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FRANKFURT -- Prices for mobile-phone calls are falling fast in Germany, threatening to introduce an era of slim profits for carriers in a country that is among the world's slowest to embrace wireless technology.

For much of the past 15 years, Germany's mobile market has been marked by high prices, low usage and fat profit margins. That is because Deutsche Telekom AG's T-Mobile unit and the United Kingdom's Vodafone Group PLC enjoyed a virtual duopoly in Europe's largest economy.

Now the landscape is changing as the country's No. 3 and No. 4 wireless carriers, bidding for market share, aggressively court customers with lower prices. O2, a mobile unit of Spain's Telefónica SA and the No. 4 player in Germany, raised the ante this month by launching a discount brand that offers calls and text messages at 9.9 European cents (14 U.S. cents) a minute on any network -- compared with prepaid rates of about 50 cents a minute three years ago.

Today more than three dozen wireless brands are vying for German callers with inexpensive, no-frills offerings, bringing prices in line with European norms. Many of the competing brands have been unleashed in the past two years by E-Plus, a unit of the Netherlands' KPN NV and Germany's No. 3 wireless carrier. T-Mobile and Vodafone still enjoy a combined market share of a bit more than 70%, but it is slipping.

Falling prices are prompting Germans to spend more time on their cellphones but T-Mobile, Vodafone and O2 each have suffered revenue drops in recent quarters in Germany.

Market leader T-Mobile's revenue for the first half of the year was down 2.6%, and operating profits of wireless carriers fell by more than 5% in that period, even as revenue and profits rose in Europe overall.

"I think it's going to get a bit more messy" in Germany, says Jan ten Sythoff, an analyst in London with Pyramid Research, a telecommunications consultancy.

Germans spend only around 100 minutes a month on cellphone calls, about a third less than other Western Europeans and roughly one fourth as much time as Americans, according to industry estimates.

German consumers long have been conditioned to steer clear of cellphone calls because they have cost three to four times as much as landline calls. In countries where wireless use has made big inroads, the price difference is much smaller, with a mobile call costing only about twice what a landline call does.

Prices for mobile calls in Germany rose between 2000 and 2005 even as price wars started in other countries where competition was stiffer. They then dropped 3% in 2005 and an additional 11% last year, before the latest round of cut-rate offerings. T-Mobile and Vodafone have had to do the most catching up after waiting the longest to cut prices; Vodafone says its prices plunged 31% in the 12 months ended March.

Jens Kürten, a spokesman for Vodafone's German unit, says the company expects prices to keep falling. "Competition is still increasing," he says.

T-Mobile and Vodafone also face a tougher playing field after German regulators late last year reduced the "termination fees" that rivals pay the big carriers to complete wireless calls on their networks. Another round of fee cuts could be implemented later this year.

E-Plus broke ranks with its competitors in 2005 by launching a no-frills brand called Simyo that offered mobile calls at 19 European cents a minute, roughly half the prevailing rate. The same year, it introduced Germany's first flat-rate brand, Base. E-Plus has launched 30 brands under various names in Germany over the past two years, signing up 5.9 million customers.

O2 also is becoming more aggressive. Its new discount brand Fonic undercuts the competition at 9.9 cents a minute and doesn't require customers to pay a monthly fee or sign a contract. O2 management, after slashing jobs earlier this year, has vowed to ramp up investments in Germany and return to a fast-growth path. It had 13% of the German market at the end of June, trailing E-Plus's 15%.

Vodafone has refrained from launching discount brands for fear of cannibalizing its regular customer base. But T-Mobile already is testing the waters. Its Congstar brand, introduced in the summer, offers rates lower than its core T-Mobile brand -- though higher than those of many of its discount rivals.

T-Mobile and Vodafone have been trying to retain their edge by upgrading their wireless networks for super-fast Internet connections. Both are betting that much of their future cellphone revenue will come from users downloading data or watching videos -- and that these users will be willing to pay a premium for superior service.

Vodafone says it spent around €3.5 billion ($4.95 billion) in recent years to roll out an improved network that allows German cellphone users to surf the Internet on connections as fast as 3.6 megabits per second across most of the country. The carrier's data-related revenue, not including text messaging, has been growing at a 50% clip recently and already represents about a tenth of its overall sales.