The so-called interconnection pact ensures that GST phone customers will be able to connect with Hawaiian Tel customers.

Hawaiian Tel will continue to offer services such as 911 services, directory publishing and directory assistance, the two companies said.

The deal requires the approval of the Public Utilities Commission, which has 90 days to review the pact and make its decision.

GST is one of several companies trying to enter the $250 million local phone market, long dominated by monopoly carrier Hawaiian Tel. Recent federal regulation has opened up local telephone markets nationwide.

AT&T Corp. and Sprint Hawaii also are trying to enter Hawaii's phone market but both companies have yet to reach an interconnection agreement with Hawaiian Tel, said Calvin Tadaki, Hawaiian Tel spokesman.

In September, Hawaiian Tel and GST agreed to share pole space and cable conduits. That deal is being reviewed by the PUC.

Hawaiian Tel said it is continuing to negotiate the resale of local phone services with GST and other prospective competitors.

GST, established in Hawaii in 1993, is a unit of Vancouver, Wash.-based GST Telecommunications Inc.

GST, which also owns local Internet service provider Hawaii OnLine, employs about 100 workers statewide. The company has provided business-to-business phone services using microwave technology.

"Competition gives new choices to customers and new opportunities to telecommunications carriers, including GTE Hawaiian Tel," said Warren Haruki, Hawaiian Tel's president.