Evolution Of Telecommunication Pricing Strategy

Since 1980, Chinese telecommunication market has developed from monopoly to duopoly. Meanwhile, pricing pattern which evolved from linear tariff to two-part tariff is now evolving into third-part tariff, exceeding the evolution speed of developed country. Without theoretical instruction, Chinese telecommunication industry frames new tariff just by intuition. So, it is significant to investigate the evolution of pricing pattern.First, the paper introduces the history and status of Chinese telecommunication industry, the practical evolve process of pricing pattern and related theories including game theory and discrimination theory. Common pricing pattern and strategy is introduced in succession.Based on related theory of game theory and microeconomics, the paper constructs duopoly telecommunication model (DTM). Equilibrium of DTM shows that in heavy consumption homogeneity duopoly market, the emergence of two-part tariff is inevitable, and the pricing pattern on intersected market turns into third-part tariff——the combination of linear and two-part tariff.Furthermore, paper establishes heavier consume market DTM in order to illustrate the equilibrium on developed market. Three interim equilibriums are educed. Comparing with two-part tariff, three-part tariff is superior. Other achievements include discussion of several selective pricing patterns,changeable patterns and methods of market subdivision.The main conclusions and some questions for further research are proposed at last.