Bell Canada Was Slow to React to Market and Technological Changes

For decades, Bell Canada had a collection of (nearly natural) monopolies in communications in Canada. But it is now on the skids. They fought to keep their long-distance monopolies but lost out first to micro-wave transmissions and later to satellite communications. They fought to keep their local monopolies but have been losing out to local cable companies and cellular plans. Isn't entry and competition wonderful?

True story:

Last year we switched our telephone service from Bell to our local cable company. When we called Bell to cancel our service, they said, "Why didn't you call us first? We could have met their offer."

That type of short-term maximizing is what lies behind their failure. If they had had any one of their extremities on the pulse of the market, they would have anticipated the competition and met it without our having to consider the switch. Now all they have is a host of upset customers who switched providers because Bell hasn't been aggressive enough in its reactions to new market conditions, and who rightly believe that Bell was happy to charge high prices to whomever was willing to pay them.

Apparently price discrimination was a short-term income maximizing strategy but not a long-term wealth-maximizing strategy.