BSNL extended its Rs 1 per minute STD rate to 11 million landline users by reducing the rental for this plan from Rs 225 to 180 a month.
Reliance Communications has already announced a Rs-675 STD calling card, which enables its users to make STD calls at Re 1 per minute to any network from its fixed or mobile phones. The card has a validity of 45 days. The company had earlier announced its own One India Plan under which STD calls at Re 1 a minute were available at a rental of Rs 499.
Insiders said the BSNL move would not make a major difference as calls between Reliance customers across the country already enjoyed local call rates. And even intra-circle calls across networks were available at cheap rates.
Tata Teleservices executives said they might adjust rentals to meet BSNL's challenge, though adding that the weighted realisation of a one-minute call for operators (across STD and local) was already below Re 1, so the move would not make any major impact on their customers.
Said Tata Teleservices' chief operating officer, Delhi circle, Debashis Sur: "All operators will come out with a product portfolio that can match BSNL's."
A Hutch executive said the company was examining the BSNL move, though not commenting on its specific response.
Sanjay Kapoor, joint president mobility, Bharti Airtel, said: "We will talk to our long-distance providers and see the impact of the BSNL offer, which in any case is for fixed line users."
Experts said the BSNL move was aimed at protecting its dwindling fixed line user base. "BSNL is facing a churn of over 250,000 customers in a month and that is serious. This move will ensure that the churn gets reduced," said one of them.
A senior executive of the Association of Unified Telecom Service Providers of India said, "All other operators will follow as the rate is affordable."
He said an increase in talk volume would compensate the drop in tariff. Operators should also start sharing infrastructure to cut down on costs, while reduction of taxes would ease matters for mobile operators.
"It is a survival-of-the-fittest situation. One has to match up," he said.
