The phone wars escalated yesterday after Telecommunications Minister E.T.

(Bob) Richards promised a media blitz to counter a "misleading'' ad campaign by Cable & Wireless over the introduction of competition in overseas calls.

Sen. Richards hit back after a series of C&W advertisements claimed Government had tied its hands by stopping it from competing with newcomer TeleBermuda International.

And the firm -- once sole provider of an overseas network -- warned it would have to cut jobs as its market share shrinks.

C&W has also signalled it will sue Government for $100 million in compensation for its lost exclusive contract -- an action Government said it will fight all the way.

Sen. Richards said: "I want to publicly express my disappointment at C&W's recent attempts to torpedo Bermuda's efforts to introduce competition in long distance telecommunications services.'' And he added: "I want to assure the public that those attempts will fail.'' Sen. Richards said: "Let me say that C&W's claim that they are making this fuss because Government won't allow them to reduce their rates is false.'' He added that Telecommunications Commission chairman Robert Stewart had written to the company to point out rate reduction applications had not been supported by costing information.

And he pointed out that the Commission had noted discrepancies in different sets of financial information provided to it amounting to "several million dollars.'' Sen. Richards said: "The ball on rate reductions is firmly in C&W's court.'' He added: "They are not claiming that competition is a bad thing -- they know they'd never win that argument. So they've put in eight applications in to the Telecommunications Commission, failed to justify them as the law requires and they're raising Cain about how unfair the Bermuda Government is.'' Sen. Richards said Government had begged C&W to reduce its rates several times -- which the firm said it could not afford.

But he added: "I do think it's most ironic that the moment TeleBermuda International starts offering lower rates, C&W suddenly discovers that its financial position isn't so bad after all and that it can offer lower rates.

"I must also comment that the company appears to be holding its staff to some sort of ransom in this campaign to stop competition. This is not the sort of action one expects of a company which prides itself on being a model employer.'' And Sen. Richards said: "The Government didn't start this competition business on some kind of whim. It is in the Country's long-term interest that we provide the best possible service here at the lowest possible rates.'' He added: "We have been rendered less competitive both in tourism and international business because our telecommunications are not coming down in line with overseas. People say our services are too expensive -- this is something we can do something about.'' Sen. Richards said C&W had "done a lot for Bermuda'' over the 100 years the firm has operated on the Island, including providing an international network which Government could not have afforded.

He added, in return, the firm had been allowed to act as a monopoly and had been untaxed until 1985.

He added, however, that the law giving Cable and Wireless a monopoly also included a clause saying Government could change the rules if it wanted.

Sen. Richards said: "They have been well compensated for their efforts. But there was never any kind of guarantee that they would be able to operate as a monopoly for ever.'' Last night C&W were staying tightlipped over its battle with Government.

A company spokesman said general manager Colin Little would study a transcript of Sen. Richards speech before deciding whether to respond.

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