PTCL Privatization and Its Impact On Financial Health

INSTITUTE OF BUSINESS AND TECHNOLOGY PTCL Privatization and its Impact on Financial Health Prepared By Fahad Abbas BM-25078
Course Code : MKT-606
MBA (Banking and Finance) FACULTY OF MANAGEMENT AND SOCIAL SCIENCES FALL - 2010
PTCL Privatization and its Impact on Financial Health
INSTITUTE OF BUSINESS AND TECHNOLOGY

ABSTRACT SUBMITTED BY: DISCIPLINE: TITLE OF PROJECT REPORT: Fahad Abbas MBA (Banking and Finance) PTCL Privatization and its Impact on Financial Health MONTH OF SUBMISSION: November, 2010
NAME OF PROJECT SUPERVISOR: Dr. Noor Ahmed Memon
ABSTRACT
Privatization is the incidence or process of transferring ownership of a business, enterprise, agency or public service. The impact of privatization on financial health of Pakistan Telecommunication Limited. Whereas it affects many other sectors as well, such an in-depth treatment would have added a great deal of value to this research in terms of understanding how privatization can lead to efficiency. The main focus of the Project is to analyze the situation for privatization, Impact of privatization on financial health of Pakistan telecommunications, is privatization adding value to PTCL.
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ACKNOWLEDGEMENT
At the completion of my research project I would like to thank ALLAH Almighty for giving me the power, energy and guidance to do this research study. I would then like to thank my resource person, Dr. Noor Ahmed Memon for giving me this opportunity to carry out this project. I would like to thank him for all his help and guidance. Last but not the least, I would like to thank my family and friends for being there for me whenever I needed them and for bearing with me all the way through.
Fahad Abbas
TABLE OF CONTENTS
ABSTRACT ACKNOWLEDGEMENT TABLE OF CONTENTS 1. INTRODUCTION 2 3 4 1
1.1 Introduction..................................................................................................1 1.2 Purpose of Study.........................................................................................1 1.3 Research Objectives...................................................................................1 1.4 Research Methodology...............................................................................2
2. LITERATURE REVIEW
2.1 The Biggest Financial Scam in Pakistans History......................................3 2.2 Pakistani Workers Revolt against PTCL Privatization................................4
3. PROFILE OF PTCL
3.1 History of PTCL...........................................................................................7 3.2 Introduction of PTCL....................................................................................9 3.3 Core Values...............................................................................................13 3.4 Mission.......................................................................................................14 3.5 Vision.........................................................................................................14 3.6 SWOT Analysis.........................................................................................15
4. PRIVATIZATION OF PTCL
18
4.1 Privatization...............................................................................................18 4.2 Impacts of Privatization on PTCL..............................................................20 4.3 Major Benefits............................................................................................27 4.4 Porters Analysis of PTCL.........................................................................27 4.5 Points In Favor of Privatization .................................................................29 4.6 Privatization Techniques...........................................................................32
5. FINANCIAL ANALYSIS OF PTCL
34
5.1 Financial Statement of PTCL ...................................................................34

5.2 Management of PTCL and Current Financial Position..............................35 5.3 Accounting System & Practices................................................................43
6. IMPACT OF PRIVATIZATION
45
6.1 PTCL and Pakistan Economy...................................................................45 6.2 Financial Aspects of PTCL........................................................................51 6.3 PTCL and Financial Health 2010..............................................................55 .........................................................................................................................55 6.4 Special Issues of Telecom........................................................................61
7. CONCLUSION AND RECOMMENDATIONS
66
7.1. Conclusion................................................................................................66 7.2. Recommendations....................................................................................67
BIBLIOGRAPHY APPENDEX
69 70
1. INTRODUCTION
1.1 Introduction Privatization is generally referred to as the total or partial sale of shares of a state-owned enterprise (SOE) to private investors. Privatization refers to the transfer of any Federal property, right, interest, concession or management to any person. Person in turn is broadly defined to include partnerships, companies, and the like, other than those owned or controlled by Federal Government. In legal terms, privatization includes a transaction by virtue of which any person from the Federal Government or any enterprise owned or controlled, wholly or partially, directly or indirectly, by Federal Government Thus it includes the sale of shares or assets of companies in which the Government sells only a minority interest. 1.2 Purpose of Study The ptcl privatization and its impact on financial health .In the local scenario to study and analyze the effects of Privatization. There is very little emphasis on studying the impact of privatization process in terms of creating value. This project will provide in depth analysis of Pakistan Telecommunication Company limited before and after privatization. The Main Focus of the report is to. 1. Analyze the situation for privatization. 2. Impact of privatization on financial Health of Pakistan Telecommunications. 3. Is privatization adding value to PTCL? 1.3 Research Objectives This study is significant both from theoretical and practical standpoints. In theoretical terms, the study highlights gaps in the existing theoretical literature, especially in relation to privatization initiatives and its impact. In
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practical terms, the study is also significant, as not much literature exists on the privatization experience of Pakistan telecom sector and its impacts. The subject is rather under-studied, particularly by independent research and, more importantly, from the perspective of telecom sector. 1. Causes for privatization. 2. Study of causes involving privatization. 3. Privatization strategies 4. National and international perspective is considered. 5. Specifically, Case of PTCL is studied to analyze the impact of privatization on financial health of the company. 1.4 Research Methodology The research provides a comprehensive background on the nature, characteristics and profile of Pakistan Telecommunication Corporation before the onset of the privatization process, and identifies what are the issues that lead to privatization of a profit making public company. The pre-privatization scenario is compared with the situation after privatization process. This research is based on both primary and secondary sources. The primary sources include official reports, decisions of regulators and various documents prepared by the privatization commission. The secondary sources also include academic books and journals, magazines, newspaper reports and articles.
2. LITERATURE REVIEW
2.1 The Biggest Financial Scam in Pakistans History By Atif Tahir | September 4, 2007 |1 The fall of corporate giants like ENRON and WORLDCOM left many learning impressions for both public and private sector enterprises besides stakeholders including governments, employees, Board of Directors and strategic partners. In both of the above mentioned historical cases, the core reason was fraudulent conduct by the corporate level management. The top officers consistently kept hiding the true financial facts and figures bearing losses and public reports kept displaying healthy financial results and profitability, which strengthened the trust of shareholders and partners to keep investing besides helping the share price to grow further in the stock market. Unfortunately, we might have another big financial scandal in Pakistan about privatization of PTCL. PTCL no doubt is one of the strongest corporate enterprises not only in Pakistan but also in the continent known as Asia. Pakistans Telecom market, Economy and Pakistans political stability. Pakistans image, which already is in crisis, will be hurt further. Supreme Court of Pakistan has already given decision against the privatization of PSO and Pakistan Steel and if PTCLs privatization gets challenged on true facts, it will bring horrifying results. Now this brings another example to Corporate Governance books and poses immense need to improve upon corporate governance practices. Corporate Governance is the set of policies, procedures, practices, processes, customs, laws and institutions affecting the way in which a corporation or enterprise is controlled or administered.
1 http://telecompk.net/2007/09/04/ptcl%E2%80%99s-privatization-the-biggest-financial-scam-in-pakistan%E2%80%99s-history/
It further involves shareholders, stakeholders, management and the enterprise goals and objectives i.e. profitability, organizational growth, share price stability for which a company is governed. The two main aspects of corporate governance are Accountability and Economic efficiency for the welfare of the shareholders. Being state owned enterprise, it was Governments critical responsibility to measure the scope and feasibility of privatization. PTCL was and is one of the oldest & strongest corporate enterprises and revenue contributor in Pakistan. The key objective of any business entity is to earn profit. So, why there was a need to privatize such a Giant, Whatever PTCL is doing after privatization could also have done before privatization. When there is no major change in organizational structure and policies and even new owners have still not been able to even lay off those 20,000 employees for which our Government has agreed to bear 50% cost of layoff. 2.2 Pakistani Workers Revolt against PTCL Privatization By Vilani Peiris and Keith Jones 4 June 20052 Workers at Pakistan Telecommunication Company Limited (PTCL) who have been occupying the companys Islamabad headquarters and other facilities since May 25are threatening to sever the countrys communications network next Monday, unless Pervez Musharrafs military government abandons its plans to privatize what is Pakistans largest and most profitable public-sector enterprise. The military government, meanwhile, has made it clear that it is ready to use the full power of Pakistans security forces against the PTCL workers. On May 30, the Dawn reported that 600 police and Frontier Constabulary had taken up positions on the grounds of the PTCL headquarters and that
http://www.wsws.org/articles/2005/jun2005/paki-j04.shtml Security forces poised to attack occupation

knowledgeable sources were saying security forces might soon storm the complex. While no attack has yet been launched, large numbers of security personnel remain in position at the PTCL headquarters and military helicopters regularly fly overhead. Paramilitary forces have also been deployed outside telephone exchanges across the country. According to news reports, a growing number of union leaders and activists have been seized by security forces. Malik Maqbool Hussain, a member of the PTCL Workers Unions Action Committee, was detained and interrogated for several hours by one of Pakistans intelligence agencies.The 60,000 PTCL workers began job action after the government announced that on June 10 it will begin selling off its 88 percent share of the telecommunications company. The strike escalated on May 25 when workers, who were picketing outside the PTCL headquarters, responded to reports that negotiations between the company and a nine-union joint action committee had failed, by breaking through police lines and taking the building over. PTCL facilities in cities across the country were also soon occupied. For over a week, all PTCL operator services and equipment as well as line repair and installation have been at a standstill. The workers confidence in the unions was undermined by their calling off a strike last year against the layoff of 30,000 temporary workers, after management compromised on some of its demands of the workforcethe right to even form unions or bargain collectively. With privatization, thousands of PTCL workers jobs will lose their jobs. According to industry experts, the company would have to cut its workforce in half to meet the standard industry ratio of employees to telephone lines. Under a recent management offer, only permanent employees with at least 10 years seniority would have any guarantee against the loss of their jobs under privatization.
The Musharraf regime is hoping that the PTCL workers militant struggle can be defused through a combination of threats of bloody violence and the intercession of the opposition, whose claims to support the workers have been trumpeted by the union leadership. Indeed, even as the government prepares for a possible violent assault against the strikers, the union leaders are promoting the false notion that with the support of the likes of the PPP and MMA, the Musharraf regime can be pressured into abandoning its privatization plans, which are pivotal to its and the Pakistani bourgeoisies export-led growth economic strategy.
3. PROFILE OF PTCL
3.1 History of PTCL When Pakistan came into being then it start with name of "Pakistan post & telegraph Department" in 1947. As time passed and new technology developed communication system has also developed. So in 1962 telephone and telegraph department was established and Pakistan post was declared as separate department. Telephone &Telegraph department has converted to Telecommunication Corporation in 1991 under Pakistan Telecommunication Corporation (PTC) ordinance of 1991. With Pakistan Telecommunication Corporation Ordinance 1991 government open the way for private competition and start awarding licenses for cellular phone and card operated pay phones. With this liberalization 1991 government of Pakistan decided to privatized PTC and use voucher method in 1994 for privatization that later were convertible to shares, total number of voucher was six million that were equal to 600 million shares at the rate Rs. 10 per share. The telecom sector was liberalized but PTCL was still the monopolist of the land line telephone services. In 2003 PTCL monopoly comes to an end when government decided to completely liberalize the telecommunication industry. In 2006 the company was completely privatize when government sold its 26% management share to Etisalat. Evolution and change are choices we make not for their own sake but for the sake of progress, growth & better adaptation to a changing world. This is a time of growing challenges. The pace of technology is changing. Networks of the future will not only have to be digital and intelligent, but also offer high transmission capacity and flexible bandwidth. Services provided will be personal and tailored to individual needs. As Etisalat embraces new technologies and make the world of global communications accessible to more people it perfects the art of bringing people together. To reflect growth, the firms insight for the future and concern
for people, it now has a new Corporate Logo and Identity. The identity has a green background, which signifies solidity, inspires confidence and denotes Etisalat the mother brand. The red dot represents technology and the world of communication. The 3 curves featured in the design not only represent the letter 'E' which stands for Etisalat and the Emirates, but also signify an entity that is growing outside its boundaries and expanding into strategic businesses locally and internationally.
Ordinance of 1994, which stipulated the Following.
1. To convert PTCL into a public limited company (renamed as the Pakistan Telecommunication Company Limited, or PTCL) and provide this company with a 25-year renewable license to continue as a fixedline domestic and international telecom operator. 2. To establish a separate regulatory authority to monitor the operations of telecom operators in Pakistan. 3. To establish a tariff structure linked to changes in the Pakistan Consumer Price Index. 4. To form the National Telecommunication Corporation Limited to take over telecom services provided to Federal and Provincial government bodies and Defense. 5. Presently, PTC is the sole provider of fixed-line domestic and international telephone services and certain other telecommunication services in Pakistan. It owns all public exchanges, the nation-wide network of local telephone lines, principal public long-distance telephone transmission facilities and international telecommunication gateways. PTC maintains its monopoly on fixed-line domestic and international telephone services in all regions of Pakistan except the Northern Areas, the Border Areas and Azad Jammu and Kashmir for seven years. However this monopoly expired in December last year.
3.2 Introduction of PTCL

Name of Company Pakistan Telecommunication Company Limited
Monogram Slogan Feel the Difference Industry Telecommunication
Pakistan Telecommunication Company Limited (PTCL) is proud to be Pakistans most reliable and largest converged services carrier providing all telecommunications services from basic voice telephony to data, internet, video-conferencing and carrier services to consumers and businesses all over the country. Whether it is an office in the largest city of Pakistan or a home in a small village, we are present in every corner of Pakistan to serve our customers. PTCL is all set to redefine the established boundaries of the telecommunication market and is shifting the productivity frontier to new heights. Today, for millions of people, we demand instant access to new products and ideas. More importantly we want them for their better living standards with increased values in this ever-shrinking globe of ours. We are setting free the spirit of innovation. PTCL is going to be your first choice in the future as well, just as it has been over the past six decades.
Product and Services Business & Corporate Users
For clear communication the first choice of business circles is PTCL telephone for local, nationwide and international calling. Today businesses can have 10-100 lines with modern day services to meet their needs. Now you get options like Caller-ID, call-forwarding, call-waiting, Call Barring, to name a few.
Other Business Specific Services Include
VPN-Virtual Private Network, Audio Conference Service, Digital Cross Connect (DXX), ISDN (Policy), Teleplus (ISDN/BRI), Digital Phone Facilities/ Modification Char3ges, UAN, UIN.
Nationwide Infrastructure
We have the largest Copper infrastructure spread over every city, town and village of Pakistan with over million installed lines. The network has over 6 million PSTN lines installed across Pakistan with more than 3 million working. Furthermore installed capacity of broadband is more than 0.6 million ports spread across 414 cities and town of the country
Carriers Services
As carriers-carrier, we provide the core infrastructure services to the cellular, LDIs, Local Loop operators, ISPs, Call Centers and payphone operators. We provide all carrier services, right from inter-connects and telehousing to DPLC and IPLC connectivity. Our interconnect services are provided from our 3200 exchange locations that connect your carriers networks domestically.
White Label Services
PTCL customers can now provide uninterrupted services to their clients without undertaking large scale investment in infrastructure or developing expertise in their own network. PTCL White Label Services are focused on speed and simplicity at minimal capex.
EVO Wireless Broadband
PTCL EVO 3G Wireless Broadband is Pakistans fastest wireless internet which offers its customers superior 3G internet experience. Evo Wireless Broadband is enabling the wireless broadband revolution in Pakistan with flexibility to roam freely like never before. PTCL Evo has revolutionized the way people connect to the internet by offering true
mobility. PTCL Evo is currently offering its services in more than 18 cities on EV-DO technology offering speeds up to 3.1 Mbps.
Broadband Pakistan
PTCL Broadband is the largest and the fastest growing Broadband service in Pakistan. Since its launch on 19th May 2007, PTCL has acquired approximately 432,821Broadband customers in over 414 cities and towns across Pakistan, leading the proliferation and awareness of Broadband services across Pakistan. With its entry in this market segment, PTCL opened up a broadband culture in Pakistan, where till a couple of years back there was very little awareness in the country about broadband & high speed internet services. PTCL also offers multiple FREE personalized e-mail accounts exclusively to its broadband users. In addition, PTCL recently doubled its broadband speed for all its existing and new customers at the same price, making 1 MB as its minimum offered speed.
IPTV Service (Smart TV)
PTCL SMART TV Using its state of the art Broadband network, PTCL entered the media sector on 14th August 2008, by launching a digital interactive television service for the first time in Pakistan. Employing the IPTV (Internet Protocol TV) technology, PTCL brought Pakistan in the list of a few countries across the globes that offer this state of the art interactive TV service to its subscribers, the service is available in 16 cities.
Pak Internet Exchange
It is the only IP enabled network with 40 (number increase) pointof-presences (POP) in 26 cities. The existing 16G active bandwidth is used for internet, data, and video and video-conferencing services and for voice of LDI.
V-fone
PTCL also continues to be the largest CDMA operator in the country with approximately 1.25 million V-fone customers. It offers fixed wireless telephone for your homes & business. With CDMA2000 1X technology, ours is the largest WLL network with a capacity of 2.6M, covering over 10,000 urban & rural areas.
International Network SEAMEWE-3 Submarine Cable System
PTCL is a member of SEAMEWE 3 Cable Consortium with its Cable Landing Station at Karachi. SMW-3 cable connects 39 cable landing stations in 33 countries and four continents. SMW-3 is the longest system of the world with a total length of 39,000 Km.
SMW-4 Submarine Cable System
SMW-4 is a relatively new submarine cable system (inaugurated in December 2005) and links 14 countries with 16 landing stations across Europe, Middle East and Asia. The system is using Terabit DWDM technology to achieve. The link between any two destinations is STM-1. SMW-4 is designed for relatively higher traffic volumes.
I ME WE cable details and Status with Map
IMEWE Submarine Cable is a Tera bit capacity submarine cable system connecting India to Western Europe through Middle East. The Cable system is 13,000 km long with 10 landing points in 8 countries.
Satellite Communication
PTCL has Intelsat Standard Earth Stations near Karachi and Islamabad. These installations provide the diversity for International voice connectivity and also work as Hub for domestic satellite users. There are four Intelsat Standard B Earth Stations at Islamabad, Gilgit, Skardu and Gwadar.
3.3 Core Values Professional Integrity Customer Satisfaction Teamwork Company Loyalty Corporate Culture
Energy
We value and nurture the energy and dynamism needed to achieve the very best in business. We look forward to future challenges and opportunities.
Openness
As a company, we are welcoming, sociable and friendly to customers, suppliers and employees. We deal with people in a clear, direct way and are always honest and fair in business dealings. Enablement our aim is to open up opportunities and to actively help people reach their goals. We always deliver what we say we will.
The Future A world in which Technology extends our Reach.
Already, music, books and services no longer have to have a physical format to be sold online. Advanced networks will increasingly provide education, healthcare and other services and goods. For instance, telemedicine already allows patients to seek the best advice from doctors around the world; now robotic aids are beginning to make remote surgery possible. As the pace of technological change increases, Etisalat will extend its reach into new technologies, services and markets to create opportunities for our customers.
International Investment of Etisalat
Thuraya Excelcomindo (XL) Indonesia ) Canar, Sudan Etisalat Nigeria (EMTS) PTCL, Pakistan Etisalat Misr (Egypt) Zantel, Tanzania Etisalat Afghanistan Etisalat Software Services Private Limited (ESSPL) - Technologia Atlantique Telecom (AT) Millicom Sri Lanka TIGO Etisalat International Etihad Etisalat Mobily Saudi Arabia Etisalat DB Telecom India PVT LTD. 3.4 Mission An organizational environment that fosters professionalism, motivation and quality an environment that is cost effective and quality conscious Services that are based on the most optimum technology "Quality" and "Time" conscious customer service Sustained growth in earnings and profitability 3.5 Vision To be the leading Information and Communication Technology Service Provider in the region by achieving customer satisfaction and maximizing shareholders' value. The future is unfolding around us. In times to come, we will be the link that allows global communication. We are striving towards mobilizing the world for the future. By becoming partners in innovation, we are ready to shape a future that offers telecom services that bring us closer.
3.6 SWOT Analysis

Strength
Largest operational network and infrastructure within ICT (Information & Communication Technologies) segment.
Market leadership in Local loop, Wireless local loop (WLL) and fixed telephony.
Competitors still depend on PTCL network either directly or indirectly About 2000 exchanges all around the country and leader for landline network.
Internet facility on basic telephone line and both Dialup and DSL. With the brand name "Vfone" using CDMA based "wireless local loop" to provide services of fixed line and has a largest network across the country. It has around 1,250,000 Vfone customers. The service is both for household.
Impacts of Privatization on PTCL - 28 -and businesses; Vfone has a largest wireless local loop network and provide services in 10,000 rural and urban areas.
"Ufone", PTCL subsidiary for mobile communication, is the country's third largest mobile phone operator with 21.5% market share, and about 20 million subscribers.
Ufone has the top class technology and services in mobile telecom sector; it is continue expanding its coverage and customer base and as one of the leading services provider in Pakistani cellular market.
Ufone have its own 21 sales and customer service center and about 250 franchisees all around the country, its customer service center is known for efficiency and friendliness, and they have innovative solutions and a "Web Based Franchise management system".
In Pakistan PTCL has a fastest growing and largest network of broadband services. Within a short time after its services launch (2years) it acquires more than 150,000 subscribers from 150 towns and cities across the country.
PTCL offer "digital interactive television" services with the highest digital quality picture. More than hundred TV channels are offer in big cities like Lahore, Karachi and Rawalpindi and Islamabad by PTCL Smart TV.
Weakness
Not been able to nurture its growth around customer services oriented strategy
Internal organizational and business processes issues Monopolistic culture has further added to its complexities PTCL-V, the fixed wireless phone service is poor Over employment & low productivity. Slow decision making including external interferences. PTCL has a continuous downward trend in its revenue since 2005, where PTCL has Rs.75, 972 million revenue and the year Ended June, 2008 it has Rs.61, 086 million, when it comes to after tax loss of 2825 million Rupees.
Continuous decline in the number of subscriber from 5million in 2006 to 3.5million till late 2008. .
Employees are unaware of work ethics, and are irresponsible especially those working in the rural areas.
Slow pace in adopting the latest technology. Telephonic complaint will rarely complete, customer need to go physically to the offices for making complaints.
PTCL has no Research and Development.
Opportunity
Have vast infrastructure and real estate assets which can be leveraged further.
Global connectivity reliability has been improved. PTCL is expanding the long distance and infrastructure side through spreading out two sea-mewe submarine cables.
Large unmet market with total population of 150million PTCL has the opportunity to utilize its sources namely submarine cable system and satellite communication system for low cost long distance communication.
There is no strong competition in the landline market.
Threats
Increased competition in long distance continues to exert pressure. Exposure to market competition Migration to Cellular Networks Ability to Attract & Retain Quality Professionals Reduction in International Settlement Rates There is continues price war between telecom operator in
4. PRIVATIZATION OF PTCL
4.1 Privatization Privatization is generally referred to as the total or partial sale of shares of a state-owned enterprise (SOE) to private investors. Savas (1987: 3) talks of privatization as a process that leads to reduction in the role of the government and a corresponding increase in the ownership of assets by the private sector. Berg (1998: 185) also takes a narrow view and equates it with the selling of state-owned companies to private buyers, whether by sale of shares or by disposal of whole enterprises. Self (1993: 60), however, takes a broader view of privatization and refers to it as a way of slimming the state and increasing the competitive influence of market forces within government. The slimming of state requires the wholesale transfer of functions and assets to the private sector, while the increasing of competition within the government involves contracting out the provision of public services. Hanke (1986: 4) also takes a similar view and defines privatization as the transfer of assets and service functions from public to private hands.
Privatization in Pakistan
The last few years in Pakistan have seen significant proliferation of privatization of traditional state functions. There are a growing number of private security companies providing armed guards, private toll roads, and private education at all levels, private hospitals and clinics, private water delivery businesses, and private clubs. Instead of helping improve the situation for all of their fellow citizens; it seems that the Pakistani elite are retreating into their own shells to isolate themselves from the terrible effects of deteriorating governance in their land.
Privatization Process of PTCL
In December 1990 "Pakistan Telecommunication Corporation" was established to replace the "Pakistan Telephone and Telegraph
Department". In 1991 government of Pakistan show its intention for the privatization of PTCL to meet the need of the country and also for esteem growth of economy. A consortium was hired for this purpose to see the feasibility and on the bases of his report government decided to sell out the 26 % share capital with management rights and to convert it to limited company. As decided in the "privatization session of 1991-1992" 12% shares of Pakistan Telecommunication have been divested during 1994. One million exchangeable vouchers has been issued in august 1994 these were equal to 100 million shares each has a value of Rs 10. In September 1994 five million vouchers has been issued to international 31 investors. The value of these issues were $900 million from international and Rs.3 billion from domestic issue while the values of the voucher in first and second issues were Rs.3000 and 5500 respectively. While the issues of 26 % management share was still a controversy, the Government was continue with its mission by issuing Notes with 150 million US dollar worth to international investor in 1997. The Notes were convertible to fully paid "A" class ordinary shares of PTCL and these were 3.3 % of the total share capital issued. In august 1997 foreign receivable has been securitized successfully obtaining 250 million US dollar to GOP. In 1995 a new financial advisor was hired by Privatization commission for the implementation of strategic sale (26% management shares) but the new governments suspended the services of the financial advisor, and in 1998 hire the M/S Goldman Sachs International to provide advisory services on PTCL privatization. The Financial Advisor has start working and established a data room at the head quarter of PTCL where all possible information that is related to PTCL was available to facilitate the team. Government approved the proposed policy and decided to complete the Re-regulation by December 2003, major steps has been taken on legal and regulatory measures, PTA granted license to PTML (Ufone) and proposed DSI regulation for tariff
and licensing has also been accepted. At last in April 2006 control of the Pakistan Telecommunication corporation was handed over to Etisalat(UAE based company), Etisalat assume the control of the company by paying 2.6 billion US dollar to buy 26% share with management right in PTCL. With the control of PTCL Etisalat also assume the control of Ufone, one the top class mobile service provider subsidiary of PTCL. This privatization has bring in great technological change and innovation, as we can now connect to internet through mobile from all around the country, telenor is providing TV coverage, MMS and GPRS are the services available on all the mobile operator. PTCL also signed a contract with Emaar to provide information and telecommunication technology services to household in Karachi and Islamabad. After this agreement PTCL is the only services provider that offer ICT to two big project of Emaar Pakistan, every household and office will be connected through fiber optics. 4.2 Impacts of Privatization on PTCL Impact on Competition Impact on Employment Impact on Performance
Impact on Competition
With the privatization of PTCL many Competitors have entered in Pakistani market. Paktel and Instaphone were entered in Pakistan telecom industry in 1990 and in 1994 Mobilink started its function. In 2001, Ufone, a supplementary part of PTCL entered in the market and in 2005 both Warid and Telenor one by one started their services. From the year 2000 there is tremendous increase in the cellular users. Mobilink is the largest cellular company with the highest number of users, compare to Ufone.
Currently 79% population in Punjab have mobile phones, 75% in Sindh, 34% in Baluchistan, 63% in N.W.F.P. and overall 73.3% of population in Pakistan enjoying this facility. Zong (previously Paktel) has great share in the cellular market. Latest data from PTA shows that Telenor rise to number two and Warid telecom is becoming more popular and capturing market share with the high pace as compare to other traditional rivals. Within 4 year of time Telenor has reached to the second largest cellular mobile company after Mobilink with Subscribers of approx. 19 million.
Impact on Employment
PTCL has approx. 65000 employees before privatization. The main workforce of the PTCL is unqualified and unskilled. About 50% employees are under graduate. After privatization of PTCL the new management has realized that company spent huge amount on employees in respect of salary and other different remunerations. In order to reduce the operational cost of the organization, to make it more effective and profitable, PTCL need to layoff these unskilled employees. PTCL has launched a scheme called VSS (Voluntarily separated scheme). Under this scheme PTCL has to pay a lump sum amount to the employee who is willing to leave PTCL. The VSS scheme cost Rs. 34.94 billion to PTCL for the period 2007 and 2008, assuming that 60 percent of the employees avail this package. PTCL HR wing stepped forward to facilitate the emergence of new Corporate Culture by becoming Equal opportunity employer, inducting fresh blood from the market, improving the way PTCL runs and reducing the number of employees having outdated skill set. The Training & Development wing of the HR Department also organized a comprehensive six months Urgent Training Needs program in technical and managerial fields to enhance soft skills. Healthy improvements have been made in the area of Recruitment and Retention as the whole recruitment process has been redefined to cope with the changing business
requirements. Detailed facilitation programs have been initiated for the orientation of newly hired employees. PTCL employees have been provided excellent international placement opportunities across various Etisalat International Business Operations.
Training and Development
The role of training and development in a service involved organization is many times more in comparison with what it has in a manufacturing involved organization. This role becomes more significant in a situation where the need to transform organizational culture is identified as the most glaring problem and the most difficult impediment on the way to organizational growth. PTCL employees are a great asset not only for the company but also for the country. Their marvelous potential is yet to be exploited. Their skills need to be developed, their expertise need to be updated for which training and development department is at their disposal to cater to their training needs. At PTCL, training and development team would never miss an opportunity to contribute towards the betterment of the company. Training and Developments is playing an essential role in changing PTCL from a government sector organization to corporate sector company. PTCL consider every employee of the company as our customer and firmly believe that meeting their expectation would help us achieve customer satisfaction. We look forward to your input for making our endeavors more effective. The Training and Development has a clear road map of activities and is committed to provide high quality trainings for the development of every single employee.
Impact on Performance Liquidity Ratio Liquidity
A firms ability to satisfy its short-term obligations,
(Lawrence J. Gitman; Principles of Managerial Finance).
Liquidity refers to the solvency of the firms overall financial position, the ease with which it can pay its bills. Because a common precursor to financial distress and bankruptcy is low or declining liquidity, these ratios can provide early sign of cash flow problems and implementing business failures. The two basic measures of liquidity are current and quick ratios.
Generally, the higher the current ratio, the more liquid the firm is considered to be.
Year Current Quick
2009 Time Time 1.50 1.36
2008 1.81 1.58
2007 2.19 2.06
2006 1.66 1.54
2005 1.89 1.73
2004 2.78 2.67
Interpretation
The above figures shows that the firm had more liquid before privatization, company has privatized in 2006 and above table shows more favorable figures before 2006, which shows that the liquidity of PTCL has decreased after privatization.
Source. PTCL Website
Verage Ratio
By using a combination of assets, debt, equity, and interest payments, leverage ratio's are used to understand a company's ability to meet it long term financial obligations. Leverage ratios measure the degree of protection of suppliers of long term funds. The level of leverage depends on a lot of factors such as availability of collateral, strength of operating cash flow and tax treatments.
Interpretation
Debt equity ratio shows that PTCL after privatization use more aggressive financing for its operations, and its debts continuously increases after privatization which owners investment more risky. In case of Interest Earned Ratio, the ability to pay its interest payments before privatization continuously improving but after privatization it shows decline, even that in 2008 it shows negative or unfavorable result which is (5.26) Times.
Leverage of PTCL over the time
Source. PTCL Website Profitability Ratio
There are many measures of profitability. As a group, these measures enable the analyst to evaluate the firms profits with respect to given level of sale, a certain level of assets, or the owners investment. With out profit a firm could not attract the outside capital. Owners, creditors and management pay close attention to boosting profits because of the great importance placed on the earning in the marketplace.
Interpretation
Operating Profit Margin of PTCL before privatization is above 40% of sales and in 2004 it is 51.37%, but after privatization is constantly a decrease and in 2009 it is only 18.15% of sales.
Profitability over the time
Source. PTCL Website EPS over the time
4.3 Major Benefits The benefit to the country of privatization especially PTCL is its effect on the budget. With all these loss making companies running to the government for help, the budget has to be used to cover their failings. Every rupee spent on that is one less available to build roads or schools or health clinics. Much of the current budget gap could be closed by getting those companies private. In addition, privatization will allow the government to sell the companies and raise real money in return. The total market value of companies on the books for privatizing is about 4.5 billion dollars. The government hopes to raise that much by sales of these firms. Even if it only gets 3 billion for these firms it will mean a significant reduction in the national debt as it appears that these funds will be earmarked for debt retirement. 4.4 Porters Analysis of PTCL After making a detail study of the Pakistan Telecommunication Company Limited now lets put its case in the context of Porters Five Forces Model.
Rivalry among the Firms
The increase in the intensity of rivalry especially after the entrance of Telenor and Warid in 2005 greatly influences prices as well as the cost of competition. The cost of advertising and sales become very high and a continuous price reduction has been observed due to price war among the competitors. There are three areas of competition wired line, wireless local
loop and cellular; there in the wired line PTCL is the sole operator in the market, in the wireless local loop PTCL (Vfone) is the leader but facing severe competition from WorlCall,TeleCard, and Wateen, while in the cellular sector Mobilink is the leader and Ufone (PTCL subsidiary) is at number two position. The cellular sector is not just a threat in this sector but also to the fixed line sector because the function of both is the same to make a call. In this type of competition firms with best technology and superior customer services can survive.
Threats of New Entrants
As there is already a severe competition in the market and cellular operator like Mobilink, Telenor, Warid, Ufone and Zong have already reached to their maturity and have control in every corner of the country. PTCL landline is also mature and has an establish infrastructure everywhere and for new operator to establish its landline network will take a long time. While in the wireless local loop beside the four big operator including PTCL (Vfone) there are some other firm which are still struggling for their survival so there is no chance of new entrants.
Bargaining Power of Suppliers
In the telecommunication industry there is no such supplier because this is a service sector and in the market of Pakistan if there are some services needed Pakistan Telecommunication Authority is responsible for that which has the same criteria for all operators. Beside this PTCL is providing some services to some operator especially to wireless local loop so for PTCL there is no such threats.
Bargaining Power of Buyers
Most of the population of the Pakistan belongs to middle and lower middle class and the main use of the telecommunication in the country is to make a call, value added services are not in use of general
population and limited to some segment of the market like the use of internet with cell phone or video conferencing. So there is a strong bargaining power of buyers in the market and some people even use more than one SIM Card to take benefit of different packages offered by the operator. This is the main problem in the market if one operator is offering free air time after mid night till morning the other offer it from evening to mid night the third one offer Rs.50(50 Paisa: there are 100 Paisa in one rupee) per minute. The ultimate benefit goes to users. To retain the subscribers, PTCL land line offer free local call after mid night and Ufone also has such packages.
Threats of Substitute
The current downward trend in the subscribers is mainly due to wireless local loop in which currently there are more than 2million subscribers and PTCL is the leader of the segment. While the DSL internet is the future substitute for all the three segments: Wired, WLL and Cellular. As it has happened in the developed world all the official communication take place through Email and Messengers as text messaging, voice chat and videos conferencing. Internet is the cheap source of communication and there is an increasing trend of the use of internet despite the lack of infrastructure in the country. While looking to its use many 45 operators have entered to the market and functioning well. PTCL also provide services in this segment both dialup and DSL Broadband and the main advantage of the PTCL in the segment is that it has an established network of exchanges everywhere in the country. If there are some problems in the landline, PTCL can cover that with its Wireless local loop. 4.5 Points In Favor of Privatization
Performance
State-run
industries
tend
to
be
bureaucratic.
political
government may only be motivated to improve a function when its poor performance becomes politically sensitive, and such an improvement can be reversed easily by another regime.
Increased Efficiency
Private companies and firms have a greater incentive to produce more goods and services for the sake of reaching a customer base and hence increasing profits. A state-owned firm would not be as productive due to the lack of financing allocated by the entire government's budget that must consider other areas of the economy.
Specialization
A private business has the ability to focus all relevant human and financial resources onto specific functions. A state-owned firm does not have the necessary resources to specialize its goods and services as a result of the general products provided to the greatest number of people in the population.
Improvements
Conversely, the government may put off improvements due to political sensitivity and special interests even in cases of companies that are run well and better serve their customers' needs.
Accountability
Managers of privately owned companies are accountable to their owners/shareholders and to the consumer and can only exist and thrive where needs are met. Managers of publicly owned companies are required to be more accountable to the broader community and to political "stakeholders". This can reduce their ability to directly and specifically serve the needs of their customers, and can bias investment decisions away from otherwise profitable areas.
Civil-liberty Concerns
A company controlled by the state may have access to information or assets which may be used against dissidents or any individuals who disagree with their policies.
Goals
A political government tends to run an industry or company for political goals rather than economic ones.
Capital
Privately held companies can sometimes more easily raise investment capital in the financial markets when such local markets exist and are suitably liquid. While interest rates for private companies are often higher than for government debt, this can serve as a useful constraint to promote efficient investments by private companies, instead of crosssubsidizing them with the overall credit-risk of the country. Investment decisions are then governed by market interest rates. State-owned industries have to compete with demands from other government departments and special interests. In either case, for smaller markets, political risk may add substantially to the cost of capital.
Natural Monopolies
The existence of natural monopolies does not mean that these sectors must be state owned. Governments can enact or are armed with anti-trust legislation and bodies to deal with anti-competitive behavior of all companies public or private.
Concentration of Wealth
Ownership of and profits from successful enterprises tend to be dispersed and diversified -particularly in voucher privatization. The availability of more investment vehicles stimulates capital markets and promotes liquidity and job creation.
Profits
Corporations exist to generate profits for their shareholders. Private companies make a profit by enticing consumers to buy their products in preference to their competitors' (or by increasing primary demand for their products, or by reducing costs). Private corporations typically profit more if they serve the needs of their clients well. Corporations of different sizes may target different market niches in order to focus on marginal groups and satisfy their demand. A company with good corporate governance will therefore be incentivized to meet the needs of its customers efficiently.
Job gains
As the economy becomes more efficient, more profits are obtained and no government subsidies and less tax are needed, there will be more private money available for investments and consumption and more profitable and better-paid jobs will be created than in the case of a more regulated economy. 4.6 Privatization Techniques
Asset Sales
In Asset Sales privatization the government sold out the enterprises to existing private firm or to a group of investors. It depends upon the government to sell its share in fraction or in whole in Asset Sales privatization, the traditional method of such privatization is auction, but 12 government may sometime sold out its enterprises directly to the investors (Megginson,Nash, Netter, & Poulsen, 2004).
Share-issue privatizations
The Share-issue privatization (SIPs), in this way the government sells equity shares in the public capital market which open to retailer and investor. This method is the most significant method of privatization in
terms of size and also one of the most economical ways of privatization (Megginson, et al., 2004).
Voucher privatizations
The Voucher privatization is similar to SIPs Privatization, in such privatization the share are open to the masses, these Voucher normally free or very low cost and are open to all masses, in other words we may say that it is another kind of SIPs offered at low price (Megginson, et al., 2004).
5. FINANCIAL ANALYSIS OF PTCL
5.1 Financial Statement of PTCL 1. Financial statement of position of ptcl is in Appendix No 1 2. Statement on comprehensive income is in Appendix No 2 3. Statement of cash flow is in Appendix No 3 4. Statement of changes in equity is in Appendix No 4
5.2 Management of PTCL and Current Financial Position The management of PTCL has come in for criticism for its relatively slow response to the rapidly changing world of technology. Nevertheless, if realistically compare todays PTCL with that of the mid 90s we believe that the changes are significant and in a positive direction. From single entry accounting system to double entry; multi qualifications to a clean balance sheet; implementation of comprehensive tariff re-balancing and the reduction of a 90-day lead time for a connection to 24 hours. These are extremely positive developments with a major impact on the operating efficiency of the company. But the question is what positive changes brought the privatization of the company.
PTCL has a lot to do in areas such as:
Organizational reengineering Proper focus on HR restructuring Marketing, and implementation of information systems for operational support, CRM, data warehousing, billing, and customer care to even come close to its regional peers.
COMPANY Symbol Industry
PTCL PTC Fixed Line Telecommunication PKR 20.16 PKR 87924 Million (On June 30, 2009)
Current Stock Price Market Capitalization
Recent Results 2001 H 2010
The PTCL Group Revenue of Rs 49.4 billion for the period under review was 6% higher compared to the corresponding period last year. The revenue earned by PTML (Ufone), the wholly-owned subsidiary of
PTCL, was higher by 24%, while PTCL s revenue was decreased by 5%. Cost of sales for PTCL increased by 0.5%. PTCL s domestic voice revenue declined by 7% whereas International revenue registered an increase of 3%. Operating profit was lower by 14.25% to Rs 6.2 billion. Other income increased by 18.6%, while finance cost declined by 48.6%. Due to these positivities, the group s net profit of Rs 6.7 billion showed a 13% growth compared to the same period last year. PTCL s Profit after Tax at Rs 5.354 billion was slightly better than the same period last year because of better cost controls and improved realization of receivables.
Financial Performance Financial year 2005-2009
During FY09 PTCL faced a two-fold challenge of price attrition and escalating costs. Due to the increasing competition in the telecom sector and shift in customer preferences PTCL did not only provide more value to its customers by introducing unified tariff for on-net calls but also introduced new services specially focusing on areas of Wireless Broadband and Corporate services for customer retention and enhancing its revenue stream. The following paragraphs discuss in detail the financial performance of the company during the last 5 years. During FY09 the profit after tax of PTCL was Rs 9,151 million as compared to the loss in FY08 of Rs 2,825 million. The loss during the year FY08 was because of the organizational transformation measures taken by the company. These measures included introduction and implementation of Voluntary Separation Scheme, Enterprise Resource Planning Packages and different innovative services. Furthermore, the decline in PTCL s profits during FY07 were due to the structural adjustments brought about in the telecom sector due to increasing competition, and increasing substitution of mobile expansion. Also, the operating expenses in FY07 increased by 11.7% due to prudent provisions for doubtful debts and long-term systematic improvement in operation and customer services.
The revenues in FY09 stood at Rs 59,239 million, which were 10.7% lower than the last year. Revenues from voice continued to decelerate with an increasing rate of decline in fixed telephony due to aggressive price competition, higher taxation and mobile substitution. The revenues from the local telephony declined from a level of Rs 60,704 million in FY08 to Rs 53,093 million FY09. However, the revenues from the international telephony increased from Rs 5,632 million in FY08 to Rs 6,199.5 million in FY09. The total revenues in FY07 were Rs 65.28 billion as compared to Rs 69.09 billion in FY06. This decline was mainly in the domestic segment due to competition and reduction in tariffs. However the management is making efforts to boost revenues by improving customer care in addition to launching new packages and services. The decline in the profits of the company due to the above-cited reason has led to a decrease in the gross margin percentage also. The gross margin or operating profit margin of PTCL declined in FY09 to 18.15% from 24.67% in FY08 and 26.33% in FY07. The reason for the decline in the operating profits has been increasing in the cost of selling, and marketing and selling expenses. This increase is attributable to the introduction of new services and packages and launching of campaigns to increase awareness of multimedia and broadband. The foreign operators cost and satellite charges increased to a level of Rs 6,053 million in FY09 from Rs 3,541 million in FY08. Vigorous efforts were exerted during the year to collect overdue receivables culminating in reduced level of provision required for doubtful debts and thus decreasing Administrative and General Expenses to Rs 8.935 billion compared to Rs 10.824 billion last year, ie a saving of 17.45% on this account. Also the net margin of PTCL has shown a declining trend over the last 5 years. It declined from 30.46% in FY05 to 15.45% in FY09.
The declining income after tax has been the prime reason for the decline in net margin. Moreover, the declining net income has also led a decline in the return on operating assets and return on equity over the past years. The return on operating assets stands at 10.96% in FY09 as compared to -3.34% in FY08, 18.76% in FY07, 25.53% in FY06 and 34.83% in FY05. Similarly the return on equity stands at 9.28% in FY09 as compared to -2.71% in FY08, 14.45% in FY07, 20.22% in FY06 and 25.45% in FY05. The liquidity position of PTCL has shown a fluctuating trend over the last 5 years. The current ration declined to 1.5 in FY09 as compared to 1.81 in FY08 and 2.19 in FY07. The current assets increased by 36.9% in FY09 from the FY08 levels of Rs 39.6 billion. The increase was noted in short-term investments, which grew by about 103%. These investments are in the form of short-term deposit placements with different banks. The current liabilities grew by 64.7% in FY09 from FY08. The current liabilities stood at Rs 21.9 billion in FY08 as compared to Rs 36.1 billion in FY09. Increase has been in the amount of current portion payable to PTA against the WLL licence fee, the amount payable is Rs 1,953 million. Also trade and other payables have registered a growth of 20% in FY09 to Rs 26,114 million from the FY08 levels of Rs 21,731 million. These payables include the sales tax payable and advances from the customers. Combined these two have grown by 71% in FY09 from FY08 levels. (FY09: Rs 2,918 million, FY08: Rs 1,704 million). Similarly, the quick ratio of the company has shown a fluctuating trend. It declined from 1.58 in FY08 to 1.36 in FY09. There has been a slight increase in the stores and spares. They increased by Rs 248 million in FY09 from the FY08 levels. The DSO of PTCL has shown a mixed trend. The ratio jumped up considerably in the FY06, completely nullifying the effect of the decline in
FY05, and exacerbating the already long collection period of the company. However, DSO showed a decline in FY07 showing that management of PTCL was constantly striving for improvement and enhancement despite stiff competition. It then again increased in FY08 due to increases in trade debts and considerable fall in revenue by almost 6%. The DSO declined in FY09 and this is attributable to the better receivable management that reduced the trade debts from Rs 13.366 billion in FY08 to Rs 10.761 billion in FY09, a reduction of Rs 2.605 billion. The total asset turnover of PTCL has also been showing a decline in the last 5 years. It declined from 0.56 in FY05 to 0.38 in FY09. The reason for this is the decline in sales and increase in assets. The total assets of the company increased in FY09 to Rs 154 billion from Rs 137 billion in FY08. A major shift was seen in capital work in progress, which increased by 25% in FY09 from the FY08 levels of Rs 7.8 billion. Longterm investments have also shown a growth. They grew in FY09 by 55% from the FY08 levels (FY08: Rs 3,607 million, FY09 Rs 5,607 million) and the long-term loans grew tremendously by 743% in the same period (FY09: Rs 3,332 million, FY08: Rs 394 million). The increase in long-term investments was due to the advance given to Pakistan Telecom Mobile Limited for issuance of ordinary shares. The increase in long-term loans was due to the loan given to the subsidiary Pakistan Telecom Mobile Limited under a subordinated debt agreement. The debt to asset ratio of the company had declined considerably in the FY05 but the trend reversed in the FY06, declining again in FY07. It is important to notice that the company has a provision of leveraging by raising funds through borrowing money from financial institutions. The change in current liabilities was brought about mostly due to a decline in current liabilities of the company in the FY05 and an increase in
the same in the FY06. The absence of the dividends payable portion of current liabilities in FY05 and its coming back online in FY06 was an important contributor to the trend. Furthermore, the FY06 also saw an increase in short term borrowings of the company, complemented by increases in other components of current liabilities. Increases in assets, mainly arising from higher cash and bank balances, could not prevent the trend of the debt ratios. The debt to asset ratio has again increased in FY09 to 36% from the previous level of 29% in FY08 due to an increase in the liabilities of the company. There has been a major jump in the current liabilities due to the reasons cited in the previous paragraphs. The long-term liabilities also increased by 5% in FY09 due to an increase in deferred government grants, these represent grants received from Universal Service Fund (a government formed agency) mainly relating to property, plant and equipment received as assistance towards development of the telecommunication infrastructure in rural areas and include telecom infrastructure project for (i) basic telecom access in Pishin, Mansehra, Dadu and Larkana; (ii) Optical fibre extension - Balochistan Package - 2; (iii) Broadband projects in Faisalabad, Sargodha Civil Division, Multan, Bahawalpur, Dera Ghazi Khan Civil Division and Hyderabad Civil Division. These reasons have also caused fluctuations in the debt equity ratios of PTCL.The financial strength of the PTCL was satisfactory till the year FY07 but it was alarming in FY08, as the TIE ratio had fallen considerably. The TIE ratio of the company continued to rise in the FY06 despite lower profits during the period. However, it declined in FY07, as a result of decrease in profits. This reflects the little ability of the company to pay off its liabilities as they become due. The major portion of debt arises from current liabilities. The TIE ratio became negative in FY08 due to the losses suffered but then it improved in FY09.
The EPS of PTCL has shown a fluctuating trend in accordance with the net profitability of the company. It declined from Rs 5.22 in FY05 to Rs 1.79 in FY09. It was negative 0.55 in FY08 due to the losses suffered. Dividends have also seen the fluctuating trend over the past 5 years. The dividend payout was around 38.34% in FY05 and has now increased to 83.6% in FY09. However in real terms the DPS have declined from PKR 5/share in FY06 to Rs 1.5/share in FY09. The stock price of the company has also seen a fluctuating trend. It stood at Rs 70.25 in FY05 but on June 30, 2009 it has declined to Rs 17.24. Currently the share is being quoted at KSE around Rs 20/share. The graph above shows the trend in the variation of stock price of PTCL and the KSE 100 Index over the last year. The stock has a beta of 1.06, which means that the returns on the stock are positively correlated with the market. The maximum price reached by the stock during the period starting 1 January 2008 and ending 24 February 2010 was Rs 50.80/share on April 18, 2008; and the minimum level during the same period was Rs 12/share on 26 January 2009. The current stock price is around Rs 20/share.
Financial Analysis
FY05
FY06
FY07
FY08
FY09
Profitability Revenue (PKR Million) Profit after Tax (PKR Million) Gross Margin % Net Margin % Return on Assets % Return on Equity % Liquidity Current Ratio (Times) 1.89 1.66 2.19 1.81 1.5 87356 69085 71068 66336 59239 26606 20777 15639 -2825 9151 41.63 34.5 26.33 24.67 18.15 30.46 26.16 22.01 -4.26 15.45 34.83 25.53 18.76 -3.34 10.96 25.45 20.22 14.45 -2.71 9.28
Quick Ratio (Times)
1.73
1.54
2.03
1.58
1.36
Market Valuation
EPS DPS
5.22 4.07 3.07 -0.55 1.79 2 5 2 0 1.5 57 38.64 17.24}
Market Value per Share (as on June 70.25 40.6

Asset Management
Days Sales Outstanding 73.52 83.69 62.93 78.77 66.3 Total Asset Turnover
Debt Management
0.56
0.45
0.43
0.44
0.38
Debt/ Equity Debt/Asset TIE

DISCLAIMER
36% 27%
44%
38%
43% 29%
55% 36%
31% 27%
86.35 92.07 46.54 -5.26 15.43 No reliance should be placed on the [above information]
by any one for making any financial, investment and business decision. The is general in nature and has not been prepared for any specific decision making process. The newspaper has not independently verified all of the [above information] and has relied on sources that have been deemed reliable in the past. Accordingly, the newspaper or any its staff or sources of information do not bear
any liability or responsibility of any consequences for decisions or actions based. 5.3 Accounting System & Practices PTCL does not have a very sophisticated accounting system. Since the company had changed its single entry based accounting system to a Double-Entry based mechanism just a few years ago, majority of the areas still lack the full acceptability of Generally Accepted Accounting Principles (GAAP):
Revenue Recognition
The revenue recognition policy of the company is not exactly on an accrual basis. Rather the company incorporates all billed revenues, and ignores the actual call traffic at the closing date of any fiscal period. This signifies that revenues are generally underreported.
Cost Side
However, the cost side is based on the accrual system. This shows that the company is not optimizing the use of the Matching Concept in its accounting system.
Fixed Capital Expenditures & Depreciation
The company uses the straight-line Depreciation Method. The fullyear charge is applied on additions while no depreciation is charged on deletions. This is technically one of the correct methods. However, knowing the nature of CAPEX in the company, our analysis suggests that at times, entire lots of lines come just at the end of the year. It would be more useful if the company operates on a system where it charges proportionate depreciation on fixed assets.
Employees Retirement Benefits
The company operates a funded pension scheme for permanent employees. Actuarial valuations are carried out once in three years. The
latest was done on June 30, 2002. The company has a non-funded provident fund scheme for its permanent employees.
6. IMPACT OF PRIVATIZATION
6.1 PTCL and Pakistan Economy
Working at PTCL
Telecommunications is now an integral part of the social, economic and political fabric of the world. As we embrace new technologies and make the world of global communications accessible to more people in more ways we perfect the art of bringing people together. With this new vision and many new opportunities to excel, PTCL offers a continually challenging and professionally rewarding experience be it in data networks, Internet, mobile networks, information technology, finance or sales management
Corporate Customer Centers
PTCL Corporate Customer Centre is a one-point contact facility designed to give our valued Corporate Customers maximum convenience with personalized and prompt service. These centers will facilitate Corporate Customers in.

New service provisioning Maintenance support End-to-end communication solutions provisioning
Objective
PTCL has established Corporate Customer Centers to facilitate corporate customers. Currently, these centers have been established in Islamabad, Karachi and Lahore. Our aim is to provide better customer care through:

Swift processing of Corporate Customer requests. One window for all Telecom Services.
Convenient registration procedure. Minimum documentation for hassle-free registration.
Services Offered at Corporate Customer Centres
PTCL offers a host of unmatched services to suit the needs of a business organization.
Basic Services (PSTN Lines)
Voice Data & Video Voice Messaging Service (VMS)
Value Added Service
Universal Access Number (UAN). Universal Internet Number (UIN) - for ISP's Licensed only). Intergrated Services Digital Network ISDN-PRI, ISDN-Tele Plus. Local/Domestic/International Leased bandwidth and point to point leased lines.
Local Leased Circuits (2 Wire/4 Wire). Premium Rate Audio-Text Service. Digital features like Call Waiting, Call Transfer etc. Calling Line Identification (CLI) service. Voice Mail & Messaging Services. Digital Subscriber Loop (DSL). Colocation Facilites Payphones/PABX. Channel/Stream.
IN Based Value Added Service
0800 Toll Free PTCL Calling Cards Domestic & International Premium Rate (0900) & Virtual Private Network Service.
Registration at Corporate Customer Centers
Simply fill out the Corporate Customer Registration Form and get Corporate Customer Registration Number. This will serve as a reference for all communication between you and PTCL, and will help avoid multiple submissions of documents for additional services that you may require in future.
Pre-Requisites
To register with PTCL, you are required to provide the following:

Company registration number. NTN number at the time of registration. Company authorized representative details.
Corporate Customer Centers
Islamabad
PTCL F-8 Exchange Nazim-Ud-Din Road F-8/1, Islamabad ph: 051 - 111 20 20 20 Fax: 051 - 111 21 21 21 Shahzad.khalil@ptcl.net.pk
Karachi Corporate Customer Centre

Ground Floor, DG Office, Hatim Alvi Road, Clifton, Karachi. Ph: 021 - 111 20 20 20 Fax: 021 - 111 21 21 21 Email:salman.khan@ptcl.net.pk
Lahore Corporate Customer Centre

26A Civic Centre Barkat Market, Garden Town, Lahore. Ph: 042 - 111 20 20 20 Fax: 042 - 111 21 21 21 Email:Basharat.qureshi@ptcl.net.pk
After deruglation of telecommunication industry, the sector has seen an exponential growth. Pakistan Telecommunication Company Ltd has emerged as a successful Forbes 2000 conglomerate with over US
$1 billion in sales in 2005. The mobile telephone market has exploded fourteen-fold since 2000 to reach a subscriber base of 91 million users in 2008, one of the highest mobile teledensities in the entire world. In addition, there are over 6 million landlines in the country with 100% fibreoptic network and coverage via WLL in even the remotest areas. As a result, Pakistan won the prestigious Government Leadership award of GSM Association in 2006. The contribution of telecom sector to the national exchequer increased to Rs 110 billion in the year 2007-08 on account of general sales tax, activation charges and other steps as compared to Rs 100 billion in the year 2006-07.The World Bank estimates that it takes about 3 days only to get a phone connection in Pakistan.
In Pakistan, following are the top mobile phone operators
1. 2. 3. 4. 5.
Mobilink (Parent: Orascom Telecom Holding, Egypt) Ufone (Parent: PTCL (Etisalat), Pakistan/UAE) Telenor (Parent: Telenor, Norway) Warid (Parent: Abu Dhabi Group / SingTel, UAE/Singapore) Zong (Parent: China Mobile, China) By March 2009, Pakistan had 91 million mobile subscribers - 25
million more subscribers than reported in the same period 2008. In addition to 3.1 million fixed lines, while as many as 2.4 million are using Wireless Local Loop connections. Sony Ericsson, Nokia and Motorola along with Samsung and LG remain to be the popular brands among customers. Pakistan is on the verge of a telecom revolution and it is by far the most attractive sector in Pakistan in terms of Foreign Direct Investment coming into the country. Since liberalisation, over the past four years, the Pakistani telecom sector has attracted more than $9 billion in foreign investments.[During 2007-08, the Pakistani communication sector alone
received $1.62 billion in Foreign Direct Investment (FDI) about 30% of the countrys total foreign direct investment. Present growth of state-of-the-art infrastructures in telecom sector during the last four years has been the result of the PTA's vision and implementation of deregulation policy. Paging and mobile (cellular) telephones were adopted early and freely. Cellular phones and the Internet were adopted through a rather laissez-faire policy with a proliferation of private service providers that led to fast adoption. With a rapid increase in the number of Internet users and ISPs, and a large English-speaking population, Pakistani society has seen an unparalleled revolution in communications. According to the PC World, a total of 6.37 billion text messages were sent through Acision messaging systems across Asia Pacific over the 2008/2009 Christmas and New Year period. Pakistan was amongst the top five ranker with one of the highest SMS traffic with 763 million messages. Pakistan is ranked 4th in terms of broadband Internet growth in the world, as the subscriber base of broadband Internet has been increasing rapidly. The rankings are released by Point Topic Global broadband analysis, a global research centre. Pakistan has more than 20 million Internet users in 2009. The country is said to have a potential to absorb up to 50 million mobile phone Internet users in the next 5 years thus a potential of nearly 1 million connections per month. Almost all of the main government departments, organisations and institutions have their own websites. The use of search engines and instant messaging services is also booming. Pakistanis are some of the most ardent chatters on the Internet, communicating with users all over the world. Recent years
have seen a huge increase in the use of online marriage services, for example, leading to a major re-alignment of the tradition of arranged marriages. As of 2007 there were six cell phone companies operating in the country with nearly 90 million mobile phone users in the country. Wireless local loop and the landline telephony sector has also been liberalized and private sector has entered thus increasing the teledensity rate. In mid-2008, the Local Loop installed capacity reached around 5.5 million. Telecom industry created of 80,000 jobs directly and 500,000 jobs indirectly. The Federal Bureau of Statistics provisionally valued this sector at Rs.982,353 million in 2005 thus registering over 91% growth since 2000.
PTCL 2009/10 Net Profit Reaches to 9.29 Billion
Pakistan Telecommunication Company Limited (PTCL) Net Profit of financial year 2009/10 reaches to 9.29 billion rupee ($108.5 million) which mean the PTCL per share is now Rs. 1.82 and there is slightly increase in the profit of PTCL if we compare it to the last year profit which was 9.15 billion in last financial year. But the revenue of the PTCL for the last quarter of the financial year was lower than the last years for same quarter; revenue of PTCL for this year in 4th Quarter is 57.17 billion rupees lower than previous which was 59.24 billion rupees, Said by PTCL in Karachi Stock exchange. PTCL operating income reaches to 5.13 billion rupees in this year, which was 4.26 billion rupees in the last year. PTCL had to pay a one-time cost for a voluntary redundancy scheme in the 2008/09 fiscal year. PTCL attributed the rise in net profit to dividend income and interest payments
on a loan Rs. 5 billion loan to mobile subsidiary Ufone. PTCL also received Rs. 330 million in dividends paid by Ufone.
PTCL Employees Demand Implementation on 50% ad hoc Relief
LAHORE, August 02, 2010 (Balochistan Times): The Pakistan Telecom Employees Union (PTEU) has demanded the government give the 50 percent ad hoc relief allowance to Pakistan Telecommunication Limited (PTCL) employees like other departments which was announced in the federal budget 2010-11. Addressing a press conference at the Lahore Press Club on Monday, secretary general PTEU Hasan Muhammad Rana said that the PTCL management was not cooperating with employees in this regard. He said that due promotion was not being given to employees even after 12 years. The general secretary said that PTCL annual revenue had reached Rs 60.39 billion because of efforts of employees and if the management decided to pay ad hoc relief, only Rs 700 million would be paid to the employees. He said the PTCL president was not following the federal government directives on an increase in salaries. He said that promotion cases and bonus should be given to employees or the PTEU would go on strike and stage protest demonstrations all over the country. Malik Maqbool Hussain, Amad-ul-Hasan Qureshi, Haji Zahid and other PTEU leaders were also present. 6.2 Financial Aspects of PTCL In the last few years the impact of Re-regulation and increase of competition in the telecommunication industry of Pakistan has been increasingly mounting pressure on PTCL. PTCL has launched its profit of Rs. 15.64 billion for the period of 2007 compare to last year profit of 20.78 billion. The decreasing trend in the profit was due to the structural change brought by the competitors in the telecom market. PTCL remain leader in fixed line, however there was decrease in revenue by 5.5% due to huge entry of
different telecom companies in the market. There was increase in operation expenses by 11.7% mostly due to systematic developments in the operations and customer service and provisions for doubtful debts. The total revenue for the financial year 2006-07 was Rs.65.28 billion against the previous year revenue of 69.09 billion. The main reasons for the reductions in the revenue are reductions in tariffs and heavy competition in the market. (PTCL, Annual Report 2007) To succeed in this highly competitive telecom market and to meet the increasing challenges, PTCL has taken certain necessary steps for organizational revolution. These steps include Enterprise Resource Planning Packages, introduction & implementation of Voluntary Separation Scheme (VSS), as well as penetrating new innovated services. However, the profitability of the Company for the year ended June 30, 2008 suffered due to amalgamation of a massive VSS cost amounting to Rs. 23.94 billion. Because of these steps company bears a net loss of Rs. 2.82 billion against previous year's net profit of Rs. 15.64 billion.
As PTCL,
1,271,699
TeleCard,
609,316
WorldCall,
543,881
Great Bear,
45,029
Wateen,
60,785
Others,
16,582
WLL Subscribers April 2009
38 discussed above the decreasing trend the subscriber and the ultimate affect on the revenue is not just for PTCL but also for two other companies who have the largest share in the cellular market in 20000,
table 4.3 and figure 4.4 show these results( PTCL, Annual Report 2008). Another reason for the decrease in the revenue is the decrease in the tariff, if we look at table 4.2 there is huge decrease in the international tariff from Rs.26/per minute to Rs. 2/per minute so it ultimately affect the revenue. The total revenue for financial year 2007-08 was Rs. 61.09 billion compares to previous year revenue of Rs. 65.28 billion. The decreasing trend in the revenue was due to huge penetration by mobile business and tight market competition. Due to improved operational controls, the Company managed to reduce its operating costs to Rs. 44.7 billion as compared to Rs. 46.6 billion last year. The non-operational income of the company is also affected by the huge outflow of the financial reserves in the shape of VSS (Voluntary Separation Scheme). But the implementation of VSS scheme can help the company to understand certain savings in the last quarter against allowances and salaries. (PTCL, Annual Report, year ended June 30, 2008) Following are the financials highlights of the PTCL.
Despite the severe competition in the Telecom market, the Company management is confident that after successful execution of new initiative and implementation of improved strategies, it will increase the revenue and shareholders value with quality and low cost services while making improvement in the operational competence (Ibid).
6.3 PTCL and Financial Health 2010
6.4 Special Issues of Telecom

Special Issues of Telecom Reforms in Developing Countries
Developing nations have realized the ample importance of privatization reforms in the development level and progress of a country. It is experienced that efficiency gains can be quickly met by adopting privatization policy and that such initiative would lead a country towards technological innovation and resulted in high growth rate in the long run. One of the reason of privatization is increased competition in which each organization tends to improve its management and provision of better services become necessary that leads to innovation and development. (Ibid.,Notwithstanding, telecommunication sector experienced some unique difficulties. Such problems should be overcome in order to derive the positive effects. Following are the major hurdles hampering progress of Telecommunication Sector (Ibid.,)
Incomplete Infrastructure
Infrastructure plays a vital role in the progress and development of any sector. As a general notion, developing nations face a bigger problem with incomplete or inefficient telecommunication infrastructure (Ibid). In fact, existing telecommunication facilities in most of developing countries is either of insufficient capacity or outdated. So it is important to extend the circle of telecommunication services countrywide by installation of new technology and by broadening the range of telecommunication facilities available even in the rural areas of the country. It is argued that there is a need to restructure the currently operating companies in order to satisfy and fulfill the increasing demands and to meet the standard growth targets (Ibid).
Scarce Human Resources
Literacy rate is a good indicator of a country development level because education plays a vital role in the progress of a society. It is deemed that there is a limited number of education professionals in most under developed countries. Developing Countries are not only lacking the competent telecommunication engineers & technicians but also there is a shortage of other business professionals like Managers, Accountants and Computer Specialists that are considered as key personnel to run a telecommunication organization.(Ibid.,) Another point against telecommunication sector reforms is due to the reason that even so developing countries are lacking well education professionals hence they cant employ more percentage of qualified scholars in a particular sector like telecommunication at the cost of other sectors. This means that developing countries has to assign the limited number of 15 technicians, engineers and other professionals to each of its sectors, telecommunication sector is one of them. Aforementioned shortages limit
the range of sector designs that are viable, especially in the least developed countries of sub-Saharan Africa and some parts of Asia (Ibid.,)
Paucity of Information
Another problem with telecommunication sector is that there is no more operating information available about this particular sector. It is a common notion in under developed countries that Accounts are usually not maintained according to the IAS (International Accounting Standards) & GAAP (Generally Accepted Accounting Principles) (Ibid.) Another problem faced by telecommunication sector is that financial statement are either audited on irregular basis or even in some extreme cases never audited. Hence information about liabilities especially about due debt is not reliable. Further information about assets like plant, Network utilization, telephone connections & other importance assets is outdated & always remains incomplete due to less availability about operating history. Such fallacies in the practice prove to be a hurdle in the way of progress of telecommunication sector development (Ibid.)
Undeveloped Local Capital Markets
Another
problem
with
telecommunication
sector
of
underdeveloped countries is poorly established local capital markets. Only a few developing countries are able to manage well established local capital markets. Otherwise, in majority of the countries stock markets are either operating in a small context or even nonexistent in some cases. Further other companies including insurance & leasing which can utilize the savings of the people toward development of the industrial sector are rare to find. (Ibid.,) Developing countries are facing a big issue with the provision of big industrial companies and because mostly rich families tend to make investment in those countries where they reveal more profitability so such companies
demand high rate of return on their underlying investment. There is also a shortage of available financing in developing countries. Provision of debt is either not available or only available on complex terms & conditions. Microfinance facilities are unreliable & most importantly expensive to meet due to high interest rate levied on the debt. In nutshell, the market efficiency of developing countries tends to low and market system to effectively use the savings in large investments required by telecommunication sector is rare to find. (Ibid.,) 16
Weak Legal, Regulatory, and Institutional Framework
Another important big problem among developing countries is the presence of weak legal, regulatory and institutional framework. Poor progress of institutions tends to place a negative effect on the country development level & hampers growth rate. Many of these countries are paying attention to such reform that would bring about revolution in the hierarchy of the institutions & would lead to a competitive work place & open economy (Ibid.,) Weak legal, regulatory framework includes poor enforcement of property rules and Regulations, inadequate and outdated trade laws. Likewise, telecommunication law in underdeveloped countries is outdated and old enough and in some other cases there is no presence of proper telecommunication law but instead telecommunication law is merged with Law governing to some other sector with which it may not resembles in reality. Such a weak regulatory and institutional system is a big problem in the way of progress of telecommunication companies (Ibid.,).
Limited Interest of Foreign Investors and Banks
Foreign investment is believed to be a viable source of development and growth of a country. Though a number of developing countries are now taking initiative to call for private investment in the
telecommunication sector including foreign investment but yet such reforms are rare in practice because only a few investors would give attention to such proposal.(Ibid.,)Foreign companies are hesitant to invest in these countries due to increasing level of political risk and uncertainty. Although multinational companies are doing investment in most of the developing companies but either these companies are doing investment in their own subsidiaries or in a very small amount that is not enough for establishment of a big telecommunication set up. Above all, presence of commercial banks in developing countries is relatively low and these banks are hesitant to offer loan facilities without external guarantee or personal collateral and are misused by political pressure (Ibid.,).
7. CONCLUSION AND RECOMMENDATIONS

7.1. Conclusion As we know that each activity has pros and cons or positive and negative impacts, similarly the phenomenon of Privatization also have impacts on both grounds. If we look at the whole study we can find that privatization has the following Negative impacts on the performance and development of PTCL; Decrease in Subscribers: Due to privatization PTCL subscription level is getting low, because of poor customer services and the obsolete wired technology which always have problem of disconnection. While the competitors have international experience in customer services and they have the latest technology which attract customer to use their services.
Decrease in Revenue
the revenue was mainly decreases due to market
competition and the ultimate decline in the tariff and subscribers. There is a huge decline in the tariff from Rs.26 in 2003-04 to Rs. 2 in 2007-08 which badly impact the revenue of the organization.
Decrease in Employment
PTCL is in the process of employees layoff and
provide huge amount to separate unskilled personnel beside this there is a turnover of the skilled employees as competitors offers more attractive packages as compare to PTCL. Beside this privatization also cast some significant impacts on PTCL: Induction of New Technology: The most important impact of privatization on PTCL is the induction of New Technology. Although PTCL is still staying behind the rest of the market competitors but due to privatization it is now in the process of adopting new and latest technology like 3G, Which will give competitive edge in future. Improvement in customer services: Keeping in view the customer services of competitors PTCL has also making steps towards further improvements in their services to attract more customers, which were simply not possible as state run
enterprise. Increase in Competition: Privatization always encourage healthy competition based upon good services and cheap prices where the end benefits goes to the customers, which always favors further growth of the Industry. While studying the case of Telia, and keeping in mind the current situation of PTCL. It has been observed that PTCL is not in a bad condition. PTCL is in the same condition as Telia (the world leading telecommunication company) were after privatization. After privatization 64 Telia has reduced its overall cost by reduction in employees, outsourcing, acquiring the latest technology and providing the cheap services to its customers as compare to their competitors. PTCL have to introduce innovative products and services and should revise the human resource policies such as hiring right person for the right job. To remain the leader in the telecom sector PTCL has to give importance to its customers by offering low charges and high quality service. In nut shell privatization always leads to efficiency but not in short run. 7.2. Recommendations Some suggestions are enumerated hereunder for the improvement of the PTCL as says There is always room of improvement. Recommendations suggest improvements in areas, which have capacity for polishing and progress. The suggestions are as under:Services
On the bases of our study it is clear that PTCL customers care services are not in line with its business. Customers care service unit of PTCL is unskilled and unqualified. While competitors main competitive advantage are their reliable and customers friendly services. It is observed that PTCL customers are not satisfied with the customers care services, particularly billing system and complaint processing system. It is recommended that staff of customers care services must be qualified and trained with in the area of customers services so that they can facilitate customers properly. There must be proper complaints management
system, which can handle customers complaints on daily bases. Subscribers of landline in the rural areas are suffering from disconnection due to many reasons for which customers makes complaints, takes weeks to connect. If this problem is being resolved, usage of those lines will be increase which ultimately contributes to the revenue.
Substitute to Landline
The problem of landline disconnection in rural areas can be resolved with the wireless substitute called V-phone (WLL). The demand of V-Phone is at hike day by day due to avoid the complications of Cable system. It has another advantage that this technology is also economical as well as feasible in remote & far flung areas where this facility may be provided easily. It also carries less maintenance expenditure. PTCL should increase the coverage of V-Wireless communication to the rural areas.65
Technological Improvement
Although PTCL is adapting new technology after privatization but the pace of acquiring the latest technology is very slow. All the competitors are very advance in acquisition of new technology. In order to become a leader in telecom market PTCL must acquire the latest technology like, 3G and 4G. In the same way Internet services around the world are growing swiftly so in this global world PTCL has no exception to cater the requirement of modern era.
Common Awareness
As the PTCL is undergoing post privatization process it is inevitable that all employees at every level must be well conversant with the latest Technology, Marketing tactics, Computer inventions in order to meet with the present era requirements, so that they may utilize their talent & abilities to improve the overall performance of the entity.
BIBLIOGRAPHY
Websites
www.ptcl.com.pk/ PTA, wireless local loop subscribers Retrieved May 10, 2009, from http://www.PTA.gov.pk/index.php? option=com_content&task=view&id=649&Itemid=602&bold=land%20line %20subscriber PTCL. Annual report of PTCL for the year ended June 30, 2006 Retrieved March 15, 2009 from http://www.PTCL.com.pk/financials.php Retrieved May 10, 2009, from http://www.PTCL.com.pk/contentb.php?NID=133 http://www.brecorder.com/index3.php? id=1094115&currPageNo=1&query=&search=&term=&supDate= http://www.riazhaq.com/2010/03/privatization-of-key-state-functions-in.html SBP, Balance Sheet Analysis www.sbp.org.pk
Articles
http://telecompk.net/2007/09/04/ptcl%E2%80%99s-privatization-the-biggestfinancial-scam-in-pakistan%E2%80%99s-history/ http://www.wsws.org/articles/2005/jun2005/paki-j04.shtml Security forces poised to attack occupation
APPENDEX
Financial statement of position of ptcl is in Appendix No 1
Statement on Comprehensive income is in Appendix No 2
Statement of Cash flow is in Appendix No 3
Statement of Changes in equity is in Appendix No 4

PTCL Privatization and Its Impact On Financial Health

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INSTITUTE OF BUSINESS AND TECHNOLOGY PTCL Privatization and its Impact on Financial Health Prepared By Fahad Abbas BM-25078

Course Code : MKT-606

PTCL Privatization and its Impact on Financial Health

INSTITUTE OF BUSINESS AND TECHNOLOGY

NAME OF PROJECT SUPERVISOR: Dr. Noor Ahmed Memon

Institute of Business and Technology

PTCL Privatization and its Impact on Financial Health

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PTCL Privatization and its Impact on Financial Health

5. FINANCIAL ANALYSIS OF PTCL

5.1 Financial Statement of PTCL ...................................................................34

PTCL Privatization and its Impact on Financial Health

7. CONCLUSION AND RECOMMENDATIONS

7.1. Conclusion................................................................................................66 7.2. Recommendations....................................................................................67

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3.2 Introduction of PTCL

Monogram Slogan Feel the Difference Industry Telecommunication

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Other Business Specific Services Include

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3.6 SWOT Analysis

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PTCL has no Research and Development.

There is no strong competition in the landline market.

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