prompted the Bermuda Telephone Company to levy a one percent charge on late payments of phone bills.

In recent years, the company has been hit by a trend where some customers are waiting 45 to 60 days to pay their telephone bills, Telco spokesman Karla Lacey-Minors said on Friday.

Customers who let their balance go beyond 30 days will now face a one percent charge on the overdue amount with a minimum $3 fee. The move will apply to September bills, which are sent out in the first week of October.

Telco had found itself providing "no-cost financing'' to customers, she said.

"We're hoping it will encourage customers to pay their bills on time.'' After notice of the fee went out with the last bills, the most frequent question Telco received was why it was penalising late payments but not offering a discount for on-time payments.

Mrs. Lacey-Minors said Telco already discounts its service more than 50 percent of cost.

Local telephone service is kept low due to Cable & Wireless (C&W) subsidies, she said.