Changes would especially benefit residential callers as they would not have to wait until the early hours for discounts, New T&T marketing director Tony Cheung Tung-lam said.

'We're giving our target customers incentives to talk longer, and they don't have to get up at 2am to save a few dollars,' he said.

The company is the first to launch a 24-hour discount service offering a rate of 45 cents a minute to the United States, Canada, Britain, Australia, New Zealand, Japan and Taiwan, and $3.45 a minute to the mainland outside Guangdong after the first 10 minutes at regular rates.

The $3.45 rate to the mainland outside Guangdong was lower than operating costs of $4.42 a minute, analysts said.

Before the new rates were announced, 40 per cent of New T&T residential customers spoke for more than 10 minutes per call. The average call time was eight minutes.

The new scheme will last from Friday to February 28.

Hutchison Telecom also revealed its new deal, reducing charges to 48 cents a minute for calls to the US and Canada between 1am and 7am, and $6.48 to the mainland outside Guangdong.

The package will start on Friday but end 10 days earlier than New T&T's.

City Telecom announced a new package last night, the second cut in less than a week. It matches Hutchison's prices for popular destinations, effective from now to March 31.

The operator also pledged to give a rebate on differences in calling rates if customers found cheaper offers.

Simon Tse Kai-fai, Hutchison's director of international and multimedia services, said he expected a 30 per cent increase in the company's IDD traffic.

'We are considering a peak hour tariff cut,' Mr Tse said.

A spokesman for the Consumer Council warned callers to be wary of the time restraints which applied to reduced tariffs, but welcomed the competition that led to price cuts.