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Telco to battle it out with new phone companies

-- and cheaper calls seem likely whoever wins.In a surprise announcement, Telco revealed it was joining the list of companies hoping to provide overseas phone calls for Bermudians.

-- and cheaper calls seem likely whoever wins.

In a surprise announcement, Telco revealed it was joining the list of companies hoping to provide overseas phone calls for Bermudians.

This would shatter the deal it now has with Cable & Wireless, the only firm now allowed to handle international calls.

The long-standing arrangement between the two firms has been attacked by new phone companies as a "monopoly''.

At least seven new companies are applying for Government licences to supply international phone services for the Island.

Four of them presented their proposals to the Telecommunications Commission last month. Yesterday, three more unveiled their plans.

At the end of yesterday's hearing Telco revealed it is also applying for an international licence.

It slammed C&W and Government for blocking Telco plans to offer cheaper calls under the present arrangement.

Mr. John Cunningham, Telco's lawyer, said it would apply for a licence "in a matter of weeks''.

If it got a licence, Telco could then compete on the same basis as the new firms.

The cost of international calls would be "dramatically reduced'' by cutting out C&W as the "middle man''.

He said: "Telco wants to provide an international service in the same way as everyone else.

"We want to compete with anybody who's making an application for a licence.'' He said that if Telco got a licence, it would mean a "restructuring'' of its deal with C&W.

At present, Telco bills customers for international calls on behalf of C&W and shares the profits.

Mr. Cunningham said Telco was waiting for Government and C&W to agree to a new method of billing which would work out cheaper for customers.

Access to 1-800 numbers and discounts for frequent callers had also been blocked.

But commission member Mr. Charles Collis produced figures from C&W that showed how its present arrangement with Telco works.

According to these figures, he said, Telco got the biggest slice of the profits on calls to the US. So Telco had more scope to reduce prices than C&W.

This was denied by Telco general manager Mr. Ernest Pacheco.

One of the new companies bidding for a licence has no plans to offer phone calls. Business Systems told the hearing that it wanted to hook up local firms, libraries and homes to a worldwide computer information system called Internet.

Mermaid Beach hotel owner Mr. Brian Alkon told the hearing that his new firm, Bermuda Global Access, would aim to serve homes and small firms. Mr. Jon Feldman, Mermaid vice-president, said the hotel had signed up with the pioneer phone service Global Access Bermuda last year. It was "dismayed'' when GAB was stopped by the courts, he said.

He praised Mr. Alkon's proposal for a similar service, saying the hotel industry had to cut phone costs if it were to survive in its present form.

Probably the most ambitious new venture, TeleBermuda International, told the hearing it wanted to make communications into the Island's third-biggest industry.

Its backers include local executives Mr. Jeffrey Conyers and Mrs. Lynda Milligan-Whyte.

It wants to lay a new undersea cable to the Island and make it a world centre for companies taking advantage of the international trend to open up phone services to competition.

C&W was part of the old "club'' of big companies ruling the international phone system, said company president Mr. Michael Kedar.

A new wave of companies could use Bermuda as a hub for rival services, he said.

This would mean more business for Telco, C&W and everyone, he added.