With Government offering telecommunications licences to Bermuda Digital Communications Ltd. (BDC) and North Atlantic Communications Ltd. (NAC) the two companies plan to be operational later this year.

BDC chairman and CEO Kurt Eve said his cellular phone service is scheduled to start offering commercial service on June 1.

NAC plans services to Hamilton in third quarter, the company's president Barry Kayes said.

Island residents preferring to be NAC customers will be able to access that company's telephone network through BDC's wireless network. Though the two companies operate separately, there is an alliance between them.

BDC will compete with Bermuda Telephone Company Ltd. (Telco) on the cellular telecommunications front while NAC will compete with Telco for wire line telecommunications services.

NAC will spend an estimated $13 million to wire the Island while BDC will spend $2 million on equipment. Operating losses at BDC are anticipated to run around $2 million in the first two to three years of operation, Mr. Eve said.

A Bermuda bank as well as an unnamed US firm are anticipated to provide the $2 million capital investment. Financing is anticipated to be finalised in the next 30 days, Mr. Eve said.

Mr. Kayes said Island sources will generate most of the $13 million needed to set up his company's telecommunications infrastructure.

On going public, Mr. Kayes said the timing is currently not favourable for an initial offering because interest in local issues is low.

Government announced on Friday that the two companies had been offered conditional licences.

BDC applied for a telecommunications licence in 1994 while Mr. Kayes, who is president of two-way radio company Electronic Communications Ltd., said for him, the process began eight years ago.

Under the licence offer, both companies must demonstrate evidence of adequate capital by March 31 and be operational within a year.

Mr. Eve said BDC initially proposes cellular phone rates only marginally below Telco's current 30 cents a minute peak time rate and 15 cents non peak time.

BDC plans 28 cents and 14 cents respectively, Mr. Eve said.

NAC will better positioned to discuss rates mid-year, Mr. Kayes said.

Both said the customer benefits will come by way of service and new technology.

"The subscriber, in the end, will get a choice of local and international carriers. The customer can decide which local and which international,'' Mr.

Kayes said.

"It's a major change from a duopoly, a complete change to a competitive environment.'' Currently Telco and Cable & Wireless Bermuda enjoy a telecommunications duopoly. The former is the lone domestic service provider and the latter the only provider of long distance telecommunications services.

TeleBermuda International Ltd. was given its telecommunications licence on Friday and will compete with Cable & Wireless Bermuda.