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Pricing strategy for wireless carriers

P.14 According to Cahners In-stat Group, the number of worldwide wireless phone subscribers will soon reach the 1 billion mark. In the United States alone, the number of wireless subscribers is projected to grow by almost 17 million subscribers per year for the next 5 years. Contributing to the extensive growth are lower prices, large geographic coverage, prepaid services, and Internet enabled phones. While the actual cost of a basic wireless phone is about $75, most wireless carriers offer their customers a "free phone" with a one year wireless agreement. Is this pricing strategy rational? Explain.

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According to Cahners In-stat Group, the number of worldwide wireless phone subscribers will soon reach the 1 billion mark. In the United States alone, the number of wireless subscribers is projected to grow by almost 17 million subscribers per year for the next 5 years. Contributing to the extensive growth are lower prices, large geographic coverage, prepaid services, and Internet enabled phones. While ...

Solution Summary

Pricing strategy for wireless carriers is discussed in great detail in this solution.

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