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CAG raps PowerGrid for inadequacies in pricing methodology in telecom biz | Times of India

The CAG observed, “There were inadequacies in the pricing methodology followed by the Company. The multiplication factor adopted to scale up tariff for higher capacities was low, which adversely impacted revenue. Pricing of Indefeasible Right to Use (IRU) contracts was inconsistent with different methods applied for different contracts, leading to lower revenue for the business.”

“The discounts offered by the Company on ceiling tariff were neither transparent nor non-discriminatory. Shortcomings were noticed in sharing of revenue with State transmission utilities for using transmission assets for telecom business. The financial impact of observations worked out to Rs 412.88 crore (Rs 399.48 crore related to pricing methodology and Rs 13.40 crore related to sharing of income and allowance of downtime credit).”

The CAG recommended, “The Company may review the multiplication factor for scaling up bandwidth price in line with the TRAI notification. The Company may also frame a uniform pricing methodology for IRU contracts. Transparent criteria for offering discounts to customers may be instituted and uniformly implemented.” KKS MR MR

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CAG raps PowerGrid for inadequacies in pricing methodology in telecom biz – Times of India.