because a larger company would be in a better position to mitigate the costs of upgrading the infrastructure in one area with the profits from another or whatever.

In this case it appears that it was a small monopoly. Where I live one can generally change a telco without changing your physical exact location. Lots of clumsy wires though under the ceiling near the elevator.

But that was off topic, I’ll add one small point - a bigger company could do what you described too.