Abstract: Setting up two price competition models for the state-owned enterprises of telecommunications, this paper analyses the conditions of the bloody price war in telecommunications market of China. The conclusions are drawn as follows: First, without difference between competitors and the value of distortion of property rights bigger than 1, the bloody price war appears; Second, with difference between competitors and the value of distortion of property rights bigger enough, the bloody price war appears too; Third, the property rights regulation method is necessary to the bloody price war regulation.

Key words: state-ownedenterprisesoftelecommunicationsdistortionofpropertyrightsbloodypricewar