About Meridicom
Meridicom is the oldest and largest telecommunications player in the country. They are the market leader in the landline business with 85% market share and broadband business with 60% market share. There third business i.e. mobile though lags behind and they hold a market share of 5% only. The commercial customer base of Meridicom – The market leader in broadband and landline market, has been targeted by Telzip : a small mobile-network operator is providing free broadband service into a long-term contract. Telzip is offering “FREE broadband FOREVER”. This has come as big threat to Meridicom as it is already facing the following problems:
1. No increase in Customer Base : Its mentioned in the beginning that the new customer initiatives were running behind schedule
2. Underperformance of the mobile unit.
3. Customers finding the broadband service expensive
4. No synergy between the three units : Landline, broadband and mobile
Meridicom has to ensure its customers are retained. As indicated in the case, as switching network is considered a hassle, the current unsatisfied customers are still sticking along as the cost of switching is much higher than the 10% difference between Meridicom and other competitor’s prices. But Telzip’s offer apparently is available at one time cost of switching as it is free.

Alternatives
Revisit the pricing: Not Slashing the Prices but Changing the Focus from Cost based to Value based Pricing.
Meridicom has been receiving inputs from the customers that their services are a bit over priced. Regardless of the Telzip’s offer, Meridicom need not slash down their prices as low as telzip but they should shift their focus from cost based pricing to value based pricing in order to ensure that customers perceive the net positive value in the transaction. The said Net value can be determined by the following formula:
Net