Well, it makes sense from the point of view of the telcos, if I'm reading it correctly. In a very competitive market that can't really expand by much, such as t

Well, it makes sense from the point of view of the telcos, if I'm reading it correctly. In a very competitive market that can't really expand by much, such as this one, there exists a "perverse" incentive for all competitors to implicitly collude in a price point much above reasonable, since noone stands to win much by lowering prices, but all stand to lose. Until a bright, young startup comes and fucks it up. The requirement of total competitivity in the market is needed for this to happen, so that no agent can win persistently through competitive advantage. Then, any lowering of prices is futile; it becomes a game of musical chairs, in which the telcos are constantly lowering prices until loss of profit, and costumers are just swapping between one and the others. So it's not done. Basic micro. Of course, if the market can tolerate growth, then you lower prices just enough to get the largest market share. I guess this is yet another reminder that markets do not care for global optima, just for Nash equilibria. Right now, I'm thanking those individuals, specially R Telecomunicaciones, that disrupted the Spanish telecom market with a cavalier disregard for massive profits.