[ian@huth]

Originally Posted by Dingbat

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.

Companies price as you point out because in general the British public lets them. They do not look for the best deals, they prefer the safety of staying with those they know. Look at the gas and electricity supply position and how many people have not changed suppliers even though they know that they could save money by doing so. It's not that people don't know about changing suppliers, there are enough knocks on the door from different suppliers trying to get your business. There is quite often a lot of talk about things being cheaper in the USA. One of the reasons for this is the American mentality towards saving money. Shop in any American supermarket and the locals are all pulling wads of money saving coupons out. Americans by and large will not allow companies to make excessive profits and vote with their feet if they think they are paying too much.