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November 25, 1991


By CBR Staff Writer

Meanwhile, International Discount Telecommunications (IDT) Corp of New York has made an announcement calculated to shake up the PTTs in a big way. While arguments concerning telephony price de-regulation are waged across the world, IDT has introduced a new service which may make many of these arguments irrelevant. The new service lets international users call the US (and other countries) at the outgoing American rate to their country, potentially bringing call cost savings of 75%. This is achieved by giving users direct access to the US network: the user calls an IDT node in New York (using a toll-free number) and hangs up when the call is answered. The node registers the call, and immediately dials the user back with an American dial tone. From there, the user can make a call as normal, and is charged at the standard price of the US carrier being used. Since the call effectively originates from New York, it sidesteps any price or regulatory legislation in the user’s own country. It seems unlikely that other countries’ PTTs will take this lying down, however, since if the service proves popular it could deeply dent profits from the very lucrative international telephony market. At present, it is thought that there is no legislation in place to prevent users taking advantage of the service, but the next few months could see some heavyweight lobbying from PTTs trying to find grounds for having it stopped. Indeed, the deciding factor may not be the service’s legality, but the ability of IDT to fend off such challenges – after all IDT is a small company and it is unlikely that it would have the financial clout to deal with a concerted campaign against it.

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