Salem Telephone Company And The State Public Service Commission Essay

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Salem Data Services was established after an agreement was reached between Salem Telephone Company and the state Public Service Commission. Salem Data Service is a computer data service, which performs data processing for Salem Telephone Company. They also sell computer services to other companies and organizations. Since Salem Telephone company was a regulated utility it drove the need for Salem Data Services to be a separate entity since it was an unregulated utility. Even though Salem Data Services had its pros the separate entity was a drain on Salem Telephone Company since it had not produced a profit from 2001 to the current year during the case study of 2004. Salem Data Services encountered many typical problems that new organizations face when getting started. They did however work through these problems and by the end of 2003 had solved and overcame most of their problems. Even though most of the problems Salem Data Services faced were overcome it still did not positively impact the profits of 2003. In 2003, income for Salem Telephone produced the lowest return on investment for their shareholders in seven years. Salem Data Services’ drain on Salem Telephone Company was a large reason for this. Key Information Once Salem Telephone Company shared their income report with their shareholders showing the lowest return on investment in Seven years Peter Flores, the president of Salem Telephone Company, call a meeting with Cynthia Wu manager of Salem Data Services.

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