Facing stiff home-state competition, Bank of Boston Corp. is beefing up its Massachusetts telephone banking operations, adding at least two hundred employees to its base of 300.

The $45 billion-asset bank will relocate its Boston facility and move 150 employees in June to a new $2.5 billion Dedham office with twice as much capacity, said Michael Sundin, sales and service center manager.

Bank of Boston has another 150 employees in an East Providence telephone center that services Rhode Island and Connecticut. The bank plans to add 50 new employees there by yearend, Mr. Sundin said.

Bank of Boston also plans to expand to 24-hour, seven-day-a-week telephone service before the end of the year, he added.

Bank of Boston began looking for space in October to develop delivery systems that are cheaper and more efficient than traditional branches.

Analysts said building telephone operations has become more critical for Bank of Boston, with Fleet Financial Group Inc.'s pending acquisition of Shawmut National Corp.

The acquisition, expected to close in the fourth quarter, would make Fleet New England's largest bank - and the nation's ninth biggest - with $80 billion of assets.

And, Fleet will benefit from a $20 million overhaul of Shawmut's telephone operations undertaken last summer.

That means along with BayBanks Inc., famous for its technology driven systems, Fleet's ATMs and branches will blanket the Boston area.

"On the other hand, Bank of Boston - you're going to have to look for them," said Gerard Cassidy, an analyst at Hancock Institutional Equity Services.

BayBanks, which began telephone banking three years ago, has 400 employees fielding some 10.6 million calls a year in its Waltham-based facility.

Bank of Boston received about 6.5 million calls last year, a 60% increase over 1993.

Known for its private banking and Latin American operations, Bank of Boston is "late on the curve" developing its domestic retail bank, said Brown Brothers Harriman & Co. analyst Nancy Bush.

To catch up, "they're going to try to take their private banking expertise down to the retail level," she said.

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