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PREFACE
This report is the practical part of the most vital practice of our MBA-Marketing
program. The sole objective is to familiarize the students with the practical
manipulation of business organization. This report has been written to know how
big organizations like PTCL manage their teams to achieve their common goals.
In the first phase of the report there is the general introduction about the company
and then different terms have been explained, then the mission, values, different
services and different strategies of the organization have been explained. In the
next part, SWOT analysis of the firm have been done by the help of which it is
identified that what are the strong areas of the company and where it lacks so that
it can improve, and then in the end most important my experience while working in
the PTCL as internee is explained.
KASHIF ALI
ACKNOWLEDGEMENT
In the name of Almighty Allah who is most merciful, and who give me strength to
accomplish honors.
I take this opportunity to acknowledge my teacher’s efforts without which my
success would not have been possible. Also would like to pay my gratitude to the
very cooperative Executive staff at the PTCL OSS Barket Market Lahore office,
the venue of my internship training program. Also want to applaud my parents for
their selfless efforts and cooperation.
EXECUTIVE SUMMARY
By the grace of almighty God, I have successfully completed my 6 weeks
internship as per requirement of MBA program. I join PTCL OSS Barket Market
Lahore. I feel my self-lucky to have worked with such a dedicated and result-
oriented team. They all helped me in every possible way they can. I was assigned
to work in Customer Care Department.
With employee strength of 30,000 and more than 5.7 million customers,
PTCL is the largest telecommunications provider in Pakistan. PTCL also
continues to be the largest CDMA operator in the country with more than 1.25
million V-fone customers. The company maintains a leading position in Pakistan
as an infrastructure provider to other telecom operators and corporate customers of
the country. It has the potential to be an instrumental agent in Pakistan’s economic
growth. PTCL has laid an Optical Fiber Access Network in the major metropolitan
centers of Pakistan and local loop services have started to be modernized and
upgraded from copper to an optical network.
This report is being started with the comprehensive introduction of organization, its
historical background, its services and its products offerings. In this report
organization structure is discussed. The hierarchy in the organization as well as
working of marketing department is concisely discussed.
The most important thing the Business Strategies is discussed in such a way that it’s
not difficult to understand. Business analysis has the vital importance, which in this
report is also done. More over the Competitor Strategies is also discussed. Whereas
SWOT analysis is done which clearly shows what are the strengths, weaknesses,
opportunities and threats to the organization. My learning as an intern is also
discussed. Finally some suggestions and recommendations are given to organization
in this report. Limitations of PTCL are discussed. Thus this report completely
depicts the true picture of PTCL in a meaningful way.
PRESEDENT MESSAGE
As we have pledged and committed in previous years, PTCL
continues to position itself as the market leader and the
catalyst for change in the telecom industry of Pakistan.
During the year, we managed to maintain our profitability
growth despite facing many challenges. Earnings per share
improved compared to last year. In fact this year, ended 30th
June, 2010 has been quite exciting, eventful and monumental.
I am pleased to report that we remained focused on our strategy of positioning
PTCL as the leading integrated telecom company in Pakistan providing multiple
solutions to the business and household market segments and extending vital
services to other telecom operators in Pakistan.
This year has witnessed the consolidation of PTCL as a market leader for
broadband services whereby we have expanded the footprints of our DSL services
to more than 500 cities and towns providing connectivity of speeds ranging from
1-10 Mbps. This comes with the realizing that broadband services are now a
necessity and remains our mission and mandate to take this service into every
household in Pakistan.
We also continued to expand the coverage of our wireless broadband ensuring that
customer have access to seamless services and coverage through national roaming
across major cities. Our flagship product EVO has gained significant attraction and
popularity with its user- friendly and plug and play feature as seen from a
consistent and high subscription. Our recent launch of EVO Nitro will give an
exciting experience to our customers at a much higher speed of up to 9.3 Mbps.
PTCL is the first operator in the world to launch this high speed wireless product
commercially and remains the single operator to offer true 3G high speed internet
services across major cities of Pakistan. In order for users to enjoy higher speed
internet connectivity along with real value for money, we have had to enhance and
augment all portions of our network which has now been duly completed.
PTCL is the only company today which operates the largest international IP
bandwidth connecting Pakistan with the rest of the world and I am pleased to
announce the inauguration for the 3rd International Submarine Cable (IMEWE), we
shall commence commercial services shortly. This new cable will not only bring
more capacity and reliable connectivity to the country but it will also provide
backup to SEA-ME-WE-3 and SEA-ME-WE-4 ensuring that Pakistan remains
connected to the information highways of the world.
For our corporate customers, this year has also witnessed exciting developments
whereby PTCL signed contracts with major banks in Pakistan to provide total
connectivity and solutions covering hundreds of branches spread throughout the
country. We have also educational institutions offering high speed internet
accesses to the students all across Pakistan. Additionally, PTCL has introduced
new services intended to serve the business community – the Data Centers in
Karachi and Lahore have been constructed according to the highest standards and
certifications ensuring continuous and secure operations for data hosting
operations. Telepresence studios have been launch to high quality audio visual
conferencing facilities between major cities in Pakistan. To facilitate end to end
managed services we have established two international Points of Presence (PoP)
in Singapore and in Amsterdam providing managed VPN services to cooperate
customers.
PTCL remains the carriers’ carrier of choice for many operators in Pakistan and we
continue to offer vital bandwidth services to innumerable licensed operators in the
country using fiber optic satellite services covering all parts of Pakistan.
At PTCL, we remain highly conscious of the fact that our success and growth can
only come from satisfied customers. It remains our challenge to provide friendly,
seamless and prompt customer service. To this end, we endeavored to embark on
several projects intended to bring PTCL closer to its customers. We continued to
refine our processes and systems and to provide training to all our representatives
in the field or in our various customer contact shops to ensure swift and timely
response. Our emphasis has been on shortening cycles for service provision,
facilitating bill payments and making our services readily available to our
customers through wider distribution points. We realize that customer satisfaction
is a continuous, never ending process and we shall continue with our efforts to
interact with our customers to ensure that the services we roll out measure to their
full expectation and satisfaction.
With our multiple and dynamic products and services, our robust, resilient and
agile network and our sound financial situation, we strongly believe that PTCL is
poised to grow and remain the leading and dominant integrated telecom service
provider of choice for customers throughout Pakistan.
I take this opportunity to thank the Government, Etisalat Group, Board of Directors
and all my fellow colleagues for their continued patronage, guidance and support.
Best Wishes
Walid Irshaid
President & CE
Table of Contents
PART 1....................................................................................................................................... 1
Introduction of PTCL................................................................................................................... 1
History of PTCL..............................................................................................................................3
By Year Progress...........................................................................................................................5
Restructuring of PTCL....................................................................................................................6
Company Analysis.........................................................................................................................7
PTCL’s Core Objectives..................................................................................................................9
Current Situation of Organization...............................................................................................11
Geographical Business Areas......................................................................................................11
Nature of the Organization....................................................................................................11
Main Offices...........................................................................................................................11
PTCL’s Privatization: The Biggest Financial Scam in the Pakistan History....................................12
Vision....................................................................................................................................... 15
Mission.................................................................................................................................... 16
Core Values.............................................................................................................................. 17
PTCL Brand Philosophy............................................................................................................. 18
PTCL Positioning Statement: Hello to the Future........................................................................18
Brand Values..........................................................................................................................19
Corporate Responsibility.......................................................................................................... 19
PTCL employees donate One-Day salary for IDPs.......................................................................19
Donation to SOS Villages........................................................................................................19
Scholarships for Persons with Disabilities...................................................................................20
Donation to Earthquake victims in Baluchistan...........................................................................20
Donation to Benazir Income Support Program...........................................................................20
Sponsoring Event at LUMS..........................................................................................................20
PTCL Gets Environment Friendly.................................................................................................21
Part 2....................................................................................................................................... 23
Company Management System................................................................................................23
Corporate Information............................................................................................................. 24
Management..............................................................................................................................24
Board of Directors.......................................................................................................................26
STRUCTURE OF PTCL...................................................................................................................27
Organizational Hierarchy Chart...................................................................................................29
Management Responsibilities.....................................................................................................30
STAFF ROLE OF THE HUMAN RESOURCE DEPARTMENT.............................................................31
POLICY INITIATION AND FORMULATION................................................................................32
HR&A TASK ASSIGNMENT (EXISTING).........................................................................................34
PTCL Subsidiary........................................................................................................................ 35
Privatization................................................................................................................................36
Key Accomplishments.................................................................................................................36
Performance...............................................................................................................................36
Brand..........................................................................................................................................36
International Coverage...........................................................................................................37
Customer Service...................................................................................................................37
Network Coverage..................................................................................................................37
Current Situation of Ufone..........................................................................................................38
Total User Base of U-fone......................................................................................................38
Departments of PTCL..................................................................................................................38
Finance Wing Structure............................................................................................................ 38
Finance & Accounting System of PTCL........................................................................................40
Accounting System of PTCL.........................................................................................................41
Funding of PTCL..........................................................................................................................43
Mobilization of Funds.................................................................................................................43
Generation of Funds...................................................................................................................44
Allocation of Funds.....................................................................................................................45
Human Resource Assessment...................................................................................................46
Part 3....................................................................................................................................... 50
Management and Administrative Styles...................................................................................50
Impact of Management Styles on Motivation of Employees......................................................51
Impact of Management Styles on Productivity of the Employees...............................................51
Job Satisfaction of Employees................................................................................................52
Issues..........................................................................................................................................52
Right downsizing....................................................................................................................52
Employee Moral.....................................................................................................................53
Denationalization...................................................................................................................53
Service Concerns....................................................................................................................54
Non-functioning of public telephones....................................................................................55
Part 4....................................................................................................................................... 56
Production and Operations....................................................................................................... 56
PTCL Performance in production..............................................................................................57
Expansion of Network and services improvement......................................................................59
Conclusion..................................................................................................................................60
Part 5....................................................................................................................................... 63
Company Marketing Mix..........................................................................................................63
PRODUCT LINE OF PTCL............................................................................................................ 64
Fixed Line....................................................................................................................................64
Unique Features of PSTN........................................................................................................64
New Offering...............................................................................................................................64
Broadband..................................................................................................................................67
PTCL Smart TV.............................................................................................................................68
EVO Wireless Broadband............................................................................................................68
EVO 3G Nitro...............................................................................................................................69
EVO Wifi Cloud............................................................................................................................70
EVO Tablet..................................................................................................................................70
V-fone.........................................................................................................................................74
PTCL V-fone (WLL) Payphone.................................................................................................75
SERVICES OF PTCL..................................................................................................................... 76
SERVICES FOR CORPORATE CUSTOMERS....................................................................................78
BRIEF INTRODUCTION OF SUBSIDIARIES...................................................................................80
UFONE........................................................................................................................................80
WorldCall Telecom.................................................................................................................83
Link dot Net............................................................................................................................83
Marketing Department............................................................................................................. 84
MARKETING STRATEGY...............................................................................................................85
TARGET MARKET....................................................................................................................85
Market Segmentation.................................................................................................................85
POSITIONING STRATEGY.............................................................................................................86
MARKETING MIX OF PTCL...........................................................................................................86
PRODUCT....................................................................................................................................87
PRICE...........................................................................................................................................88
PLACE..........................................................................................................................................90
PROMOTION...............................................................................................................................91
“Pay 3 months line Rent in advance and get your Nitro USB Absolutely FREE”.....................92
DIRECT MARKETING....................................................................................................................92
ONLINE MARKETING AND ELECTRONIC COMMERCE.............................................................93
DISTRIBUTION.............................................................................................................................94
PROMOTIONAL STRATEGY..........................................................................................................96
SWOT Analysis......................................................................................................................... 96
Why use a SWOT Analysis?.........................................................................................................97
Strength......................................................................................................................................97
Weakness....................................................................................................................................98
Opportunities..............................................................................................................................99
Threats........................................................................................................................................99
Concluding Remarks on SWOT Analysis....................................................................................100
Part 6..................................................................................................................................... 102
COMPANY FINANCE SYSTEM..................................................................................................102
Ratio Analysis......................................................................................................................... 103
Advantages...............................................................................................................................103
Types of Ratios Analysis............................................................................................................103
Liquidity Ratios..........................................................................................................................104
Current Ratio........................................................................................................................104
Acid Test (Quick) Ratio:........................................................................................................105
Leverage Ratios.........................................................................................................................106
Debt Equity Ratio:................................................................................................................106
Activity Ratios...........................................................................................................................110
Profitability Ratios.....................................................................................................................112
Market Ratios............................................................................................................................114
Dividend per Share:..............................................................................................................115
Horizontal & Vertical Analysis...................................................................................................117
PTCL’s Common size Balance Sheet.....................................................................................117
PTCL’s Common size Balance Sheet.....................................................................................118
PTCL’s Common size Profit and Loss Account...........................................................................119
PTCL’s Indexed Balance Sheet...................................................................................................120
PTCL’s Indexed Balance Sheet...................................................................................................121
PTCL’s Indexed Profit & Loss Account.......................................................................................122
FUNDING OF PTCL.................................................................................................................. 123
Conclusion................................................................................................................................125
Part 7..................................................................................................................................... 126
Training Programme............................................................................................................... 126
Internship Programme........................................................................................................... 127
Structure of Internship department..........................................................................................128
MARKETING OPERATIONS.........................................................................................................129
LEARNING AS AN INTERN.......................................................................................................131
Strategic Management Matrices.............................................................................................134
Porter's Five Forces Analysis of Market Structure.....................................................................137
EFE Matrix of PTCL....................................................................................................................140
IFE Matrix of PTCL.....................................................................................................................141
SWOT Analysis of PTCL..............................................................................................................143
SWOT Strategies Matrix............................................................................................................145
BCG Matrix for PTCL..................................................................................................................146
SPACE Matrix............................................................................................................................148
QSPM MATRIX..........................................................................................................................151
Part 8..................................................................................................................................... 153
Conclusion & Recommendations............................................................................................153
PTCL: Future Prospects & Challenges........................................................................................154
Weaknesses Identified..............................................................................................................155
Suggestions and Recommendations.........................................................................................155
Future Prospects of the PTCL....................................................................................................157
References............................................................................................................................. 158
PART 1
Introduction of PTCL
1
Introduction of PTCL
Eleven years into a new century, the telecom sector of world finds itself at
crossroads after changing itself almost beyond recognition over the last 27 years.
Privatization and competition are the order of the day, with a majority of countries
having adopted these policies to advance their telecom sector. The results have
been impressive; the industry has grown at unprecedented pace. Although there has
been a phenomenal growth in Pakistan, especially in the cellular mobile
communication and in the internet, yet the late density remains almost stagnant. So
far PTCL is the sole land line service provider of Pakistan. PTCL is the giant of
Pakistan telecommunication industry and enjoying the monopoly. This part of the
report contains a brief introduction of PTCL. This introduction is divided into two
parts.
History and Current situation
Pakistan Telecommunication Company Limited (PTCL) is the largest
telecommunication company in Pakistan. This company provides telephony
services to the nation and still holds the status of backbone for country's telecom
infrastructure despite arrival of a dozen other telecom companies including
telecom giants like Telenor and China Mobile. The company consists of around
2000 telephone exchanges across country providing largest fixed line network.
GSM, CDMA and Internet are other resources of PTCL, making it a gigantic
organization. The Government of Pakistan sold 26% shares and control of the
company to Etisalat in 2006. The Government of Pakistan retained 62% of the
shares while the remaining 12% are held by the general public.
PTCL is also part of the consortium of three major Submarine communication
cable networks: SEA, SEA-ME-WE 4 and I-ME-WE. In addition to wireline line
operations, PTCL also provides fixed line service through its countrywide CDMA
based WLL (Wireless Local Loop) network, under the Vfone brand name. In the
cellular segment, the second largest cellular provider in Pakistan, Ufone, is also a
wholly owned subsidiary of PTCL. With employee strength of 30,000 and 5.7
million customers, PTCL is the largest telecommunications provider in Pakistan.
2
PTCL also continues to be the largest CDMA operator in the country with 0.8
million Vfone customers.
History of PTCL
Pakistan has made steady progress in expanding telecommunication networks and
services in recent years. In Pakistan this industry had few big giants in the past
with PTCL being the sole provider of landline telephone
service in the country. At present the organization’s
principal activity is to provide telecommunication
services all over the country. It offers both domestic and international services
throughout Pakistan. PTCL also manufactures telecommunication related
equipment.
Pakistan Telecommunication Corporation (PTC) has established in December
1990, taking over operations and functions from Pakistan Telephone and Telegraph
Department under Pakistan Telecommunication Corporation Act 1991. This
coincided with the Government's competitive policy, encouraging private sector
participation and resulting in award of licenses for cellular, card-operated
payphones, paging and, lately, data communication services. In 1994, the PTCL
becomes the company limited (Pakistan Telecommunication Company Limited) by
issued six million vouchers exchangeable into 600 million shares of the PTCL in
two separate placements. Each had a par value of Rs. 10 per share. These vouchers
were converted into PTCL shares in mid-1996.
In 1995, Pakistan Telecommunication (Reorganization) Ordinance formed the
basis for PTCL monopoly over basic telecommunication sector in the country. It
also paved the way for the establishment of an independent regulatory regime. The
provisions of the Ordinance were lent permanence in October 1996 through
Pakistan Telecommunication (Reorganization) Act. Pakistan Telecommunication
Company Limited had exclusive rights to provide basic telecom services in
Pakistan till the end of year 2002. With the announcement of Deregulation Policy
by the Government of Pakistan in 2003, PTA has issued licenses for basic
telephony to the private sector in Pakistan who will be competing PTCL, the
incumbent. From the humble beginnings of Posts & Telegraph Department in 1947
3
and establishment of Pakistan Telephone & Telegraepartment in 1962, to this very
day, ours is a story of commitment and vision. PTC set sails for its voyage of glory
in December 1990, taking over operations and functions from Pakistan Telephone
and Telegraph Department under Pakistan Telecommunication Corporation Act
1991. This coincided with the Government's competitive policy, encouraging
private sector participation and resulting in award of licenses for cellular, card-
operated payphones, paging and, lately, data communication services.
Pursuing a progressive policy, the Government in 1991, announced its plans to
privatize PTC, and in 1994 issued six million vouchers exchangeable into 600
million shares of the would-be PTCL in two separate placements. Each had a par
value of Rs. 10 per share. These vouchers were converted into PTCL shares in
mid-1996. The company maintains a leading position in Pakistan as an
infrastructure provider to other telecom operators and corporate customers of the
country. It has the potential to be an instrumental agent in Pakistan’s economic
growth.
PTCL has laid an Optical Fiber Access Network in the major metropolitan centers
of Pakistan and local loop services have started to be modernized and upgraded
from copper to an optical network. On the Long Distance and International
infrastructure side, the capacity of two SEA-ME-WE submarine cables is being
expanded to meet the increasing demand of International traffic. In the last couple
of years the impact of deregulation and increase in competition in
telecommunication industry in Pakistan has been increasingly felt by PTCL. This
phenomenon is not unique to PTCL - incumbent providers all over the world have
gone through this difficult transition from being a monopoly to a free
market competitor.
During the period under review, PTCL added net 108,000 new working
connections to its network. Overall, PTCL’s sales revenue for the first quarter was
Rs.16.9 billion as compared to Rs.17.7 billion during the corresponding period of
last year. The company announced net profit of Rs 8.4 billion translating into an
EPS of Rs 1.64 for the first half of 2007, a decline of 23 percent over the
corresponding period’s net earnings and EPS of Rs 10.8 billion and
4
Rs. 2.12 respectively. The major factor for the decline in the top line was six
percent downfall in the Revenues from Rs 34.9 billion in first half of 2006 to Rs
32.7 billion in first half of 2007.
By Year Progress1947 Posts & Telegraph Dept. established
1962 Pakistan Telegraph & Telephone Dept.
1995 About 5 % of PTC assets transferred to PTA, FAB & NTC
1996 PTCL came into being and listed in Stock Exchange
1997 WTO Agreement Signature Signed and divided into 5 entities
1998 PTCL gets Cellular Mobile License
1999 PTA issues 100 of lines on internet value added Services
2000 Issues Licenses in the Area of Azad Kashmir
2002 PTCL Monopoly expired/End
2003 Telecom Deregulation Policy Announced
2004 PTCL is laying down Fiber Optic cables between the local exchange and the end users
2006 Etisalat Takes over PTCL With 26% of PTCL management shifted to Etisalat
2007 Restructuring and VSS(Voluntary Separation Scheme)
(Source: PTCL)
In 1995, Pakistan Telecommunication (Reorganization) Ordinance formed the
basis for PTCL monopoly over basic telephony in the country. It also paved the
way for the establishment of an independent regulatory regime. The provisions of
the Ordinance were lent permanence in October 1996 through Pakistan
Telecommunication (Reorganization) Act. The same year, Pakistan
Telecommunication Company Limited was formed and listed on all stock
exchanges of Pakistan. Since then, PTCL has been working vigorously to meet the
dual challenge of telecom development and socio-economic uplift of the country.
This is characterized by a clearer appreciation of ongoing telecom scenario
wherein convergence of technologies continuously changes the shape of the sector.
A measure of this understanding is progressive measures such as establishment of
the company's mobile and Internet subsidiaries in 1998. As telecommunication
monopolies head towards an imminent end, services and infrastructure providers
5
are set to face even bigger challenges. Pakistan also entered post-monopoly era
with deregulation of the sector in January 2003. On the Government level, a
comprehensive liberalization policy for telecom sector is in the offing. PTCL is in
full awareness of the same, and future policies feature a strong conviction of
healthy competition.
The company is in process of enhancing organizational and business proficiency
through vertical integration and horizontal diversification. At the same time, cross-
national ownerships, operations and partnerships are being evaluated with a view
to developing and diversifying the business.
Restructuring of PTCL
The government’s efforts to restructure and privatize PTCL have been on-again
off-again since 1991. It had an offer in the late 1990s for 26 percent equity,
reputedly totaling $3 billion, but held out in negotiations and ultimately missed the
unique global market window at that time. Since then, it faced difficulty in
attracting potential buyers and new competitive entrants. From the government
perspective, breaking up PTCL prior to a sell-off will help curtail the market power
of any one single service provider, thereby stimulating competition.
Unbundling the sale was also likely to increase revenues for the government. The
risk, of course, was that the mobile company, PTML (branded as Ufone), was
disproportionately more attractive than the other businesses. According to AKD
Securities, PTML's contribution to PTCL's total revenues was expected to rise to
12.5% over the next five years í and was assumed to contribute 39% of PTCL’s
overall revenue growth. Future growth of mobile, both in terms of subscribers and
net revenues, was considered to almost certainly outstrip demand for fixed line
services. The target was to sell up to a 26 percent stake in PTCL; the government
held 88 percent of shares. Some estimates placed the value of the trance at around
$1 billion. PTCL’s net profit for the year ending June 2003 was 23 billion rupees
($400 million).
The new buyer would gain management control. Splitting up PTCL could take at
least two years or longer, complicating hopes for a quick disposal. Leading
international investors that publicly stated their interest in the sale include
6
Singapore Telecommunications Ltd., Egypt's Orascom Telecom Holding, Saudi
firm Oger and the Menara Telecom consortium. Unsolicited offers were reportedly
made the planning process a moving target. The eventual new owner(s) greatest
challenge was considered to be organizational. PTCL needed a fundamental shake-
up of its corporate culture, and a massive reduction in staff.
Company Analysis
Pakistan Telecommunication Company Limited (PTCL) is the primary provider of
Telecommunication services in Pakistan. The range of services include basic
telephony, telegraph, fax, telex, Public data, Internet, E-mail, ISDN (Integrated
Services Digital Network), Universal Access Numbers (UAN), and other value
added services. Pakistan Telecommunication Company Limited is a professionally
managed company and has initiated measures, with active support of the Federal
Government, to inculcate a corporate culture that benefits company. Pakistan
Telecommunication Company Limited believes that it has an inherent potential
that it can exploit to emerge as an important and active business entity.
Pakistan Telecommunication Company Limited has some basic strength and the
potential that needs to be exploited into real business opportunities. The Directors
of the Company feel that a firm and unwavering commitment towards provision of
a complete range of market driven Company’s Analysis. Pakistan
Telecommunication Company Limited (PTCL) is the primary provider of
Telecommunication services in Pakistan. The range of services include basic
telephony, telegraph, fax, telex, Public data, Internet, E-mail, ISDN (Integrated
Services Digital Network), Universal Access Numbers (UAN), and other value
added services. Pakistan Telecommunication Company Limited is a professionally
managed company and has initiated measures, with active support of the Federal
Government, to inculcate a corporate culture that benefits company.
Pakistan Telecommunication Company Limited believes that it has an inherent
potential that it can exploit to emerge as an important and active business entity.
Pakistan Telecommunication Company Limited has some basic strength and the
potential that needs to be exploited into real business opportunities. The Directors
of the Company feel that a firm and unwavering commitment towards provision of
7
a complete range of market driven change is gradually becoming visible through
expanded capacity and increasing revenue.
Pakistan Telecommunication Company Limited has taken decisions to cope with
the competition within the next years. The initiatives taken resulted in the
establishment of 100% Pakistan Telecommunication Company Limited owned
subsidiaries like Pak Telecom Mobile Limited, Paknet and Pak Telecom Pay
Phone services limited. These new entities shall provide cellular mobile
information technology, Internet, payphone, prepaid calling cards and other range
of services. Pakistan Telecommunication Company Limited made a conscious
decision to enter the cellular business as it has tremendous potential and an
accelerated annual growth of about 60% which is likely to continue for many
years.
Pakistan Telecommunication Company Limited has been successful in obtaining a
Cellular Mobile License for its subsidiary and has selected the GSM 900 state -of
the art technology, which is growing at a much faster rate internationally. Pak
Telecom Mobile Limited was incorporated on 18th July 1998 to establish and run
this new business independent of Pakistan Telecommunication Company Limited
with full accounting separation thus creating a level playing field for industry
competitors.
Pakistan Telecommunication Company Limited is following a business-oriented
policy to associate private entrepreneurs in telecom sector development. The
options are based on interconnect and revenue sharing arrangements with license
operators and through out-sourcing revenue sharing with 0 & M contractors as
business partners. PTCL has successfully entered into arrangements with foreign
and local telecom companies and has signed three contracts prepaid calling card
service to promote international traffic.
The Government of Pakistan has encouraged the growth of the telecom sector to
enable Pakistan to keep pace with the rapid technological advancement in the field
of telecommunication. The tariff structure remains under constant review of the
government to rationalize from the point of providing adequate returns to the
telecom operators and to tap the tremendous potential of the growth in the demand
8
and market for telecom services. The GOP has reduced the CED on telecom
services, encourages the use of value added services with special emphasis on
proliferation of Internet. It has also reduced the import duties on telecom
equipment and allows tax exemption.
Private sector data and Internet services providers are operating under license and
revenue share arrangements. Internet & information technology services are now
very popular in the market and numbers of new entrants are competing, providing
Pakistan Telecommunication Company Limited an opportunity lease capacity. Its
available IT & Internet infrastructure both for private sector licensed operators and
Pakistan Telecommunication Company Limited own customers.
Pakistan Telecommunication Company Limited is launching a three-phased project
for IT & Internet to expand the service to take care of 300,000 customers including
the needs of private license for infrastructure.
PTCL’s Core Objectives
The primary objective of Pakistan Telecommunication Company Limited is to
provide telecommunication services to the people in the country or in short to
satisfy the telecommunication needs of its customers. Responding to the rapid
economic and technological growth, the company is determined to meet the
challenge of expanding needs of telephone and data communication such as public
data network, integrated services digital network and Internet services.
The major focus of attention is to improve and expand the services, minimize the
faults and provide communication facilities to rural areas. It is also one of the
major objectives of management that the company should not improve its
performance but also encourage the private sector to enter the Tele business. The
company has entered the domain of free market economy, which necessitates the
liberal management policies and private sector.
The following basic policy steps have been taken to meet the objectives laid in
PTCL Act to expand and operate telecommunication services in the country. The
main objective of any company is to earn the profit and minimize expenses by
winning goodwill in the market private sector to enter the Tele business. The
9
company has entered the domain of free market economy, which necessitates the
liberal management policies and private sector.
Convert its cash basis single entry accounting system to accrual basis
double entry system meeting the commercial international accounting
standards
To introduce computerized directory assistance and complaint services
reform billing and a revenue collection system
Strengthen relation with foreign international administration, entities,
services providers, international and regional telecom organizations for
better international communication and technical cooperation in
telecommunication business
Expand customer awareness for all value-added services of PTCL
To improve the efficiency of Customer Service Centers by deputing
qualified persons who are well aware of public relation techniques
To introduce new services of audio Tex and video conferencing for the
business community
In a static sense, profits are not the appropriate indicator but it is the sustained
capacity of the enterprise to generate maximum profits, make productive and
efficient investments to grow over time and provide quality goods or customer
satisfactory services that are relevant. There are many cogent reasons that question
the assumption of sustained profitability of PTCL under the changed environment
of telecom sector deregulation that is sweeping Pakistan since 2003. PTCL enjoys
high profits because it earns monopoly rents as a single provider of fixed telephony
in the country. Comparison with other telecoms in developing countries shows that
it is not due to the efficiency of PTCL that it is showing good financial results and
paying dividends.
Tele density under PTCL monopoly is quite low - only three percent compared to
seven per cent in India. Another more efficient operator in the private sector would
have generated twice the current level of PTCL profits through better cost controls
and higher penetration rates. Had it not been for the private cellular companies
with their seven million customers calling to and from its network, the revenues
and profits of PTCL would have been much lower.
10
Current Situation of Organization
After having brief introduction from past end of PTCL now we move towards the
current situation of the company .In this part focus will be on the:
Structure of organization
Technical & operational Net work
Services provided by PTCL
Financial front of PTCL
Competitors and subsidies
Geographical Business Areas
Nature of the Organization
It is service oriented Communication Company. It has two subseries (Paknet &
Ufone) it has centralized management system. Its main offices are situated at
PTCL H/Qs Islamabad and few in Lahore. Its main decisions are taken by the
Board of Directors and CEO/President. PTCL has its own research and
development department.
Main Offices
The Head Office of Pakistan Telecommunication Company Limited is situated in
Sector G-8/4, Islamabad, which is headed by the “President”. Besides, it has
Regional Headquarters like:
Islamabad Telecom Region
Rawalpindi Telecom Region
Hazara Telecom Region, Abottabad
Northern Telecom Region-I Peshawar
Lahore Telecom Region (South)
Lahore Telecom Region (North)
Multan Telecom Region
Faisalabad Telecom Region
Southern Telecom Region-I Hyderabad
Southern Telecom Region-II Karachi
Southern Telecom Region-V Sukkur
Western Telecom Region Quetta
11
PTCL’s Privatization: The Biggest Financial Scam in the Pakistan History The fall of corporate giants like ENRON and WORLDCOM left many learning
impressions for both public and private sector enterprises besides stakeholders
including governments, employee, Board of Directors and strategic partners. In
both of the above mentioned historical cases, the core reason was fraudulent
conduct by the corporate level management. The top officers consistently kept
hiding the true financial facts and figures bearing losses and public reports kept
displaying healthy financial results and profitability, which strengthened the trust
of shareholders and partners to keep investing besides helping the share price to
grow further in the stock market.
Unfortunately, we might have another big financial scandal in Pakistan in
upcoming days – this is about privatization of PTCL. As you may recall Etisalat
acquired a 26% strategic stake along with management control in 2006 after
months of deals and bargaining on the actual value of the deal. Now the scandal
reported in the papers claims that PTCL was worth a lot more. PTCL no doubt is
one of the strongest corporate enterprises not only in Pakistan but also in the
continent known as Asia. Therefore, if the news story becomes true, it will have a
devastating effect on the Pakistan’s Telecom market, Economy and Pakistan’s
political stability. Pakistan’s image, which already is in crisis, will be hurt further.
The business schools around the world surely will have another good case study.
Jang, one of leading Urdu newspaper in Pakistan, has highlighted news on the
secret contract over privatization of PTCL as shown above. An ex-Senior Vice
President has claimed the privatization as Pakistan’s Biggest Financial Scandal.
PTCL former official further commented that the deal was closed on 2.6 billion
dollars including U-fone & Paknet, however only U-fone had enterprise value of
more than 6 billion dollars which does not include assets of U-fone. Moreover,
pricing decisions were made through old records instead of determining current
market value, which means, it was like Buy One Get 2 Free offer. It has been
reported further that in September 2006, when Etisalat had refused to honor the
deal, they were offered a secret price discount of 394 million dollars along with
commitment to lay off 20,000 employees and to bear the 50% cost of layout.
12
Supreme Court of Pakistan has already given decision against the privatization of
PSO and Pakistan Steel and if PTCL’s privatization gets challenged on true facts, it
will bring horrifying results.
Now this brings another example to Corporate Governance books and poses
immense need to improve upon corporate governance practices. Corporate
Governance is the set of policies, procedures, practices, processes, customs, laws
and institutions affecting the way in which a corporation or enterprise is controlled
or administered. It further involves shareholders, stakeholders, management and
the enterprise goals and objectives i.e. profitability, organizational growth, share
price stability for which a company is governed. The two main aspects of corporate
governance are Accountability and Economic efficiency for the welfare of the
shareholders.
Being state owned enterprise, it was Government’s critical responsibility to
measure the scope and feasibility of privatization. PTCL was and is one of the
oldest & strongest corporate enterprises and revenue contributor in Pakistan. The
key objective of any business entity is to earn profit. So, why there was a need to
privatize such a Giant, Whatever PTCL is doing after privatization could also have
done before privatization. When there is no major change in organizational
structure and policies and even new owners have still not been able to even lay off
those 20,000 employees for which our Government has agreed to bear 50% cost of
layoff.
Marketing, Corporate Level, Business level strategies and new product launch
could also be carried on without risking a profitable business. All PTCL needed
was good corporate governance through accountable and economically feasible
process with holistic approach towards growth besides integrity & ethical behavior,
transparency and control by the BODs (Board of Directors).
Corporate governance practice includes a set of internal and external controls,
which, if applied properly can bring growth results in all operational activities.
These controls include Internal Controls such as Monitoring by the Board of
Directors, Human Resource Development, and Transparent & Accurate Disclosure
13
of Financial Results. Then there are External Controls such as Debt Covenants,
Government regulations, Media pressure, Competition etc. Concluding here, one
could well imagine that if PTCL‘s management had implemented such controls, it
would have been in a better position.
14
.
15
Vision
To be the leading Information and
Communication Technology
Service Provider in the region by
achieving customer satisfaction and
maximizing shareholders' value'.
16
Mission
To achieve our vision by having:
An organizational environment
that fosters professionalism,
motivation and quality
An environment that is cost
effective and quality conscious
Services that are based on the
most optimum technology
"Quality" and "Time" conscious
customer service
Sustained growth in earnings and
profitability
17
Core Values
Professional Integrity
Customer satisfaction
Team Work
Company Loyalty
Corporate Information
PTCL Brand Philosophy
As the leading Information and Communication Technology Service Provider in
the region we are the link that allows global communication. We are striving
towards mobilizing the world for the future. By becoming partners in innovation,
we are ready to shape a future that offers telecom services to bring the world
closer.
PTCL Positioning Statement: Hello to the Future“Hello to the Future” is an amalgam of our vision, brand philosophy, brand values
and strategy. The essence is “futuristic approach”. The positioning statement
“Hello to the Future” is basically comprised of two words “Hello” and “Future”
that provides the inward communication through the word “Hello”, i.e. PTCL
welcomes its customers and the future. Also it offers the outward communication
through the word “Future” by promising customers the futuristic ideas and
products.
The first key word “Hello” captures the essence of the whole telephony network
that is the backbone of PTCL. “Hello” is a word which is related to the
telecommunication history and has been used ever since and will be used in future.
This word expresses the welcoming nature of the PTCL brand, its customer
oriented approach and warm environment. Everyday most conversations and
relationships start with the word “Hello”, hence it portrays the relationship
building of PTCL with its customers.
The second key word “Future” translates PTCL philosophy in a nutshell to provide
planned and proactive solutions and products to its customers. PTCL is constantly
evolving and taking its customers into the future. The word “Future” holds the
promise that PTCL is committed to, by providing complete customer satisfaction
through innovative and futuristic services and products. PTCL is breaking the
stereotypical perception launching into the Future embracing it as the mission to
transform the world of telecommunication and the way its customers communicate.
PTCL establishes itself as a futuristic entity which is working constantly towards
inventing paramount solutions for its customers.
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Brand Values
Evolving Innovative Human Trustworthy Quality Conscious
Corporate Responsibility
PTCL as a socially aware and responsible entity is determined to do its utmost in
furthering worthy causes that contribute to the lives of individuals and help better
the standards of society as a whole.
PTCL employees donate One-Day salary for IDPsPakistan Telecommunication Company Limited employees have contributed their
one day salary that amounts Rs. 20 million for the support of internally displaced
people of Swat and other affected areas. CEO and President of PTCL Mr. Walid
Irshaid called on Prime Minister Syed Yousuf Raza Gilani at PM’s House and
presented him a cheque of Rs. 20 million on behalf of PTCL employees for PM’s
Special Fund for the Relief of Victims of Terrorism. While thanking PTCL
employees for their generous contribution and appreciating their willingness to
help IDPs, Mr. Waild Irshaid said that PTCL employees have exhibited their
profound sense of sharing and empathy on this occasion. This highly speaks of the
strong commitment of our employees with this national cause.” “Contribution from
our employees during these days specially donating one day salary for IDPs in
these testing times shall be greatly helpful in mitigating IDPs miseries and will go
a long way in their rehabilitation process.
Donation to SOS Villages
PTCL keeping with its healthy tradition of supporting non-governmental
organizations recently donated a sum of Rs.2.5 million to the SOS Villages. As
most people would be aware, SOS is an organization that looks after the well-being
and education of orphans and the destitute. Last year, PTCL organized a special
event at the SOS Village Rawalpindi, which the then Prime Minister of Pakistan,
Mr. Shaukat Aziz, attended. He handed over a cheque of Rs.2.5 million, donated
by PTCL for this noble cause, to the SOS Children’s Village.
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Scholarships for Persons with DisabilitiesAnother recent CSR initiative taken by PTCL was announced at the World
Telecommunication Day held on May 17, 2008. This year the worldwide theme for
the Day was “Connecting Persons with Disabilities.” To raise awareness of this
theme and support initiates focusing on less privileged persons, PTCL chose to
become the lead sponsor of the World Telecom Day event in Islamabad
contributing PKR 6.8 Million. During his address at the event, PTCL’s
President/CEO, Mr. Walid Irshaid announced five academic scholarships per year
for persons with disabilities so that they could pursue their career of choice by
obtaining higher education at any university with Pakistan. PTCL would bear the
full tuition costs and living expenses of those awarded these scholarships. PKR
1.5Million was announced focusing on the education of the special people
Donation to Earthquake victims in Baluchistan Earthquake struck the western telecom region Quetta leaving terrifying effects in
the region. Mr. Walid Irshaid President & CEO PTCL donated Rs.10 Million for
the reconstruction and rehabilitation of the area.
Donation to Benazir Income Support ProgramMr.Walid Irshaid President & CEO PTCL donated Rs.10 Million to the Benazir
Income Support Program. This program directly focuses on the poor populace of
Pakistan.
Sponsoring Event at LUMSPTCL was the lead sponsor for Synergies 2008; the 1st ever Business School
Competition in Pakistan organized by Lahore University of Management Sciences
costing PKR 1 Million.
20
PTCL President Mr. Walid Irshaid announces Rs 10 Million for National
Press Club Islamabad
The president of PTCL, Walid Irshaid has said that PTCL was still one of the most
profitable National organizations, despite all economic and financial crisis and
back draws. Addressing the inaugural of the new building, alongside president
NPC (National press Club), Tariq Chaudhry, general secretary Afzal Butt, and
other luminaries, including SEVP PTCL Sikandar Naqi, EVP Ali Qadir Gilani.
Walid Irshaid expressed the company's willingness and readiness to tackle any
impending challenges with élan and preparedness. Mr. Walid Irshaid also assured
press club about his full cooperation and assistance, and during the lunch hosted in
his honor by NPC also announced a grant of Rs. 10 million, DSL Internet services,
IPTV and other facilities. He said that PTCL would continue to work for
betterment of media in Pakistan, and also lauded media services rendered during
the last few years.
PTCL Gets Environment FriendlyThe Pakistan Telecommunication Company Limited (PTCL) has decided to
introduce a new bill format for its customers, effective February 2009. This
decision was taken to ensure that PTCL stir towards adopting environmental-
friendly and customer-friendly policies in line with the government of Pakistan's
efforts, which recommends companies and institutions to go green. This initiative
of PTCL also coincides with the Government’s decision to celebrate 2009 as the
"Environment Year".
PTCL's decision to reduce the number of billing pages is an environment friendly
initiative and is a way forward towards becoming a paperless enterprise. According
to Dr. Sadik Al-Jadir, SEVP Commercial PTCL, preceding bill format comprising
multiple pages, would be replaced with a new one-page bill format, thus packing
all the essential billing details on a single page. This single page bill format would
help save, at least 12 million papers every month that are being used for printing
the billing details. To facilitate the customers, itemized billing details would
remain obtainable and accessible. Customers would be able to obtain their itemized
billing details by visiting any customer service centre of PTCL and would also be
able to access essential billing details through IVR by dialing 1200. PTCL Call
21
center is also expected to start taking orders from customers for their itemized
billing details. Subsequently, these details would be delivered to the customers
through courier within a certain time frame. Dr. Sadik said, “PTCL is determined
to improve and build good relationship with its customers by providing novel and
superior telecom products and services to its valued customers and is striving hard
to meet their expectations.
22
Part 2
Company Management System
23
Corporate Information
Management Walid Irshaid
President & Chief Executive Officer
Muhammad Nehmatullah Toor
S.E.V.P (Finance) / Chief Financial Officer(C.F.O)
Mohammad Nasrullah
Chief Technical Officer (C.T.O)
Syed Mazhar Hussain
S.E.V.P (HR / Admin & Procurement)
Hamid Farooq
S.E.V.P (Business Development)
Javed Mushtaq
C.I.O
Sikandar Naqi
S.E.V.P (Corporate Development)
Naveed Saeed
S.E.V.P (Commercial)
Furqan Habib Qureshi
S.E.V.P (Corporate Services)
Abdullah Yousef
S.E.V.P (Business Zone South)
Nasir Iqbal
S.E.V.P (Business Zone Central)
Farah Qamar
Company Secretary
Legal affairs
Zahida Awan
Ghulam Mustafa
24
Bankers
Allied Bank Limited
Askari Bank Limited
Bank Alfalah Limited
Bank Al Habib Limited
The Bank of Punjab
Citibank. N.A
Dubai Islamic Bank
Faysal Bank Limited
Habib Metropolitan Bank Limited
MCB Bank Limited
Meezan Bank Limited
National Bank of Pakistan
NIB Bank Limited
Royal Bank of Scotland
Silkbank Limited
SME Bank Limited
Standard Chartered Bank (Pakistan) Limited
United Bank Limited
Registered Office
PTCL Headquarters,
Block-E, Sector G-8/4,
Islamabad-44000, Pakistan.
Tel: +92-51-2263732 & 34
Fax: +92-51-2263733
E-mail: [email protected]
Auditors
A.F. Ferguson & Co.
Chartered Accountants
25
Ernst & Young Ford Rhodes Sidat Hyder,
Chartered Accountants
Share Registrar
M/S FAMCO Associates (Pvt.) Limited
Ground Floor,
State Life Building 1-A
I . I Chundrigar Road
Karachi 74000
Tel: +92-21-2422344, 2467406
Fax: +92-21-2428310
Board of Directors
Mr. Saeed Ahmad Khan
Chairman PTCL Board
Mr. Abdulrahim Abdulla Abdulrahim Al
Nooryani
Member PTCL Board
Dr. Waqar Masood Khan
Member PTCL Board
Mr. Abdulaziz Ahmed Saleh Ahmed Al Sawaleh
Member PTCL Board
Mr. Jamil Ahmed Khan
Member PTCL Board
26
Dr. Syed Ismail Shah
Member PTCL Board
Mr. Fadhil Mohamed Erhama Al Ansari
Member PTCL Board
Mr. Abdulaziz Hamad Omran Taryam
Member PTCL Board
Ms. Farah Qamar
Company Secretary PTCL
STRUCTURE OF PTCLAn Organizational Structure clarify the roles of personnel of an Organization and
to determine who has to do what task, which is responsible for what, objectives to
be achieved, who is to report to whom and to remove the obstacles for performance
caused by confusion and uncertainty of job assignment as well as to make easy
decision- making and communication networks reflecting and supporting
organization objectives.
The head of Pakistan Telecommunication Company Limited is called “President”.
Then come the SEVPs (Senior Executive Vice Presidents), i.e. SEVP (Finance),
SEVP (Operations), SEVP (Technical), and SEVP (Human Resource
Management), SEVP (Marketing & Business Development). Then there is a chain
of Executive Vice Presidents (EVPs) like EVP (Finance Central), EVP
(Marketing), EVP (HR Central), EVP (Accounts), EVP (Operation), EVP
(Information Technology, Training & Research), and EVP (Revenue).
27
All these are appointed at Pakistan Telecommunication Company, Headquarters at
G-8/4, Islamabad. Apart from these EVP, there are also EVP (Operation), EVP
(HR) etc who are heading the other regions of PTCL in major cities country wide.
Then there are Chief Engineers and General Managers at H/Qs who report to their
relevant EVP. Then there are Senior Managers, Deputy Directors, Assistant
Directors, Account Officers, Assistant Account Officers, Financial Analysts,
Marketing Managers, Computer Programmers, and IT Specialists etc. There are
also Regional Heads (General Managers) to head PTCL Regions then comes the
Senior Managers (Operations), Senior Engineers (Operations), Engineers to look
after the telecom system of Regions. There are also Senior Managers Finance,
Account Officers and Accountants to Handle Regional account and billing matters.
Manager HR & his staff are responsible to take care of Personnel affairs at
Regional Level.
28
Organizational Hierarchy Chart
29
Management ResponsibilitiesPresident
President is the Chief controller. He is responsible for the overall management of
an organization.
SEVP (I/Audit)
He is chief officer of internal audit. He is responsible of rectification of errors. He
submits his report to the president periodically showing any irregularities found in
the procedure.
G.M (Internal Audit)
He carries out instructions given by the SEVP.
Company Secretary
He maintains Minutes Register and arranges meetings of Directors or Share
Holders. General
Manager Network Switching System is master controller of all Exchanges
nationwide. He controls them through Centralized Network System. He can
remove faults through remote help system. These are directors of the board. They
make planning and decisions, establish operating policies and guide the
organizations’ interaction with its environment. These are top managers. Their
policies are implemented through front line managers. They are called S.E’s
(Senior Engineer), Senior Executive Vice President makes strategies to achieve
overall organizational goals.
CE (RRR)
Chief Executive Recruitment hires and fires the employees according to
organizational policy.
CE (HRM)
Chief Executive Human Resource Management deals employees matters i.e.
salary, leave, and disciplinary cases.
EVP (Accounts)
He deals PTCL Billing, new connections, facility charges and shifting charges of
connections etc.
EVP (Finance)
30
He controls transactions for payment i.e. Salaries, Advances, purchase/repair of
assets etc.
EVP (Revenue)
He deals overall revenue collected from exchanges and maintains its accounts.
SEVP (Technical)
He deals in installation of new exchanges, their maintenance and operation.
EVP (Development)
He arranges for the installation of new Exchanges.
MD Ufone
Managing Director is head of PTCL subsidiary Ufone.
MD Paknet
He is head of Internet section of PTCL. It is also a subsidiary of PTCL.
MD CTI
This is training institute of PTCL personnel. They offer training and refresher
courses to staff periodically.
SEVP (Admn)
He deals with the postings and transfer of staff.
SEVP (IT)
Manager information technology deals with data base management and computer
related problems.
EVP (Sales and Commercial)
This office deals with the sales of different products i.e. Calling Cards, V Wireless
Connections etc.
EVP Marketing
This officer deals with the Advertising products on all Medias (Print media,
electronic media etc.).
EVP (CC)
Customer Care office deals with the removal of customer complaints and gets
customer feedback.
STAFF ROLE OF THE HUMAN RESOURCE DEPARTMENTThe Human Resource department of the company operates in an auxiliary,
advisory, or facilitative relationship to other departments in the organization. Any
staff unit, whether it be personnel or otherwise, exists to help the line effectively. It
31
has been created in the first place to take advantage of specialized talent and
knowledge.
The H.R department of the company generally performs the following roles:
Policy Initiation and formulation
Advice
Service
Control
POLICY INITIATION AND FORMULATION
The SEVP of the H.R. Department is the individual most actively involved in
policy revision to cover recurring problem or to prevent anticipated problems.
Ordinarily these are proposed to the president of the company, and it is up on the
latter’s authority that the policy is actually issued. When proposing a new or
revised policy the personnel director must analyze problem that have occurred in
the past, survey other companies to determine how they handle similar situations,
discuss the matter with colleagues and subordinates and give due consideration to
the prevailing philosophy in the organization.
ADVICE
A major portion of the activities of those engaged in staff personnel work is in the
nature of counsel and advice to line manager. Countless examples can be given. A
shop foreman may be confronted with a grievance over distribution of overtime.
Another foreman may have the problem employee who he feels should be
disciplined or even suspended. At the time of the annual review of all salaried
personnel for possible pay increases, the operating manager plays a key role in
advising operating manager on the administration of the program. An apparent
concerted slowly down may occur in the assembly department. It may have been
instituted by the union in retaliation for the cutting of piece rates the week before.
How should production supervision handle this situation?
The H.R. Managers and their staffs are expected to be fully familiar with H.R.
policy, the labor agreement, past experience and the needs and welfare of both the
company and the employees in order to develop a sound solution. Successful
personnel specialist must be people centered. They must be feeling sensitive,
32
wants, and motives of other people. At the same time they must continually be
cognizant of their obligation to preserve the structure and functioning of the
organization. In fact, this really is the essence of H.R. management. Management
must seek to so direct and coordinate the efforts of the people that the goals of the
organization are achieved while at the same time providing need satisfactions for
the members of that organization.
SERVICE
The service responsibilities of the H.R. department are apparent when one
examines such things are as the employment, training, and benefits functions. The
tasks of recruiting, interviewing and testing job applicants are performed in the
H.R. Dept. Training programs are planned, Organized and often staffed through the
H.R. Dept. H.R. Dept must see that adequate instructional materials and facilities
are available. Once pension and insurance programs have been setup, all claims
must be through the H.R. Dept. The maintenance of adequate employee records is
a service function that permeates all functional specialties within the personnel
field.
Control
The H.R. Dept carries out important control functions. It monitors the performance
of line department and other staff departments to ensure that they conform to
established personnel policy, procedures, and practices. The control function of the
personnel department is quite comparable to the activities of a quality control
group that measures product variables to ensure conformance to engineering
specifications or to the activities of the auditing staff that inspects accounting
records to ascertain conformance with prescribed standards.
33
HR&A TASK ASSIGNMENT (EXISTING)GM (HR&A)
Overall responsibility of HR & A
SM (HR & A)-I
Security Vehicle Management Store Matters / Auctions Janitorial Service Buildings & Maintenance Management Furniture & Fixture repair & Logistics Police Matters Protocol Matters Investigations / Inquiries All Admin Reports
MHR& A-I
Vehicle Management Store Matters / Auctions Procurement & Disbursement Protocol Matters Recruitment / Interviews Training Buildings / M & R Janitorial Services Attendance and Time Management System All Admin Reports
AMHR
SAP ERP Compensation & Benefits Honoraria & Rewards FSTCs Management All HR Reports Accounts Matters, Reimbursements, Payments
SM (HR&A)-II
Staff Matters, Transfers / Postings Welfare Matters Medical Matters Leave Management Retirement & Separation Matters
34
Honoraria & Rewards FSTCs Management Union Matters (IR & ER) Legal Affairs SAP / ERP Procurement & Disbursement Accounts Matters, Reimbursement, Payments Colonies/ Residential Services Disciplinary & Appeal Cases All HR Reports
MHRA-II
HR Data Staff Mattes, Transfers / Postings Welfare Matters Medical Matters Honoraria & Rewards Retirement & Separation Matters Disciplinary & Appeal Cases All HR Reports
MT
Presently Under Training and Exposure
PTCL Subsidiary
Ufone (Pakistan Telecom Mobile Ltd) a wholly-owned subsidiary of PTCL
commenced its operations on 29th January 2001 as a GSM 900 service provider.
Since the outset, it has expanded its coverage and customer base at a rapid pace
and established itself as one of the leading cellular service providers in Pakistan.
Ufone is now considered to be one of the most active, aggressive and innovative
players in the mobile sector of Pakistan.
The growth of the cellular industry is a direct result of the successful
implementation of the telecom deregulation and cellular mobile policy by the
Ministry of IT and Telecommunications (MOIT&T) and the support, guidance and
timely enforcement of regulatory process by the Pakistan Telecommunication
Authority (PTA).
35
PrivatizationThe 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.
Key AccomplishmentsUfone has always played a pivotal role in the development of the cellular market in
Pakistan. For the most part, it has been a step ahead in introducing innovative
products to the market. Ufone was a pioneer in launching the GPRS services and
Multi-media Messaging Service (MMS) in Pakistan, and lead the way in
introducing GPRS international roaming and prepaid international roaming for
these services in the Pakistani market.
PerformanceAs mobile users in the country have reached over 28 million at a very rapid pace,
Ufone has maintained itself as the 2nd largest cellular operator in Pakistan with a
subscriber base of around 6.5 million and a market share of nearly 25%. Ufone has
seen a subscriber growth rate of over 200% in the last year, and since the start of
2005 Ufone added nearly 5 million subscribers onto its network. A remarkable
achievement indeed, especially considering the fact those two new international
players also entered into the market in 2005. Subsequently the growth in subscriber
base caused a healthy trend in revenues which have doubled.
BrandWhile keeping its tradition of being the trend setter in the industry, Ufone changed
the image of mobile phones from a luxury only affordable by the elite, to a
36
necessity affordable by the common man. Since its inception, Ufone has positioned
its brand for masses. In keeping with the upcoming competition and market
dynamics, Ufone increased its focus on the youth segment (which comprises 50%
of the population), with the Prepay brand. By designing market focused products,
Ufone’s brand team launched aggressive campaigns, which further increased the
brand equity.
The new brand image gained huge popularity amongst the targeted market. A
recent marketing survey conducted by a prominent marketing research company
showed that Ufone has considerably increased its brand visibility and image.
Ufone’s Prepay brand is now considered to be one of the most favored brands by
the youth market and is followed by other mobile operators launching their
respective brands for the youth market.
International Coverage
Ufone provides International Roaming facility with more than 150 international
operators across 79 countries. Ufone has GPRS roaming agreements with several
international operators and also provides prepaid roaming facility to selective
destinations.
Customer Service
Ufone is proud to have an efficient and friendly customer service through 21
company-owned Sales & Customer Service Centers and nearly 250 franchisees
across the country. The outlets are able to service the customers with innovative
solutions, and are empowered with Web based franchise management systems.
Ufone is poised to face the ever increasing challenges of the market and is
confident it will attract new customers. It has the ability to retain its existing
customer base with a high level of customer satisfaction via optimum network
service and a 24 hour call center facility.
Network Coverage
Ufone has always believed in a solid commitment to growth, security and
reliability. Therefore, Ufone has always balanced its expansion efforts and quality
of service. With a total current investment of $400 Million, Ufone has network
coverage in more than 260 cities and towns and across all major highways of the
37
country. Ufone has been instrumental in the growth of the cellular market in
Pakistan. It is a company committed to excellence. Under the new vision of
Etisalat and with the support and collaboration of its employees and vendors,
Ufone aspires to be the best in the market by offering customer focused products
and a quality service and sales network.
Current Situation of UfoneUfone has started Sales in all the major cities of Pakistan which include Karachi,
Lahore, Islamabad, Peshawar, Rawalpindi, Kohat, Jehlum, Quetta, Sialkot,
Faisalabad, Multan, Sukkur, Gujrat, & Gujranwala including 1500 other small
towns across the country. New Connections are available at all ufone centers and
authorized dealers forjust Rs. 50/ which includes Rs. 150/ of airtime. U-fone is in
process of starting the salesof connections in a large number of other destinations
across Pakistan. This expansion will also result in increase of Ufone coverage in
many additional cities and highways.
Total User Base of U-fone
U-fone is currently enjoying 24.53% user of Pakistan mobile industry.
Departments of PTCLFollowing are the main departments of PTCL;
Engineering & Technology
Finance
Marketing
HR
Finance Wing Structure
At this level there is one head SEVP (Finance) who controls the functions of
Finance, Accounts, and Revenue with the assistant of EVP in their respective
within the Region, Director Accounts has Senior Revenue Officers in his area of
Finance Jurisdiction on Division Level. The Senior Revenue Officer, usually the
head of Finance Division and Revenue Officers then supervised on District level.
SEVP (Finance)
EVP (Finance), (Accounts) & (Revenue)
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The Director (Finance), (Accounts) & (Revenue)
The Regional Level comprising two or three Divisions.
The Senior Revenue Officers on Division Level
The Revenue Officers on District Level
In view of the challenging scenario PTCL has to take bold steps regarding its
organizational structure in order to demonstrate that PTCL has set-up arms-length
relationships among the staff. There should be separation of Finance Wing from
the Engineering Wing. Finance Wing should give liberty to take the decision in
their favor. Management has to take the strategic decisions, the clear and
institutionalized arrangements.
Number of Employees in Finance Section
There are about 30,000 (2008-2009) employees are working in the PTCL, which
are being divided into categorically here under
Division of Employees according to their Status
Regular Daily wager Through T.F Contract *Ad-hoc
22,200 4250 2300 1250 NIL
*There is no any employee in PTCL on Ad-hoc basis. This system of recruitment
has since been changed into contract basis.
39
Finance & Accounting System of PTCL
The PTCL Finance & Accounting system is actually divided into three wings.
1- Finance
2- Accounts
3- Revenue
1) Finance
The SEVP (finance) is concerned with the makeup of the all type of financial
decisions especially in the context of acquisition, financing and management of all
assets with some goal in mind. The EVP (Finance) with the General Manager
(Finance) extend their expertise in the decision making process.
2) Accounts
Here the SEVP (Finance) is once again concerned by heading the EVP (Accounts)
and General Manager (Accounts) to deal with all Accounts Decision. In PTCL the
Finance and Accounting are so correlated but the difference between finance and
Accounting is the method of Funds Recognition and the decision making. In the
Accounting the Director Accounts in the PTCL Regions assist the higher
management.
3) Revenue
Here the SEVP (Finance) is once again concerned by heading the EVP (Revenue)
and General Manager (Revenue) to deal with all Revenue matters. One Director
Revenue within the Region assists to implement and control the inflow of Revenue
and reconcile it with the PTCL Headquarters Islamabad.
The PTCL is actually the Revenue Generation organization. PTCL collects the
Revenue from the following modes.
Revenue from products and services
Revenue from System Billing of Land Line Numbers
• Through Line Rent of Land Line Numbers
• Through National wide dialing from LLN’s (Land Line Numbers)
• International dialing from LLN’s
• Providing Value Added services to customers, Like UAN (Universal
Access Numbers), PABX (Private Auto Branch Exchanges), VPN
40
(Virtual Private Network) Bandwidth of ISP’S (Internet service
providers)
PTCL has its three subsidiaries PAKNET (leading ISP in the country), Ufone
(unique cellular phone company in Pakistan), TF (Telecom Foundation), the
leading foundation for the welfare of employees of Telecom Sector.
Accounting System of PTCL
In PTCL the rules contained in the special volume of the PTCL under which the
SEVP (Finance) is responsible for creating the procedure of Accounting matters.
Capital Receipts Side
1. Revenue From Billing System
Revenue from Usual customers
Revenue from DXX System
Revenue from DSL System
Revenue from PABX/PBX System
Revenue from Card Phone Operators
Revenue from IPOs Internet service providers
Revenue from Mobile Phone Operators
Co-location charges from various companies
2. Revenue From Other
Revenue from Overseas calls (Incoming)
Revenue from Premium PRS (0900) calls
Income from Dismantle Exchanges
Revenue from MDF used by other companies
Capital Expenditures
Installation of New Exchanges
Expenses of installation of new Exchanges are the major capital expense of PTCL
because PTCL purchases the new telephone exchanges from France, Italy,
Germany and China. A heavy cost is to be paid for purchasing process in order to
proper margin. Each exchange having different capacity and due which each
Engineer should has to be trained accordingly so expenses rises on purchasing of
new Telephone Exchanges. This is the major expense of PTCL.
41
Extension of Existing Exchanges
The extension of the existing exchanges is the dire need as the density of the
population is increasing day by day and in order to fulfill the basic communication
and fill the communication gap PTCL has to extend its normal Telephone
Exchanges in accordance with the demand and per paid connection. So PTCL
sustain heavy expenses on the extension of exchanges.
Minor Expenditures
Internal Audit and Technical Inspection
The PTCL has sustained huge amount in context of internal audit both Accounts
and Technical from various agencies. For example M/s Ferguson conduct both
internal audit and external audit and payment made to auditors in the expenses of
the company.
Administration and Control Expenses
Sometime in the best interest of company, some expenses could be occurred for
example if there is need of induction of a financial analyst in one region or if there
is need of an Engineer then transfer and posting order can be issued and traveling
and training expenses could be realized to employees.
Salaries of Staff
The monthly salary of the staff is rest with the approval of PTCL H.Q Islamabad.
PTCL is spending lot of amount on the salaries.
Printing and Stationary Charges
On printing of stationery PTCL spends reasonable amount.
Contribution in Provident Fund
There is also contribution in the provident fund from the PTCL.
42
Funding of PTCL
Mobilization of Funds
PTCL mobilized its funds with following ways.
1) Purchase the new imported infrastructure like new Exchanges etc.
PTCL mobilized its finds mostly in the purchase of new telephone
exchanges from abroad (France, Italy & China). There is also purchase
of accessories of telephone exchange generators and other equipments.
2) Capital expenditure for the organization
There are various expenses for the PTCL in the context of capital
expenditure that has already been mentioned in previous pages.
3) Purchase and acquisition of stores
PTCL store items are very important components i.e. Stationery, stand-
by Exchanges, generators, barites and other equipments. PTCL spend
lot of funds on these items.
4) Loan and advances to others, and re-investment
There are offering of Loan and advances to the employees on various
rates according to the length of services on roll. This is the main source
of mobilization of funds.
5) Payment of dividend to the stockholders
Payment made to the shareholders in the context of dividend to be paid
to the shareholders. PTCL has currently announced the divided of
Rs.32/per share.
6) Salaries of the staff all over the country
Obviously services rendered by the staff and in this way PTCL has to
pay handsome amount to their staff, those are the main source of
generating the revenue.
7) Annual Bonus to employees
PTCL pays annual Bonus of Rs. 12000/- to its employees on the Eid
occasion.
8) Security deposits, Transfer of Company’s Land & Building
43
Where PTCL does not find any building or land then security deposit
may be paid to the private landholders for the installation of PTCL
infrastructure.
9) Insurance of the Company
PTCL offers the insurance from its own side in case of death and
medically unfit of its employees.
10) Pension, graduate, and other fringe benefits
For the pension and gratuity of the retire official PTCL mobilized its
funds accordingly.
11) Supply of Furniture and Fixtures to the office buildings
This is the responsibility of the Management to be provided the
furniture and fixture to the office buildings accordingly.
12) Renovation, alteration, and rental charges of privately owned buildings
PTCL has to pay the handsome amount for renovation and alteration of
existing building and the charges of privately owned builders are being
issued accordingly.
13) Premium paid to the other telecomm companies of different countries in
the context of overseas calls and media used.
Generation of Funds
Amount Realized from System Billing
Amount Realized from defaulters
Revenue from Value-added Services
Bandwidth facilities provided to the companies
Earning from DXX, PSTN, PABX, VPN, PRI & ISD
Media used by cellular and pay-card companies and earn royalty
Earning from subsidiaries PTML, PAKNET & TF
Amount realized through co-location charges
Basic Rate Interface provided to the subscriber
International dialing customers
Corporate Billing customers, valued customers
Earning from MTR mobile Termination Rate
Earning from Incoming Overseas Calls in shape of premium from overseas
44
Allocation of Funds
Against all purchase orders issued by the PTCL H/Q’s Islamabad payment made
after allocation of Funds which further allocated by the Regional offices. The funds
usually allocate in order to manage the following:
i. Capital expenditure
ii. Purchase of infrastructure like new exchanges
iii. Launching of new Product
iv. Human resource development
v. Transportation expenses, misc expenses
vi. Domestic and overseas training of staff
vii. Bonus to the employees, house/building advances, and motor car/motor
cycle advances
viii. Worker compensation fund, benevolent fund contribution general provident
fund
ix. Maintenance of buildings, vehicles, fixed assets
x. Default situation of subsidiaries
Allocation of Funds for Marketing exploration 19% of net profit
Allocation of Funds for Research & development 18% of net profit
Allocation of Funds for Human Resources & Admn. 33% of net profit
Allocation of Funds for Corporate affairs 30% of net profit
45
Human Resource Assessment
It is the department of the PTCL which has been established in 1999 so it is still in
the development stage and there are number of activities which are yet to be
decided to take into the consideration by the Human Resource Department of
PTCL. It is established to regulate the human resource activities and to solve
number of critical activities and the problems of PTCL regarding the human
resource and their critical matters. This department has its own importance and
course of action to resolve and to foresee the future for the development of the
employee and the customers’ interests simultaneously.
A great deal of delay has been there for the establishment of Human Resource
Department. Previously recruitment of the employees was the responsibility of the
RRR Department but now it is decided that activity would be given under the
supervision of the Human Resource Department of PTCL. This is also done in the
recent years to cope with the new market condition of telecommunication industry
in Pakistan as the government had decided to privatize the PTCL. So to attract the
healthy customer, it was also necessary to make valuable arrangements so that the
company can fulfill all kind of international standards which would be then helpful
to convince the customer about the worth and the value of PTCL. Besides the
functional requirement this was another factor, which played vital role for the
establishment of the Human Resource Department.
Human Resource Department is lead by the Chief Engineer and he is responsible
for the activities carried out by the department. There are four Directors working
under the supervision of the chief engineers. Then these Directors supervise the
divisional engineers and assistant divisional engineers and so on. As it is at its
initial stages so authorities and responsibilities are still under the process of
development and precise definition of these are not finalized by the top-level
management. The hierarchy of the human resource department clarifies the
responsibilities and level of authorities between the different level of the
department and also between the persons of human resource department.
46
The general hierarchical structure is as follows: -
This is general hierarchy whereas there are four directors working under the
supervision of the chief engineer. Their classifications of the directors are through
their region like Karachi, Lahore, and central and north.
Special Tasks
There are no defined and precise responsibilities of this department as it has
already been mentioned that this department is still in the development stage.
However some special task has been assigned to the department so that its
activities can be started and the flow of activities and their harmony with other
department can be established. For this purpose numbers of activities are assigned,
out of which some were accomplished and some others are in the process of
accomplishment.
There was confusion about the exact number of PTCL employees. Exact data was
not provided to the top-level management, approximate figure was there. More
over different departments of PTCL claim different number of employees, which
they collected through their own resources.
Top level managemen t was not satisfied which such kind of information, so it
assigned the first task to the Human Resource Department. The challenge was
accepted by the department and was successfully met with in the given time
47
period. The figure of fifty five thousands three hundreds and eighty five (55,385)
was found for the regular employees and figure eight thousands (8,000) was found
out for the employees on contract basis. This figure is for the year 2002, so is the
latest figure and is accepted by the top-level management.
The organization of data base management system was also assigned to the HRM
department, which was also successfully done by the department. This helped
PTCL to gather the distributed employee data which is then helpful for the
regulation of pay system for the employees and also helpful for the regulation of
seniority system for the employees. These works are done successfully by the
HRM DEPARTMENT. There are some other responsibilities, which are still in
process of accomplishment.
The development of recruitment manager software
Restructuring of organization structure
Revising of performance appraisal process
Establishment of some new rules and regulations to cope new market
conditions
Changes in the salary structure of the employees
Changes in the medical facilities
Establishment of compatibility between the expertise and their appointment
Reduction of union influence in the company matters
Establishment of programs for the development and training of employees
Grant For Training Personnel in Information Technology by Subsidizing
International Certification Fees
In order to meet the international standards in Information Technology there was
need of certification and qualification improvement by getting training and passing
the examinations of different classifications of IT. So a grant was approved for the
said purpose. The purpose of this grant is to support the candidates in obtaining
specified and internationally recognized certification relevant to information
technology and telecommunication by either completely or partially subsidizing
the fee of examinations.
Grant for Human Resource Development and Institutional Up Gradation
48
Capacity-building in science and technology is one of most important aspects of a
viable infra structure. Unfortunately majority of institutions in Pakistan suffer from
a severe lack of human and institutional capacity to conduct any meaningful
research and development projects and to provide quality teaching in the areas of
science and engineering. There was therefore an urgent need to train manpower
and upgrade scientific institution in Pakistan. SO a grant was approved by PTCL.
This grant scheme was thus aimed to train manpower. The purpose of this grant
was fold to support the candidates in obtaining essential training and certifications.
Staff-Welfare
PTCL is providing free medical facilities (indoor / outdoor) to both its serving and
retired employees and their dependent family members from panel hospitals as
well as from 42 staff dispensaries / medical centers established in various cities.
The total number of beneficiaries is 296,850. Besides this, employees are given
merit/stipend awards and general education grants for professional and general
studies of their children.
Benevolent grants of Rs. 1 lac as special compensation is paid to the employees on
accidental death. Widows are also financially compensated out of welfare funds on
the eve of Eid. Marriage grant is paid to the employees on the marriage of their
dependent daughters as well.
Transportation facilities for the commutation of staff and school going children are
provided on nominal charges. Schools being run by Telecom Foundation (TF) are
providing quality education to the children / wards of PTCL employees at
concessional fees.
49
Part 3
Management and Administrative Styles
Management and Administrative Styles
50
Management style can best be described as somewhat bureaucratic despite the fact
that organization privatized six years ago. The organization is in a state of
transformation and changes are taking place but there is a resistance to the process
of change. The officers have an equal opportunity for development and grow,
though the pattern is not the same for all employees of the organization. People are
recruited into the company based on references, head hunting and sometimes on
merit too and with disregard to considerations of gender, race, color or creed.
Performance evaluations are conducted on the basis of the employee category.
Promotions are similarly guided by merit and the suitability of an employee to the
position for which he or she is being considered. Leadership follows the principle
of 'management by walking around', where managers are expected to make daily
rounds of all areas of responsibility, and have first-hand information of all
significant happenings.
This informal style of management may seem arbitrary, but is serious without
being intimidating and has stood the company in good stead over the years.
Working environment is quite friendly, however, Autocratic Style is being
followed i.e., Decision environment is not participative. Heads of different
departments participate to some extent in decision making but the executive level
employees don’t participate in goals setting and strategies formulation. They just
follow, what their managers ask them to do. There is an environment of “Yes
Boss” around the organization.
Impact of Management Styles on Motivation of EmployeesNo doubt, employees of management level are highly motivated to enhance the
performance of the organization and to achieve the desired goals; despite highly
centralized environment, employees at executive level are very motivated towards
achievement of the goals of the organization and to enhance the performance of the
organization. The salary package is market competitive and well placed in keeping
the executive level staff motivated and satisfied.
Impact of Management Styles on Productivity of the EmployeesEmployees at clerical level don’t exhibit high efficiency and productivity due to
lack of participative environment and intrinsic and extrinsic rewards. Executives
exhibit satisfactory productivity; they fulfill their responsibilities and duties in time
51
and posses and exhibit the morale to exceed the standards or to increase
performance levels to drive their organization forward. Also, employees at
management level exhibit high efficiency level due to their participation in goals
making and satisfactory salary packages.
Job Satisfaction of Employees
As discussed earlier, the staff at all levels at PTCL is satisfied with their packages
and jobs in general. The employee turn over is not very high, though many
engineers view PTCL as a very lucrative opportunity to start their career with.
Also, the market reputation supports their thinking and PTCL holds a great
standard for the entrants
IssuesPrivatization processes invariably involve restructuring economies in terms of
ownership, management as well as changes in the nature and direction of decisions
about investments, service delivery and market strategies etc. The nature of such
conflicts is determined by the study of a particular privatization model used and the
specific socio-economic realities in a country. It is, therefore, hard to generalize
about what kinds of outcomes can be expected through privatization, especially
when it involves a range of variables. There are some issues or conflicts that are
raised by the privatization of Telecom sector.
Right downsizing
Employee Moral
Denationalization
Service Concerns
Risks for national security
Lead toward inequalities across regions.
Right downsizing
Privatization has been followed by employee layoffs. If we see that some
privatization generates net employment as a result of expanding production or
services, employment in many privatized entities may decrease after privatization.
This is all about due to State owned enterprises often have many more employees
than needed for efficient operation of the company. Many of the employees
52
perform little or no work and/or have low productivity. This implies that either
taxpayers end up subsidizing their salaries or consumers pay for it through higher
prices. The extra amounts paid by taxpayers or consumers leaves less money in the
hands of people who might otherwise spend it in a way that promotes productive
employment.
If we see the privatization program as a whole, by injecting new investment,
introducing better management, improving competitiveness, and leaving more
money in the hands of the public, then result will likely to increased employment
opportunities. At the same time, laid-off workers are often given generous
severance packages that can be used to start business or obtain training to help
them prepare for a new job.
It is justified on the grounds that entities in the public sector generally employ
more workforce than required for efficient and profitable functioning, as people get
employment in view of political considerations. In situations when such
retrenchments involve significant numbers of employees, labor unions put up
significant resistance and hence a conflict situation arises.. Steps that can be taken
to make privatization acceptable for workers include offers of a certain number of
shares to them for free or on discounted rates.
Employee Moral
After the deregulation, an issue arise which is employee moral. It is seemed that
due to deregulation employees has threat about their jobs. When privatization was
made there are many employee layoffs, due to which it distorts the moral of the
employee, they even have no hope of their job. In this regard, PTCL takes the steps
for the moral of employees, job surety and gives the incentives, accommodation,
house rent allowance, school fee of the Childs hospital facilities etc.
Denationalization
Privatization process is opposed in certain situations on the grounds that it opens
up the door for the foreign companies to buy national assets and gradually establish
control on the national economy. In many developing countries; privatization is
referred to as “denationalization”, which is understood as a transfer of control of
national assets to foreign investors or managers. The reason why privatization is
53
considered difficult in developing countries is that their domestic markets are
generally not strong enough to buy a significant percentage of shares or assets
privatized. Opposition to privatization comes from a range of actors including
national enterprises, who are often competitors of foreign companies, as well as by
political groups and labor unions. Ownership of national assets by foreign
companies is seen as a threat to national independence.
Service Concerns
The major grievances of the users of PTCL include the following:
Low quality of service, despite the fact that the rate of digitalization of the
sector is 90%. The target fixed by PTCL is of 100% digitalization by 2003.
Long waiting lines for telephone connections, since there is an ever-
increasing demand for telephone connections, but the demand is not being
matched by the supply of services.
However, PTCL’s target for fixed line teledensity is 5.6% by the year 2003.
Low tale-density, which is only 3.2%. In 2008.
Delayed complaint redressed.
Excessive billing is one of the most important consumer concerns. Just in
the year 2000, the tariff of telephone service and other charges were raised
a number of times despite the fact that the PTCL is earning a huge profit.
Moreover, the tariff and other charges of basic telephone services are very
high despite the fact that the government has fixed the price-cap for tariff of
telecommunication services.
Arbitrary price fluctuations are rampant, which are often made without any
prior notice to the consumers.
Consumers of telephone service often complaint of dead telephones for
long periods of time. The number of total installed lines is 4.00 million,
whereas the actual number of working lines is 3.18 million.
Since PTCL has given more connections than its infrastructure can support,
the ‘call completion rate’ is poor. Many times, a number does not get dialed
even if the called number is not busy.
Delay in shifting of telephones from one place to other.
54
Non-functioning of public telephones
Unfair practices of PCO operators (licensees of telephone department).
Delay in publication of telephone directory is also a concern of the
telephone users, since it is an obligation of PTCL to publish its directory
regularly and distribute it free of cost to the people.
The directory has not been published for a number of years. Though in
1994, PTCL published a directory for telephone subscribers in Karachi, the
number of copies was limited. As a result, 36% of the consumers in
Karachi could not receive its copy. Given the increasing number of
telephone subscribers in the country, at least 2.86 million directories were
needed in 1999 alone. This number must have increased by now.
Concentration of telecom facilities in urban areas and neglect of rural areas.
Concerns of Internet like VSATs & Cable TV Users.
The role of Internet in information dissemination cannot be over-
emphasized. Therefore PTCL is relatively weak in the areas of high-speed
digital Communications and satellite-based telecoms. Though the Internet
connectivity is inexpensive as compared to expansion plans in other areas
of telecommunication services, and relatively less physical infrastructure is
involved in it, these areas are lagging far behind the other areas. It can be
accessed from the fact that in Pakistan the on line population or the Internet
users in the year 2000 were merely 0.25 million.
The consumers of these services also suffer from a number of problems.
The prices of leased lines have been about ten times higher than the
55
Part 4
Production and Operations
56
PTCL Performance in production
In a static sense, profits are not the appropriate indicator but it is the sustained
capacity of the enterprise to generate maximum profits, make productive and
efficient investments to grow over time and provide quality goods or customer
satisfactory services that are relevant. There are many cogent reasons that question
the assumption of sustained profitability of PTCL under the changed environment
of telecom sector deregulation that is sweeping Pakistan since 2003. PTCL enjoys
high profits because it earns monopoly rents as a single provider of fixed telephony
in the country. Comparison with other telecoms in developing countries shows that
it is not due to the efficiency of PTCL that it is showing good financial results and
paying dividends.
With the induction of new licensees, the teledensity of Pakistan is estimated to
double in the next two years to eight million subscribers. Public Sector monopoly
could reach only four million in 60 years. Cellular phones have already jumped
almost threefold to seven million subscribers during the last one year due to
competition among the four players and have contributed to increased tax
collection. Government would still receive all the taxes from PTCL and 65 percent
of all the dividends that hopefully will be higher under private management. State
enterprises have an inherent disadvantage that their procedures, clearances, and
lengthy approval processes do not permit the managers to make timely decisions to
respond to the business opportunities.
Ufone valuable time has been facing various inquiries into its procurement while
its competitors were successful in enhancing their market share at its cost. Such a
scenario is most likely to recur once a government owned PTCL is pitted against
several private competitors. The skill mix of the staff employed by the PTCL and
its numbers are inappropriate to meet the new challenges of providing high
standards of customer service, introduction of value added services and new
product development. This legacy of PTCL inherited from the culture of the Post
and Telegraph Department cannot be washed away and this culture will always
keep it at a competitive disadvantage.
57
It will always be difficult to get rid of the redundant labor in a public sector
company due to the political repercussions while the private sector firms face no
such constraint. The PTCL Board has been recently reconstituted and private
sector individuals of eminence have been inducted. This has improved the quality
of the oversight and monitoring. However, as they have no direct personal stakes it
cannot be expected that these part-time members engaged in their own professional
pursuits will be able to devote as much time or energies to the Board's affairs as the
private strategic investors will.
Voice and data transmission are two separate domains. Both domains served their
own functions, where voice was supposed to provide timely and reliable delivery,
while data transmission was known for its reliability element. The intrinsic
difference between the Internet and voice telephony services worldwide is that the
Internet was born out of a completely unregulated network, while the telecoms are
heavy with regulation. Internet expansion and evolution is exponential in its
timing, while the telecoms have been cautious and slow moving. However, when
in the early 90s data traffic exceeded voice traffic; the telecoms realized a new
opportunity of voice and data convergence.
Pakistan Telecommunication Company Limited (PTCL), which has shown a lack
of vision, implemented ad hoc policies and have used their monopolistic
advantage. The largest earnings of PTCL are through international calls, not from
calls made from Pakistan but from those that are made from abroad with Pakistan
as their destination. In accordance to the International Telecommunication Union
treaty that Pakistan is signatory to, there is an accounting rate system of half-circuit
charging that translates into splitting the cost and revenue from a leased line or
international call between the two or more Public Telecommunication Operators
providing network service. Thus, PTCL generated a steady flow of foreign revenue
into the country and earned more than a fair share of it, a scenario PTCL can see
changing and will do utmost to resist. However, PTCL did make very solid
infrastructural investments and while not all of these can be called rational, all of
them are proof of PTCL's financial prosperity.
58
The government has taken various initiatives to spread Internet connectivity across
the country as effectively and efficiently as possible. Apparently PTCL is
decreasing the cost of leased lines for ISPs and the charges for international leased
lines have been reduced 5 times over the last couple of years. Digital Subscriber
Lines (DSL), which increases bandwidth and enhances data-carrying capacity of
lines, is not yet operational but PTCL is looking for private sector investment in
this sector. PTCL has issued 122 licenses to Internet Service Providers and 357
licenses to cable television operators.
DSL technology without upgrading the country's backbone infrastructure will not
yield the desired results. Currently all of Pakistan data traffic transits through the
United States so while I may just be sending my neighbor an email, it will first go
and touch base at a peering point in the US and then come all the way back to his
computer, which can be avoided by installing specialized routers, networking and
related software. Similarly when it comes to supporting ISPs, out of the 122
licensed ISPs only 43 of them are operational because the leased line rates,
bandwidth, license fee, renewal charges and royalty is still too high. Also with
PTCL not allowing ISPs to use their own networks for providing internet, these
ISPs do not invest enough in their telecom infrastructure to achieve high speed
networks; as a result the end-user suffers from sub-standard and unreliable service.
Expansion of Network and services improvementThe telecom infrastructure is expanding fast in Pakistan. In order to maintain its
leading position, PTCL also embarked on an ambitious plan to expand its services
throughout the country. During the year 2005, an optical fiber Access (OFAN)
project of 145,000 lines was completed providing high capacity 10 GB and 2.5GB
metro ring in Karachi, Lahore and Islamabad. There are protected rings and are
critical for providing media to newly establish high capacity transit exchange of
PTCL in eight cities and also for other operators including cellular companies. Call
processors at 15 exchanges were replaced with a new version and speed increased
in 21 exchanges. During last year 160 new stations were brought on National Wide
Dialing (NWD) thereby increasing the number of NWD stations to 2,252.
Moreover additional optical fiber cable laid in rural areas and 107 new towns were
brought on to the Optical Network to enhance the voice and data communication
59
capabilities. The company would now be capitalization on its strength of the fiber
backbone network which extends to over 700 cities for provision of increased
bandwidth and broadband services.
To modernize its local loop network and accelerate the expansion process, PTCL
obtained the licensed and spectrum of the provision of WLL services in 14
operating regions of the Company. Frequency Spectrum worth over RS.4 billion
was purchased in an open auction for provision of the widespread coverage in the
rural as well as urban areas.
The platform will also used to providing high speed data and numerous other value
added services like SMS, MMS, call forwarding, ring back tone close user groups
etc.
The board of Director of the company approved new capital project worth over RS.
34 billions mainly to expand the network of the company by an additional 3
million WLL lines camp airing of 2.5 million WLL lines along with the handset
mentioned above, and another 0.5 million lines through OFAN expansion. The
company also initiated certain other large capital expenditure project to provide the
media requirements of the fast expanding infrastructure needs of cellular
companies. The management is committed to fully utilize the opportunities arising
from OFAN expansion capacity and WLL roll out thereby accelerating its
customer acquisition drive to enhance its customer base and revenue.
Introduction of two Next Generation Networks (NGN) soft switches Islamabad and
Karachi along with 20 Media gateways in other cities speaks of PTC’s
commitment to serve its customer with leading edge technology. As Telex and
Tele Graph services became obsolete following the adoption of fax, e-mail and
internet Technologies, they ceased during the year. To augment network reliability,
the company has invested in preventive Maintenance programs relating to Outside
Plant (OSP) of identified cabinet areas and Multi- Story building.
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Conclusion PTCL Privatization provide for a public welfare model driven by market forces.
These rules change the role of Governments from public service provider to a
regulator.
On the basis of this study the following conclusions can be drawn:
In Pakistan the PTCL Privatization has proven beneficial to the economy
and positive effect on customers
PTCL performance is also improved, investment increased, quality of
service also improved but customer are not satisfied about network
accessibility and growth of PTCL services in rural areas. Employment also
increased but working condition and skill level of employees is not
satisfactory
Share Holders are satisfied from the PTCL and receiving the dividend
timely. The value of PTCL share also increased and number of share
holders after privatization
New and better technology is being transferred in the country
The emergence of new players in telecom sectors has facilitated the
economy. It has positive impact on business transactions as well as the
daily life of a common man. The increased competition among service
providers has benefited the consumer as they have a wide array of telecom
service choices available at affordable prices
For residents of the remote areas these facilities largely remain inaccessible
for various reasons. There is a need to develop a mechanism for incentive
and motivation to be offered to the private sector to be able to address the
issues of digital divide
Liberalization of telecom has boosted the economic activity and has
generated numerous employment opportunities
The result of PTCL Privatization is very encouraging for policy makers of
Pakistan. It is expected that this experience will be replicated in other
sectors of the economy but before that a strong institution framework has to
be formulated to manage market dynamics and trade challenges for long
term sustainability of economic growth resulting from liberalization,
privatization and deregulation
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It is also beneficial for the government. The management control is
transferred to the private investor for the proper utilization of resources and
earns huge revenue.
The foreign telecom companies realized huge market potential in the
country and thus invested not only in paying high license fee but also
invested in the infrastructure.
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.
Part 5
Company Marketing Mix
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PRODUCT LINE OF PTCL
Fixed LineThe PTCL phone line now gives customers convenient features and options like
Caller-ID, Call Forwarding, Call Waiting, Conference Calling, Call Barring and
Do not Disturb to name a few. Now anyone can buy his own phone and enable
features similar to cellular services on landline too. Super Sunday and Zero Line
rent are very attractive promotions now a day for landline customer.
The new pricing packages now give customers choices to suit their talking habits.
Besides the standard per minute charges, PTCL subscriber now have many choices
with flat calling rates for local, nationwide and international calling for added
convenience in their phone conversations.
Unique Features of PSTN
PTCL Landline offers customized packages and call rates according to
customer needs.
PTCL land line offers the most economical call rates
PTCL Landline provides unmatched voice clarity
PTCL Landline has the largest network spread across the country
New OfferingSuper Sunday
PTCL has introduced a new promotion of Unlimited On-Net Calls on Sundays
effective May 01, 2011 for a period of two months. All PTCL landline Customers
are now able to make unlimited calls from
their PTCL Landlines on PTCL Network
(Landline and Vfone) for 24hrs on
Sundays. As per the promotion PTCL
landline telephones line rent is increased
from existing Rs. 174 per month to Rs. 199
per month (excluding tax) and this increase
will be compensated by free on-net calls to all PTCL landline numbers on
Sundays.
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This new calling incentive has been introduced to encourage the landline usage
among residential customers and to keep them connected to their loved ones
without worrying about the charges. With this new initiative PTCL intends to
address the needs of our valued and budget conscious customers in the most
effective and affordable way possible.
Details of offer
Line rent: Rs 199
Free minutes : Unlimited On net calls (PSTN to PSTN and PSTN to Vfone
numbers) on Sundays
Target Market
All PTCL existing and potential Landline Customers
Zero Line Rent
After the successful launch of Regional and Local call packages in rural and semi-
urban areas of Pakistan, Capped minutes
were tested through special NTC packages
in Lahore, Karachi and Sukkur. The
customer feedback has hinted towards a
latent demand for capped on-net packages
especially in current economic condition
where people want to budget their expenses.
Basic Budget (For Low end Users)
Package charges: of Rs. 249 per month
Free minutes: 200 On-Net minutes
Line rent: Zero
Package type: Opt In
Budget Plus (For Low to Medium Users)
Package charges: of Rs. 399 per month
Free minutes: 400 On-Net minutes
Family Budget (For Medium to High Users)
Package charges: of Rs. 699 per month
Free minutes: 750 On-Net minutes
Business Budget (For Business / Commercial users)
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Package charges: of Rs. 1,999 per month
Free minutes: 3,000 On-Net minutes
Value Added Services
Call Forwarding
A customer with this facility may forward his calls to another predefined desired
number.
Immediate Transfer
A customer with this facility may transfer his calls to another predefined desired
number. A change in dial tone will be observed.
Call Transfer on Busy
In case the customer number is busy, an incoming call will be transferred
automatically to another predefined specified number.
Call Transfer on No Reply
In case there is no reply, the call will be transferred automatically to another
predefined desired number.
Call Waiting
During a conversation, a customer can hear a beep indicating that another call is
coming. The new incoming call can be attend by tapping which will put the
present call on hold.
Code Barring
Customers can prevent misuse of their telephone with the help of a code barring
facility. This can be changed by the customer if the need arises.
Do not disturb
Activating this facility will stop all incoming calls for a pre determined time slot.
This will allow customers to be in peace if he does not want to be disturbed during
such time. The caller will get a pre-recorded message.
Abbreviated Dialing
Dial a short number (single digit) to get desired number. A maximum of 10 such
numbers can be registered. The facility can be activated through a written
application to the concerned DE Phones along with copy of NIC. The customers
can activate or deactivate the facility from their own telephone sets.
Absent Customer
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A customer with this facility may inform the calling person about his non
availability at the. This calling person will get an announcement or a special tone.
The facility can be availed through a written application to the concerned DE
Phones along with copy of NIC. The customers can activate or deactivate the
facility from their own telephone sets.
Wake up
Ringing of a Customers telephone is initiated automatically at the fixed time. In
case Customer does not answer the ring at the first offering, subsequent rings will
follow after five minutes. For Activation *55*hrs mints# and for Deactivation dial
*55*
BroadbandPTCL Broadband is the largest and the fastest
growing Broadband service in Pakistan. Since its
launch on 19th May 2007, PTCL has acquired
432,821 Broadband customers in over 414 cities
and towns across Pakistan, leading the proliferation and awareness of Broadband
services across Pakistan. Experience the Internet at its fastest with high-speed
access from Broadband Pakistan, simultaneously, enjoy Voice service over the
same telephone line without any extra cabling connections! Broadband Pakistan
offers DSL service with unmatched reliability, affordability and connectivity.
Again like other options from PTCL, you have option of many plans to meet your
bandwidth and download needs and you can choose the packages of your choice
between 1Mbpsto 50Mbps.
Offering
There is also student package which is just Rs 879 per month. Mostly students
have this package. Besides student package, there are more packages as follow:
1Mbps at Rs 1,199
2Mbps at Rs 1,499
4Mbps at Rs 1,999
6Mbps at Rs 4,999
8Mbps at Rs 6,999
10Mbps at Rs 9,999
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20Mbps at Rs 14,999
50Mbps at Rs 20,000
PTCL Smart TV PTCL SMART TV Using its state of the art Broadband network, PTCL entered the
media sector on 14th August 2008, by launching a digital interactive television
service for the first time in Pakistan. Employing the IPTV (Internet Protocol TV)
technology, PTCL brought Pakistan in the list of a few countries across the globe,
which offers this state of the art interactive TV service to its subscribers.
EVO Wireless Broadband PTCL EVO is Pakistan’s fastest 3G Wireless Broadband internet which offers its
customers “superior 3G internet experience”. With flexibility to roam freely like
never before, in 106 cities Nationwide, Evo Wireless Broadband is enabling the
wireless broadband revolution in Pakistan in its true
sense. So whether you are going on a field trip,
business trip or a family reunion – downloading a
song, an image rich presentation or the latest episode
of your favorite TV show – with PTCL EVO, we let you spend less time waiting
and more time working and visiting your favorite web sites, anywhere anytime you
want. Just plug and play or work at home, in the office or anywhere in between
with the unsurpassed & amazing speed of up to 3.1Mbps, backed by the country’s
largest Wireless service provider; experience the evolution of broadband revolution
at its best.
Key Features
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Superior 3G experience.
Broadband Internet in your pocket.
Plug & Play - Instant Connectivity.
Fastest growing *Coverage in more than 50 cities.
Average download speeds from 300 kbps to 500 kbps!
Instant Prepaid Recharge through V-fone-scratch cards.
EVO Prepaid Packages
USB Device Rs. 3,999
Evo Volume Based Packages
Evo Time Based Packages
EVO 3G NitroIntroducing Evo 3G Nitro in Pakistan; ―The World’s first & most cutting edge
EV-DO Rev.B commercial network. PTCL is the first operator in the world to
commercially launch EV-DO Rev.B products which offer blazing fast speeds of up
to 9.3 MBPS.
EVO 3G Nitro is all set to meet the next-generation’s need for ultimate speed &
superior performance. It is the next step in Evolution of the Wireless Broadband
Revolution.
Whether it is streaming High Definition video or music, conducting a video
conference while simultaneously browsing the Internet or uploading multimedia
content, in the Nitro Universe everything happens at the speed of light.
EVO 3G NITRO Packages
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USB Device Charges: Rs.3, 999
Nitro Device Charges 3999
Nitro Unlimited 2999 per month
EVO Wifi CloudMake the world your hotspot with Pakistan’s smartest Wi-Fi device. Evo Wi-Fi
Cloud allows you to stay connected to the people, places and information that are
important to you and the best part; you can even share your connection with others.
Introducing yet another first of its kind in Pakistan; EVO Wifi cloud is a mobile
hotspot that intelligently converts your home/work space into a personalized wifi
zone and is sure to revolutionize the way internet is used in the country.
Features of EVO Wi-Fi Cloud
Simple One touch high speed internet connectivity.
Connects up to 5 Wi-Fi enabled devices simultaneously to blazing fast 3G
speeds.
Plug & Play—Instant Connectivity
Compact portable device that fits in the pocket.
Secure password protected connection to ensure optimal connection
security.
Internet connectivity at speeds of up to 3.1Mbps.
Currently available in Islamabad/RWP, Lahore & Karachi
Nationwide roaming on Rev A Network (up to 3.1Mbps) in 106 cities
across the country.
EVO TabletPTCL has introduced this above pictured 7 inch tablet device as August 14th
Dhamaka to celebrate the Independence Day. PTCL’s 3G Evo Tab boasts built-in
EVO service to offer wireless broadband internet on the go.
After the launch of Ufone Futura (which offered GSM voice and EVO
Broadband), one such high-end device was very much expected. And here we have
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a mid-range touch screen, Android Froyo powered device at a price tag of Rs.
27,999 (three months of free unlimited internet included).
With EVO coverage in more than 100 cities, PTCL definitely had a chance to
come up with a CDMA compatible Smartphone or tablet. They can win handsome
number of subscribers before 3G could practically hit the market in 2012 or
beyond.With this EVO tab, PTCL is now part of smart phone competition that was
earlier geared by cellular companies only. Probably a good solution for those who
require high speed internet while on the go. Though PTCL isn’t disclosing the
original manufacturer of this tablet; their helpline said they don’t have any words
on the make or model – but we are pretty certain (thanks to a reader’s comment
below) that it’s Indonesia made IVIO Twilight 7 device or it’s little variant maybe
that is tailored specifically for PTCL. Ivio is a brand owned by an Indonesian
company PT. Intersys. They develop mobile devices like modems, handsets, and at
least 1 Android tablet. Following is the device image being displayed on IVIO
official page, which looks pretty similar to PTCL’s EVO Tab.
It merits mentioning here that PTCL’s EVO Tab supports GSM network as well,
meaning that, you can use cellular SIM for voice calls too. Having a bluetooth
earphone will be added advantage – or you can use speakerphone for voice calls.
P.S. We are not sure if PTCL allows you to use cellular SIM or not.
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Specifications
Size & Weight
Size: 199*114*12mm
Weight: 429g
Display
7” screen
WVGA LCD 800X480 resolution
Capacitive touch screen
Multi-Touch
Memory
512 MB (RAM) & 512 MB (ROM)
Micro Slot up to 32 GB
Cellular & Wireless
Support EVDO/CDMA 1X 1900Mhz,
GSM/GPRS/ EDGE/UMTS Quad-band: 850/900/1800/1900/ UMTS
2100Mhz
Dual Mode: EVDO or UMTS
Processor
Qualcomm MSM7627T (Turbo) 800Mhz
Operating System
Android Froyo OS Smartphone 2.2
Sensors
G-Sensor
Light Sensor
Wi-Fi
Bluetooth EDR 2.1
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Camera
5 Megapixel rear Auto Focus,
VGA Secondary front Camera
Input/output
USB Port
Ear phone port
TF card slot
SD card Slots
Battery
3500 mAh internal Battery
7hours usage
140hours standby time
In the Box
3G Evo Tab
Stereo Earphones with Mic
Micro USB Cable
USB Power Adapter
Free Sleeve Pouch
Documentation
Warranty Card
Warranty
PTCL Evo Tab comes with 1 Year after sales & service warranty. Please refer to
limited warranty statement on Warranty Card placed inside the box for complete
terms & conditions.
Price and EVO Tariff
As a part of launch offering, PTCL is selling EVO Tab with 3, 6 or 12 month
contract for EVO unlimited package at following rates:
EVO Tab + 3 Months Unlimited EVO = Rs. 27,999
EVO Tab + 6 Months Unlimited EVO = Rs. 29,999
EVO Tab + 12 Months Unlimited EVO = Rs. 31,999
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After the launch offer, usual 3G EVO pricing would be as following:
Evo Tab Unlimited (Unlimited data volume): Rs. 2,000
Evo Tab 5 GB (5GB Data Volume): Rs. 1,500
Evo Tab 2 GB (2 GB Data Volume): Rs. 1,000
V-fone Fixed Wireless Access Network Using CDMA2000 1X
technology, PTCL already has built-up capacity of 2.6M
covering over 10,000 urban, suburban and rural villages. The
network is already enabled for voice, dialup-internet access
(153.6kbps & 256 kbps).
Value Added Services
CLI
Identify your caller with the caller line identification free of cost. Name/Number
shall be displayed on your V PTCL wireless phone screen.
SMS
enjoy the facility of Free SMS to any Ufone, Mobilink, V PTCL wireless phone
and PTCL landline.
Wireless Internet
You can use PTCL V wireless phone to connect to the internet and enjoy a world
of information and entertainment at rate as low as Rs.5/per hour (2000 hr to
0800hr).
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Call Waiting
Customer during conversation can hear a beep indicating that another call is
coming. The new incoming call can be attended by putting the present call on hold.
Call Transfer
A customer with this facility can transfer his/her calls to another predefined desired
number. Calls can be transferred immediately, on Busy tone or on No Reply.
Phone Book
Save all your important numbers with ease. A phone book that keeps you in touch
with your friends and family.
Missed Call Alert
Calls on No Reply are forwarded to Miss-call-notification-system, which sends a
short message (Missed Call Alert) to the subscriber. Caller is informed through an
announcement of No Reply and Short Message being sent to the subscriber.
PTCL V-fone (WLL) Payphone
The promotional scheme consists of free air time in the shape of WLL prepaid card
amounting to Rs. 500 per set on bulk purchase of 50 or more WLL Payphone sets
during the promo months Dc07 to present.
Pricing
The price of a payphone set is Rs. 3,600/- with Rs. 1,000 free balance.
The retailers have 58%+ margin on the cost of a V card.
There is no line rent.
Best tariff package to call any network.
Features
Different denomination of cards as per usage (Rs. 100, Rs. 300 , Rs. 500
and Rs. 1,000)
Easy availability of scratch cards (same PTCL V-cards) from open market.
Wide Area Network coverage, quality service, best speech quality, and
reliability.
In small towns/villages community activists can start their business for
supplemental income.
There are lot more services which PTCL offers to individuals and corporate
customers.
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SERVICES OF PTCL
Pakistan Telecommunication Company Limited not only Provides Conventional
telephone facilities, it also offers optical fiber services to the private sector. We
will briefly discuss below the product lines being offered by the PTCL. Basically
PTCL divide their services into two parts.
Services for consumers Services for corporate customers
Services for Consumers
These services are basically for the common users (Individual/home users) those
use telephone in their home/work place and they are basically non business users.
a) New Telephone Connections
As mentioned earlier, PTCL is presently the only telecom company, who provided
fixed-line telephony in the country. So whenever, any Private business concern or
any individual needs a new telephone connection for provision of telephone
service.
b) Value Added Services
CLI (Caller’s Line Identification)
Caller Line Identification (CLI): Calling line Identification (CLI) allow customers
to identify the caller before picking up the phone receiver. To subscribe to CLI
services, a customer needs a telephone set with display capability or a CLI device
attached to the phone.
Advantages
Check on obnoxious calls.
Complete record of incoming / outgoing calls with time & date.
User Friendly
PREPAID CALLING CARDS
PTCL calling card is the most popular choice of millions of customers all over the
country. It is now available with balance transfer facility and follow on call
facility.
Comes in easily affordable denominations of Rs. 100, 250, 500, 1000 and
2000.
Easily available throughout the country
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Easy to use from any PTCL digital phone (Dial 1010)
Fast and easy, nationwide and international access
No line rent and no Phone bills
24 hours customer services through toll free number (0800-80800)
How to use it?
Scratch off the security coating on the indicated strip to get your card
Pin Number.
Dial PTCL’s toll free number 1010 from any digital phone.
Dial 1 for Urdu & 2 for English Instructions; enter your card Number &
Press #.
For International Call Dial 00+CountryCode+CityCode+PhoneNumber+#.
E-BILL PAYMENT
Billing system is a part of customer services so providing connivance to its
valuable customers PTCL launched a new billing service which is available
through “ PTCL Calling Card” This is another service from PTCL. This service is
basically providing billing solutions for the users.
How to use it?
The basic concept of the service is to provide billing solution to PTCL customer.
The same PTCL Calling cards are used for this purpose.
Through these cards customer can pay his bill on phone. No additional charges for
bill payment transaction.
Advantages
Customer can save his time by paying his bill on phone
Customer can pay his bill whenever he wants
DIGITAL FACILITIES
PTCL offers a variety of features to digital exchange customers like:-
Hotline
Abbreviated Dialing.
Call Waiting
Don’t Disturb
Call Transfer on (a) Busy (b) No Reply (c) Immediate
Wake up call
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Absent Subscriber
Code Barring
Prepayment Telephony Services (PPT)
With the changing trends most telecoms are diversifying their services towards
Prepaid solutions .one of such modern era telecommunication service is
Prepayment
Tele Phone (PPT).It provides the facility to subscriber to load a prepayment
Telephony card against their telephone number thereby generating an account on
I/N platform and any call made from that telephone will be charged to this account.
The service will provide state of art technological facilities to the subscribers.
Features
Account number recharging
Outgoing call pin setting
Cancel out going call pin
Balance query
Follow on call
Low balance prompt
Balance shortage warning
SERVICES FOR CORPORATE CUSTOMERSPTCL is striving hard to facilitate its valued corporate customers at each level of
service. PTCL offers a host of unmatched services to suit the needs of the
Corporate Customers. The list of Corporate Services is given as under. For more
information regarding any of the following services, PTCL Corporate Customer
Centers can be contacted.
Universal Access Number (UAN)
UAN (Universal Access Number) service is ideal for organizations Engaged in
marketing of products or services. Here is a list of business that can avail UAN
Service.
Banks Insurance Newspapers Credit Card Companies Airlines Travel
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Hotels Courier Services Shipping Lines Utility Services Fast Food Outlets Trading Companies Consumer Products Companies Stock Brokers
Voice Messaging Service (VMS)
With PTCL Messaging Service, you can have all for (or Desired) calls
recorded when you are absent, busy on phone or do not want to attend the
calls for any reason. You can, later on at your convenience, retrieve all
recorded messages from any telephone anywhere in the country.
Security of message is ensured against eavesdropping through subscriber
controlled password.
PTCL VMS is designed for those who do not want to miss a call or Fax
because that can be beneficial.
Great for anyone owning a telephone or Fax, at home or business.
Much more powerful and flexible than answering machine due to
Features
Call answer
Fax
Messaging
Notification
Capacity 10 messages
Free for user paying RS. 2000/- or more bill/month.
PTCL Messaging Plus
PTCL MESSAGINH PLUS is designed for small and medium business
enterprises having problems with managing telephone message.
PTCL MESSAGING PLUS will definitely handle these problems for you.
Advanced messaging features save time, make you truly mobile and
increase productivity.
Essential for time-conscious executives, frequent travelers and Professional
group.
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Virtual Private Network (VPN)
Communication is the secret of success in today’s highly competitive market.
When it comes to enabling your enterprise, your communication got to be instant,
fast and hassle free. The answer to this corporate need is virtual private net work.
Digital Cross Connect (DXX)
Telecommunication networks are the most important infrastructure elements of any
business today. As the businesses increasingly depend on it, quality of networks is
gaining strategic importance. PTCL offers flexible and reliable data services
solutions through a high quality platform of digital leased line network. PTCL
digital cross connect (DXX) network provides the most dependable media for
WAN connectivity with more than 200 nodes country wide.
Features
End to end digital connectivity on digital cross connect network
Country wide as well as global coverage
Flexible bandwidth to suit the requirement
Better quality of services
Target market
Corporate customer
Software exporters
Data network operators
Airlines/travel agencies
ISP’s
Financial institutes
Courier services
BRIEF INTRODUCTION OF SUBSIDIARIES
UFONELaunched on January 29, 2001, Ufone is
growing cellular operator in Pakistan. Ufone
services are offered to you by Pak Telecom
mobile Ltd., which is a 100% owned
independent subsidiary of Pakistan Telecommunications Corporation Ltd. U-fone
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has been a highly successful venture both in terms of subscriber uptake and
coverage. With fastest expanding coverage, unmatched product leadership, and
consistent focus on customers, Ufone has emerged to be the most prominent player
& has 2nd largest customer base in the market in the short span of its operations.
Current Situation of Ufone
Ufone has started Sales in all the major cities of Pakistan which include Karachi,
Lahore, Islamabad, Peshawar, Rawalpindi, Kohat, Jehlum, Quetta, Sialkot,
Faisalabad, Multan, Sakkhar, Gujrat, & Gujranwala including 1500 other small
towns across the country. New Connections are available at all ufone centers and
authorized dealers for just Rs. 50/ which includes Rs. 150/ of airtime. U-fone is in
process of starting the sales of connections in a large number of other destinations
across Pakistan. This expansion will also result in increase of Ufone coverage in
many additional cities and highways.
Main Features
Both postpaid and prepaid Ufone subscribers can enjoy any/ all Ufone services
including MMS, Ufone Internet, Global SMS, and Pocket Stocks etc. In order to
use any of the GPRS based services just call 333 and activate your GPRS
subscription.
Multi Media & Broad Band (Phone n Net)
Formerly Paknet Limited a fully owned Subsidiary of Pakistan Telecommunication
Company Limited (PTCL) is now merged in PTCL as Multimedia & Broad Band
Region. It was formed in March 1999 and started commercial operation in January
2000. It is now the biggest Internet Service Provider of the Country. Besides
Internet this region also provides data communication services like Clear Channel
data links, Frame Relay and Digital Circuits on Optical fiber cross connect systems
etc. PTCL was running its Internet Division through its region by the name of
Public Data Network (PDN).
On December 1999 the PDN region was dissolved and all the assets and
Liabilities were transferred to Paknet Limited. Paknet made a fresh start with an
Internet customer base of 6000 as of January 2000 and successfully achieved the
target of its first year business plan of 50,000 Internet customers. Now it became
Multi Media & Broad Band Region which currently has a custome r base of more
than 130,218 (Mar 31, 2008).The Company commenced its business in January
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2000 with a balance sheet size of over US $ 7.0 million. Currently it has a revenue
base of approximately US $ 5.0 million per annum and is most likely to double in
the next fiscal year keeping in view the market demand of Data products and
expansion plans of the PTCL. In near future PTCL is introducing a new IPTV
service for its valued customers.
Competitor strategy
There is a hard core competition among the cellular service providers in Pakistan.
PTCL is market leader in its competitive position while Worlcall, Wateen is
market challenger to PTCL. While Go CDMA and link Dot Net is also strong
competitor.
PTCL has following direct competitors in different product line
In Broadband DSL wired and wireless
Wateen Wimax
Wi-Tribe
Link Dot Net
Wordcall wireless
Qubee
In Wireless phone
Worlcall
Go CDMA
Wateen
Wateen telecom
Wateen Telecom Ltd embarks on
providing leading international voice
retail and wholesale communication
services to its esteemed customers
through its ability to seamlessly connect and enable smarter, faster, cost-effective
and flexible solutions. Wateen continues to build on the heritage of its parent
company - The Abu Dhabi Group. We believe in leadership through people. Our
technology and service-delivery strengths stems from our valued employees who
have joined Wateen from all over the world to earn customer trust and loyalty with
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a continuing commitment to the deployment of innovative products and services,
reliable, high-quality service and excellent customer care.
WorldCall Telecom
WorldCall Telecom Limited (WTL), an Oman
Telecommunications Company (Omantel), is the
most reliable and unique telecom and multimedia
service provider in Pakistan. WorldCall launched its
business in June 1996 with payphone operations.
Amid fundamental shifts in technology and industry, innovation and dedication led
us to growth in diversified businesses with a range of services designed to serve
the needs of the local market. From Cable Broadband to Wireless Broadband, from
Cable TV to Video on Demand, from LDI services and fiber optic network to
wireless local loop telephony, WTL has crossed a number of milestones. WTL
offers an array of services under three major service categories i.e. Data,
Entertainment andVoice.WorldCall Telecom Limited became an associate
company of Omantel after acquisition of major share holding by Omantel in 2008.
Today, WorldCall Telecom has become synonymous with innovation, dedication,
and reliability in Pakistan.
Link dot Net
Established in 1992, InTouch Communications was the
first ISP in Egypt. It grew to become an industry leader
and one of the largest in the country in terms of volume.
Link Egypt was set up to provide turnkey Internet
services and solutions. Formed in 1995, the company
quickly held and maintained an enviable track record, and displayed strong
leadership qualities. This irresistible combination made Link Egypt one of the
fastest growing companies in its sector.
In June 2000, the two joined forces to become LINKdotNET. Overnight, the
company became a dominant new force in the marketplace. LINKdotNET enjoys
the backing and considerable technical and financial resources of Orascom
Telecom Holding Company. Orascom Telecom is the largest integrated
telecommunications services provider in the region, serving twenty markets
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throughout the Middle East and Africa. LINKdotNET is now the largest Internet
Solutions Provider in the Region with regional offices in Dubai, UAE; Riyadh,
KSA; Qatar; Algeria; and Islamabad, Pakistan
GO CDMA
GOCDMA is revolutionary concept where life revolves around a single goal: to
bring people closer. At TeleCard, we believe communication is the expression of
life and we work endlessly to make it possible. We aim to strengthen our ties and
create a world where distance has no meaning. TeleCard began its journey from a
convenience-driven concept of the country’s first ever payphone operation. Over
the years, through a synergy of a dedicated team, cutting edge technologies and
uncompromised values, it has become an important part of every other Pakistani
individual’s life.
They started with heavy campaign and low call rates and gain market share from
GO CDMA. PTCL use attacking strategy for Go CDMA and became the market
leader.
Marketing Department
Marketing Department is called a revenue-generating department of an
organization. Marketing Department undertakes market research and gives
feedback to management about customers needs and wants on the basis of which,
products and services are developed and positioned to give value to the customers.
Thus Marketing department of an organization plays a pivotal role in its business
development, growth & expansion. During my internship I worked with PTCL
marketing department. For understanding the work flow and the operation of the
department we have to move in certain manner, we have to look the key operation
the structure of the department and in the end the focus will be on the critical
analysis.
So we will move in the pattern describe below:-
Marketing strategy of PTCL
Market segmentation of PTCL
Marketing mix of PTCL
Promotional strategy of PTC
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MARKETING STRATEGYA marketing strategy is the marketing logic by which the company hopes to
achieve its marketing objectives. It consists of specific strategies for target
markets, positioning the marketing mix and marketing expenditure levels. For
understanding the marketing department work flow and its function we must have
clear picture of the PTCL’s marketing strategy. Marketing has been all about the
“four P’s”: Product, Place, Price and Promotion. The marketer identifies a target
market, defines the product and Pricing to appeal to this market and a strategy to
deliver the product to the market. Thus the marketer is the steward of the value
proposition, ensuring that the firm is delivering maximum value to its customers.
TARGET MARKET
PTCL’s 80% revenue comes from just 20% customers, who are corporate
customers and other big and small business organizations. The main focus of
PTCL marketing efforts is on retaining and satisfying that 20% chunk of key
customers at any cost. For this purpose, PTCL is now established Corporate
Customer Services Centers in major cities to take care of these vital customers.
Apart from these important customers, PTCL targets general public and other
small business companies for sale of its landline telecom services like telephone,
fax, Internet, as well as other services like CLI, VMS, and Digital Facilities etc.
Market SegmentationBasically PTCL segmented its market on two bases
To better implement customer services features, segment the market on a customer basis:
o Corporate
o Resident ional
On the basis of services as:
o Telephony
o Data
o Video
PTCL has segmented its market for its services and products to effectively deal
with its customers. Some of its services like Universal Access Number, Co-
Location centers and virtual private network are specially targeted at corporate
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customers and business concerns. The other services like new telephone
connections, digital services etc. are meant for mass market. The services like
Internet, fax facility etc. are targeted at both the corporate and general customers.
POSITIONING STRATEGYAs PTCL is the sole provider of the landline telecom services in the country; it is
the market leader in providing these services because there are no competitors to
challenge its market leader status. Thus presently PTCL is facing no problems in
positioning its services in the market as a market leader because it enjoys
monopoly in the industry. However, with the deregulation of telecom sector PTCL
is gearing up itself to maintain this market leader position, on the other hand
competitors are doing to challenge it.
MARKETING MIX OF PTCLAs we are well aware that marketing mix consists of 4 Ps that is Product, Price,
Place, and Promotion. In modern area marketing not confined only to the selling of
products and services. Today it become an art how to recognized your customer,
how to reach your customer, what are their needs and what services you are
offering at what price. PTCL has a monopoly and enjoying a corporate image in
Pakistan due to its wide range of services at comparably at low prices in the remote
areas by using different techniques of promotion
PRODUCT
PRICE
PLACE
PROMOTION
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MARKETING MIX
PRODUC PRICE
Channels CoverageAssortmentsLocationsInventoryTransportOSSs
Product varietyQualityDesignFeaturesBrand namePackagingSizes ServicesWarrantiesReturns
PRODUCTPTCL is offering multiple services to its customers in almost all the cities of
Pakistan. The differential point as compare to others is that it covers almost all the
needs and wants at very low prices so we can say that company is attracting both
quality conscious and cost conscious at the same time. Some of the distinguished
services offered by P TCL are as under
IN Based Value Added Service
Internet facility
0800 80800 Toll Free
Customer services center
Basic Services (PSTN Lines)
Package of seven special services
Digital communication all around the world
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PTCL Calling Cards Domestic & International
Premium Rate (0900) & Virtual Private Network Service.
Voice
Data & Video
Voice Messaging Service (VMS)
Value Added Service
Collocation Facilities
Digital Subscriber Loop (DSL).
Universal Access Number (UAN).
Voice Mail & Messaging Services.
Calling Line Identification (CLI) service.
Digital features like Call Waiting, Call Transfer etc.
Universal Internet Number (UIN) - for ISP's Licensed only).
Integrated Services Digital Network ISDN-PRI, ISDN-Tele Plus.
Local/Domestic/International Leased bandwidth and point to point leased
lines.
PRICEPrice is a main factor in Pakistan while getting a product or service. PTCL has an
edge on its competitors like Worldcall, Wateen, Link dot Net and all the other
companies which are offering Internet facilities and communication facilities.
PTCL is basically a service organization. Its aim is customer satisfaction not to
only earn the profit. The call charges are set which are assessable by the customers.
At the same time the connection charges are also very low e.g., connection charges
of fixed telephone line is only Rs. 600 in urban and rural areas. Customer can take
telephone connection only providing a photo copy of NIC and filing an application
form. This form is available free of cost from customer services centers and Online
using Internet. This facility is post paid with International dialing, Besides PTCL
no company is available in Pakistan who provides the land line phone and without
submitting any security in monitoring terms. PTCL consider the different factors
while setting the price of their products, like economic power of the customers,
competitor pricing strategy, customer value etc.
Pricing Strategy
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There are many ways to price a product.
Premium Pricing
Use a high price where there is uniqueness about the product or service. This
approach is used where a substantial competitive advantage exists.
Penetration Pricing
The price charged for products and services is set artificially low in order to gain
market share. Once this is achieved, the price is increased.
Economy Pricing
This is a no frills low price. The cost of marketing and manufacture are kept at a
minimum. Supermarkets often have economy brands for soups, spaghetti, etc.
Price Skimming
Charge a high price because you have a substantial competitive advantage.
However, the advantage is not sustainable. The high price tends to attract new
competitors into the market, and the price inevitably falls due to increased supply.
Manufacturers of digital watches used a skimming approach in the 1970s. Once
other manufacturers were tempted into the market and the watches were produced
at a lower unit cost, other marketing strategies and pricing approaches are
implemented.
Premium pricing, penetration pricing, economy pricing, and price skimming are
the four main pricing policies/strategies. They form the bases for the exercise.
However there are other important approaches to pricing.
Value Pricing
This approach is used where external factors such as recession or increased
competition force companies to provide 'value' products and services to retain
sales.
In Case of PTCL
Pricing strategy changed according to the market situation. It may be increased or
decreased. World Call Telecom has provided country wide free call on his own
network. In countering V Wireless has offered 1200/- free balance to retain and
attract new customers. This is a short term method as against world call strategy.
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PSTN
For PSTN or landline PTCL is using “ECONOMY” strategy which means PTCL is
getting average revenue per user. As PSTN is now on maturity stage so the focus is
on retaining customers.
EVO
EVO is a newly lounged brand by PTCL. As it has no other competitor in market
so PTCL is using “Skimming strategy” by which they are getting high no. of
customers with high revenue.
Vfone
For the pricing of Vfone and SmartTV PTCL is using “Market Penetration”
strategy through which the have added two new ways to penetrate its market.
Smart TV
For SmartTV “Market Penetration” strategy is being used. Purpose is to get
maximum market share.
Broad Band
“Skimming” and “Value added” strategies are being used for broadband for
maximum revenues and high market share.
PLACEPTCL covers every nock and corner of the country. PTCL has its offices
approximately in every city of Pakistan. PTCL has also its customer’s services
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center throughout the country to provide better facilities to the customers known as
One Stop Shops.
Customers can reach PTCL by visiting one of its One Stop Shops (OSS) or
Customer Service Centers (CSC). Offering one window operation, these One Stop
Shops and Customer Service Centers are strategically located to ease the reach of
PTCL’s valued customers. PTCL’s courteous and friendly staff is trained to handle
customers from varying backgrounds and different walks of lives.Equipped with
the latest products and services the OSS/CSCs have been designed to facilitate
customers and provide all the convenience under one roof. The following services
are available at One Stop Shops:
Order Booking(Telephone, Broadband, Smart TV)
Sales (Wireless Local Loop and EVo Wireless Broadband)
Billing Service
Information Service
Recent plane is to concentrate in rural areas more properly because
telecommunication services are as much beneficial in rural areas as in the urban
areas. Where Land Line is not feasible PTCL has launch V-fone facility with the
same land line tariff.
PROMOTIONDifferent techniques are being used for the promotion program. It is clear that
PTCL has a monopoly in the telecommunication services in Pakistan and no other
organization is providing this facility on that much large scale. However
management of PTCL is trying to fulfill customer needs in a better way and trying
to overcome the need of increasing customers. Different media’s are use to
promote its services such as Television, Radio, Newspapers and Brochures for
promotion and for achieving organization objectives.
Different packages and special services are also providing for promotion such as:
Pakistan Package
Zero Line Rent
EVO CPSP, ICAP, ITD package
Free V-fone Bonus Balance package.
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Local Call Package.
Double up of broadband packages
EVO Nitro promotional Package
Nitro New Sales Promo
“Pay 3 months line Rent in advance and get your Nitro USB Absolutely FREE”
Objective
To communicate new sales promotion on Nitro whereby any new Nitro customer
making advance payment of 3 months line rent shall be eligible for a Free Nitro
Device.
Key Objectives of this promotion
To encourage new sales by providing free Device incentive to the
customers.
Limited time promotion shall generate additional demand by encouraging
potential customers for product trials.
Create awareness for potential users about the core product benefits.
Highlight the product USP i.e. Download Speed of up to 9.3Mbps& uplink
of up to 5.4Mbps.
Nationwide Roaming facility, providing Rev B speeds in Islamabad,
Rawalpindi, Lahore & Karachi with Backward compatibility & seamless
roaming on Rev A Network (up to 3.1Mbps) in 106 cities across the
country.
DIRECT MARKETINGMass marketers have typically sought to reach millions of buyers with a single
product and standard message delivered through the mass media.
In contrast, direct marketing consists of direct communications with carefully
targeted individual consumers to obtain an immediate response. Thus, direct
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marketers communicate directly with customers, often on a one to one, interactive
basis.
The benefits customers in many ways, consumers report that home shopping is fun
convenient, and hassles free it saves timer and introduces them to a larger selection
of merchandise. They can do comparative shopping by browsing through mail
catalogs and online shopping services, then order products for themselves or
others. Industrial customer can learn about available products and services without
waiting for and tying up timer with salespeople.
FORMS OF DIRECT MARKETING
Face to Face Selling
Direct Mail Marketing (Fax mail, E-mail, Voice mail)
Catalog Marketing (Direct marketing through catalogs that are mailed to
select list of customers or made available in stores)
Telemarketing (using the telephone to sell directly to consumers
Direct Response Television Marketing (Direct marketing via television,
including direct response television advertising and home shopping
channels)
Kiosk Marketing
ONLINE MARKETING AND ELECTRONIC COMMERCE
Online marketing is conducted through interactive online computer systems, which
link consumers with sellers electronically; a modem connects the consumer’s
computer “Web machine” with various services through telephone lines. There are
two types of online marketing channels
Commercial Online Services
Internet
PTCL has made his web database. A person can apply online for taking services
provided by the company.
Advertising
PTCL has a strong advertising strategy. They use different strategies for different
products according to products lifecycle stage. At the maturity stage PTCL used
different advertising channels to promote the product and to maintain the sale
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level. He uses news paper, bill boards, back boards for franchiser, banners, TV,
magazines etc.
Sales promotion
PTCL offers different sales promotion schemes like “Get free balance” Buy V-fone
at Rs 3600/ and get Free Balance of Rs 1000. At the purchase of EVO 3G, after the
recharge of one month the next month is absolutely free to all new customers.
Personal selling
Some franchisers built their own personal selling team who went door to door or
instead of purchasing product or service from CSC or OSS or from franchiser.
Sales team also introduced the new features and use of the product to the target and
potential subscribers. PTCL have not his own sales team but in near feature the
company intends to prepare his own sales force. At present company is using
franchisers sales force to enhance the sales, commonly known as indirect sales.
DISTRIBUTIONDistribution includes warehousing, distribution channels, distribution coverage,
retail site locations, sales territories, inventory levels and location, transportation
carriers wholesaling, and retailing. Most producers today do not sell their goods
directly to consumers. Various marketing entities act as intermediaries; the bear a
variety of names such as wholesalers, retailers, brokers, facilitators, agents,
middlemen, vendors, or simply distributors
Companies must decide on the best way to store, handle, and move their products
and services so that they are available to customers in the right assortments, at the
right time, and in the right place. A poor distribution system can destroy an
otherwise good marketing effort Here we consider the nature and importance of
marketing logistics, goals of the logistics system, major logistics functions and the
need for integrated logistics management.
To cope with the EVO customers and dealers demand and to cover the whole
country Pakistan Telecommunication Company limited established three main
warehouses in Lahore, Karachi and Islamabad. Company Sale/Distribute these sets
through following channels.
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PTCL Head Quarter (Warehouses)PTCL CSC/OSSExchanges
Customer
PTCL Head Quarter (Warehouses)Franchise Sub Dealers Customers
Direct Sales
PTCL has establishes the in house sale centers to provide the product to the
customer in their nearest Customer services centers in different cities.
Indirect Sales
PTCL has also deliver her product through franchisers/dealers and sub dealers. The
aim is only to create the easy access for the customers. For this purpose PTCL pay
order to the nearest store according to the regional demand and sent it to the
franchiser through courier service or through vehicles.
Physical Distribution (marketing logistics)
The tasks involved in planning implementing, and controlling the physical flow of
materials, final goods, and related information from points of origin to points of
consumption to meet customer requirements at profit.
Distribution of EVO through Direct Sales Point
PTCL increases its distribution channel. In start PTCL directly sales his product
through his own Customer services center (CSC) or OSS. When he feels that their
product is not reaching to their customer well in time. He starts to sale the product
through indirect channel e.g. through franchise or sub dealers.
Distribution of EVO through Indirect Sales Point
PTCL has also sale his product through authorized franchisers. According to the
survey, only a small percentage of the total sale is done through direct channel and
remaining sales is done through franchiser and retailers.
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PROMOTIONAL STRATEGY
Above the line advertising is including newspaper T.V at big level and below the
line advertising at low level like local cable banners, sign boards.
Several types of promotions are used extensively by PTCL. All the promotional
tools are used in service industry. Advertising and sales promotion has been used
extensively in service fields. Public relation and publicity also play important role.
PUSH STRATEGY
To achieve the sales targets, PTCL uses push strategy. In this strategy PTCL gives
extra bonuses and discounts on purchasing of prescribed quantity. By using this
strategy PTCL meets its sales targets and can generate more revenue in a short
period of time.
In this strategy the benefits are given to the dealers and sales teams.
PULL STRATEGY
PTCL also using pull strategy, it directs its marketing activities toward final
consumers to encourage them to buy the product. Promotion is directed to end-
user. The intention is to motivate the dealers to prescribe the company’s products
to their users. It increases the demand of products. When demand increases, all
channels give more orders to distributors and in the same way distributors will
further give orders to PTCL.
Effective steps taken by PTCL for promotion
PTCL uses different media for promotion
Print Media Newspapers Electronic Media Local cables TVC Radio Internet Brochures Bill Boards
SWOT Analysis
A SWOT (Strengths, Weaknesses, Opportunities, and Threats) is a tool used to
provide a general or detailed snapshot of a company's health. SWOT analysis is a
tool for auditing an organization and its environment. It is the first stage of
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planning and helps marketers to focus on key issues. SWOT stands for Strengths,
Weaknesses, Opportunities and Threats. By identifying the organization's
strengths, weaknesses, opportunities and threats, managers can formulate strategies
in such a way so that the strengths and opportunities can be utilized and internal
weaknesses and environmental threats can be minimized. To fulfill its mission,
PTCL should capitalize on its key strengths, overcome or alleviate its major
weaknesses, avoid significant threats, and take advantage of the most promising
opportunities.
Why use a SWOT Analysis?In any business, it is imperative that the business be its own worst critic. A SWOT
analysis forces an objective analysis of a company's position and the marketplace.
Simultaneously, an effective SWOT analysis will help determine in which areas a
company is succeeding, allowing it to allocate resources in such a way as to
maintain any dominant positions it may have.
Strength Experience in the Field of Telecommunication
Unlimited download on all packages on broadband.
Most Experience Staff of Telecommunication sector
PTCL is enjoying the monopoly in the landline and DSL
Largest Pre-Established operational network and infrastructure
Maximum use of telephone cable for different brands i.e. Voice, video, files
etc.
The company is run by a body of highly professionals who have dedicated,
in depth knowledge and experience in the fields of Engineering, Accounts
and Administration.
The PTCL enjoys a strong financial position, which is the biggest source of
confidence for existing and prospective potential investors and lenders.
IPTV is only IP TV provided by the PTCL. No competitors still in this
market.
Competitors still depend on PTCL network either directly or indirectly
Wired and Wireless Services provided at one stand.
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All the competitors of PTCL are using PTCL services like UAN, Toll Free
etc.
PTCL (Ufone) is market challenger in GSM segment.
Largest operational network and infrastructure within ICT (Information &
Communication Technologies) segment.
Market leadership in Local loop, Wireless local loop (WLL) and Fixed
telephony.
SMW-4 Submarine Cable System
SMW-4 is a relatively new submarine cable system (inaugurated in
December 2005) and links 14 countries with 16 landing stations across
Europe, Middle East and Asia. The system is using Terabit DWDM
technology to achieve. The link between any two destinations is STM-1.
SMW-4 is designed for relatively higher traffic volumes.
Experienced Telecom Resources as oldest telecom provider in the Pakistan
Weakness Very Strong labor union.
Old version of bios setup of the modems
System not upgraded as no. of users increases.
Noise in Telephone Line is very common problem.
Poor Response from PTCL exchange to install the service
Infrastructure is needed to be upgrade in most area of Pakistan
Technical staff who is sitting in Complain office doesn’t know anything
about Broadband and IPTV problems.
Variation in the speed of broadband create problem in working
The Process of getting product is time consuming
Over employment and low productivity
No action taken early against customer complaints
Internal organizational and business processes issues
Signal problem in EVO Wireless USB even in Model and Johar Town
Lahore.
Not been able to nurture its growth around customer services oriented
strategy.
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Paknet, the internet service provider arm of PTCL continues to incur losses
due to poor management and lack of network optimization
Monopolistic culture has further added to its complexities
Slow decision making including external interferences
Corporate culture akin to government departments
Opportunities Opportunity to introduce High Value Added Products / High margin
products for the new, more aware consumer.
Scope for efficient/cost effective operations
Low tele-density of Pakistan
Maximum coverage in Pakistan
Have vast infrastructure and real estate assets which can be leveraged
further
Externally the company can become an important medium for
globalization of the society by bringing different nations together. In This
Company has a major role to play
Global connectivity reliability has been improved. PTCL is expanding the
long distance and infrastructure side through spreading out two sea-me-we
submarine cables
Partnership with new entrants is a deregulated environment
Huge target market is ready to come on PTCL platform as no one is
providing unlimited downloading at this price
Threats Exposure to market competition
Migration to Cellular Networks from PSTN
Reduction in International Settlement Rates
Ability to Attract & Retain Quality Professionals
Wi-Max signal problem during environmental effect
Mostly roads construction damages the main wires of PTCL
Increased competition in long distance continues to exert pressure
VOIP use is increasing despite ambiguous and discriminatory policies
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PTCL has enjoyed long Monopoly and is now likely to be faced with tough
competition from various service providers.
Concluding Remarks on SWOT AnalysisTo maintain its monopoly in Land Line services PTCL has to improve its services
including customer care and low fault duration. As it has experienced telecom
resources to have them is not a big deal but to retain them should be its mission.
there is no care of network from the last two years the reason behind that is the
issue of privatization, every one is not clear about the policies and future of the
company and there is no concentration on network improvement no material is
available in the store for maintenance purpose. In order to compensate the line
fault ratio a proper system of WLL V wireless promotion can be adopted which
can nullifies the issues of line faults. There is burden of staff in offices in the
context of supporting staff and those staff which has become obsolete after
technological changes (replacement of manual exchanges with digital exchanges)
which has reduced the need of staff at that level as in manual system. Employee’s
Union Involvement is still high which the main cause of slow decision-making is.
However it has been take over by a private company but still there attitude and
behavior is like government officials. Company is not focusing on proper
advertising of the products and services even some time company owns employee
don’t know about the new feature and services offered by the company then how
customer will come to know about it. Company should try to gain its customer
confidence back by offering timely response to complaints secondly company
should enhance its product line. After the takeover of Etisalat, management is
trying to implement an ERP system which will be very helpful in coming future for
decision-making and analysis. Not only the capacity but also the quality of network
should be enhanced for proper market share.
After the deregulation policy there are huge chances of partnership with other
private companies and it also leads to true market competition. The country’s
economy at macro level is expanding and future of services providing companies is
very bright. Today is the era of IT and IT without telecom is impossible. There is
enough potential in cellular services, LDI, LL and WLL, company can invest in
such kind of activities for revenue growth. IPTV rollout can change the game, if
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done right it will tilt the odds in PTCL’s favor. It will make sticky bundles possible
(tv+pohne+internet) with say a single bill for convenience. After privatization it
has become a global company the major benefit to the employees are that they can
move to any subsidiary of that holding company in other countries. Three main
projects of Triple play, Ofan and wimax are in pipe line which will be launched
very soon and it will be very helpful for the company to get a competitive edge.
now that time has been passed when company connections were selling with out
any advertisement due to his monopoly now the time is going to change very
quickly there are a lot of emerging telecom companies with a big mission to get a
big market share like Mobilink and Wateen Telecom is spreading its own optical
fiber cable throughout the country that will reduce there dependency on
PTCL .People are quickly switching to cellular companies due to their low call
rates it’s a big threat for PTCL in addition there quality professionals are also
searching place in that companies due to high salary package and benefits. Rising
sale of mobile operators due to low call rates is very big shock for its revenue. Due
to increased competition in long distance and local loop company is unable to
sustain its current market share, companies using Voip technology can provide low
call rates then PTCL. Paknet is suffering from loss from many years it should be
merged with PTCL to improve its management that is the main reason of loss.
The centralized structure and management style should be modified with new
company culture environment to improve overall company position; double
standard policy for employees should be eliminated. Currently company launched
VSS for its current employees which effects will be cleared in near future at
present employees are not cleared that what management will do with them in case
they don’t accept this VSS what will be their future in company.
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Part 6
COMPANY FINANCE SYSTEM
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Ratio Analysis
Ratios simply mean a number expressed in terms of another. A ratio is a statistical
yardstick by mean of which relationship between two or various figures can be
compared or measured. Thus Ratio Analysis shows the relationship between
accounting data. Ratio can be found out by dividing on number by another number.
Ratio analysis is an important and age old technique of financial analysis.
Following are some of the advantages of ratio analysis.
AdvantagesIt simplifies the comprehension of financial statements.
Ratios tell the whole story of changes in the financial condition of the
business
It provides data for inter-firm comparison. Makes inter-firm comparison
possible
Ratio analysis also makes possible comparison of the performance of
different divisions of the firm. The ratios are helpful in deciding about their
efficiency or otherwise in the past and likely performance in the future.
Ratios highlight the factors associated with successful and unsuccessful
firm. They also reveal strong firms and weak firms, over-valued under-
valued firms.
It helps in planning and forecasting. Ratios can assist management, in its
function of forecasting, planning, co-ordination, control and
communications.
Types of Ratios AnalysisLet us now have a detailed analysis of all the following four ratios for PTCL and
industry.
1. Profitability Ratios
2. Liquidity Ratios
3. Leverage Ratios
4. Activity Ratios
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Liquidity Ratios
Current Ratio:
Current ratio is equal to current assets divided by current liabilities.
Current Ratio = Current Assets
Current liabilities
= 45450236
30192778
= 1.51
Comparison on Yearly Basis:
Interpretation:
Current ratio is a general and quick measured of liquidity of firm. It represents the
margin of safety or cushion available to the auditor. It is the index of the firm’s
financial stability. It is also an index of the financial solvency and index of strength
of working capital. The current ratio of the firm is ranging between the figures of
1.5 to 2 which shows that company is maintaining the strong liquidity position.
The ratio is quite stable as compared to the industry.
Graphical view:
2010 2009 2008
0
0.5
1
1.5
2
2.5
PTCLIndustry
104
Year PTCL Industry
2010 1.51 1.2
2009 1.65 1.1
2008 1.61 2.3
Acid Test (Quick) Ratio:
Acid Test (Quick) ratio is equal to Current assets fewer inventories divided by
current liabilities. It gives more liquid amount of assets to cover your liabilities.
Quick Ratio = Current assets – Inventories
Current liabilities
= 45450236 - 4075863
30192778
= 1.37
Comparison on Yearly Basis:
Interpretation:
The quick ratio is a very useful measuring of the liquidity position of the firm. It
means the firm’s ability to pay its short-term obligations or current liabilities
immediately and is a more rigorous test of liquidity than the current ratio.
The quick ratio should be1:1, but here it is greater than 1, which depicts the strong
liquidity of the company. Here again the company ratio is stable relative to the
industry that is a good sign for the company.
Graphical view:
2010 2009 2008
0
0.5
1
1.5
2
2.5
PtclIndustry
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Year PTCL Industry
2010 1.37 1.15
2009 1.63 1.0
2008 1.60 2.1
Leverage Ratios
Debt Equity Ratio:
Debt equity ratio is equal to long term debts divided by stockholder’s equity.
Debt Equity ratio = Long Term Debts
Stockholder’s equity
= 20816238
99758711
= 0.21
Comparison on Yearly Basis:
Interpretation:
This ratio indicates the proprietor’s claims of owners and outsiders against the
firm’s assets. The purpose is to get an idea of the cushion available to outsiders and
the liquidity of the firm. Debt Equity ratio increment is a negative point to
management that the more of their business is financed by debts this will increase
their financial charges or interest expense and firm’s liquidity and hence
decreasing the company’s profit. The lower the ratio the higher the firm’s
financing that is provided by the shareholders and larger the creditors cushion
(margin of protection) in the extent of shrinkage of assets values or outright loss.
Here the ratio is according to the industry average so the management has to
maintain and improve this situation.
Graphical view:
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2010 2009 20080
0.05
0.1
0.15
0.2
0.25
PTCLIndustry
Year PTCL Industry
2010 0.21 0.20
2009 0.17 0.18
2008 0.18 0.20
Debt to Capitalization Ratio:
Debt to capitalization ratio is equal to total long term debts divided by total
capitalization.
Total capitalization= Total long term debts + Shareholder’s Equity
Debt to Capitalization Ratio = Long Term Debts
Long Term Debts + Shareholder’s Equity
= 20816238
20816238+99758711
= 0.17
Comparison on Yearly Basis:
Interpretation:
It can be defined as how much sufficient our assets are in retrieving the total debts.
The debt ratio of the company has remained stable almost over the last three years
as shown clearly by the above calculations. It is an acceptable situation for the
company.
Graphical view:
2010 2009 2008
0.135
0.14
0.145
0.15
0.155
0.16
0.165
0.17
PTCLIndustry
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Year PTCL Industry
2010 0.17 0.15
2009 0.15 0.15
2008 0.15 0.17
Long Term Debt to Total Asset Ratio:
Debt ratio is equal to total liabilities divided by total assets.
Long Term Debt to Total Asset Ratio = Total Long Term Debts
Total Assets
= 20816238
150767727
= 0.14
Comparison on Yearly Basis:
Interpretation:
It can be defined as how much sufficient our assets are in retrieving the total debts.
The debt ratio of the company has remained stable almost over the last three years
as shown clearly by the above calculations. The ratio shows that the management
is efficiently using the assets. It is an acceptable situation for the company.
Graphical view:
2010 2009 2008
0
0.02
0.04
0.06
0.08
0.1
0.12
0.14
0.16
0.18
PTCLIndustry
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Year PTCL Industry
2010 0.14 0.16
2009 0.12 0.15
2008 0.11 0.17
Times Interest Earned (Coverage Ratio):
It briefs that how many times the firm has earned the interest or how many times
the firm has user its earnings before interest and taxes to cover the interest expense.
Times Interest Earned = Profit before Interest and Taxes
Interest expense
= 14684358
403240
= 36.42
Comparison on Yearly Basis:
Interpretation:
Investors should not own a stock that has an interest coverage ratio under 1.5. An
interest coverage ratio below 1.0 indicates the business is having difficulties
generating the cash necessary to pay its interest obligations. As the ratio is below
1.5 and also from industry average so the company should review its strategies
regarding debt.
Graphical view:
2010 2009 200805
10152025303540
PTCLIndustry
109
Year PTCL Industry
2010 36.42 18.24
2009 16.43 16.58
2008 14.23 12.56
Activity Ratios
Inventory Turnover Ratio:
Inventory Turnover Ratio is equal to Cost of Goods Sold divided by Closing
Inventory.
Inventory Turnover ratio = Cost of Goods Sold
Closing Inventory
Inventory Turnover Ratio = 55,345,017
470,673
= 118 times
Comparison on Yearly Basis:
Interpretation:
It means how many times stock in trade can be sold in a year. If the ratio is too
high the chance of stock out arises. Much higher ratio also indicates low stock.
Here the ratios are acceptable because the demand of communication devices is
always higher. PTCL purchases in bulk and utilize equipments quickly due to high
demand.
Graphical view:
2010 2009 20080
0.51
1.52
2.53
3.54
4.5
PTCLIndustry
110
Year PTCL Industry
2010 11.8 14
2009 26.7 19
2008 18.0 13
Total Asset Turnover Ratio:
Total asset turnover ratio measures that how much sales are generated through the
total assets of the organization.
Total Asset Turnover Ratio = Sales
Total assets
= 57174527
150767727
= 0.38
Comparison on Yearly Basis:
Interpretation
It shows that firms must manage its total assets efficiently and should generate
maximum sales through their proper utilization. As the ratio, increases there are
more revenue generated per rupee of total investment in asset. The firm ability to
produce a large volume of sales on a small total asset based is an important part of
the firms overall performance in terms of profits. It is stable but below the industry
average so it is not a good sign for the company.
Graphical view:
2010 2009 20080
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
PTCLIndustry
111
Year PTCL Industry
2010 0.38 0.67
2009 0.43 0.69
2008 0.49 0.74
Profitability Ratios
Gross Profit Margin:
Gross profit margin is equal to the ratio of gross profit to sales.
Gross Profit Margin = Gross Profit
Sales
= 18915816
57174527
= 33.1%
Comparison on Yearly Basis:
Interpretation:
Gross profit margin or gross profit ratio is the ratio of gross profit to net sales
expressed as percentage. It is very good in the industry and favorable for the firm.
Graphical view:
2010 2009 20080
5
10
15
20
25
30
35
40
45
PTCLIndustry
112
Year PTCL Industry
2010 33.1% 27%
2009 40% 26%
2008 44% 14%
Net Profit Margin:
Net Profit Margin is equal to net profit divided by sales.
Net Profit Margin = Net Profit
Sales
= 9294152
57174527
= 16.26%
Comparison on Yearly Basis:
Interpretation:
This used to show the overall profitability and hence it useful to the proprietors.
Higher ratio is better for the organization .It shows the firm’s ability to turn each
rupee of sale into profit. Due to VSS the company suffered losses in 2007 and
2008, but this loss was temporary, so the company should continue its operation
normally.
Graphical view:
2010 2009 20080
2
4
6
8
10
12
14
16
18
PTCLIndustry
113
Year PTCL Industry
2010 16.26% 7.2
2009 11.8% 5.4%
2008 2.2% 7%
Market Ratios
Earnings per share:
This ratio shows that how much amount per share does a common stock holder
attains.
Earnings per share = Earnings Available for Common Stock Holders
No. Of Common Stock Shares
= 9294152
5100000
= 1.82
Comparison on Yearly Basis:
Interpretation:
This ratio shows the worth of the share. As we can see that the worth of the shares
is increasing in current year that is a good sign.
Graphical view:
2010 2009 20080
0.20.40.60.8
11.21.41.61.8
2
PTCLIndustry
114
Year PTCL Industry
2010 1.82 1.45
2009 1.79 1.11
2008 1.2 1.93
Dividend per Share:
It is the amount calculated by dividing amount of dividend by number of shares
outstanding.
Dividend per Share = Dividend paid
No. of Shares outstanding
= 8925000
5100000
= 1.75
Comparison on Yearly Basis:
Interpretation:
This ratio shows the amount of dividend paid over each share. As we can see that
the amount of dividend on shares is above the industry average so it is an
acceptable situation.
Graphical view:
2010 2009 20080
0.20.40.60.8
11.21.41.61.8
PTCLIndustry
115
Year PTCL Industry
2010 1.75 0.38
2009 1.5 0.32
2008 0 0.30
Dividend payout ratio:
Dividend payout ratio = DPS
EPS
= 1.75
1.82
= 96.15%
Comparison on Yearly Basis:
Interpretation
The payout ratio provides an idea of how well earnings support the dividend
payments. More mature companies tend to have a higher payout ratio. The ratio
indicates poor position of the company.
Graphical view:
2010 2009 20080
102030405060708090
100
PTCLIndustry
116
Year PTCL Industry
2010 96.15% 80%
2009 83.60% 78%
2008 0 40%
Horizontal & Vertical Analysis
PTCL’s Common size Balance Sheet
Common size (%)
Non Current Assets 2009 20010
Property, Plant 0.67 0.61
Capital WIP 0.064 0.062
Finance Lease Assets 0.000005 -
Intangible assets 0.02 0.018
Long term Investments 0.00057 0.0005
Long term loans 0.0021 0.0015
Total Non Current Assets 0.76 0.69
Current Assets
Stores, Spares 0.027 0.023
Stock in trade 0.001 0.11
Trade Debts 0.066 0.05
Loans and Advances 0.006 0.0045
Accrued interest 0.0018 0.0037
Recoverable from tax authorities 0.0076 0.005
Taxation–net - 0.00027
Other receivables 0.020 0.0085
Receivable from Govt. 0.011 0.097
Short term investments 0.055 0.098
Cash and bank 0.044 0.098
Total Current Assets 0.24 0.30
Total Assets 1.00 1.00
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PTCL’s Common size Balance Sheet
Common size (%)
Liability + Equity 2009 2010
Equity 0.24 0.24
Revenue Reserves 0.27 0.025
Non Current Liabilities
Long term loans 0.048 0.04
Payable to PTA against license fee 0.01 0.0007
Deferred taxation 0.023 0.03
Employees’ retirement benefits 0.076 0.066
Deferred Government grants 0.0005 0.005
Long term security deposits 0.075 0.0069
Long term liabilities 0.135 0.06
Current liabilities
Trade and payables 0.13 0.15
Interest and mark–up accrued 0.0012 0.0013
Current portion of
Long term loans 0.0067 0.00047
Liabilities against assets subject to finance lease
0.0001 -
Payable to PTA against license fee 0.0001 0.009
Long term liabilities - 0.090
Unearned income - 0.0064
Taxation – net 0.0003 -
Dividend payable - 0.035
Total Liability + Equity 100 100
118
PTCL’s Common size Profit and Loss AccountCommon size (%)
2009 2010
Revenue 1 1
Cost of services -0.05 0.6
Gross profit (G.P) 0.45 0.40
Administrative and general expenses -0.15 0.145
Selling and marketing expenses -0.071 0.084
Operating profit 0.22 0.17
Voluntary separation scheme -2.61 0.0001
Other operating income 0.04 0.056
Finance cost -0.03 0.048
Share of profit / (loss) from an associate -0.0004 0.000003
Profit / (loss) before tax -0.027 0.180
Taxation
Group 0.005 0.062
Associate 0.0001 0.000003
Profit/(loss) after tax -0.022 0.12
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PTCL’s Indexed Balance Sheet Common size (%)
Non Current Assets 2009 2010
Property, Plant 100 1.042255
Capital WIP 100 1.098411
Finance Lease Assets 100 -
Intangible assets 100 1.029428
Long term Investments 100 0.995882
Long term loans 100 0.841585
Total Non Current Assets 100 1.046078
Current Assets
Stores, Spares 100 0.952344
Stock in trade 100 123
Trade Debts 100 0.862407
Loans and Advances 100 0.826068
Accrued interest 100 2.316621
Recoverable from tax authorities 100 0.737997
Taxation–net - -
Other receivables 100 0.485079
Receivable from Govt. 100 1
Short term investments 100 2.031808
Cash and bank 100 2.534263
Total Current Assets 100 1.447175
Total Assets 100 1.142686
120
PTCL’s Indexed Balance Sheet Common size (%)
Liability + Equity 2009 2010
Equity 100 1
Revenue Reserves 100 1.125
Non Current Liabilities
Long term loans 100 0.95
Payable to PTA against license fee 100 0.67
Deferred taxation 100 1.83
Employees’ retirement benefits 100 0.966
Deferred Government grants 100 0.905
Long term security deposits 100 1.169
Long term liabilities 100 0.56
Current liabilities
Trade and payables 100 1.15
Interest and mark–up accrued 100 1.23
Current portion of
Long term loans 100 0.08
Liabilities against assets subject to finance lease
100 -
Payable to PTA against license fee 100 77.9
Long term liabilities - -
Unearned income - -
Taxation – net 100 -
Dividend payable - -
Total Liability + Equity 100 1.14
121
PTCL’s Indexed Profit & Loss AccountCommon size (%)
2009 2010
Revenue 100 1.011536
Cost of services 100 1.089812
Gross profit (G.P) 100 0.914294
Administrative and general expenses 100 0.965797
Selling and marketing expenses 100 1.195017
Operating profit 100 0.789031
Voluntary separation scheme 100 -0.003848
Other operating income 100 1.404174
Finance cost 100 1.680889
Share of profit / (loss) from an associate 100 -0.00767
Profit / (loss) before tax 100 -6.68824
Taxation
Group 100 -12.4223
Associate 100 1.651961
Profit/(loss) after tax 100 -5.36796
FUNDING OF PTCL
MOBILIZATION OF FUNDS
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PTCL mobilized its funds with following ways.
Purchase the new imported infrastructure like new Exchanges etc
PTCL mobilized its finds mostly in the purchase of new telephone
exchanges from abroad (France, Italy & China). There is also purchase of
accessories of telephone exchange generators and other equipments.
Capital expenditure for the organization
There are various expenses for the PTCL in the context of capital expenditure that
has already been mentioned in previous pages.
Purchase and acquisition of stores.
PTCL store items are very important components i.e Stationery, stand-by
Exchanges, generators, barites and other equipments. PTCL spend lot of
funds on these items.
Loan and advances to others, and re-investment.
There are offering of Loan and advances to the employees on various rates
according to the length of services on roll. This is the main source of
mobilization of funds.
Payment of dividend to the stockholders
Payment made to the shareholders in the context of dividend to be paid to
the shareholders. PTCL has currently announced the divided of Rs.32/per
share.
Salaries of the staff all over the country.
Obviously services rendered by the staff and in this way PTCL has to pay
handsome amount to their staff, those are the main source of generating the
revenue.
Annual Bonus to employees.
PTCL pays annual Bonus of Rs. 12000/- to its employees on the Eid
occasion.
Security deposits, Transfer of Company’s Land & Building.
Where PTCL does not find any building or land then security deposit may
be paid to the private landholders for the installation of PTCL
infrastructure.
Insurance of the Company
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PTCL offers the insurance from its own side in case of death and medically
unfit of its employees.
Pension, graduate, and other fringe benefits
For the pension and gratuity of the retire official PTCL mobilized its funds
accordingly.
Supply of Furniture and Fixtures to the office buildings.
This is the responsibility of the Management to be provided the furniture
and fixture to the office buildings accordingly.
Renovation, alteration, and rental charges of privately owned buildings.
PTCL has to pay the handsome amount for renovation and alteration of
existing building and the charges of privately owned builders are being
issued accordingly.
SOURCES OF FUNDS OF PTCL
Cash generated from operations
In this context we can say that PTCL usual earning lot much more depends upon
the usual earning from Telephone number and payments of the bill thereof, this is
the primary source of funds of PTCL.
Security deposits
Various pay card companies like Dancom, World call, Pearl Tel, Soft tech, and
deposited huge amount as the securing deposit in the books of PTCL for the media
that is being used by these companies. PTCL is utilizing these security deposits.
Return on deposits
After payment the dividend to the share holders and having paid the income tax on
the profit the surplus amount is being used in the deposits of various national and
multinational banks from where ROD is received accordingly.
Dividend Income
PTCL some time itself purchases the share from the open market and earn the
dividend income thereof. It is also possibly that PTCL if applicable may detain the
shares of different other companies and earn the dividend.
ConclusionAfter going through the entire analysis of the company, quite evident results can be
deduced about the financial situations of the industries. Each and every ratio has
124
been analyzed quite profoundly and the results have been provided along with the
clear illustration of the graphs.
As far as current financial situation of PTCL is concerned, it is going in a quite
better condition as compared to the current financial situation of the industry
except for the year 2007. Company is reducing in its debt ratio and increasing in its
profitability.
But one thing that should be taken into notice is the stable performance of industry
as compared to the PTCL. In fact VSS put a great burden on the company and the
whole financial structure is disturbed. The whole VSS expense is charged against
the revenue of year 2007 and year 2008. This factor put the profitability of the
company into losses. But still the company should review its strategies and
financial structure.
As far as loss of year 2007 is concerned the company needs to take some steps for
its overall financial structure and needs a renewal of its strategy to compete in the
market and to remove instability.
So, in the light of all the details given above about the financial analysis of the
company, it can be seen that PTCL is managing its resources well but the internal
management needs a lot of improvements.
125
Part 7
Training Programme
126
Internship Programme
The internship is a golden chance for the students of MBA to develop the
capability and polish skills of administration and management in the practical
environment of different organizations. In the context, I selected the PTCL
(Pakistan Telecommunication Company Limited). This report shows and will
guide the readers to have an idea about operations and the practices followed by
PTCL. The reason for doing the internship in PTCL is to get knowledge about
financial activities and accounting practices prevailing in this organization.
I started my training in PTCL OSS Barket Market, Lahore. I joined on July
11.2011. This training session lasts till August 20.2011. During this internship I
learnt how to implement theory in practical. I tried my level best to polish my
professional skills and enhance my practical knowledge.
127
Structure of Internship department
128
President
S.E.V.P
E.V.P
Staff Introduction
Ali Riaz Shaikho Senior Business Manager
Syed Shahper Abbaso Assistan Manager/ Supervisor OSS
Tahir Jamil Shaikho Revenue Accounts Officer
Amin Shahid o Cashier
Ubaid ullah Anwer o Cashier
Ahmad Shamimo Customer Services Representative
Khaleeq ur Rehmano Customer Services Representative
MARKETING OPERATIONSAt OSS Barket Market, Lahore, marketing team has the following operations.
Focus on the Customer
Monitor the Competition
Own the Brand.
Find & Direct Outside Vendors.
Create New Ideas.
Communicate Internally.
Manage a Budget.
Set the Strategy, Plan the Attack, and Execute.
Let's take it one step further though, with this second list, which should best serve
marketing departments that have already accomplished all above marketing
functions and are looking for the next step in their evolution:
Befriend your customers.
Become your market. (Don't just monitor the competition. Rewrite the
rules. Set the pace. Lead. Outdistance your competition. Make them copy
you. Force them to up their game.
Breathe your brand.
Recruit and direct outside vendors.
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Industry(A collection of sellers)
Market(A Collection of buyers)
Goods/Services
Money
Information
Communication
Foster Innovation.
Simplify your internal communications. Then simplify them again and
again
Strategize as if your budget had been slashed in half. Deliver as if your
budget had been twice what it actually is.
Observe, adapt, strategize, anticipate, plan, execute.
A BROAD VIEW OF MARKETING TASKS
Marketers are skilled in stimulating demand for a company’s products. But this is
to limit a view of the tasks marketers perform.
Just as production and logistics professional are responsible for supply
management, marketers are responsible for demand management. Marketing
managers seek to influence the level timing and composition of demand to meet
the organization’s objectives.
Marketing (management) is the process of planning and executing the conception
pricing, promotion, and distribution of ideas, goods, and services to create
exchanges that satisfy individual and organizational goals.
130
LEARNING AS AN INTERN
Duties
I have to perform following duties at OSS Barket Market, Lahore
Managing the files for New Orders, Sales and Replacements.
Filling the service order form
Mail checking and forwarding to respective person.
Visit market to check the franchisee and dealers offerings
Welcome customer with warm greeting
Issue duplicate bills
Listening complaint of customer
Registering the complains on CMS
Providing solutions
Giving product information to customer
Selling the product.
Sale of EVO, Vfone
Writing application on behalf of customer
Correction of bills
Restoration of suspended lines
Installments of bills
Handling the EVO complains and issues
Placing of new telephone and DSL connections on BnCC
Processing on Temporary close application
Reactivation and new order entry of EVOs
Printing and punching of EVO bills
Changing of address and ownerships of PSTN and EVO
Watching the front desk and reception
Providing of information to customers
Keeping all the computers running
131
New Knowledge Acquired
How to deal with the customer was one of the most useful thing I learn
there.
How to break the franchisees’ sales and how to attract the customer
CSR assignment was new for me it also guides me how to work in
pressure.
How manager organize and hire new employees so that they come into fit
in just few days of training.
Theoretical knowledge is quite different from actual happening. We talk in
the book very professional approach while in the organization we have to
do task using just organization resources, no one is going to financially help
you
How telecommunication companies manage their resources and do sale.
Stock lifting and issuing is quite different from other business sector. In
PTCL usually push strategy is adopted
Short time period give me chance to learn the corporate culture of the
PTCL.
I observed the hiring process in OSS; I was there when interview was being
conducted for CSR.
I got command over BnCC, pCRM, CMS and Billing and Recovery
Console during my internship.
I learnt how to handle my anger and hyper and how to smile in front of
customer.
I got knowledge about CDMA technology
Problems encountered
Biggest problem I face was, I had to do work of 5 people alone.
Customers shout and misbehave with me mostly as their problems were not
being cleared by backend.
Financial problems I face as PTCL did not provide any financial assistance
Transport facility was not available with me sometime
The lower level permanent employees do not want to work at all
Non serious attitude of old employees. They don’t want to do work.
132
I found big gap while communicating with old Govt. employees.
I had to learn everything depending on Self learning.
Load shading problem, some time we have to wait long time for all the sort
of works.
Most of the time LAN was not working especially in billing days.
I had to stay there for more than 9 hours daily as there was only one CSR in
the morning and one in evening.
Computer systems are not up to the mark and no backup for power failure
Future impact on my career
This short time period internship gave me chance to improve my career. It was
very learning process for me and it had store its impact on my career in the
following way
It will help me in the future to fit in the organization
It help me the learning of corporate culture in Pakistan which is key point
that will effective on my carrier if I do job in Pakistan
This practical experience in the telecom sector will help me in the future if
I join telecom sector
Sale is a tough job I learn there but its quiet interesting it is very useful in
creating your own good will or reputation.
This internship has given me practical knowledge about managerial
techniques being used in the practical field
133
Strategic Management Matrices
134
Components of Mission Statement
Improved Mission Statement
“We desire to be the most admired and valuable telecommunication company with
a goal to enrich our customers' personal lives and to make their businesses more
successful by bringing to market exciting and useful communications services with
integrity, ethical business practices and building shareowner value in the process
having great concern for our employees.”
Why it is improved
The vision is to be the best and leading telecom company in Pakistan, to facilitate
the people of Pakistan and we emphasis on consumer more rather than competitors
we among the top telecom companies in the world, by continually challenging
present conventions and always staying a step ahead of the competition.
It is our mission to be the number one telecom company of Pakistan by providing
our customers with the highest product quality in terms of consistent quality,
experience, and satisfaction. We will ensure this through an unwavering
dedication to the continuous development of our products and processes ensuring
that we remain best in class. We will strive to hire the most competent and
dedicated employees whose work ethic will set the standard in the industry. We
135
No. Components Analysis
1. Customers 2. Product and Services 3. Markets -
4. Technology
5.Concern for survival, growth
And profitability -
6. Philosophy -
7. Self Concept -
8. Concern for public image -
9. Concern for employees
will be paymasters, as we strongly believe that human resource is the only asset
that truly appreciates over time. We will also be a responsible social corporate
citizen, and strive to enhance the quality of life in the markets we serve.
Comments on vision and mission (In terms of how they support the
strategies)
The vision statement of our company supports the existing strategies that is
(generic strategy) that PTCL needs to pursue is that of differentiation. In their
current vision and mission statements, the company says it aims to provide
satisfaction to customers and investors, yet through our thorough analysis of the
strategic direction the company needs to adopt a generic strategy of differentiation.
This will allow PTCL to do three things;
1. Survival in competitive environment 2. Increase revenue 3. Gain
customers satisfaction. However, at the expense of sounding
simplistic, it is necessary that the company communicate its
differentiation to its customers, otherwise these three advantages
will not avail themselves.
2. Initially PTCL will need to adopt a focused differentiation
approach, which means that they should selectively choose which
markets will profit them the most and then target only those markets
until such provisions are in place from where the company is able to
expand its target base. After which they should opt for a broad
differentiation generic strategy.
With the market just turning the bend to ‘saturation’, it is entering a phase of
intense competition with all major players diversifying their product lines, ranges
and even businesses into a versatile range of products to put in place more infantry
on the battle ground to use to their advantage in this war of brands. Therefore, we
believe that the current strategic objective of PTCL should be to consolidate its
existing brand, PTCL through extensive strategic market research and consumer
insights to be able to home in on the correct target market like a precision targeting
missile rather than as an Anti-aircraft gun.
136
Porter's Five Forces Analysis of Market StructureThe competitive structure of an industry can be analyzed using Porter's five forces.
This model attempts to analyze the attractiveness of an industry by considering
five forces within a market. According to Porter (1980) the likelihood of firms
making profits in a given industry depends on five factors:
1. Barriers to Entry
This factor shows the extent to which barriers to entry exist. The more difficult it is
for other firms to enter a market the more likely it is that existing firms can make
relatively high profits.
The likelihood of entering in telecom market is lower as: The entry costs are high e.g. heavy investment is required in marketing or
equipment
There are major advantages to firms like PTCL, Wateen and Worldcall that
have been operating in the industry already in terms of their experience and
understanding of how the market works (this is known as the "learning
effect")
In Pakistan government policy prevents entry or makes it more difficult
The existing firms usually react aggressively to any new entrant e.g. with a
price war
The existing firms have control of the market operations
2. The Power of Buyers
The stronger the power of buyers in an industry the more likely it is that they will
be able to force down prices and reduce the profits of firms that provide the
product. In Pakistani telecom sector buyers are in great power.
Buyer power is higher as:
There are a few, big telecom companies so each one is very important to
the firm
The buyers can easily switch to other providers so the provider needs to
provide a high quality service at a good price
The buyers are in position to take over the firm e.g. PTCL. They have the
resources to buy the provider this threat can lead to a better service because
they have real negotiating power
137
3. The Power of Suppliers
The stronger the power of suppliers in an industry the more difficult it is for firms
within that sector to make a profit because suppliers can determine the terms and
conditions on which business is conducted.
Suppliers are not powerful as:
Switching to another supplier is easy and not expensive
The supplier cannot threaten to buy the existing firms so they are not in a
strong negotiating position
4. The Degree of Rivalry
This measures the degree of competition between existing firms. The higher the
degree of rivalry the more difficult it is for existing firms to generate high profits.
Rivalry in telecom sector is very high because:
There are a large number of similar sized cellular companies (rather than a
few dominant firms) all competing with each other for customers
The costs of leaving the industry are high e.g. because of high levels of
investment. This means that existing firms will fight hard to survive
because they cannot easily transfer their resources elsewhere
The market is going to be saturated so firms are fighting for their share of
falling sales
There is little brand loyalty so customers are likely to switch easily between
products
5. The Substitute Threat
This measures the ease with which buyers can switch to another product that does
the same thing e.g. aluminum cans rather than glass or plastic bottles. The ease of
switching depends on what costs would be involved (e.g. transferring all your data
to a new database system and retraining staff could be expensive) and how similar
customers perceive the alternatives to be.
There is a threat of substitute products. There are so many companies which are
threatening the monopoly of PTCL. There are perfect substitutes available for all
of its products. Worldcall and Wateen have introduced wireless phones,
broadband, cable TV and many others which are a threat for PTCL.
138
The implication of Porter's analysis for managers is that they should examine these
five factors before choosing an industry to move into. They should also consider
ways of changing the five factors to make them more favorable.
The five forces will change over time as market conditions alter. For example,
more information is available nowadays to enable customers to compare offerings
and prices; this gives buyers more power. The opening up of world markets (for
example through the efforts of the World Trade Organization to reduce
protectionist measures that limit trade and the expansion of the European Union
enabling free trade between more countries) has led to much more rivalry in
markets in recent years.
In North America, for example, the sales of Japanese firms such as Toyota have
gradually been reducing the market share of American producers such as General
Motors as consumers have more choice. Meanwhile, the success of the internet has
made it easier for producers to enter many markets such as finance, book retailing
and clothes retailing; the ability to start selling online has reduced a major barrier
to entry which was the investment required to set up a network of shops. As ever
the business world is not static and the conditions in any industry will always be
changing. As this happens the various elements of the five forces are always
shifting requiring established firms and potential entrants to review their strategies.
139
EFE Matrix of PTCL
Sr.
No.Key External factors Weight Rating
Weighted
Score
Opportunities
1. Increasing growth in telecom sector 0.08 3 0.24
2. Expansion by acquisitions 0.10 4 0.40
3. Internet users in the Asia-Pacific region
forecast to increase by over 35%0.07 3 0.21
4. Developing countries are striving for
communication revolution0.06 3 0.18
5. Diversification of telecom business to other
industries like IT and electronics0.10 2 0.20
6. Low teledensity of Pakistan 36% 0.08 4 0.32
7. e-marketing to approach customers directly 0.07 3 0.21
Threats
1. Growth Potential of competitors 0.10 3 0.30
2. Acquisitions and alliances by competitors 0.07 2 0.14
3. Ability to attract and retain quality
Professionals0.05 2 0.10
4. Global credit crisis and significant decline in
the equity markets0.02 2 0.04
5. Mobilink as brand loyalty category winner 0.04 3 0.12
6. Market Saturation 0.08 2 0.24
7. Increasing prices of communication
equipments0.02 3 0.06
Total 1.00 3.04
Conclusion:
This assessment of the External Factors reveals that PTCL is above the industry
average in responding to the external environment. But they should begin to
prepare a strategy to better defend the firm against external threats present in the
business environment and try to identify ways to take advantage of opportunities
because there is large competition in telecommunication sector due to the entry of
many new rivals.
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IFE Matrix of PTCLSr.
No.Key Internal factors Weight Rating
Weighted
Score
Strengths
1. High brand recognition 0.10 4 0.40
2. Experienced Telecom Resources 0.07 4 0.28
3. Product diversification (20+ brands) 0.06 3 0.18
4. Market Leader having market share of 80% 0.09 4 0.36
5. Efficient Supply Chain Management 0.10 4 0.40
6. Strong financial position 0.08 4 0.32
7. Ethical and corporate social responsibility 0.05 3 0.15
Weaknesses
1. Decreasing gross profit (9% in 2009) 0.08 2 0.16
2. Expansion focus structure rather product focus 0.07 1 0.07
3. Poor inventory management 0.05 2 0.10
4. Limited product portfolio 0.06 2 0.12
5. Finance cost increased by 40% in 2009 0.05 2 0.10
6. Ineffective logo evolution 0.02 1 0.02
Total 1.00 2.66
Conclusion:
This assessment of Internal Factors indicates that PTCL is above average in using
its internal strengths to offset their weaknesses. PTCL is having some success in
controlling their internal operations relative to responding to their weaknesses.
However, they should not be satisfied with being just above average in this highly
competitive business environment. The goal is to establish a competitive advantage
over other firms, and they have plenty of room for improvement. PTCL needs to
identify ways to improve their operations to gain this competitive advantage.
141
MATCHING STAGE
SWOT Analysis of PTCL
Strengths Opportunities
1. Efficient Procurement &
Supply Chain
Management
2. Brand Stature
3. An Integrated Monopoly
4. Product Assortment
(Landline, DSL, V Wireless
and Smart TV etc.)
5. Market Leader having market
share of 80%
6. Ethical and corporate social
Responsibility
1. Increasing growth in telecom
sector
2. Expansion by acquisitions
3. Internet users in the Asia-
Pacific region forecast to
increase by over 35%
4. Developing countries are
striving for communication
revolution
5. Low teledensity of Pakistan
36%
Weaknesses Threats
1. Over employment & low
productivity
2. Slow decision making
including extraneous
intervention
3. Corporate culture akin to
government departments
4. Complaints due to improper
management
5. Financial Disturbance due to
VSS
6. Lack of coordination with the
other departments
7. High operating cost
1. Market Saturation
2. Global credit crisis and
significant decline in the equity
markets
3. Growth Potential of cellular
companies
4. Mobilink as brand loyalty
category winner
5. Ability to attract and retain
quality Professionals
6. Acquisitions and alliances by
competitors
7. Evolution of satellite and
cellular communication
Consumer Analysis:
According to the analysis 70 % of the customers got the good service, 20% of the
customers think that they got the excellent, 10 % of the customer realize that the
service is just OK and no one thought about the bad service.
SWOT Strategies MatrixSTRENGTHS (S) WEAKNESS (W)
1. Efficient Procurement & Chain Management
2. Brand Stature3. An Integrated
Monopoly4. Product
Assortment (Landline, DSL, Vfone and Smart TV etc.)
5. Market Leader havingmarket share of 80%
6. Strong financial position
7. Ethical and corporate social Responsibility
8. Experienced TelecomResources
1. Over employment & low productivity
2. Slow decision making including extraneous intervention
3. Corporate culture akin to government departments
4. Complaints due to improper management
5. Financial Disturbance due to VSS
6. Lack of coordination with the otherDepartments
7. Low growth and high operating cost
Opportunities (O) SO Strategies WO Strategies
1. Increasing growth in telecom sector
2. Expansion byacquisitions
3. Internet users in the Asia-Pacific region forecast to increase by over 35%
4. Developing countries are striving for communication revolution
5. e-marketing to approach customers
1. Investment of 1200 million rupees is required for acquisitions and horizontal integrations (Worldcall) (S6, O2)
2. Improve social and cultural awareness with community involvement (S7, O5)
3. Market penetration strategy (S5, O3)
4. Use e-marketing to promote brand image among new
1. Expansion by alliances and integrations with cellular industry e.g. Wateen (W1, O2)
2. Market development strategy in Caribbean and Asian markets (W1, O3, O4)
3. A strong E-Commerce framework will boost sales by 14 % (W7, O5,O6)
145
directly6. Low teledensity
of Pakistan 36%
segments (S2, O6)
146
Threats ( T) ST Strategies WT Strategies
1. Market Saturation
2. Global credit crisis and significant decline in the equity markets
3. Growth Potential of cellular companies
4. Mobilink as brand loyalty category winner
5. Ability to attract and retain quality Professionals
6. Acquisitions and alliances by competitors
1. Product development and unrelated diversification strategy (S4, T1)
2. Use of core competencies will sustain and grow market position by 3%/year (S3, S8, T3)
3. Hire qualified management team (S6, T5)
1. Unrelated diversification to develop a new market (W7, T1)
2. Product focus to offset the effect of competitors’ alliances (W4,T6)
BCG Matrix for PTCL
Products Revenues
(Million)
Percent
Revenues
Profits
(Million)
Percent
Profits
Percent
Market
Share
Percent
Growth
Rate
Landline 4973 41% 2099 48% 27% 3%
DSL 530 4.5% 184 4% 55% 40%
Vfone 642 5% 115 3% 25% 11%
EVO 210 2% 134 3.1% 10% 14%
Ufone 5735 48% 1858 42% 19.5% 8%
Total 11990 100% 4410 100% - -
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Graph of BCG Matrix
Relative Market Share
High Medium
Low
1.00 0.50
0
High +20
Stars
Industrial
Growth %
Cash Cows Dogs
Low -20
Size of pie shows volume of revenues
Shaded area shows percentage share of profit of a division
Pies are positioned according to their relative market share and industrial growth in
the matrix
148
FS+6
+1
+5+4+3
+2
-6
-5
-4
-3
-2
-1-6 -5 -4 -3 -2 -1 +1 +2 +3 +4 +5 +6
ES
CA IS
Conservative Aggressive
Defensive Competitive
Analysis of BCG Matrix of PTCL
We can see from the graphical presentation of BCG matrix that only DSL is in
Stars. The problem lies in landline and Ufone which having largest revenue but
having almost no growth and less market share.
PTCL must decide to strengthen it by pursuing an intensive strategy (market
penetration, market development, product development).
Recommended Strategies
Unrelated diversification, horizontal integration, Market penetration, Market
development and product Development are appropriate strategies for these
segments to consider.
SPACE Matrix
Financial strength (FS) Environmental Stability (ES)
Return on asset (ROA) 6 Competitive pressure 6
149
Return on Equity 6 Barrier to entry into Marke 3
Net income 6 Economic changes 2
Leverage 5 Technological changes 2
Inventory Turnover 3 Inflation rate 3
Financial strength (FS) Average: 5.20 Environmental Stability (ES) Avg.-3.2
Competitive advantage (CA) Industry Strength (IS)
Market Share -1 Growth potential 6
Product Quality -1 Financial Stability 6
Brand Recognition -2 Ease of entry into market 4
Monopoly -2 Profit potential 5
Supply chain management -1 Resource Utilization 5
Competitive advantage (CA) Average -1.4 Industry Strength (IS) Average5.0
X-axis: -1.4 + 5.0 = 3.6
Y=axis: 5.2 + -3.2 = 2
Coordinate: (3.6,2)
150
DECISION STAGE
151
152
QSPM MATRIX
KEY FACTORS Weights
To increase efficiency
Acquire
World call
Market
Development
AS TAS AS TAS
OPPORTUNITIES
Increasing growth in telecom
sector0.08 4 0.32 2 0.16
Expansion by acquisitions 0.10 3 0.30 4 0.40
Internet users in the Asia-
Pacific region forecast to
increase by over 35%
0.07 3 0.21 4 0.28
Developing countries are
striving for communication
revolution
0.07 _ _ _ _
Low teledensity of Pakistan
36%0.08 4 0.32 3 0.24
e-marketing to approach
customers directly0.07 2 0.14 3 0.21
THREATSAbility to attract and retain
quality Professionals0.05 _ _ _ _
Acquisitions and alliances by
competitors0.07 _ _ _ _
Growth Potential of cellular
companies0.10 3 0.30 4 0.40
Global credit crisis and
significant decline in the
equity markets
0.02 _ _ _ _
Mobilink as brand loyalty
category winner0.04 _ _ _ _
Market Saturation 0.08 3 0.24 4 0.32
TOTAL 1.00
STRENGTHS
High brand recognition 0.10 3 0.30 2 0.20
Experience Telecom
Resources0.07 4 0.28 2 0.14
Product diversification (20+
brands)0.06 4 0.24 3 0.40
Market Leader having
market share of 80%0.09 3 0.27 4 0.36
An Integrated Monopoly 0.10 3 0.30 4 0.12
*It is better for the company to find out new customers and offer such new and
quality services that the annoyed customers come back to them.
Part 8
Conclusion & Recommendations
153
PTCL: Future Prospects & ChallengesAs the past incumbent and current Significant Market Player (SMP), PTCL, no
doubt, has got the largest operational network and infrastructure within ICT
(Information & Communication Technologies) segment. They don’t lack numbers
and potential if we mention human resources. Their financial strength has further
become their strategic strength after Etisalat has joined them as investment arm.
PTCL enjoys market leadership in Local loop, Wireless local loop (WLL) and
fixed telephony. PTCL (Ufone) is market challenger in GSM segment. Overall
they have the largest consumer clout on average in the whole Pakistan telecom
industry. Even their competitors still depend on PTCL network either directly or
indirectly. All this adds to their strategic strengths and after having all that in their
basket they lack at area where they are supposed to have developed core
competence.
PTCL, so far has not been able to nurture its growth around customer services
oriented strategy, this has translated into inadequate brand loyalty for them.
Internal organizational and business processes issues, monopolistic culture has
further added to its complexities. For many individual prospects like me, using
PTCL offerings was a purchase decision made as no other option was available.
PTCL can turnaround very well by reaping the benefits of “Sur-petition” in the
shape of “Sur-petitive Advantages” in comparison to competitive advantages. All
they have to do is to follow a holistic approach towards growth, besides focusing
on Customer Support & Services, reverting back to competitive and service
centered operational culture, spending upon marketing communications to revamp
Brand Image, improving existing network and existing products for market
penetration and developing innovative new products and services for long term
growth.
154
Weaknesses Identified The finance department is not up to the mark there is no proper financial
system.
The policies of the company are determined by the board of directors in
accordance with the finance department. However there are certain policies
in which the company is dependent on the Ministry of IT& T Govt. of
Pakistan
Employees have developed a psychology that promotion criteria &
procedures of the company are not justified.
The quality of service in areas is much poor hence creating the problems
for customer.
Finance department is lacking employee training centers. On the other hand
the training opportunity is not provided to all the staff equally.
The staff did not get any benefit for their higher qualifications in the shape
of promotions or pay increments.
Proper evaluation of the employees is not in the normal functioning of the
company.
Refreshing courses are on & off, not timely and frequently.
The proper information system is not in progress for the finance
department.
Less or no sharing of information
Suggestions and Recommendations The image of PTCL being leading Telecom providing is not good in the
eyes of common customer especially there are lot of complaints about the
including the bogus local calls in the monthly bills of various customers.
PTCL should also provide the detail of local calls made from any Land
Line Number which would be provided in Micro level to the customer.
P.T.C.L having the monopoly in providing the Land-Line Telephone
Connection in Pakistan and its playing its role magnificently. In current
scenario P.T.C.L has increases its Revenue quite dramatically and probably
155
that as soon as this organization has become privatized it will flourish its
revenue in better manner.
PTCL should immediately change its Finance upper level of hierarchy and
should stream line in the good manner.
PTCL should also encourage the Billing On line system that each and every
customer should have to pay his/her bill on line basis.
The system of E-PAYMENT which although exist in PTCL finance system
but there is need of improvement this facility.
Faulty Telephone connection should be Fault Free within 24 hours in order
to maximize the Revenue, as Revenue of PTCL should sacrifice at the cost
of Faulty Telephone.
PTCL should make Customer Care Centers in remote areas.
The punching system of Billing through automation at CITI Bank Karachi
takes so much time to adjust so it should be revived.
The Financial D.D.O powers should be entrusted to the Director Finance
rather GM.
PTCL is not utilizing its surplus profit in long-term investment projects
which be done.
PTCL management should give concentration towards the Securities of
deposit and it should be on maximum level.
The return on deposit should be checked accordingly.
The cash generated from the operation must be utilized accordingly.
Each Region should allocate the funds at its own level.
PTCL should take the services of highly qualified financial analysts.
The promotion system in the Finance & Revenue wing should be revived in
true manner all promotion must be made strictly on merit.
Each Region should maintain Profit & Loss and Balance sheet and the
statement of Cash inflow and outflow.
156
Future Prospects of the PTCL Expansion in the Local Loop System WLL system
Expansion of the Broadband System
Reduce the NWD, International, Local Calls rate for facilitation the
customer
Expansion of TDMA, PRI, BRI, LLO system for maximization profit
Free of cost value added services.
Reduce the Tariff of Assisted Trunk Dialing System.
Free CLI (Caller Line Identification) system in Land Line system
Free DXX (Digital Cross Connect) system
Reduce the tariff of Internet charges in order to expand the customers
Free local calls rate and reduce the Line Rent, which is Currently Rs. 200-
00
E-Payment, on-line billing payment system to facilitate the customers
Expansion in the project of BILKUL-MUFT scheme
Reduce the installation charges of telephone
Project to provide the Local calls details to all customers
Expand the business on international level
Increase the investment on the international level
Reduce the charges of Co-Location Charges
157
References
www.pta.gov.pk .
www.ptcl.com.pk
PTCL,“Media” (online) accessed on July 2011, available at
http://www.ptcl.com.pk/mediac.php?NID=132
PTCL, “About Us” (online) accessed on July 2011, available at http://www.ptcl.com.pk/index.php
Wateen, “About Us” (online) accessed on July 2011, available at http://www.wateen.com/AboutUs.aspx
WorldCall, “About Us” (online) accessed on July 2011, available at http://www.worldcall.com.pk/aboutus.html
Link dot Net, “History” (online) accessed on July 2011, available at http://www.linkdotnet.com/English/Linkcorp/About/Our%20History/
Go CDMA, “History” (online) accessed on July 2011available at http://www.gocdma.com.pk/low/index.php
Annual Reports
PTA Annual report
PTCL Annual Reports from 2008 to 2010
www.dailytimes.com.pk
www.privatisation.gov.pk
www.finance.google.com
www.researchandmarkets.com
www.telecomstats.com
Case Studies
Privatization of Public Utilities: How is it Generating and Impacting
Conflicts in Pakistan? (By Mukhtar Ahmad Ali)
158
