Public Consultation on the Definition of the Regulatory WACC
The Cost of Capital (CoC) is the allowed rate of return, usually determined as the Weighted Average Cost of Capital (WACC).
The WACC sets the “interest rate” for the capital used by Ooredoo and influences wholesale and retail pricing significantly.
The WACC defines the fair profit margin that an operator should obtain from its investments in the business. A fair profit margin provides the operator with sufficient funds to cover its costs, while encouraging additional investments.
Pricing services that include fair and efficient costs, including an accurate WACC, encourage competition and growth in the market.
Given the relevance of the WACC, ictQATAR conducted two rounds of public consultations.
After that the consultations, ictQATAR issued the WACC Order setting the WACC at 10.75%. As Ooredoo is currently tax-exempt, this WACC rate is the same for pre-tax and post-tax.
The WACC Order can be downloaded from this link