TELECOMMUNICATIONS PRICING AND CONSUMER EXPECTATIONS - THE CASE OF ALTERNATE OPERATOR SERVICES

Traditional discussions of telecommunications pricing utilize microeconomic models that are often timeless. In reality, static models of price-based decision making in telecommunications do not capture an important reality: that the price feedback is substantially delayed. Since consumers have no immediate feedback on which to base rational decisions, they must utilize their expectations of price. This article analyses the implications of this, using the alternate operator services as a discussion case. This analysis shows that few alternatives beyond price regulation exist to resolve the rampant complaints in this industry.