Cellular companies have decided to offer free cell-to-cell incoming calls across all cellular networks from Tuesday evening, the Cellular Operators' Association of India confirmed on Tuesday.  This will be applicable to both prepaid and postpaid subscribers.

"We've made incoming cell-to-cell phone calls from any cellular network free," Rajeev Chandrasekhar, chairman of the Cellular Operators Association of India, said. "We've maintained for over two years that a proper interconnect regime will make cellular tariffs more affordable."

COAI has said that the cellular industry is in the process of upgrading its networks and billing systems to ensure a smooth transition to the new system of mobile-to-mobile incoming free. This process is expected to take up to a week in some service areas.

Consequently, subscribers would transition from the current regime to mobile-to-mobile incoming free between now and February, 2003.  The date of launch in different markets would be communicated individually by the respective operators.

Cell operators have also indicated that other incentives, which might include lower rates for outgoing calls, are likely to be announced in near future. They have declared that they are in a position to match, even better WLL or limited mobility tariffs, if their request for identical license conditions and terms with regards to entry fee, interconnection and other issues is resolved. 

News reports have said that the 10.5 million cell phone users could look forward to a 50 percent cut in international rates, too.

India's cellular industry, which already boasts the world's lowest-cost local calls, has pledged to cut prices further to battle competition from cheaper limited mobility service operators.

The announcement came after a government-brokered truce in a bitter row between cellular and limited mobility service providers over access fees that badly disrupted service.

The government promised on Monday that the Telecom Regulatory Authority of India would 'come up with regulations for a just and fair interconnect regime' in a couple of days.

If TRAI asks fixed line operators (who also provide WLL services) to pay access charge for connecting to cellular networks, cell firms are ready to announce free incoming calls from landline to cellphones too.

Private cellular firms withdrew an appeal against a regulatory decree ordering them to offer interconnect facilities to calls from limited mobility operators on Monday.

Telecom Minister Pramod Mahajan had announced on Monday that cell operators had agreed to link their networks with limited mobile players, ending the connectivity problem.

The promised tariff cuts were the latest salvo in a two-year war between cellular and fixed-line phone firms offering the less expensive limited radius facility, also known as wireless in local loop mobility services.

The money-losing cellular industry which paid hefty licence fees to offer cellular services says fixed-line operators which paid much lower entry fees to offer limited mobility services have an unfair edge and is demanding a level playing field.

The new fee structure may bring cellular call rates closer to limited mobility facilities which levy no incoming charges. Now only incoming cellular calls within a network are free.

The cuts would be the second since early January when cellular providers slashed national long-distance tariffs.

A cellular industry source said the cuts were based on the expectation that TRAI would soon introduce a fair and non-discriminatory interconnect regime.

Under regulatory rules, cellular customers now pay Rs 1.20 for a three-minute local call to fixed-line and limited mobility users while fixed-line firms and limited mobility service users pay nothing for calls to cellular clients.

The cellular firms which include Bharti Tele-Ventures Ltd -- 16 per cent owned by Singapore Telecommunications -- and the Indian unit of Hutchison Whampoa conglomerate, call the charges their users pay discriminatory.

They want the regulator to exempt their customers from the fee or get users of fixed-line and WLL services launched by private players such as the powerful Tata and the Reliance groups to pay a similar sum.

However, this rate cut could further intensify the price war between limited mobility service providers and cellphone companies. Even state-owned telecom giants like MTNL and BSNL might cut rates to give the other operators a run for their money, say analysts.

Additional inputs: Reuters