If Santa Barbara entrepreneur Don Oas is right, 5 million Californians will abandon their traditional local phone company over the next two years and jump to competing start-up phone companies like his, Blue Casa Communications.

Oas would like to get all of that business, but for now he's concentrating on the Central Coast, offering local, long distance and international calling service to customers from Oxnard to San Luis Obispo.

He hopes to lure customers away from Verizon Communications and SBC Communications with lower prices, simplified calling plans, better customer service and specially tailored international calling plans for customers with strong family ties to Mexico.

"Competition is fundamentally good for consumers and not good for monopolies," said Oas, Blue Casa CEO and founder. "Monopolies don't have the incentive to invest in better service or lower prices. We do."

Competition in the local phone service market is relatively new. In recent years, state by state deregulation has forced the Baby Bells to open their networks to competing phone companies. California has moved slower than states like New York, Florida and Texas, where competing phone companies control as much as 25 percent of the market.

Blue Casa, a privately funded company with 22 employees, launched last month as an alternative to Verizon. Oas will offer service to SBC customers by the end of July.

Blue Casa is on Verizon's radar, but the largest local phone company in the country isn't worried about a new competitor siphoning off customers, said a spokesman in Verizon's California headquarters in Thousand Oaks.

"Nothing wrong with competition, but we're comfortable with our services. We just came out with the Freedom plan and that's been popular," Verizon spokesman Jonathan Davies said.

The Freedom plan allows customers to make unlimited local and long distance direct-dialed calls for a flat monthly fee. SBC has a competing bundle of services that it calls All Distance. Verizon and SBC are the dominate local wireline phone service providers in California, controlling about 95 percent of the market, according to the California Public Utilities Commission.

Bundling is the latest phone industry trend. Companies group, or bundle, various phone service options, in an effort to give customers increased choices.

Blue Casa has added a new twist with bundles designed specifically for the Hispanic market.

"There's not been much focus on Hispanics as a group by the phone industry. We're changing that," said Oas, who previously worked for Verizon. "For many Californians, calling home means calling Mexico. We've designed some of our best packages for calling Mexico."

One Blue Casa calling plan includes 200 minutes of calls to Mexico, unlimited local calling and a 20 percent discount on other international calls for a flat fee of $41.99 a month.

The company plans to spend considerable money marketing itself to the Hispanic community, Oas said.

"We're 100 percent bilingual in everything we do --all of the voice prompts on our phone system, print, radio and TV advertising," Oas said. "But it's not a program with us, it's who we are and that's who are customers are."

On the Net: www.bluecasa.com