Industrial Analysis of PTCL

Industrial Analysis of PTCL

PTCL is the exclusive provider of basic telephony in Pakistan with over 3.2 million telephone lines in service. Besides providing fixed line, value added and other ancillary services, PTCL owns subsidiaries that provide cellular and Internet services. Since its transformation from a public sector corporation into a publicly listed corporate entity in 1996, PTCL has implemented an aggressive restructuring program, the primary aim of which is to improve profitability through increased customer focus and efficiency and to prepare the company for the highly competitive environment envisaged once PTCL's exclusivity on fixed telephony expires in December 2002.

Now PTCL has only one subsidiary:

• Ufone

Company's Objectives

Being a public Limited Company whose majority shares are controlled by GoP (through Ministry of IT) PTCL is responsible to provide telecommunication services in the country on affordable price while ensuring that the telecom service become accessible throughout the country. Since exclusivity of PTCL has ended on 1^st Jan 2003, the telecom sector of Pakistan has entered into a new era and PTCL is slowly moving towards competition in basic telecom services. The company's objectives are as follows:

• Increase services choice for all consumers of telecom services at competitive and affordable prices.
• Increase private investment in the telecom sector and encourage local telecom manufacturing/services industry.
• Enhance ling-run benefits to the Government's financial position by expanding the taxable revenue base.
• Accelerate expansion of telecom infrastructure to extent telecom services to unserved and underserved area.
• Encourage fair competition among services providers, while maintaining leadership in a telecom sector.
• Maintain consistency with the Pakistan IT and Internet promotion police of low prices for BW and internet access.

 

Regular Activities

As stated above, PTCL is actively engaged in developing telecommunication infrastructure throughout the country. This entails undertaking of various projects with a view to enhance the communication provisioning capabilities of the company. Apart from this, physical provisioning of telephone communicates to the customers while maintaining quality of services remains the hallmark of PTCL activities. In addition, the management is also responsible to manage the activities of its subsidiary i.e. Ufone, While Ufone has become one of the leading mobile operators in a limited period of time grabbing about 25% of market share.

Privatization of PTCL

The growth of the cellular sector in Pakistan can also be attributable to good governance policies of the government of Pakistan and the Privatization Commission. In April 2006, Emirates Telecommunication Corporation, which is commonly known as Etisalat, has assumed management control of Pakistan Telecommunication Corporation Ltd – part of the $2.6bn deal to buy a 26% stake in PTCL. The successful privatization of PTCL, and consequently Ufone, is hailed as ushering in a new era for telecommunications in Pakistan.

Now, under the management of Etisalat, Ufone will concentrate on customer needs and benefits and is more determined than ever to be the leading cellular player in the market. Ufone has been known for providing superb propositions and quality service to its customers. With the new expected investment, Ufone can now aggressively expand its network coverage. 

Emirate Telecommunication Company Etisalat

Emirates Telecommunication Corporation - Etisalat was founded in 1976 as a joint-stock company between International Aeradio Limited, a British Company, and local partners. In 1983 the ownership structure changed - United Arab Emirates government held a 60% share in the company and the remaining 40% were publicly traded.

In 1991 the UAE central government issued Federal Law No. 1, which gave the corporation the right to provide the telecommunications wired and wireless services in the country and between UAE and other countries. It also gave the firm the right to issue licenses for owning, importing, and manufacturing, using or operating telecommunication equipment. This practically gave Etisalat both regulatory and control powers, which completed the monopoly of the telecom giant in the UAE. In order to safeguard the country's economic development, the law made provisions for the development of the telecommunication sector in the country.

An important milestone was Etisalat's commencement of international operations in January 2001, when under the brand name of Ufone it started operating out of Islamabad.

Today Etisalat stands 140th among the Financial Times Top 500 Corporations in the world in terms of market capitalization, and is ranked by The Middle East magazine as the 6th largest company in the Middle East in terms of capitalization and revenues. The Corporation is the largest contributor outside the oil sector to development programmes of the UAE Federal Government.

Etisalat has also won accolades from across the region for its nationalization programme.

Among the acquisitions of Etisalat in 2005 was a 26% management stake in Pakistan Telecommunications (PCTL) that was put on sale by the government of Pakistan as part of a large privatization initiative. In order to outbid competitors (which included Singapore Telecoms and China Mobile), Etisalat offered USD $2.56 billion for the stake. According to some analysts, the telecom has overpaid, as the bid went far beyond the estimated USD $2 billion value of the package.

Mr. Obaid Saeed Bin Mes'har, Chief Executive officer, Eitsalat says that the new Management will take steps for improving quality, reorganization and extension of PTCL service to more areas, he further added that technical staff might be sent to Africa and other countries after imparting additional training to them. Mr. Obaid aimed at utilizing the expertise the skills of PTCL employees in a proper way and that no PTCL employee would be relieved.

Emirates Telecommunications Corporation (Eitsalat) was the highest bidder for the acquisition of a 26 per cent stake in Pakistan Telecommunication Corporation Limited (PTCL). This latest win reflects the determination of Etisalat to strengthen its position as the leading telecommunications company in the region.

The acquisition of 26 per cent of PTCL provides Eitsalat International access to the management of the company and a pool of experienced professionals.