Prestige Telephone Company

Introduction:

The president of Prestige Telephone Company, Daniel Rowe computed an agreement for establishing a
computer data subsidiary to provide computer service to telephone and other companies. The
agreement was between Prestige Telephone Company and the state Public Service Commission. Prestige
data service started in 2000.

Situation:

• The approval of public service commission requires these conditions to fulfil-

▪ The average monthly charges for service by data subsidiary to the parent telephone company
did not exceed $82,000.

▪ All account of data service were separated from those of telephone service.

• After starting data service there were several problems-

▪ Equipment deliveries were delayed.

▪ Employees get higher salary than expected.

Prestige telephone reported low return in 2002. Prestige data service provide wages and salaries each
month to the parent company and avoid cost of payroll, collections, billing and accounting to telephone
company personnel.

Solution:

▪ To gain profit telephone company should increase sale and promotion by reducing the price.

▪ Reduce service hours from 24 hours to 2 shifts per day.

Submitted by- Akula Padma Priya, section B, PGP12101