PAKISTAN TELECOMMUNICATION COMPANY LTD

S.KAMAL HAYDER KAZMI,
(feedback@pgeconomist.com)
Research Analyst
, PAGE
July 12 - 18, 2010

PTCL was established to undertake the telecommunication business formerly carried by Pakistan Telecommunication Corporation (PTC). The registered office of PTCL is in Islamabad. PTCL provides telecommunication services across the country. It owns and operates telecommunication facilities and provides domestic and international telephone services and other communication facilities nationwide. It has also been licensed to provide such services to territories in Azad Jammu and Kashmir and Northern Areas. The company is listed on Karachi, Lahore and Islamabad stock exchanges.

FINANCIAL PERFORMANCE

The PTCL group revenue of Rs73.6 billion for the period under review was 7 per cent higher compared to the corresponding period last year. The revenue earned by PTML (Ufone), the wholly-owned subsidiary of PTCL, was higher by 22 per cent, while PTCL's revenue decreased by 4 per cent. PTCL's domestic revenue declined by 7 per cent whereas its international revenue registered an increase of 23 per cent. The group net profit of Rs9.2 billion showed a 12 per cent growth compared to same period last year. PTCL's profit after tax at Rs7.9 billion was nine per cent higher than the same period last year. The growth in profitability was made possible because of better cost controls resulting in 17 per cent decrease in administrative and general expenses, 32 per cent increase in other operating income due to improved realisation of receivables as well as prudent utilisation of available funds and 62 per cent savings in finance cost because of relative stabilisation of Pak rupee during the period.

FINANCIAL PERFORMANCE (RS IN '000)

INDICATORS MARCH 31, 2010 MARCH 31, 2009
Revenue 43,119,060 45,020,539
Gross profit 15,235,975 16,832,837
Profit before taxation 12,042,310 11,126,236
Profit after taxation 7,860,016 7,223,820
Current liabilities 25,981,225 36,086,322
Current assets 51,890,394 53,985,818
Earning per share (Rs) 1.54 1.42

INFRASTRUCTURE

PTCL has the largest copper infrastructure spreading over every city, town, and village of Pakistan with over million installed lines. The network has over six million PSTN lines installed across Pakistan with more than three million working. Furthermore, installed capacity of broadband is more than 0.6 million ports spreading across 318 cities and town of the country.

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

EVO WIRELESS BROADBAND

PTCL EVO 3G wireless broadband is Pakistan's 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 revolutionised 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. PTCL EVO gives its customers the advantage of nationwide roaming with seamless internet connectivity across Pakistan. The coverage of EVO is not limited to 18 cities as EVO customers can enjoy CDMA-1X data rates of up to 153.6 Kbps at more than 1000 destinations across Pakistan.

The portable, small and stylish EVO USB device is a multipurpose device which not only delivers fastest wireless internet but can also be used for Voice Calls by inserting a Vfone SIM and for data storage by inserting a standard Micro SD Card.

FOREIGN DIRECT INVESTMENT

Telecom industry continued to attract foreign direct investment (FDI) to expand the infrastructure and maintenance for last few years. However, the volume of FDI declined with the maturity of market over the time. During the quarter ending December 2009, telecom sector attracted $142.7 million FDI which was 26.4 per cent of the total FDI in the country during a year while in previous quarter FDI in telecom sector was reported at $39 million that was about eight per cent of the total FDI in the country. During the last one year, the sector has attracted about 37 per cent of total FDI in Pakistan which is a commendable.

Recently in Pakistan, telecom sector has been burdened with various taxes by different organs of the government of Pakistan. These taxes include GST/CED, withholding tax, income tax, activation tax, regulatory fee, spectrum charges, stamp duties and various fees by civic authorities etc.

FUTURE OUTLOOK

The management of PTCL plans to transform the organisation into a more customer friendly and commercially oriented organisation. This will be through improved customer care, better quality of service, and introduction of targeted new products and emerging services. The customer interfaces should also be fully empowered to achieve corporate objectives. PTCL must focus 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. To reach the company's traditional profitability hallmark, varied investment options for risk diversification also needs to be explored. This together may contribute to increasing the profitability of the company in the coming years.