Abstract
The objective of this paper is to evaluate the equilibrium price between PSTN and VoIP telephony services in the case of non-linear utility function. Currently there are two types of wired phone services we are known PSTN (Public Switched Telephone Network) and VoIP (Voice over Internet Protocol). The PSTN telephony which provide high quality service and VoIP which provides relatively low quality service form a vertically differentiated oligopoly. Therefore, the evaluation of the equilibrium price between PSTN and VoIP services is very important to wired phone service providers. The equilibrium price depends on the state of the service cost function has been proved different value. This paper was evaluated each equilibrium price for the state of the linear cost function and non-linear cost function. Subsequently, this paper analyzed the demand of both services and the equilibrium profit which can maximize the profit of both service providers.
