Why more expensive to call Frankfurt than rest of Germany?

I have Vonage Vopice-over-IP as my telephone/long-distance provider. I was just checking the international rates (we have a friend in Halle, nearish to Leipzieg), and I see that it costs LESS to call the countryside than to call major cities:

http://vonage.com/rate_plans_international.php

(also http://vonage.com/rate_plans_international.php?keyword=Germany )

Why would it cost more to call a city? In my experience, such services are usually cheaper where there’s a population concentration.

Why are in state calls often more expensive than state to state calls in the US? It most likely is a tax thing.

Personally, I don’t think taxes account for much of this at all.

More likely is that the intra-state rates are set by various regulatory boards in each state, and they are much more likely to be dominated & intimidated by the phone companies than the national FCC is. So they pretty much just give the phone companies whatever they ask for.

Here in Minnesota, the board is largely made up of former employees of the utility companies, or people closely connected to the industry. They hardly ever stand up to the industry. And if they do, they are at a great disadvantage in terms of budget, staff, etc. compared to what the companies can assign to such a dispute. Plus, if they are losing, the utility companies can always go to elected officials who they’ve given big contributions to, and get them to override the regulatory board.

WRT the OP: My guess is that they engage in differential pricing, i.e. they assume that the market will bear a higher price for calls to big cities, where there are more affluent people and more internationally active corporations (hence a larger proportion of business calls). I presume Frankfurt in particular, with its concentration of banks, is often called by bankers i.e. people with more money than they have a use for.

As it’s a Voice-over-IP service one factor in their cost would be the intra-German rates that they have to pay from their IP-to-telephony gateway to the destination. $0.02/$0.03 per minute looks quite reasonable to me in that respect. The cellular rates are in the range of what you pay intra-Germany calling a cell phone from a landline, but on the “NGN” numbers they seem to fleece their customers: within Germany calls to 18x numbers cost at most 0.123 EUR/min, calls to 700 numbers at most 0.10 EUR/min, and 800 numbers are toll free