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Fullscale phone war, rates in free fall

New Delhi, Aug. 27: Bharat Sanchar Nigam Ltd, the country’s largest telephony operator, today upped the ante in the raging rate war that has gripped the industry by slashing long-distance rates by 33 per cent and its mobile phone rates by 59 per cent to 90 paise a minute, setting new tariff benchmarks.

BSNL’s aggressive rate cuts comes on top of tariff reductions that were initiated last week by Reliance Infocomm and quickly followed by mobile operators Airtel and Hutch.

BSNL’s new long-distance rate of Rs 2.40 a minute will apply to both its fixed-line and mobile telephony customers.

The state-owned telephony operator will be offering the lowest STD rate in the industry at Rs 2.40 a minute. It will also match Reliance and Airtel by offering an STD rate of Rs 2 a minute for cell-to-cell calls on any network to its pre-paid users and Rs 1.80 a minute to its post-paid customers.

The sharp cuts in the pre-paid mobile phone rates is a clear attempt to take on Reliance and the other mobile phone operators in one of the fastest-growing segments in the telephony business. Pre-paid customers account for over 75 per cent of the subscriber base of GSM operators (Airtel and Hutch).

BSNL has gone a step ahead of other private operators by reducing tariffs in the post-paid segment. Under its Plan-325, the rate for a local cell-to-cell call has been reduced to 80 paise with a 15 second pulse, down from the existing Rs 1.40 a minute. The STD charges under this plan have remained unchanged at Rs 1.80 per minute.

The new pre-paid and post-paid rates for mobile phones and the STD rates for fixed line phones will be available for both existing and new subscribers for all recharging options.

The STD call costs will go down further because BSNL has, at the same time, increased the pulse rate for calls beyond 200 km to 30 seconds from the existing 20 seconds. The pulse rate for local calls and calls made up to 50 km will continue to be 90 seconds with an effective rate of 80 paise.

A senior telecom analyst said: “Those private operators who had predicted that telecom rates had reached the saturation point will need to rework their statistics. The BSNL chief has made an important point that in a country with one of the lowest per capita incomes and large population, there is huge scope to offer telecom services at low rates and still rake in profits on the volumes.”

The analyst also said it would be difficult for the private operators to match the rates.

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