What does “cross-subsidization” refer to in service provider charging?

Cross-subsidization in service provider charging refers to the practice of using profits generated from one service to help cover the costs associated with another service. This approach allows service providers to offer certain services at a lower price or even at a loss, effectively using gains from more profitable services to sustain or develop less profitable ones.

This strategy can be beneficial for maintaining a diverse range of services and ensuring that the provider can offer specialized or essential services that might not be financially viable on their own. By balancing the pricing structure in this way, providers can cater to a wider audience and foster a competitive market presence while also promoting the accessibility of various services to different stakeholder groups.