Abstract: Setting up the mathematic models of the effective traffics and the operators' income under different tariff mechanisms based on the theory of economics and consumer behaviors, how the price level and the income settlement cost influent the choice of tariff mechanisms was analyzed. The study finds out that there is a break-even point of the price by which the dominant relationship between BPP (both parties pays) and CPP (calling party pays) being exchanged, and the range of the price within which CPP dominating BPP is shrunken because of existing the income settlement cost under CPP. A demonstration shows that the average price level of the cellular mobile telephone in China is still above the break-even point at the end of 2005, so it should be very cautious to transfer BPP to CPP in China.

Key words: mobile communication, tariff mechanisms, both parties pays, calling party pays, break-even point of price, settlement cost