As an infrastructure for all economic activities, telecommunications service industry is a fundamental building block. Considering negative impacts of its failure on the national economy and its subscribers, its very important to analyze factors leading to the failure and prevent it in advance. In our research, CUP (Cost-Utility-Preference) chart is developed to analyze the failure mechanism dynamically. It considers both the competition and customers preference of each service to explain why certain services fail. Additionally, it shows how the competitive edge of each service is changed over time. Using the chart, we can understand how the competing services interact in the market, and what mechanism leads to a service failure.