This work extends a network competition model between two telecommunication networks with calling circles, allowing subscribers to derive utility by receiving calls. It can be seen that dominant firm finds strategies allowing her to sustain its position by setting convex on-net prices respect to calling pattern intensity, situation even more evident in elastic markets. Furthermore, dominant firm sets on-net prices below to competitor's prices which becomes evidence for a regulator to pay attention on this kind of behavior and extend its efforts to establish the strength of the call externality in order to avoid un-proper tariff regulation decisions.
