CAN PTCL BE A PARTNER IN UNLEASHING GROWTH PROCESS IN PAKISTAN?
PTCL is a telecom giant of more than half a century age and continues by flourishing since the day of its inception
By MUSTAFA KAMAL PASHA*
Sep 02 - 08, 2002
The Minister of Finance, Mr. Shaukat Aziz, in his Budget 2002-03 speech has announced to include Information Technology as one of the four-priority sector selected for unleashing the growth process in the country. The IT landscape unleashing in the country has been radically altered in the last three years. The Information Technology policy was given early to chart the course of initiatives, government planned to adopt for the promotion of IT sector/ culture in the country. These priority areas, in which these initiatives are adopted, include, HRD, telecom infrastructure, legal framework for IT sector and marketing support for IT sector and marketing support for IT & software exports. In each of these areas government has taken significant measures to lift the profile of IT sector.
The base of Information Technology is Communication. In our country, for such communication, Pakistan Telecommunication Company Ltd. (PTCL) is the hub of all activities from various types of landline communication to satellite communication, PTCL is the only telecom giant, which can meet the ever growing needs of IT sector. It earned a profit of Rs 18 billion during 2001-02, which represented an increase of 38 per cent over the previous year. Under the ongoing economic condition in the country and keeping in view the performance of the state owned corporations, the performance of PTCL is unmatchable. There might be one hundered and one problems with it, and of course there are problems with all service providing institutions everywhere in the world, but the performance of PTCL with reference to any standard is commendable. Recently released, nine-monthly financial results of PTCL for its shareholders and general public are a clear indication of the performance of state-owned telecom giant.
As a whole it gives a bright and encouraging picture of the company. According to the issued report, PTCL has added Rs (7796) million to the national exchequer during the past (9) months as compared to Rs (6521) millions during the same period of post financial years similarly profit after Tax is to the tune of Rs (13085) as compared to the profit of Rs (12298) millions for the same period during the previous financial year.
According to the issued balance sheet, the volume of long term loans has come down from Rs. (1362) million to Rs (1058) millions, during the nine month, under review. On the other hand volume of long term investment has gone from Rs (5786) million to Rs (6058) millions. It means the management has successfully reduced the quantum of loans and at the same time added up to the long-term investment.
The PTCL is the only Public Sector Company, constantly running in profit and adding billions of rupees into the national exchequer. The other pertinent factor in this regard is the investment made by the company for vertical and horizontal development of the company. Multilateral officials, at Pakistan investment conference held in Paris last week had stated that Pakistan Telecom sector has a potential to attract (15) billion dollars foreign direct investment. The conference was jointly organized by the World Bank and the government of Pakistan on" Business climate and opportunities for business in Pakistan". The experts were of the unanimous opinion that telecom sector alone in Pakistan has a potential of attracting (15) billion new FDI in Pakistan.
The PTCL is not only the market leader and volume leader at the stock market in Pakistan but a trendsetter as well. The increase in the volume of profit, according to stock market experts is due to the introduction of PTCL per-paid calling cards, interconnectivity agreement with the mobile operators in Pakistan and decline in US dollar rate.
The PTCL management, under the dynamic leadership of its Chairman Akhtar Ahmad Bajwa is fully aware of the ground realities, which would start appearing in Jan 2003 after the end of PTCL monopoly on December 31, 2002.
Two views are prevalent regarding the new situation arising after the end of monopoly of PTCL. Experts and a group of telecom sector analysts say that the new situation would expose the weaknesses, of the state owned telecom giant that have been piling up during the last half a century. Civil bureaucracy has run the PTCL like other departments. (On the other hand the present PTCL management is very much sure about the company's performance and efficiency, even after the end of monopoly. (Akhtar Ahmad Bajwa the present Chairman of the PTCL confidently explains the position of the company. He says, we are not operating in isolation but in the world of realities. Present PTCL is headed and run by most of the competent and professionally committed people. Right from the Chairman, Members to DGs and GMs the most qualified, experienced and dedicated personnel are there to look after the PTCL affairs in accordance with the changing scenario in the telecom sector. My team has an experience of working about 30 years in the telecom sector. We have been working for T & T department and now running the state of the art PTCL. We are well versed with the most modern telecom technologies. We have not only witnessed the development process but have been an active partner in it. We have gone through the stages of development from copper wire techniques to the optic fiber technology to provide telephony services to millions of customers across the country, Chairman PTCL said.
Practically PTCL is already passing through competition in cellular phone, pre-paid card, and Internet market. Telephone industries of Pakistan & CTI are subsidiaries of PTCL and already working in the competitive environment. U- Phone has revolutionized the cell- phone environment Phone set and allied services equipment manufactured by TIP & CTI are market leaders. Services provided by the PTCL, to its clients are comparatively cheaper and dependable. Basically PTCL is a telephony services provider. Other services including satellite, cable and data transfer communication are allied. The whole communications net work, in Pakistan is owned by the PTCL. It has taken more than half a century to develop a net work of more than (4) million lines throughout Pakistan. PTCL has been providing communication facilities to Afghan Government also", Bajwa stressed.
FINANCIAL SIZE OF TELECOM INDUSTRY IN PAKISTAN (1999-00 & 2001-02)
Rs in million 1999-00
Rs in million 2000-01
TURNOVER OF TELECOM INDUSTRY IN PAKISTAN
Rupees in million 1999-00
Rupees in million 2000-01
Pakistan Telecommunication Company Ltd. (PTCL) has set the revenue target of Rs 69 billion for the next fiscal year of 2002-2003 which may be termed a 'hard target' as its monopoly is ending by the current calendar year.
The government of Pakistan, in accordance with its commitment with World Trade Organization (WTO), will maintain PTCL's exclusivity in the provision of domestic, long distance and international telephone services till December 31,2002. After it the world telecom operators would find level playing field in Pakistan.
In the presence of world-reputed competitors, the huge target of Rs 69 billion would not be a piece of cake, when most of its corporate subscribers might switch over to other companies, due to various considerations.
In the last fiscal year 2000-2001, the company had reached the mark of Rs 62.04 billion and is now inching towards the set target of Rs 65 billion in the current fiscal year of 2001-2002.
Following the expiry of PTCL exclusive rights, the government proposes to encourage full competition in the telecommunication sector. Licenses will be granted to applicants who meet the objective criteria specified and comply with the provisions of the licensing rules, which are to be issued pursuant to the telecommunication act.
It is worth mentioning here that total earnings have improved inspite of the gradual reduction in International Accounting, Rates (IAR). The PTCL is endeavouring to minimize the impact of declining TAR by taking proactive measures to enhance the international incoming traffic volume mainly by improving call-completion ratios and expanding/adding international circuits on major traffic routes.
Complaints of wrong and excessive billing, disconnection despite payment, delay in fault, attendance, lack of courtesy and quick response are some of the areas where management is very serious. Although there has been appreciable improvement in the recent past, but there is still need to do lot to achieve customers' satisfaction.
The company is also contributing to the growth of information technology in the country by offering high quality Digital Lines, with special incentives for software exporters, Information Technology and other educational institutions.
The company plans to embark on a number of new projects especially in areas, such as DLS Fiber access & 10GB high capacity transmission systems in back-bone network that will place the Company in a leading position in the region. These achievements have been possible due to concerted efforts of the management to strengthen PTCL for the future challenges that it will face from developing technologies and competition from the year 2003.
Recognizing the growth and opportunity in the Cellular Mobile and data communications industry the PTCL is enhancing its investment to expand the infrastructure facilities of its subsidiaries namely PTML (Ufone) and Paknet.
Under the above-mentioned facts and figures, it is obvious that PTCL is a telecom giant of more than half a century age and continues by flourishing since the day of its inception. The end of its monopoly might create some troubles in some areas, but the telecom giant would remain number one giant in the country.
*The author of this article is the Media Consultant of PTCL (Punjab)