VoiceStream Wireless and GTE Mobilnet on Thursday said their customers will have to pay only air-time charges for calls they make to the other islands.

Both companies said they would absorb the cost of the tolls.

VoiceStream, though, is going one step further: It said it also will cover interisland tolls for people calling VoiceStream customers from regular landline phones. It has worked out an arrangement with GTE Hawaiian Tel so VoiceStream will get the bills, not the landline callers.

"We're basically taking the long-distance toll charges and eating it," said Catherine Ferrera, a VoiceStream marketing executive.

The development is only the latest effort by the companies to woo customers in what is becoming an increasingly intense competition.

And it likely will intensify. At least two other wireless phone companies are expected in the Oahu market by year's end.

Honolulu Cellular, Oahu's third wireless provider, said it would evaluate the competition's moves to determine if it needs to make adjustments. "We intend to continue to be the industry leader," said Robert Osias, Honolulu Cellular's general manager.

Honolulu Cellular currently offers unlimited interisland calling for $5 per month or a flat rate of 6 cents per minute, plus applicable air-time charges.

Interisland toll charges for the wireless companies currently range from 6 to 18 cents per minute.

As the competition heats up, industry observers believe consumers will get even more benefits.

"You're going to see more jostling for market share and a reduction of rates," said Courtney Brown, chairman of the Coalition for Competitive Telecommunications.

Within two years, Brown predicted, the wireless companies likely will be charging flat rates for its services in Hawaii.

VoiceStream's new interisland feature took effect Friday. GTE's takes effect on Sunday. Both companies also said their customers no longer will have to dial 1 (808) to place an interisland call.

VoiceStream entered the Hawaii market earlier this year as the state's first personal communications services provider, offering the newest generation of wireless phones. But because it only has coverage on Oahu and Maui for now, its customers can't make or receive calls on the other islands. It expects to have statewide coverage - something GTE already has - within two years.

Until several months ago, the wireless carriers here had to pass interisland toll charges directly to their customers. That was changed by a Public Utilities Commission ruling.