PTCL Report by Raja Shahid.doc Last

Pakistan Telecommunication Company Limited

Faculty of Business AdministrationDepartment of Management Sciences

Internship Report

Pakistan Telecommunication Company Limited (PTCL)

Deadline for submission

30 November, 2010

Semester..........................MBA 4.............................

Student Name..................Shahid Jahangir..............

Student Number...............SP09-MBA-153................

Total Marks Obtained (Report + viva)..................................

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Executive Summary

The company where I did my internship is called Pakistan Telecommunication Company

Limited (PTCL). My internship started on 1/July/2010 and lasted for 8 weeks until 31/Aug/2010,

with the official working hours starting from 9am to 3pm. During this internship I work in office

of the senior revenue officer Rawalpindi Cantt under the supervision of senior revenue officer.

In the first phase of the report there is the general introduction about the company and then

different terms have been explained, then the objectives, different products and different services

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

the most important my experience while working in the PTCL as internee is explained. During

this period, I deal with different kind of Revenue Functions i.e Correction of Bills, Revenue,

Record Keeping and Office Administration and also cash matters.

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1. Introduction

1.1BRIEF HISTORY OF THE COMPANY

From the humble beginnings of Posts & Telegraph Department in 1947 and establishment of

Pakistan Telephone & Telegraph Department in 1962, to this very day, it is a story of

commitment and vision.

Pakistan Telecommunication Corporation (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.

1.1.1 Distribution of PTC

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. 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

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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 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.

1.2 REGION WISE SEGMENTATION OF PTCL

To provide efficient and smooth services to the subscribers, PTCL has been divided into almost

thirty-two Regions (Nine Development and twenty-three Maintenance Region ).

The Development Regions are normally responsible to accomplish the development and

expansion program of the company and after completing the lying of cable, installation, testing,

commissioning of equipment, they are liable to hand over the exchange, building, or other

installations to the concerned Maintenance Regions.

These maintenance regions are further responsible for the look after, up keep and maintenance of

these assets. They are also required to initiate expansion proposals to meet the ever-increasing

demand of telephone connections.

The overall operations department has been divided into four wings; North, South, International

Communications and Information Technology Training & Research. Each of these wings is

headed by EVP. As PTCL is providing its services to its customers all over the country, its entire

network has been divided into fifteen regions.

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Each region is further divided into zones and headed by director. Each director controls a number

of divisional engineers.

1.3 COMPANY PROFILE

With employee strength of approximately 30,000 and 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 0.8 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 Fibre 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.

1.4 BUSINESS VOLUME

Fixed line connections in the country are more than 5.4 million and the cellular connections are 12.7 millions

Currently there are 315 Payphone and over 51,000 Wireless Payphones

There are over 140 Data and Internet service providers (ISP's) to whom PTCL has provided network infrastructure.

PTCL generated annual Revenue of over Rs. 11 billion from its private sector operating partners.

The PTCL's performance against a key set of parameters is summarized as:

Parameters ValueRevenue Rs. Billion 75.97Profit after tax Rs. Billion 26061Earning per share In Rupees 05.22Capital expenditure Rs. Billion 12.95

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Return on equity % 24.43

NO OF EMPLOYEES

President & Company Secretary 02

Senior Executive Vice President 07

Executive Vice President 22

Chief Engineers 26

General Managers 94AGM, DY. GM, Director, System Analysts, Dy. Managers, RTO, CS, SE, DE, SAO, DM, SRO etc 2500

ADE, AE, SDO, AO, SL, Lect etc 20,000

ES, Assistant. PA, Tech, LM. UDC, KPO, Khakroob, Mali, HC, etc47,000 (almost)

Total Employees

Note: This figure includes all permanents, contract bases and also appointed under new terms and conditions during the year 2005.

70,000 (almost)

1.5 ACCOUNTING SYSTEM OF THE ORGANIZATION

The accounting system of PTCL is to comply with requirements of companies' ordinance, 1984

and approved Accounting standards comprise of such IASs as notified under the provision of the

companies ordinance 1984. International Accounting Standards (IAS), as applicable

in Pakistan in all respects. Wherever, the requirements of the company's ordinance 1984 of

directives issued by the securities and exchange commission of Pakistan differ with the

requirements of these standards. Generally accounts are prepared and maintained on government

pattern as well as commercial pattern on accrual basis of bills receivable and bills payable and

also are exhibited the profit and loss account and balance sheet showing the assets and liabilities.

The revised cash account current (ACE-40) Performa is based on double entry system which

indicates the debit and credit under each head of account viz cash/bank shows the balance in

hand ceiling cash and direct payment and the closing balance. All Drawing and Disbursing

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Officers furnish commercial accounts at Lahore, where all items are separated analyzed and

noted in necessary books for preparation of financial statements.

In the Accounting system of organization, proper books of Accounts have been kept by the

company as required by the companies' ordinance, 1984.

The balance sheet and the profit and loss account together with the notes thereon have been

drawn up in conformity with the companies' ordinance, 1984.

The balance sheet, profit and loss account, cash flow statement and statement of changes in

equity together matches with approved accounting standards as applicable in Pakistan, and give

the information required by the companies ordinance 1984 in the manner so required and

respectively give a true and fair view of the state of the company's affairs as at June 30 of every

year and of the profit, its cash flows and changes in equity for the year then ended.

1.6 FINANCE SYSTEM OF THE ORGANIZATION

The office of the Director General (Finance) controls all financial activities and system of PTCL.

All financing decisions, capital budgeting decisions and processing on real and financial assets

are major responsibilities of finance department of PTCL. Necessary future plans and projects

are analyzed and selected as per their positive results i.e.; (Investment decision) installation of

new telephone exchanges and lines.

Lending and borrowing decisions are also made as per loans, interest rates, time period and

lending agencies and banks etc.

Necessary sanctions of write off and depreciation rate are also issued by the finance department.

Finance department also plays a vital role in coordination, with dividend policy matters, internal

and external auditors and share registrars. Pensions, insurance, preparation of budget and

taxation dealings are also important factors of PTCL finance department.

1.7 USE OF ELECTRONIC DATA IN DECISION MAKING

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Mostly offices of PTCL are well equipped with computers and EDP facilities.

Data is recorded on CDs and these CDs are sent to Finance department and Director Commercial

Accounts Lahore as cash accounts by regional heads. This data is fed in a main "SERVER" for

use of different sections in decision making. For example balances of General Provident Fund,

House Building Advance and Motor Cycle/Car Advances, Pay roll, etc are needed in pension

section to prepare final emoluments of a retiring employee. This requisite information's are taken

from this "SERVER" (Book & Budget Record Section) for necessary decision.

PTCL has a sound MIS System which helps all other departments in decision making and also to

preserve it for future needs. Recently, the organization provides a separate internet connection to

all its officers, so that they may connect to higher management regularly, keep their knowledge

fresh about organization strategies/affairs and also for correspondence to other officers and

higher management.

1.1.2 HISTORICAL BACKGROUND

1947 Posts & Telegraph Dept established

1961 Pakistan Telegraph & Telephone Deptt.

1990-91 Pakistan Telecom Corporation

1995 About 5% of PTC assets transferred to PTA, FAB & NTC.

1996 PTCL Formed listed on all Stock Exchanges of Pakistan.

1998 Mobile (Ufone) & Internet (PakNet) subsidiaries established.

2000 Telecom Policy Finalized

2003 Telecom Deregulation Policy Announced

2006 Etisalat Takes Over PTCL

1.2 OBJECTIVES OF THE COMPANY

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Convert its cash basis single entry accounting system to accrual basis and double entry

system meeting the Commercial & International accounting system.

Launch consumer satisfaction survey.

To introduce computerized directory assistance & complaint service, reform billing and a

revenue collection system.

Strengthen relation with Foreign International Administration, entities, service providers,

International & Regional telecom Organization for better international communication

and technical co-operation in telecommunication business.

1.3 Organizational Structure

1.2 Products or Services Offered

1.2.1 PTCL LandlineSince the deregulation of the telecom sector, a large number of foreign investors opted for

licenses in LL, LDI and cellular operations, identifying Pakistan as an emerging market.

Investors entered the market forcefully in the cellular segment, introducing heated competition

for PTCL. In this situation PTCL's counter strategy for landline service, during the year 2007-08

was aimed to increase ARPU, acquire new subscribers and contain churn.

To increase operations, PTCL shifted from its conventional duration based charging system to

value based options, like 'Pakistan Package' that offered 5,000 minutes for on-net nationwide

calls at Rs. 199/month. PTCL also launched 'International Plus' package to facilitate cost

effective international calls at unmatchable rates alongside offering Voice messaging and Phone

n Net services, adding more value to the landline service. To increase customers' base, 'order on

phone' was introduced, allowing customer to apply for a new connection by simply calling 0800-

80800. To tackle the churn PTCL established an outbound call center to reach out to potential

customers with an objective to attain higher level of brand loyalty.

1.4.2 PTCL V-Fone

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PTCL V-Fone (WLL Service) was another major area of focus for PTCL during the year. A few

prominent measures taken in this area during the year were launching of free home delivery

service. No line rent package was launched in September 2007. In June 2008, 30 seconds billing

was introduced contributing as an effective customer retention tool. PTCL has expanded the

network to provide coverage in all large and small cities including over 10,000 villages in rural

areas of Pakistan.

As Vfone becomes the Wireless substitute to landline in un-served areas, it will be a robust line

for voice, data and fax services for use at home and in the office. In business markets it will be

positioned as the CDMA tellular extension to add trunk lines to the ever expanding business

PABXs. Vfone will be spearheading the launch of the new postpay and pre-pay tariffs with no

line-rent to meet the market demand. The tariff will include new post-pay unlimited local and

nationwide calling packages to bring traffic back to PTCL’s networks to stabilize the revenues.

After the initial launch, the Company aims to retain the momentum by offering different bundled

packages for voice to increase the subscriber base, including specifically targeting the rural areas

where copper infrastructure does not exist. On Wireless broadband front, a major upgrade of

PTCL WLL CDMA network is underway to provide Wireless broadband services in 17 major

cities by end 2007. Currently technical trial is in progress which will be followed by a pilot

project on WiMax technology. This will enable PTCL to maintain its competitive edge.

1.4.3Ufone

(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.

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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).

Ufone's operational performance has been very encouraging despite stiff competition in Pakistan

telecom market which has led to reduction of prices to bare minimum level. Ufone managed to

improve its revenue and operating profit by 35% and 47% respectively, as compared to the last

year through aggressive policies and exercising strict control over expenses.

1.4.4 Paknet Limited

Paknet was incorporated in year 2000 for providing internet related services in the country is

being wound up. However, PTCL has developed its own voice, data and video infrastructure and

services. Paknet's operations have been closed and liquidator appointed for completing the

formalities involving the company closure. All customers, assets, liabilities and capital stand

transferred to PTCL in accordance with the special resolution passed in General Meetings.

1.4.5 PTCL Broadband

The first major product initiative taken towards a changing PTCL during the year 2006-07, was

the launch of PTCL’s Broadband service under the theme of ‘Broadband Pakistan’ by the Prime

Minister of Pakistan. The service was launched on PTCL’s new state of the art Broadband

infrastructure that was added to our network during the last three quarters of 2007 with the initial

capacity of over 100,000 subscribers.

PTCL achieved unprecedented success as it added over 10,000 customers within the first 120

days of its launch while historically it had taken four years collectively for all the other operators

to achieve 30,000 customers in Pakistan! The hallmark of PTCL service was the removal of the

traditional barriers such as the upfront costs of installation and customer premises equipment and

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added bandwidth download. This high customer take up also reflected on the Company’s trusted

image in the eyes of the nation. The service is already available in the five largest cities of

Pakistan and will be expanded into another dozen cities during the coming year.

1.4.6Smart Services

In March 2008, PTCL introduced a trial service that put PTCL on the path of a paradigm shift.

Branded under 'PTCL Smart Line', the service included Interactive Television, Broadband and

voice Telephony all at the same time on PTCL's telephone line. The 'Smart TV', for the first time

offered TV viewers the power to control the TV channels interactively. This included the ability

to rewind and pause live TV channels, block / unblock any TV channel for parental lock and

search through video on demand content. The Commercial launch of the PTCL Smart Line

services across the three largest cities in Pakistan was arranged on the 14th of August 2008

which will be expanded to the other cities during the course of the year.

2. Learning & Experience

2.2 Tasks performed

2.2.1 ISSUE NOC

In the first week of my internship I issue NOC to the people who want to get new PTCL

connection and also for the disconnect the PTCL connection.

2.2.2 MAINTAINING OF FILE AND RECORDS

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Every day there has been preliminary file work from initial nothing till the final presentation of

the whole scenario. Each task has to be filed.

2.2.3 WRITING MEMOS, E-MAILS, PRINTING

I wrote many applications, memos, emails for various purpose defined by my supervisors. I

forwarded mails, received and managed emails and also made important print outs for official

use.

2.3 SWOT ANALYSIS

SWOT Analysis is the most important part of the report, because it depends on my personal

observation. Only a good, keen and comprehensive analysis leads to good recommendations for

the improvement of the existing conditions. SWOT analysis is to highlight all aspects of the

Company. We can say that it is a. It forecasts the future status and points out the problems likely

to come in achieving the specified objectives.

PTCL is a big organization regarding all the departments including Finance, Operations, Human

resource etc. there are several strengths & weakness of these departments, which will be

discussed as follow:

2.3.1. STRENGTHS

5.1.1. TELECOM SERVICES ALL OVER THE COUNTRY

PTCL has spread its network of services nationwide and also facilitate international calling

facilities.

5.1.2. THE BIGGEST FOREIGN EXCHANGE EARNER

PTCL is the biggest source of foreign exchange for Pakistan. It earns a lot foreign exchange form

its international traffic.

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5.1.3. ADEQUATE FINANCIAL RESOURCES

PTCL earns billions of Rupees as a major source of capital. These adequate financial resources

not only enable the company to copy with any unexpected event but to deploy its resources to

increase product line and services without feeling any financial difficulty.

5.1.4. MONOPOLY IN FIXED LINE CONNECTION

PTCL has no competitor in fixed line the market and other companies were legally not allowed

enter in competition with PTCL before 2003. So PTCL is performing its activities freely without

any pressure.

5.1.5. LEADERSHIP IN THE MARKET

PTCL is leading Company to provide telecom facilities at domestic and business levels in the

Pakistan. PTCL aims at using the latest technology in the field of engineering and IT for its

services. It is also getting constancy from international Companies in order to remain leader in

telecom sector.

5.1.6. MODERN TECHNOLOGY

PTCL is running modern technology to develop its products and services and improve the quality

of services. In this connection it has replaced the old exchanges with new digital exchanges. It

has computerized billing system. Due to this technology thousand of complaints have been

reduced. PTCL has also entered in the business of Mobile phone and Internet services.

5.2. WEAKNESSES

Weaknesses are the shortcomings in the structure or functioning of the organization and need to

be taken care of immediately. It is usually because of these weaknesses that the competitors

leave the firms behind in the race.

5.2.1. LACK OF HUMAN RESOURCES MANAGEMENT

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PTCL has no active human resources management. It doesn’t have clear policy regarding hiring

& training of work force. In PTCL, for most of the jobs there is no job work & evaluation of

performance of employees.

5.2.2. LACK OF TRAINING PROGRAM

There is no proper training program to improve the skill of PTCL employees to cope with ever-

changing telecommunication sector. Less skilled & inefficient workers are creating hurdles in its

growth.

5.2.3. NO EFFECTIVE MARKETING DEPARTMENT

There is no effective marketing department in the Organization. There is only marketing officer

working as a manager, further more marketing staff in the field region is also not available.

5.2.4. CUSTOMER DISSATISFACTION AND DELAYED RESPONSES

Many customer of PTCL are not satisfied with its services because of wrong billing, late delivery

of bills and delayed responses for any fault in the telephone. Some customer complains that they

received their bills in full amount although they have stayed out of the home and had not use the

telephone at all.

5.3. OPPORTUNITIES

Opportunities are always present in the external market whoever grabs it first, is the market

leader.

5.3.1. INCREASING AWARENESS RATE

PTCL can show its interest in educating people & increasing literality rate. In this way, PTCL

will not only fulfill its social responsibility but will also be able to increase awareness rate and it

will be help full in the expansion of PTCL business.

5.3.2. SKILLFUL HUMAN RESOURCES

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PTCL can improve the skill of its manpower by providing them the opportunities of advanced

courses that will make them to cope with the ever-changing condition in field of

telecommunication.

5.3.3. ENTERING THE NEW MARKET

PTCL recently has started its mobile services hence; it will enter in the market. PTCL can

expand its business by exploring and entering in new markets in similar way.

5.3.4. TELECOM FACILITIES IN RURAL AREAS

All the value added services and digital facilities are available only in the main cities of Pakistan.

PTCL can expand its business by providing telecom facilities in rural areas, which is only

possible when adequate planning is done.

5.4. THREATS

Threats are also part of a firm’s external environment and pose a constant danger to an

organization’s operations. However, a proficient is the one that converts these threats into

opportunities for it.

5.4.1. EXCHANGE RATE RISK

Exchange Rate Risk will cause PTCL net exchange loss on foreign loans. Devaluation of rupees

will increase the cost of production, machinery, and almost all the equipment, imported from

foreign countries. So exchange rate risk will affect the Profitability of PTCL and also increase

the risk of getting foreign loans in future.

5.4.2. GOVERNMENT LEGISLATION

Government policies can affect the performance of PTCL. Hence government policies will be a

real threat for PTCL if they are not in favor of PTCL business activities. This can affect the

recruiting policies of PTCL.

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5.4.3. TURNOVER

At the end of the monopoly, competitors will enter the industry and the competition will increase

as a result of which they will offer high pays and facilities to skill-person of the industry. This

can increase the turnover of PTCL, which can create a serious threat for the organization

5.4.4. DECREASE IN MARKET SHARE DUE TO COMPETITION

After the end of monopoly, dissatisfied customers may shift to those telecom service providers

who they think would offer better services than PTCL, and will increase customers’ satisfaction.

Decrease in market share would decrease the profitability of PTCL, which will be a real threat in

near future.

2.4 RECOMMENDATIONS

i. There exist a huge amount of outstanding bills to be collected

by the defaulters. The company should frame tight and

effective policies to ensure the collection of its outstanding

bills. The revenue officers should be provided incentives and

bonuses on achieving the determined targets of revenue

collection.

ii. Hundred percent computerization in PTCL would be helpful to

save the time and money and provision of quick services to its

valued customers.

iii. Human resource development is a key component in every

organization; In PTCL this is not going well. So there is an

immense need to improve this department.

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iv. Over employment is main and major problem in PTCL.

Reduction / Right Sizing in over employment can give better

results.

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PTCL Report by Raja Shahid.doc Last