Unlimited long distance phone calls at a set rate as low as $35 per month caused a flurry of interest this week when Logic Communications launched a flat rate plan for calls to Canada, the United States, the United Kingdom and Ireland.

CEO Jeff Hamill told that the company introduced flat rate calling after polling the marketplace to find out what people wanted. It all boiled down to price and good quality service.

"We have been trying to grow our market share by bundling voice with DSL and competing head to head on the lower priced plans with TBI and Cable and Wireless, but we have not been able to grow our market share significantly over the last couple of years," Mr. Hamill said.

The move to increase Logic's market share from the 13 percent of the past few years, follows Logic's dramatic slashing of rates for unlimited dial up and DSL service earlier this year. Within days, the Island's other ISP's followed suit and it seems Logic's move in the long distance arena may have the same impact.

North Rock Communications currently prices evening and weekend calls as low as 16 cents through its 20-20-321 service and anytime calls over home telephones at 18 cents. Marketing manager Ch? Barker said this week however that his company is looking into launching its own unlimited plan with "a few less restrictions and less contractual obligations than Logic," he said.

TBI, which currently offers weekend and evening calls as low as 17 cents and anytime calling at 19 cents is monitoring the competition to determine whether any changes are necessary. Acting director of marketing Angela Ambrosini said however that TBI's current rates continue to be competitive while at the same time not locking callers into a one year commitment as the new Logic plan does.

"We feel that our rates are competitive and will still satisfy our customers," she said adding however that TBI will launch new calling plans if there is a need.

Mr. Hamill actually expected competitors to follow suit in this instance as well.

"It is what we have historically seen in this market from the telecom carriers. When somebody else makes a move the others follow suit or do similar. We would love it if they didn't, but we expect them to. We don't think our window of opportunity is gigantic but we are doing as much we can to leverage that opportunity in the timeframe we think we've got," he said.

Since Monday, Logic has seen a "phenomenal response" to the new plan with hundreds of signups and almost 1,000 downloads of sign up forms from the company's website.

For the same price as Logic's flat rate plan, a caller paying on the lowest minute plans would be able to talk for about four or five hours. Mr. Hamill said that while some customers may use the flat rate plans to talk all the time, the statistics show that is unlikely to be the case. Outbound long distance minutes are actually less than they were five years even though prices are about a fifth of what they were in 2000.

"What we have seen is people are putting money in their pocket and not changing their behaviour so we are betting that while some people will change their behaviour, the overall behavioural change will not be significant.

"We think we have done the math such that we can provide people with good value and make a little bit of money at the same time. That is the bet at the end of the day. That is the analysis that we have done and the decision we have made," he said.

Competition in the telecommunications marketplace has driven down pricing significantly in the past five years. In 2000, when Logic launched its long distance service at 44 cents per minute, both Telebermuda and Cable and Wireless were charging 89 cents per minute. Since then rates have tumbled dramatically and now all carriers price their lowest minutes in the high teens.

"Nobody did anything until we came along and launched our service," Mr. Hamill said, but it is too soon to say whether the competition may potentially mean consolidation.

"I don't know if all of the carriers that exist now will exist in 2-3 years as a for instance. I know that we will. KeyTech is our parent company and they stand behind this strategy. We're in it for the long-term and we're always trying to find new and innovative ways to be able to do what we do less expensively."

One reason prices have come down in recent years is that the price of back room equipment has fallen dramatically since the late 1990s.

"We are able to take those savings and build them into our plans both on the Internet and long distance side so we're not just sticking all the money in our pocket. We want to make a fair return to our shareholders but we also want to give the market what they are asking for because we want more international business to come here, we want more people to come here because it is better for the Island."

The new rates are however "just the first stage" with the company hoping to leverage the expected increase in calling traffic on the initial plan to convince carriers to offer better pricing to help create flat rate plans for other regions.

"We ideally wanted it to be a call anywhere in the world plan but because our volumes are so small, we weren't able to get the pricing from the carriers in the US that actually ultimately deliver our traffic so that we could put together a plan worldwide," Mr. Hamill said.

"Those destinations are typically more expensive to deliver to. The four destinations we are [currently delivering to are by far and away the cheapest destinations for any telephone carrier. As soon as you start delivering into the Caribbean and India and Indonesia and Philippines the pricing is a factor of 20-30 times more expensive," he said.