Company -- as employees deal with hundreds of fresh complaints.

The BPSA has begun negotiations with the firm's Human Resources Manager after moans from several workers that the mood at BTC has plunged to crisis point.

The Royal Gazette reported earlier this week that new customers had complained of a six-week backlog in installing new phone lines.

One member of staff is reported to have told a caller: "We have too much work but not enough workers.'' It has also been revealed that around 700 phones went out of order in the Paget area overnight on Wednesday because of a technical problem in the local exchange.

The faulty equipment is being replaced this weekend, affecting services in Paget for 20 minutes between midnight and 3 a.m. on Sunday or Monday.

And an anonymous letter grumbling about BTC management practices was sent to the firm's board members and the Department of Immigration earlier this month.

The letter claimed some senior BTC executives had "friends lined up for jobs'' and disgruntled young Bermudians were leaving the company to join rival firms.

Senior members of the Department of Immigration have already read the letter but declined to comment on its contents.

Edward Ball, General Secretary of the Bermuda Public Services Association, confirmed he had been shown the letter but could not take it seriously because it was unsigned.

But Mr. Ball added: "Everything must be done to train Bermudians and to ensure that the operation is as harmonious as we would like.

"Staff morale has come under the microscope for a number of reasons surrounding the firm's reorganisation.

"We are talking actively with the Human Resource Manager about staff morale and we are making in-roads.

"But as far as the letter is concerned, we are not getting involved.'' Boston-based firm Dartmouth Research and Consulting conducted a reorganisation study in 1995 and 14 managers were made redundant after the review.

A BTC insider told The Royal Gazette that the contract ran over schedule and cost the company $9 million instead of the projected $3.5 million.

And he said some of the recommendations were now being reversed by present Chief Executive Officer Lorraine Lyle.

But BTC Assistant Vice-President Karla Lacey-Minors said the extra costs of implementing recommendations did not come as a surprise.

She said: "We had to include redundancy payments and remodelling St. John's Road as part of the cost of the project. There was an inflated figure to be paid but it did not all go to Dartmouth. With regard to staff morale, this is a time of massive change in the telecommunications industry.

"Like all companies in this field, BTC recognises that uncertainty in this arena is the result of charting new ground.

"Change is necessary to survive and thrive and that's what we intend to do.'' She said the talks with BPSA about staff morale were held in Joint Consultative Committee meetings, which take place every six weeks.

"The last one dealt with a non-smoking issue,'' she said. "That's all there is to it.'' She also apologised for inconvenience to "valued customers'' after the faults in Paget.

BTC made an $11.7 million profit last year and officials said they were now investing $14 million in capital improvements.