Bharat Sanchar Nigam Ltd has claimed it still offered the cheapest cell-to-cell national long-distance tariffs to its CellOne subscribers at Rs 2.40 per minute for calls made beyond 500 km.

The company charges only the airtime from its 750,000 cell subscribers and has waived the long-distance component for calls beyond 500 km.

"The tariff announced by cell firms still charges Rs 2.99 a minute over and above the airtime charges of the average Rs 2 a minute. We charge only the airtime of Rs 2.40 a minute from our subscribers," a senior BSNL official said.

BSNL is also offering free incoming calls from its own fixed-line subscribers.

When contacted, Prithipal Singh, Chairman and Managing Director of BSNL, however, said the company was reworking its national long-distance tariffs and would approach the Telecom Regulatory Authority of India with a new tariff package.

"We are studying the market conditions and will approach the Trai with a new set of tariffs soon," Singh said.

However, if BSNL extends the low tariffs to all national long-distance calls made from its network, it stands to lose a major chunk of its Rs 12,500 crore (Rs 125 billion) revenue from long-distance calls.

BSNL might initially extend the rates to all national long-distance calls made from CellOne, an analyst pointed out.

The new tariff package announced by the cell firms is set to trigger a price war among national long-distance operators.

Apart from BSNL, basic operators will also stand to lose because they get 60 per cent of the revenues.

With national long-distance rates falling, their share of revenue is also decreasing hitting their bottomlines.

Minister for Communications Pramod Mahajan said this was the first instalment of the new rates and the industry would announce more concessions on a weekly basis to 'kill rivals in instalments.'

Meanwhile, several basic operators are claiming that Bharti has not taken Trai's approval for the new tariffs.

Bharti officials, however, said since the tariffs were announced by the cell firms, they need not be reported to Trai because there was a forbearance on cell tariffs.

Rate cuts fail to impress mobile users