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Long-distance call bonanza

New Delhi, April 1: Fixed-line phone users, it is time to rejoice: long-distance call rates — domestic and international — have been slashed by up to 25 per cent. The new rates come into effect from April 10.

Bharat Sanchar Nigam Ltd (BSNL), the country’s largest fixed-line phone operator, cut its STD rate for calls to fixed-line and mobile phones by 25 per cent to Rs 3.60 a minute from Rs 4.80.

Calls to the US, Canada, Australia, South East Asia and the Gulf were also slashed by 12.5-25 per cent. Charges for overseas calls to the UK remain unchanged. Calls to the rest of Europe will cost Rs 9.60 a minute.

The STD rate cut by the state-owned telephony major has sparked ripples in the cellular industry which offers mobile-to-mobile STD rate of Rs 3.99 a minute and a mobile-to-fixed call rate of Rs 4.80 a minute against BSNL’s new rate of Rs 3.60.

“The tariff cuts will result in a loss of Rs 300-350 crore but we hope it will be offset through a surge in traffic,” said BSNL chairman and managing director V.P. Sinha, who has been granted a tenure extension of three months with effect from March 31.

The timing of the announcement is strategic. The company had closed its balancesheet for 2003-04 on Wednesday. So, even if its revenues are hit by the cuts, it will only show up in its balancesheet for the next financial year.

Mahanagar Telephone Nigam Ltd, the state-owned telecom operator in Delhi and Mumbai, is also likely to slash its long-distance rates. Its spokesperson said the board will take a decision.

A bonanza was announced for the media and corporate houses using leased-line services by slashing the charge by 60 per cent from Rs 22 lakh for a 2 megabit per second line to Rs 8.8 lakh.

Industry sources said the cuts were designed to perpetuate the feel-good sentiment that the BJP-led government insists it has been able to whip up as it heads into the general elections.

BSNL’s total subscriber base, including cellular, WiLL and fixed-line connections, stands at over four crore. The total cellular subscriber base is estimated at 2.4 crore — but is growing rapidly. Ernst & Young, the management consultancy, has forecast India’s cellular-subscriber base will top the fixed-line-user base by September this year.

“This is an important indication of how we at BSNL have come to recognise the growing popularity of STD calls from mobile phones. We are trying to win back our customers who had started making STD calls from mobile phones,” said an official.

The cut in ISD rates to the US is an extension of promotional tariff that expired yesterday. While the cut over promotional peak ISD rates is 25 per cent, the reduction over the normal peak rate is about 70 per cent.

Officials said the cuts in overseas rates were possible because they had been able to negotiate lower call-carrying charges with Videsh Sanchar Nigam Ltd, the international call operator. “The cuts have been possible as VSNL has agreed to match the lowest settlement charges of Rs 1.69 per minute offered by other carriers to the US and the UK from Rs 2.20 quoted earlier,” said Singh.

BSNL also launched a pilgrimage card worth Rs 100 and Rs 200 with 30-day validity period. The card, coming into effect from April 5, will allow a discount of 10 per cent on local, STD and ISD rates and will be available from pilgrimage locations only.

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