Definitely the result of larger companies with fewer competitions. Around my area there is usually one or two specific providers for any service, for example internet. If they hike the price, there's nowhere else to go.
We have four Internet providers in my area, yet they still pull this crap (better prices only for new customers). We've actually switched in the past just for this reason.
I'm not seeing the problem of offering a discount to new customers. The new customer is taking a risk by accepting a new vendor, and hence to entice them the vendor offers a discount.
Now, if the vendor continuously offers the discount to the customer just because they keep asking for it, then that is unfortunate. But I usually only see this with monopolies, like Comcast. I'm sure their strategy is to do that on purpose just to satiate the vocal minority.
The problem is that it removes any incentive for loyalty and encourages churn, while being a pain in the ass for the customer. What benefit can possibly come from getting people to constantly switch providers?
In this case, "new customer" is anyone not currently subscribed. So if you go from provider A to B and then back to A a few months later, you're a new subscriber.
It's also the result of many small and medium sized competitors, who won't survive another 12 months if they don't grow faster than all their competitors.
