set to be opened to competition with the arrival of TeleBermuda International and a group of other smaller phone companies offering new services. Doug Ashbury looks at the state of the industry.

Bermuda's telecommunications market will be twice its current size five years from now, TeleBermuda International Ltd. chairman and CEO Michael Kedar has predicted.

TeleBermuda's business plan looks at projected growth over the next five years, growth Mr. Kedar estimated will be ten to 14 percent per year.

He anticipated TeleBermuda is looking for a 40 percent market share but that percentage will be in a market that has about doubled.

The company has been offered a telecommunications licence to provide international telecommunications services to Bermuda and would compete with Cable & Wireless Plc.

"The market will have quite an appetite for an additional carrier,'' Mr.

Kedar said yesterday.

Bermuda's voice traffic volume is higher per capita than any other country, TeleBermuda said in its prospectus.

The prospectus also included various market conditions: For the year ended March 31, 1996, Bermudians completed 9.2 million overseas calls, an increase of 9.2 percent over the previous year's volume; TeleBermuda believes the average subscriber spends 2,040 minutes a year on the phone making international calls; and Per capita spending was estimated at over $1,600 per annum compared to about $55 in the US.

The Bermuda market has grown significantly without competition, Mr. Kedar said, adding that once rates decline, utilisation will increase.

TeleBermuda initially anticipates a reduction of 17 percent in long distance costs with additional reductions.

Michael Leverock, who set up Global Access Bermuda Ltd. and is now chief operating officer at Bermuda Digital Communications Ltd., claims Bermudians should expect long distance rates of at least 30 percent less than what they currently pay now.

In 1993, his company, Global Access, offered a call-back service to about 1,000 customers. It was a brief venture as the Supreme Court decided the company needed a licence. Later, a Telecommunications Commission inquiry decried call-back service as "cream skimming'' ventures.

Today, Global Access is inactive and Mr. Leverock is pinning his hopes on Bermuda Digital's future.

Bermuda Digital plans to offer cellular telephone services.

Bermuda Digital has secured about $500,000 from private investors and, if offered a licence, a joint venture partner will kick in $1 million, Mr.

Leverock said.

The company, whose CEO is Kurt Eve, has yet to be offered a telecommunications licence from Government.

Last year, Government said it planned to offer licences to Bermuda Digital, North Atlantic Telecommunications, Telecommunications (Bermuda & West Indies) Ltd. (Telecom) and TeleBermuda. Technology Minister John Barritt said it might not be possible for Bermuda Digital and North Atlantic to operate concurrently due to bandwidth availability. Meanwhile, Telecom has not pursued a cellular telephone 2 (CT2) service.

TeleBermuda was offered and accepted a licence under the existing Telecommunications Act. Granting of the licence is conditional.

TeleBermuda, which can be 80 percent foreign-owned, is amid an initial public offering (IPO) to raise $30.9 million. The offering is scheduled to close on or before August 31 but in any event no later than October 31.

Though the prospectus warns that the securities are speculative, it is believed that TeleBermuda will had no difficulty raising sufficient capital locally to make it 20-percent Bermudian-owned.

After setting up international telecommunications services to and from Bermuda, the company plans to develop Bermuda as an international telecommunications hub.

TeleBermuda is key to Mr. Kedar's plan, through his company GeoReach Telecommunications Inc., to "grab a slice of North America's market of ten billion overseas calling minutes,'' the Financial Post said earlier this month.

GeoReach was formed in Canada in 1995 to apply to the Canadian government for an international overseas telecommunications licence.

TeleBermuda and GeoReach have set up a subsidiary to apply for a UK international carrier licence.

Mr. Kedar is looking to make GeoReach a competitor to Teleglobe Canada Inc., which will likely lose its monopoly on long distance calls from Canada in 1997.