TeleBermuda International Ltd. will begin connecting customers to its long-distance telephone service no later then May 19, the company announced yesterday.

TeleBermuda director Kenneth Spurling said the Bermuda Telephone Co. was in the final stage of completing the connection between the local phone system with the company's long distance service. The process of switching customers who have signed up for TeleBermuda's service from rival Cable & Wireless (Bermuda) Ltd. could take up to two weeks, he said.

TeleBermuda is promising 15 percent savings on all long-distance calls.

Yesterday rival Cable & Wireless announced that the company was going to offer its customers a six percent rebate on international calls in June, July and August. The rebate is subject to Telecommunications Commission approval.

Mr. Spurling said it was up to the Commission to decide if Cable & Wireless is engaging in predatory pricing in a bid to keep its customers from switching to TeleBermuda.

"It sounds like a death bed confession as they (Cable & Wireless) realise that their competition is going to offer a higher qulaity of servies at rates that would be generally acceptable in most telecommunications markets,' he said.

He would not reveal how many customers had signed up for TeleBermuda's service but said "everything was on target or ahead of target'' according to the company's projections.

TeleBermuda's prospectus projected that the company would capture 1.5 percent of the long distance market in 1997 and up to 42 percent by 2001.

Cable & Wireless previously held a monopoly on the long-distance telephone market until Government announced last year that it would allow competition.

The Bermuda Telephone Co. currently holds the monopoly on providing local service.

TeleBermuda is vying for a chunk of Cable & Wireless' profits. The Royal Gazette understands Cable & Wireless makes a profit of about $20 million a year from its Bermuda operations. The company's policy is to not make public the figure, but spokesman Edgar Dill said the number was "way on the high side.'' TeleBermuda's Mr. Spurling said the company was not only vying for local business but hoped to attract overseas companies to use the island as a telecommunications hub between the US and Europe.'' Tom Davis, Chairman of the Bermuda International Business Association, said any lowering of telecommunications costs on the island would be a "tremendous competitive advantage'' for Bermuda over its offshore rivals.

"The disparity between rates in Bermuda compared to the US is so big that it gets to be a real factor that you have to consider when doing business in an offshore jurisdiction.'' He said many companies tended to base their data storage facilities outside of the offshore jurisdiction in which they were located due to the relatively high cost of telecommunications transfer.

Lower rates would help companies reconsider and base their data storage operations in Bermuda, he said.

David Brown, President and Chief Executive Officer of Centre Reinsurance, said the company decided not to put in videoconferencing facilities at its head office in Bermuda because the high cost of connecting with New York.

The companies other offices in Zurich, Dublin, London, San Francisco, and New York had all put in the service. The cost of connecting those offices was one-third the cost of connecting Bermuda with New York he said.

He said companies considered the quality of telecommunications technology and cost when looking at an offshore location.

"High telecommunications costs are a disadvantage today with the increased reliance by companies on telecommunications,'' he said. "But I think for Bermuda we will see it getting fixed soon.'' A US-based newsletter comparision of Bermuda's long distance telephone rates showed that the island had a "significat competitive edge'' over prices in the Bahamas, the Cayman Islands, and Barbados.

Offshore Alert newsletter claims that Bermuda is 40 percent less expensive than the Bahamas, 62 percent less lexpenisve then the Caymans and 33 percent less expensive than Barbados. The newsletter also found Bermuda to be 549 percent more expensive than the US.

While find the comparison by Offshore Alert "encouraging'' Technology Minister John Barritt said the internationalisation of the marketplace meant Bermuda was competing with the world.

"It's wrong to think that Bermuda has arrived with the new government policy allowing competition,'' he said. It is very well to compare rates with those in competing Caribgean countries, but they may very well be yesterday's competitiors and not today's competitors. One of the things technolgy is doing is making the world the marketplace.''