  In the mobile communication services, users wish to subscribe to high quality
service with a low price level, which leads to competition between mobile
network operators (MNOs). The MNOs compete with each other by service prices
after deciding the extent of investment to improve quality of service (QoS).
Unfortunately, the theoretic backgrounds of price dynamics are not known to us,
and as a result, effective network planning and regulative actions are hard to
make in the competitive market. To explain this competition more detail, we
formulate and solve an optimization problem applying the two-stage Cournot and
Bertrand competition model. Consequently, we derive a price dynamics that the
MNOs increase and decrease their service prices periodically, which completely
explains the subsidy dynamics in the real world. Moving forward, to avoid this
instability and inefficiency, we suggest a simple regulation rule which leads
to a Pareto-optimal equilibrium point. Moreover, we suggest regulator's optimal
actions corresponding to user welfare and the regulator's revenue.
