The Great International Phone Call Grab

Surrounded by cornfields, Fairfield, Iowa, seems an unlikely base for an attack on a monolithic Japanese industry. But from this serene town of 10,000, Fred Gratzon's Telegroup Inc. is waging war against Japan's Ma Bell--KDD.

Telegroup and others can save Japanese callers as much as 50% on overseas calls by routing them via the U.S. Telegroup buys discounted long-distance time from MCI, Sprint, and others. Customers abroad register their phone numbers with the company's New York computer. To place an international call, they dial New York, then hang up after one ring. The computer calls them back with a U.S. dial tone and patches them through as if they were in Manhattan. That helped Telegroup customer Toshiaki Ichida, president of ALMA Japan Co., a small Tokyo trading house, cut his monthly bill in half.

Japan's international carriers are fighting back, asking the Posts & Telecommunications Ministry to investigate the service. But the Ministry has no plans to restrict it. Says Gratzon, 47, who launched Telegroup in 1989: "You've heard of the trade deficit? We're fighting it from here."