Having negotiated lower rates with Videsh Sanchar Nigam Ltd, state-owned Bharat Sanchar Nigam Ltd on Thursday announced a whopping 25 per cent cut in ISD rates for calls to the United States, Australia, South East Asia and Gulf countries.

BSNL also decided to reduce STD charges between two circles (inter-circle) by 25 per cent for distance beyond 200 km to Rs 3.60 per minute from Rs 4.80 for its fixed line customers. The reduced tariffs across various categories will be effective from April 10, 2004.

"For our fixed and mobile subscribers, the ISD rates have been reduced by average 25 per cent as we have decided to route our ISD calls through VSNL till we sign agreements with international carriers," BSNL chairman and managing director V P Sinha told reporters in New Delhi.

The ISD rate reduction has been made possible as VSNL has agreed to match the lowest settlement charges of Rs 1.69 per minute to the US and United Kingdom, from Rs 2.20 quoted earlier.

As per the new tariffs, calls to the US and Canada, which earlier attracted charges of Rs 9.60 per minute, would now be reduced to Rs 7.20 per minute, translating into a cut of 25 per cent.

Similarly, ISD calls to South East Asian countries including Singapore, Thailand, Malaysia, Indonesia and Hong Kong would cost Rs 9.60 per minute as against Rs 12 per minute earlier, a drop of 20 per cent.

BSNL subscribers making calls to Australia and New Zealand would enjoy reduced ISD rate of Rs 18 per minute against a peak rate of Rs 24 per minute and an off-peak rate of Rs 21.18 per minute earlier.

"The reduction in tariffs would result in a loss of Rs 300-350 crore (Rs 3-3.50 billion) but we hope it will be compensated through surge in traffic," Sinha said. 

Targeting the lower middle income group, BSNL also launched a pilgrimage calling card with denomination of Rs 100 and Rs 200 and a 30-day validity period.

To be effective from April 5, the card would entitle pilgrims a discount of 10 per cent on local, STD and ISD rates and will be available from pilgrimage locations only.

Elaborating on the other destinations where the ISD rates have been slashed, Sinha said rates to Gulf countries like Saudi Arabia, Bahrain, Kuwait, Oman, Qatar, UAE and Yemen have been cut from a peak rate of Rs 24 per minute and off-peak rate of Rs 21.18 per minute to Rs 18 per minute, with effect from April 10.

The rate to African countries has been cut to Rs 18 per minute from a peak ISD rate of Rs 24 and off-peak rate of Rs 21.18.

BSNL has left ISD tariffs to UK and Europe unchanged.

Calls to UK will continue to be charged at Rs 7.20 while charges for Europe will remain at Rs 9.60.

"Subscribers opting for BSNL alternate packages will get further discounted rates for inter-circle calls beyond 200 km.

For instance, effective charges per minute for a subscriber of BSNL's 'Super Package' will be Rs 2.40 per minute, instead of Rs 3.60 earlier," Sinha said.

BSNL also announced a 60 per cent reduction on domestic leased line charges on all circuits of 2Mbps and above.