Mahanagar Telephone Nigam Ltd took on its rivals in the international long-distance segment by slashing tariffs a whopping 55 per cent.

Tariffs to the US, UK and Europe from fixed-line phones in Delhi and Mumbai will now cost Rs 6.40 a minute from the existing peak time tariff of Rs 14.40. Calls to Southeast Asian countries will now cost Rs 8 a minute.

The new tariffs are the lowest in the market, beating Bharat Sanchar Nigam Ltd's offer of Rs 9.60 per minute to the US and Rs 12 a minute to Asian countries.

MTNL has also brought down the pulse rate from 60 seconds to 7.5 seconds for calls to the US and 6 seconds for Southeast Asian countries. This is similar to the pulse rate offered by BSNL.

The offer is valid for a period of two months starting Thursday. MTNL officials said that tariff cut impact was expected to be neutralised by the increase in traffic, especially during Christmas and New Year.

BSNL had dropped international subscriber dialling prices 40 per cent in October. In response, Bharti's Touchtel had brought down its tariffs by 50 per cent. In comparison, ISD calls made from cellular phones cost Rs 9.99 a minute to the US and Rs 15.99 per minute to Europe.

Industry analysts said the ISD segment would see further price cuts owing to a glut in international bandwidth.

"Settlement rates are falling by the minute and there are too many players in the bandwidth market vying to sell international minutes. While this is good news for the consumer, hopefully the optimism will be translated into larger volumes for the operators," said an analyst.