Research Analyst
May 3 - 16, 2010

Pakistan Telecommunication Company Limited (PTCL) is Pakistan's largest provider of all telecommunications services from basic voice telephony to data, internet, video-conferencing, and carrier services to consumers and businesses all over the country.

In April 2006, Emirates Telecommunication Corporation, which is commonly known as Etisalat, had assumed management control of PTCL as part of the $2.6 billion deal to buy a 26 per cent stake in PTCL. It is listed on Karachi, Lahore and Islamabad stock exchanges.


PTCL has the largest copper infrastructure spreading 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 spreading across 318 cities and town of the country.

PTCL has over 10,400 km fully redundant, fiber optics DWDM backbone network. It connects over 840 cities and towns with 270G bandwidth.


During 1st HY2009-10 PTCL not only provided 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. However, PTCL is facing a two-fold challenge of price attrition and escalating costs due to increasing competition in the telecom sector and shift in customer preferences.




DEC 2009 DEC 2008
Revenue 29,424,976 31,127,908
Gross Profit 10,753,394 12,541,786
Admin Expenses (3,638.155) (4,417,198)
Operating Profit 6,188,313 7,217,628
Financial Costs (216,993) 841,270)
Profit before tax 8,203.072 8,257,343
Profit after taxation 5,354,145 5,314,802
Profit in EPS (Rs) 1.05 1.04

The revenue earned by PTML (Ufone), the wholly-owned subsidiary of PTCL, was higher by 24 per cent, while PTCL's revenue decreased by 5 per cent. PTCL's domestic voice revenue declined 7 per cent whereas international revenue registered an increase of 3 per cent.

PTCL's Profit after Tax at Rs5.354 billion was slightly better than the same period last year because of better cost controls and improved realization of receivables as well as judicious utilization of available funds. On the commercial side, PTCL placed special focus on enhancing broadband penetration as a result of which PTCL's DSL broadband customer base crossed three hundred thousand (300,000) land mark spreading over 200 cities in Pakistan.

During the period under review, 'EVO' the wireless Broadband based on 3G technology with roaming facility (introduced for the first time in Pakistan), was expanded to the entire major cities in the country. Under the Universal Service Fund (USF) scheme of the Government of Pakistan, PTCL is extending voice and data services to the underserved and far-flung areas of Pakistan using satellite backhaul as well.


Major countries which invested more than 70 per cent in last 5 years in Pakistan's telecom sector included United Arab Emirates, United States of America, Norway and the Peoples Republic of China. The UAE emerges as the leading country investing over 36 per cent of the total FDI in the telecom sector in the last 5 years. UAE invested in the companies like Wateen, Warid Telecom and PTCL.

Etisalat bought 26 per cent shares of the PTCL worth US$ 2.6 billion. The UAE has invested over US$2.3 billion in the telecom sector of Pakistan since 2004-05. China Mobile has its first overseas venture in Pakistan cellular mobile sector, in addition to telecom manufacturing through companies like ZTE and others. Investment from Republic of China exceeded US$ 599 million in the telecom sector of Pakistan during the last 5 years. Telenor, a Norway based company, also brought about half a billion US dollars foreign investment into Pakistan during the last 5 years.


PTCL 808 329 222 89 7 3 1,458
Wateen 621 273 53 24 - - 971
World Call 216 121 14 - - - 351
Link Direct 114 214 3 1 - - 332
Telecard 152 120 14 9 - - 295
Great Bear 42 - - - - - 42
Mytel - - - 2 - - 2
Total 1,953 1,057 306 125 7 3 3,451


The future plans of the company are focusing on the growth of revenue by a reversal in the trend of declining fixed line subscriber base through improved customer services and response time, an increase in loyalty to the fixed line through value added services, launch of targeted new services for corporate/carrier customers and an improved automation of internal processes and external customer interfaces. In order to reach the company's traditional profitability hallmark, varied investment options for risk diversification should also be explored. This together may contribute to increasing the profitability of the company in the coming years.