The present invention provides a wireless communication system capable of managing peer-to-peer (P2P) communications. In one embodiment of the invention, upon receiving a request for initiating a call, the system determines whether P2P communication can be established between the two mobile terminals. The system also determines an operating mode of the two mobile terminals for P2P communication. If the P2P communication can be established between the two mobile terminals and both mobile terminals are in a default mode for P2P communication, the system establishes P2P communication between the two mobile terminals. On the other hand, if any one of the mobile terminals is in a prompt mode, the system sends a prompt to the mobile terminal in the prompt mode, along with information about incentives for using P2P communication services. If the user of the mobile terminal in the prompt mode selects the P2P communication services, the system allocates resources for setting up a P2P link between the two mobile terminals. After the P2P communication is completed, the system sends discounted billing information to the mobile terminals.