Airtel takes price war to US

Offers 40% cheaper calls to India, AT&T also drops rates.

Bharti Telecom has kicked off a tariff war in the US, announcing a virtual calling card service costing 7.9 cents a minute to all phones in India "" a discount of 20-40 per cent over the tariffs offered by its competitor Reliance Communications.

The move has impelled AT&T to drop the rate of its India 60 Plus calling card from $14.99 per month (around 25 cents a minute) to $11.99 per month (around 20 cents a minute) for 60 minutes of calling time to India.

Industry sources say Reliance is also expected to cut tariffs, though a company spokesperson refused to comment.

Bharti's Airtel CallHome service being launched simultaneously in 50 states in US will mainly target non-resident Indians (NRI). The company plans to introduce similar services in the top ten NRI countries, including UK, Canada, Malaysia, Saudi Arabia, and Singapore, by March 2007.

The service will initially be available under a pre-paid plan and later be extended to post-paid plans. The card of the lowest denomination comes for $5.

Manoj Kohli, Bharti Airtel president, said, "We have over 2.5 million NRIs in US who make over 450 million minutes of calls a month to their folks in India. We have been able to offer the service at rates at least 40 per cent cheaper than our competitors by leveraging our infrastructure."

Reliance Communications and AT&T are the other two key players in this segment. Calls made from Reliance cards to Reliance landline phones in India cost 9.9 cents, while calls to all other phones cost 12.9 cents.

Reliance Communications, which claims to control over 40 per cent of the calling card market in the US, has over seven lakh customers overseas, of whom a significant chunk are in the US and Canada.

Industry estimates that the market, growing at around 40 per cent annually, is worth $150 million at present.

Kohli said US-India was one of the busiest routes in the world. About 80 per cent of the in-coming calls to India are made from the top 10 NRI countries.

To avail of the service, users need to create an account on an operator's site and register, after which they get a unique code number which can be configured to phones and mobiles. Using cards to call India is 20-25 per cent cheaper than direct calls.