Editing Telecommunications tariff (section)

==Impact of tariffs on traffic==
Call minutes are highly [[Price elasticity of demand|elastic against price]], this means that the demand for call minutes varies greatly according to price. A slight decrease in price leads to a great increase in call minutes. The higher the price, the more this effect is noticeable, for both business and residential customers on international or local calls. This means that it is often the case that more revenue is achievable at lower prices, that is, E < -1.<ref name=van>Vannucci, D.E., Kennedy, I.G.,  Barker, M., "Impact of Tariff on dial-up internet traffic: Modelling the subscriber response as a dynamic system", ITC18 Workshop for Developing Countries, Berlin, 2003.</ref>

Internet traffic research show that the traffic intensity is directly affected by the tariffs charged in connecting customers to their [[Internet Service Provider]] (ISP).<ref name=van></ref> For example,  a [[circuit-switched network]] provider charges different tariffs at different times of the day. It was noted that at the time that the rates decreased, the traffic intensity logged by the ISP increased dramatically and then decayed over time at an exponential rate. The conclusion of the research was that by varying prices over time, a telecommunications service provider can reduce the level of the traffic intensity at peak periods, resulting in lower equipment costs because of the reduced need to provision to meet peak demand, which in turn leads to increases in long-term revenue and profitability. ''See [[Time-based pricing]]''.