At a time when prices of everything are going up, it's a major relief to find cellphone operators slashing rates for both local and long distance calls for pre-paid customers.

Reliance Infocomm started it all on August 13 by wielding the machete on tariffs, bringing it down by 60 per cent. Other players had no option but to follow suit.

So what are the new rates like in terms of savings and services?

According to Hutchison Essar, users opting for its new tariff will be charged a monthly fee of Rs 25 per subscription. Airtel's tariffs are applicable to both new and existing customers on the payment of a nominal one-time activation charge of Rs 50.

• Reliance slashes prepaid tariff by 60%
• Hutch joins price war, cuts pre-paid rates
• BSNL slashes cellular tariff by 60%

However, Airtel has said that customers would also get Rs 50 off on AirTel-to-AirTel SMS as a 'plan welcome benefit'. Therefore, this service is virtually free.

For new customers this charge is waived off up to September 30, 2004. The new Airtel rates are effective from August 25.

The Tariffs: Let us take up local calls first. At present, Hutch charges Rs 2.75 per minute for calls made to all mobile services and non-mobile services. The new rate (that is for those paying Rs 25 per month) will be Re 0.99 per minute to all mobile phones and Rs 1.99 per minute to non-mobile phones (fixed lines).

Those who do not pay Rs 25 per month will still be able to make calls to both fixed and mobile phones at Rs 1.99 per minute.

Airtel's rates are slightly more complicated. Local calls from Airtel to Airtel are billed at Rs 1 per minute against the current Rs 2.75 per minute.

Airtel to any other cell phone will cost Rs 2.25 per minute against the existing Rs 2.75 per minute.  A call from an Airtel phone to a fixed line number will also cost Rs 2.25 per minute, which is a reduction of 25 per cent. The other major player, BPL Mobile, is yet to join the rate war.

Long-distance or STD calls: Hutch has said that STD calls from Hutch to all other mobile phones and non-mobile phones will be at Rs 2.25 per minute irrespective of the distance.

This is for those who subscribe. For the non-subscribers too, the rates have been simplified and will be at a flat Rs 2.99 per minute irrespective of whichever phone you make a call to and whatever be the distance.

Airtel has also cleaned up its STD rates. Airtel to Airtel rates will now be Rs 2 per minute; calls from Airtel to a fixed line numbers will be billed at Rs 3.25 per minute, regardless of the distance.

At present the latter rate varies between Rs 2.99 to Rs 4.99 per minute depending upon the distance. The rate for calls from Airtel to any other mobile phone is also Rs 3.25 per minute.

Some caveats: Airtel's new tariffs apply to all, including WLL numbers. Hutch, however, has qualified that "any other mobile phone" means those starting with the number '9'.

This, in turn, means that the new tariffs are not applicable for calls made from Hutch phones to Reliance Infocomm phones.

Hutch also requires the subscriber to send an SMS saying that he wants to avail of the offer. Airtel assumes that a pre-paid customer would be glad to avail of their service and an SMS is required only if the subscriber does not want to avail of the offer.

Reliance India Mobile already charges Re 0.99 per minute for calls within the same circle made from one Reliance phone to another. Inter-circle calls to other mobile phones and fixed line numbers attract a tariff of Rs 1.79 per minute.

Long-distance or intra-city RIM to RIM calls attract a charge of Rs 1.79 per minute. To all other phones, the rate levied is Rs 2.49 per minute.

Now let us see how these rates compare with the standard STD rates. Last week, Bharat Sanchar Nigam Ltd anounced that it would be reducing its peak STD rates to a flat Rs 2.40 per minute, against the prevailing Rs 3.60 per minute.

The new rates are effective from September 10, 2004. BSNL's intra-circle STD calls (within Haryana or Maharashtra, for example) will also cost a maximum of Rs 1.20 a minute, down from Rs 1.80.

Fixed line subscribers of BSNL will have to pay Rs 1.60 per minute for making calls within the same circle to mobile phones other than BSNL's CellOne service.

CellOne's pre-paid customers will pay just 90 paise per minute for cell-to-cell calls within a circle, down from Rs 2.20 at present. For inter-circle calls, they will pay Rs 2 per minute instead of the current Rs 2.40.

For calls to landlines, CellOne subscribers will pay Rs 1.20 a minute, within a circle instead of Rs 2.40. For inter-circle calls over 500 km, the call will cost Rs 2.40.