Bharti Cellular triggered yet another price war by announcing a slew of benefits for its customers, including a 60 per cent reduction in short messaging tariffs, 53 per cent reduction in roaming charges and lowering of caller identification rates from Rs 75 to Rs 49 a month.

Bharti has also introduced graded tariffs, whereby subscribers get a 15 per cent discount on calls beyond 2 minutes and a 30 per cent discount on calls beyond 5 minutes.

The offer is, however, available only to Bharti's post-paid subscribers in Mumbai and western India.

Bharti cellular customers in Mumbai, Maharashtra (including Goa), Gujarat and Madhya Pradesh (including Chhattisgarh) will be able to send SMS at 40 paise per message, against Re 1 now.

This is the lowest SMS tariff in the country, beating Bharat Sanchar Nigam Ltd's 60 paise a message.

Reliance Infocomm is offering SMS at 50 paise to its limited mobility subscribers. Reliance and BSNL, however, offer the same tariffs across the country.

Bharti has also made roaming in the western region free. Customers will have to pay only the interconnect charges of Rs 2.99 per minute, bringing down roaming charges from the market rate of Rs 6.44 per minute.

The company has also waived the security deposit and rental for roaming.

Caller line identification charges have been lowered from Rs 75 per month to Rs 49.

While rival operators on one hand chose to play down the tariff reductions announced by Bharti, on the other company officials said that they were evaluating the offer before announcing any counter move.

A Mumbai-based GSM operator pointed out that the tariff reductions will benefit only a few lakh since it was meant only for post paid subscribers.

"SMS is actively used by pre-paid card users who form 70 per cent of the subscriber base and roaming accounts for only 10 per cent of the subscriber base. So the net benefit of the Bharti offer is not much," said a rival operator.

He also said that the graded tariff system did not have much meaning since the average talk time is not more than 64 seconds.

BSNL sources said that the public sector would continue to be the cheapest mobile option on a countrywide basis.

"There is always scope to bring down our tariffs but we would not do it for a specific region only," said a BSNL official.

Reliance Infocomm officials pointed out that they were offering free unlimited SMS to its subscribers under the Dhirubhai Ambani Pioneer Offer.

Bharti has slipped to the number three spot in the mobile market after the entry of BSNL and Reliance Infocomm last year.

Hemant Sachdev, corporate director, marketing, Bharti Enterprises said, the company was planning to invest an additional Rs 100 crore (Rs 1 billion) in the four western circles by March 2004, taking its investment in the region to Rs 1,605 crore (Rs 16.05 billion).

Bharti is gearing up to expand its services in 45 additional towns by March 2004, taking its foot print to 304 towns in the western region.

Manoj Kohli, president, mobility, Bharti Tele-Ventures said, "Bharti has the largest capital investment on the ground at Rs 11,000 crore (Rs 110 billion) and we expect to have six million customers by the end of this month. The company will invest Rs 600-700 crore (Rs 6-7 billion) in the new six circles -- J&K, Rajasthan, UP (east), Bihar, West Bengal and Orissa -- for which it has applied for licences." Kohli pointed out that the company will make investments through internal accruals.