Irish firm Cubic Telecom has launched a service which takes advantage of US telecommunications regulation to provide free international telephone calls from the US to 32 other countries, including Ireland.

The allfreecalls.net service takes advantage of the Universal Service Fund operated by the Federal Communications Commission (FCC). The fund provides a rebate to telecommunications carriers who terminate calls in certain US states that have been designated as having a poor telecoms infrastructure.

Customers of the service first call a number in Iowa. When this call is automatically answered they can then enter the international number they want to reach. The service effectively provides free international calls for US customers as most US phone companies now provide all local and long distance calls in the US for a flat monthly fee.

Pat Phelan, managing director of Cubic Telecom, said it has invested about €250,000 in establishing the service. He intends to expand the service for calls to 50 countries within the next three months.

It has a target of handling 70 million call minutes a month and, at that level, Mr Phelan said the service will turn a modest profit. "It's a numbers game," he said. "The service is totally free and we don't keep records of people's numbers - the servers are purged of numbers every night."

Mr Phelan declined to say exactly how much the company receives for each call from the FCC but said it was "tenths of cents". The service was viable due to the significant drops in wholesale call charges that have been introduced in the last six months. The calls are routed through the UK where Cubic Telecom's infrastructure is located.

The FCC is committed to keeping the Universal Service Fund scheme in place until at least 2010. Allfreecalls.net currently forwards calls to 30 countries and Phelan said the most popular destinations were Israel, China and Poland.