TRENTON, N.J. (AP) -- Little-known telephone service provider IDT Corp. is escalating the long-distance rate price war, undercutting the industry's giants with charges as low as 3.5 cents per minute.
The Hackensack-based company on Wednesday announced its new rate for domestic long-distance calls: 5 cents per minute any time, plus a $3.95 monthly fee. For customers who also sign up for IDT's dial-up Internet service, the 10-year-old company plans to offer rates as low as 3.5 cents per minute.
The move comes two days after AT&T Corp., which has about 55 percent of the $41 billion annual market for consumer long-distance calls, slashed its rates to 7 cents a minute for calls made any time; customers also must pay a monthly $5.95 fee.
Sprint charges the same monthly fee, for rates of 5 cents a minute at night and 10 cents other times. MCI WorldCom offers weekend and weekday nighttime rates of 5 cents a minute, with daytime fees as high as 10 cents a minute, plus a monthly fee of $4.95.
Howard Jonas, IDT's chairman and chief executive officer, said the company intends ``to make it clear to consumers that they can do better with us.''
``Seven cents a minute is yesterday's news. Limiting 5 cents to evenings and weekends is also yesterday's news,'' Jonas said.
Whether IDT will significantly increase its base of 50,000 long-distance customers was unclear.
Telecommunications analyst Mel Marten, of Edward Jones in St. Louis, said that while the carriers are competing strictly on price, ``someone looking at basically a no-name company'' should consider whether it provides good customer service and gets bills right, information hard to get without some research.
``Not many customers are going to go to the trouble of switching long-distance carriers to save a few pennies,'' Marten predicted.
But IDT spokeswoman Judy Fishof said that by midday Wednesday the company was ``getting overwhelmed with calls to get this rate.''
``It seems like we don't even need to advertise,'' Fishof said.
IDT, formerly called International Discount Telecommunications, derives much of its revenue from routing calls overseas for other carriers. It is the No. 1 carrier of telephone calls via the Internet, with about 250,000 customers, and also sells prepaid calling cards.