If competition is supposed to lead to lower prices, why are cell phone rates higher now?

Question

I started my cell phone plan about five years ago. I still have the same service and it works just fine. I was looking around to see if I could find a lower rate on service, and nobody, I mean NOBODY could beat the plan that I started with (Cingular, now AT&T). Even AT&T, my current carrier, not only couldn't beat it, but said they wouldn't offer it if I was a new customer. What's up with that? Isn't innovation and competition supposed to lead to lower prices and better service? What if, instead, it just leads to fewer carriers in an unregulated market, and then they set whatever rates they want?

Answer 1

Because they gouge on cell phone prices, and give free phones or huge discounts on them.