching between systems. Meanwhile, manufacturers are busy adding more features on the ever smaller mobile handsets. As ever, the internet features large in the business plans.

Last week, 3Com announced a pact with French telecommunications company Alcatel to create devices that can act as both cell phones and mobile organisers. Sun Microsystems announced a similar deal with Symbian to create Internet-enabled cell phones.

Ericsson also announced its R380, a cell phone featuring a calendar, built-in modem, and graphic display. Finland's Nokia Oyj has created a "micro browser'', a mobile phone that can display data from the Internet.

Nokia, along with IBM and The Sabre Group, have formed an alliance to bring real-time interactive airline and flight information to cell phone users.

Travellers will be able to make flight arrangements and receive updates via cell phone.

Motorola plans on introducing a small and light dual-band cell phone, a new two-way pager supporting mobile email, and a cell phone which allows users to use one handset across the Americas, Europe, and Asia, "where roaming agreements allow'', according to the company.

Into the fray steps Microsoft, which is developing a "Web-enabled telephone'', including smallish keyboard and display capable of sending and receiving emails and Internet browsing.