The price/acceptance function: perspectives of a pricing policy in European telecommunication markets

Success in innovation management of telecommunication products depends not only on sales, but also, and primarily so, on actual call times by subscribers (e.g. on their mobile phones). It is not only the purchase price that plays a major role for this type of service, but also call and rental charges. This study investigates two potential subscribers’ decisions, using the graphic device of a price/acceptance function and a charge/acceptance function. The first decision is to buy telecommunications products (accepting the purchase price), and the second decision is to use these products (accepting the charges for using the product). In particular, an attempt is made to describe the general profile of the price/acceptance function through considerations of plausibility. Based on an empirical experiment, conclusions are drawn for the pricing policy of telecommunication products, which point to abandoning fixed basic charges and to giving away end‐user sets (e.g. mobile phones) free of charge.