India has one of the lowest telephony tariffs in Asia-Pacific, said the Cellular Operators Association of India (COIA). A monthly package for 300 minutes of airtime usage in India costs only US$16 as compared to US$65.93 in the Philippines, US$53.59 in Pakistan, US$42.40 in Indonesia, US$39.47 in Malaysia, US$29.09 in Thailand and US$20.86 in China.

In the first half of 1999, India's cellular tariffs were hovering around US$0.40 per minute but in August 1999, the Indian government moved to a revenue sharing scheme that helped drove prices downwards. Then, there were two cellular operators in each of the 21 telecom circles. Now, that has doubled to four.

All cellular companies in India are using the Global System for Mobiles (GSM) standard. But Reliance Infocom will soon be introducing the Code Division Multiple Access (CDMA) standard for mobile telephony where incoming calls will be free and outgoing calls will be charged at US$0.01 cents per minute. This, analysts said, will reduce cellular tariffs further.

Industry executives say that companies are paying 35-42 percent of their revenues in interconnect charges, spectrum user charges and service tax. If these can be reduced further, India's cellular tariffs could end up being the lowest in the world.