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Originally Posted by ianathuth
The phone network owners of course who also have to cover R&D and other costs and then generate a profit. But that does not explain the disparity between charging 5p and 20p for the same thing and how they can sell carriage to suppliers such as call 18866 who can resell it for 1p and still make a profit. I cannot see that they are selling that carriage at below cost price.
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They're not selling below cost price, just renting out spare capacity in their vastly over-sized international links which are still there, partly as a result of the massive expansion in the 90s.
And as for the price disparity, most telcos, like most businesses, will try to maximise revenue by pricing at what the market will stand rather than cost-based pricing (ie cost plus overhead plus a little profit). As little companies like 18866 have such low overheads, they can afford to charge rock-bottom prices.