Cork firm Cubic Telecom has launched a new service, allfreecalls.ie, that enables telephone calls to be made to 40 countries for the price of a local or national call.

Countries covered by the service include Australia, China, Canada, New Zealand, Thailand and the US, as well as most European countries.

To avail of the service callers must first call an access number which has an 1890 or 0818 prefix. According to Comreg regulations, calls to 1890 numbers have to be charged at an operator's published rates while 0818 numbers incur national charges.

Cubic Telecom managing director Pat Phelan said the service would need to route a large volume of traffic to be profitable but that the company operated with a very low cost base.

He said that customers could make significant savings by availing of his service.

According to the Eircom call calculator, a 20-minute call in the evening to Australia costs € 13.70 while a call of the same duration to an 1890 number costs 25 cents.

"I can buy minutes to Australia for one cent and you can be sure Eircom can get it even cheaper," said Mr Phelan. "I hope they fight back and reduce their call charges."

Mr Phelan plans to offer similar free or low-cost calling services in 10 countries within a year. A UK service will be launched shortly which will allow mobile customers to use bundled minutes to make international calls.

Cubic also offers a similar service in the US, allfreecalls.net, which takes advantage of US Federal Communications Commission regulations to provide free calls to 41 other countries by first calling an access number in Iowa, where local telephone companies are effectively subsidised by larger players.

AT&T, the largest phone company in the US, has now launched a legal challenge claiming they are "deceitful and unlawful schemes".

Since the launch of allfreecalls. net and similar services, AT&T's average monthly bill from one Iowa telephone company, the Superior Telephone Co-operative, went from $2,000 to $2,000,000,

Although he would not name the telecommunications provider in Iowa with which Cubic is working, Mr Phelan confirmed it was named in the suit.

Cubic would not take any payments from the Iowa company until the case was resolved, he said, but Cubic could sustain the cost of providing the service "indefinitely".

"AT&T are trying to squeeze us out of business by stopping payments for three to six months," said Mr Phelan. "AT&T should be suing the FCC and not us."