Will Smart Pricing Finally Take Off?

The traditional preoccupation with smart pricing is likely to be reinforced by the economics of telecom. Telecom is primarily about service, customer inertia, and territorial strategic plays (where the territories may be physical or virtual). This chapter reviews briefly some of the main fallacies that invigorate the push for "smart pricing." It focuses on some missed opportunities in telecommunications. The chapter outlines the main changes that have taken place in the money flows in telecommunications in recent decades. It discusses some of the puzzles of the modern economy and the degree to which the telecom industry exhibits similar behavior. The chapter also focuses on earlier work on telecom pricing and the degree to which it reflected the prejudices observe today. The chapter discusses the growth in the demand for data traffic and improvements in transmission technologies and what the contrasts are with those that for optimal pricing strategies.