Regular (Landline) Phone Company versus Cellular Phone Company: The Non-Cooperative Case

In this paper we developed a model that has two important perspectives, theoretical and practical. From the theoretical point of view we develop a model of two different rival companies supplying different communication services whose objectives are profit maximization. Although the services somewhat overlap, they are certainly not complete substitutes. In some sense the services are substitutes but in another sense they can also be complements. These factors may lead to several optimal pricing policies of coordination and cooperation between the two companies. These results differ from the classical pricing policy of the well known regular duopoly case. The use of comparative static analysis have led to some straightforward results, however some other results are surprising, counter intuitive and in some sense even provocative.