INBOX WINS LARGEST MS ENTERPRISE AGREEMENT IN PAKISTAN - PTCL REVENUES TO IMPROVE IN 2009

AMANULLAH BASHAR
Sep 22 - 28, 2008

Inbox has signed the largest Microsoft Enterprise Agreement in the history of Pakistan. The $8.4m agreement by Inbox Business Technologies spans over three years and includes MS Enterprise Licenses as well as other value-added services. Inbox will be providing the licenses and services to Etisalat International Pakistan's two concerns - PTCL and Ufone. Pakistan Telecommunication Company Limited (PTCL) is the largest telecommunication company in Pakistan whereas Ufone is one of the largest cellular service providers.

The decision to award the project to Inbox Business Technologies came after a thorough vendor evaluation and bidding process. All Microsoft Direct Large Account Resellers (DLARs) participated in the bidding process; however the value-added services offered by Inbox were unrivaled. Furthermore, PTCL has been a longstanding customer of Inbox Business Technologies and PTCL was completely satisfied by the services provided by Inbox in the past.

In 2005 PTCL had signed an MS Agreement which covered Ufone and PakDataCom. In April 2006, Etisalat International (Emirates Telecommunication Corporation) - a Dubai based telecommunication company acquired stakes in PTCL and Ufone. After privatization, PTCL and Ufone decided to sign their respective Enterprise Agreements under the umbrella of Etisalat.

The new management of PTCL and Ufone is currently in the process of taking its IT Infrastructure to the next level. The Enterprise Agreement for PTCL will legitimize over 3000 Windows operating system currently running at PTCL. As a part of the agreement, Inbox Business Technologies will lead the migration of PTCL's Dominoes-based Mail exchange to Microsoft Exchange 2007, as well as up gradation of Ufone's Microsoft Exchange 2003 to ensure high-availability. Other value-added services include up gradation to Windows Server 2008, deployment of ISA Server with Disk Array, as well as Compact Disc Library Management Solution.

Inbox will also provide Consultancy services for IT Infrastructure Optimization, Data Protection Management, and Rights Management Services. Resident Microsoft Certified Professionals will also be deployed for real-time troubleshooting. These value-added services will be provided to both PTCL and Ufone. Trainings by local and foreign specialists will also be conducted by Inbox to educate PTCL and Ufone personnel.

Inbox Business Technologies - one of the largest end-to-end solutions providers is fully geared to help organization setup and fine-tune their technology infrastructure, integrate disparate systems for enhanced efficiency, as well as simplify IT administrative tasks with its IT outsourcing solutions. Products and services offered by Inbox include ERP Implementation Services, Custom application Development, Outsourcing or Service Desk Solutions, Infrastructure Software Services, Software Licensing, Networking & Security, Servers and Storage, as well as PCs and Peripherals. Inbox is an Acer Executive Partner, BlueCoat Systems Partner, IBM Premier Partner, Intel Premier Provider, Oracle value-added reseller and Systems Integrator, Narus and LANDesk partner. Inbox as Microsoft Large Account Reseller and Gold Certified Partner with over 5 Competencies is fully geared to provide the best solutions based on Microsoft technologies. The $8.4 million Enterprise Agreement signed between Inbox and PTCL-Ufone is one of the largest ever Microsoft wins in Pakistan.

PTCL

PTCL's board will be meeting on September 23, 2008 in order to consider the company's FY08 financials. The company is likely to register a loss after tax of PRs3.8billion as against profit after tax of Rs15.6billion previously.

This looks the primary consequence of absorbing a one-time VSS (Voluntary Separation Scheme) cost of Rs23billion. The company pursued its long due employees' layoff scheme during first half of financial year 2008 in efforts to improve cost structure and achieve higher operational efficiencies in a highly competitive and complex domestic telecom market. Besides absorbing VSS cost, operating expense of the company are also expected to receive a soaring impact due to a first time full payment of technical assistance fee of Rs2.2billion to Etisalat.

DROP IN REVENUE IS LIKELY PERSIST

The deterioration in top-line performance of the company is likely to continue for yet another year with notable declines in almost all the major segments.

The revenues during 2008 financial are expected to cumulate at Rs57billion - 12% lower than PRs65bn during last year. Leased Line, local and NWD revenues are likely to depict 25%, 31% and 32%, respective decline on y-o-y basis. It is important to mention here that the pattern of PTCL revenue composition has been fairly changed since FY04 on the back of inappropriate market response coupled with mass shift in traffic flow.

On the basis of gross levels, the revenue pie of the company is divided among LL, NWD, fixed, international incoming and interconnects in an estimated ratio of 22%, 13%, 18%, 13% and 12% respectively for FY07. In FY04, contributions from these segments were respectively at 22%, 22%, 13%, 24% and 4%.

OUTLOOK 2009

According to telecom experts, the financial 2009 will be a year of strong bottom-line rebound for the company with earnings for the year expected at Rs14.8billion. This is to be the dual impact of recovering revenue stream and absence of one time VSS cost as well as higher operational efficiency. Top line of the company is expected to depict a handsome growth of 16% with revenues at PRs66.0 billion. Major contributors to the revenue growth will be NWD and local revenues.