Two weeks ago, BTC Mobility, the mobile unit of the Bermuda Telephone Company Ltd., took a bold step and launched packages offering unlimited local calls between 7 p.m. and 7 a.m. and on weekends, priced at $35 and up.

The company is the first mobile operator in Bermuda to offer calling packages with an unlimited component, which are not even very common in more developed mobile markets overseas (in cases where they are, customers typically pay more then $35 each month for the privilege).

But the term "launched" might be the wrong word for the introduction because the packages have yet to take off, despite their potential appeal to customers. BTC Mobility has not advertised the packages and the company's website still shows the old mobile rates (although "Wildfire", a voice-activated service included with the plans, has received some prominence online). The debut a far cry from the company's MAX blitz in 1999, which began with teaser ads, followed by deeply discounted mobile phones and ended with many dissatisfied customers whom BTC could not connect fast enough.

A spokeswoman for BTC Mobility said Monday that the customer response to the new plans had been good, considering the lack of promotion, except through dealers. When the new packages finally are hyped, it is likely that many more subscribers will switch from the old plans, which charge between 15 and 25 cents for each minute beyond the monthly allotment included in subscription packages, regardless of the time of day when calls are made.

But as customers, if only a few at the moment, enjoy free nights and weekends, competitors question whether BTC Mobility's business plan is viable.

Kurt Eve, chief executive officer of Bermuda Digital Communications, which operates CellularOne, said the changes would hurt BTC Mobility's bottom line and probably would not last.

"It costs money to generate a call, and if you give customers something for free, they'll take advantage of it," Mr. Eve said.

"Once everybody starts using their cellphones and flooding their network, they'll have to revisit it."

But one industry insider familiar with BTC Mobility said that the company's network would probably be able to handle any increase in the volume of calls. Yet he did say that even though BTC Mobility's infrastructure costs were sunk, the company will still incur additional expenses to connect calls which will not contribute to revenue.

Mobile industry figures show that roughly one third of all mobile calls are made during the off-peak hours during which service is free. BTC Mobility should not lose one third of its revenues, though, as the new plans with free minutes are more expensive than the old ones. For instance, the base plan has changed from $25 a month for service and 50 peak minutes to $35 a month for 60 minutes, plus the unlimited calls during off-peak times. For customers who do not use their phone heavily, the new option might not even work out to be cheaper.

But with more economical rates, people might decide to use their phone more often and in instances where they normally would not - and BTC could lose revenue from its wireline business.

"People are going to cotton on that they don't need to use their wire line (during off-peak hours)," Mr. Eve said. BTC's basic service charge for a residential phone line includes 50 local calls a month, and the company charges 20 cents for additional calls. According to one insider, the decision to switch from wireline to mobile will vary widely among customers because the quality of cellular coverage in Bermuda is inconsistent. Consumers are also likely to consider potential health risks.

The BTC Mobility spokeswoman said the company considered the issue with BTC's landline unit and did not think it was a problem. She said BTC only wants to provide the best service for its customers.

But during a telephone interview, Mr. Eve was convinced that BTC Mobility's new rates are in response to the success of CellularOne, which began operations two years ago. The company now controls 30 percent of the mobile market (the latest statistics show that one third of Bermudians have a mobile phone).

Mr. Eve would not describe the pricing as predatory, though - only a measure by the dominant carrier to keep customers from switching to CellularOne.

"It's a very short-term approach," he said. "We are not overly worried about it."

For Mr. Eve, CellularOne's customer service and call quality are what appeal to customers.

Expecting that BTC Mobility will be forced to change its strategy, CellularOne has no plans to change its own rates. But if management changes its mind, prices can be adjusted with just 24 hours' notice; unlike BTC, which enjoys a monopoly in other areas of its business, CellularOne is not a regulated carrier and does not need to apply for permission from the Telecommunications Commission to change the prices it charges customers.

Telecommunications (Bermuda and West Indies) Ltd., or Telecom, will become the third mobile provider in Bermuda when it introduces service using the Global System for Mobile Communications (GSM) standard later this year. Last month, the company said it would offer subscriptions within 45 days.

According to Firoz Kassam, the company's vice president of marketing and business development, Telecom is still working on packages, and has not ruled out the free night and weekend option. He said that the company's rate structures would be "innovative" and competitive with BTC Mobility's.