Bermuda Telephone Company could be hit by penalties and fines for poor service, Minster of Telecommunications and E-commerce Renee Webb has confirmed.

She added that she hoped that in the face of financial loss, service would improve for Bermuda's mainline telephone users.

Ms Webb said that because there was no competition in the local telephone carrier sector, the Telecommunications Commission was looking at penalising BTC for non-delivery of services or excessive delays.

Ms Webb said that competition with the wireless sector had worked very well and with cellular prices dropping as competition hotted up.

But the Ministry was still looking for a buyer for Quantum Communications to provide local competition among telephone providers.

"In the absence of any competition in this sector, the Telecommunications Commission is reviewing possible penalties and fines for non-delivery or excessive delays in delivery of service," said Ms Webb.

"Such practices exist in other countries and have proven to be a great incentive to providing better service."

She added: "Although competition with wireless services is working very effectively, competition has yet to occur with local wire line services where BTC remains the sole carrier.

"Cable and Wireless has been working over the past year to find interested investors to make Quantum Communications, which currently ahs access to a fibre optic ring in the City of Hamilton, a viable option. Unfortunately at this point no successful marriage has taken place as yet."

Last year Ms Webb promised to levy similar penalties in the House of Assembly debate last year, and this year reiterated the promise this year in Parliament.

But last year she said that while BTC had a lot on its plate, it would look at fines for undue delays if service did not improve.

At the time BTC customer service had come under scrutiny after a Bermudian hijacked a BTC van in frustration with constant problems with BTC telephone lines at his business.

Ms Webb has pointed to the strong competition in the cellular phone services and said BTC Mobility was now a separate company from BTC to allow it to compete on a more even playing field with Cellular One (Bermuda Digital) and Telecom (Bermuda & West Indies).

The minister also pointed to reductions in rates for Internet services. She said: "There have been significant reductions in the rates businesses in Bermuda for pay for Internet access."

And she said that the recent entrance of Transact Ltd into the residential market had pushed residential prices down by approximately 10 percent.