eli5 Why do internet providers and telecommunication companies have similar or identical prices for their packages? Wouldn’t slightly lowering the cost give the illusion of ‘same speed lower prices’ and improve their business?

Question

I understand that at some point operational costs come into play but wouldn’t they automatically quote a price much more or decently greater than it?

In: Other

Answer 1

If you undercut your competitors price a little bit to gain some customers, then they do the same, it just creates a feedback look where you both will eventually end up with low prices and no profits.

It’s easier and more profitable to have your marketing department advertise gimmicky features and meaningless stats about the quality of your service compared to your competitor.