Pakistan Telecommunication Company

Limited
Project

Strategic Management

SUBMITTED TO: Dr. Rashid

SUBMITTED BY: AAMIR MAQBOOL, Hamza Haider, M. Saddam Hussain

DEPARTMENT OF MANAGEMENT SCIENCE

NATIONAL UNIVERSITY OF MODERN LANGUAGES

H-9, ISLAMABAD
Contents
PTCL.............................................................................................................................................................4
Introduction:............................................................................................................................................4
History:....................................................................................................................................................4
Performance:...........................................................................................................................................5
Strategic Posture:....................................................................................................................................6
a. Vision:..........................................................................................................................................6
b. Mission:.......................................................................................................................................6
c. Objectives:...................................................................................................................................6
Corporate Information:...........................................................................................................................6
Board of directors:...............................................................................................................................6
Top Management:...............................................................................................................................7
External Scanning:...................................................................................................................................7
a. Industrial Structure:.....................................................................................................................7
b. Market Operation:.......................................................................................................................8
c. Market Structure.........................................................................................................................8
d. Regulatory Environment..............................................................................................................9
Internal scanning:....................................................................................................................................9
a. Organizational Management Cycle............................................................................................10
b. Profitability Position..................................................................................................................10
c. Liquidity Position.......................................................................................................................11
d. Leverage Position.......................................................................................................................11
e. Activity Position.........................................................................................................................11
f. Dividends...................................................................................................................................12
g. HR Aspects.................................................................................................................................12
h. Training and Development........................................................................................................12
SWOT Analysis:......................................................................................................................................13
1. Strengths:..................................................................................................................................13
2. Weakness:..................................................................................................................................13
3. Opportunities:............................................................................................................................13
4. Threats:......................................................................................................................................13
SWOT Matrix:........................................................................................................................................14
References:............................................................................................................................................15
 PTCL

Introduction:
Pakistan Telecommunication Company Limited, commonly known as PTCL, is the
national telecommunication company in Pakistan. PTCL provides telephone and internet services
nationwide and is the backbone for the country's telecommunication infrastructure despite the
arrival of a dozen other telecommunication corporations, including Telenor GSM and China
Mobile.
The corporation manages and operates around 2000 telephone exchanges across the
country, providing the largest fixed-line network. Data and backbone services such as GSM,
HSPA+, CDMA, LTE, broadband internet, IPTV, and wholesale are an increasing part of its
business. Originally a state-owned corporation, the share-holding of PTCL was reduced to 62%,
when 26% of shares and control were sold to Etisalat Telecommunications while the remaining
12% to the general public in 2006 under an intensified privatization program under Prime
Minister Shaukat Aziz. However, the 62% of shares still remain under the management of
government-ownership of state-owned corporations of Pakistan.
On 12th February 2019, PTCL announced that Rashid Khan would be its new CEO.
Current chief executive Dr. Daniel Ritz would be stepping down from his position upon
completion of his contract on March 1st. Rashid Khan will act as CEO of both PTCL, and its
subsidiary.
History:
From the beginning of the Posts & Telegraph Department in 1949 and establishment of
Pakistan Telephone & Telegraph Department in 1962, PTCL has been a major player in
telecommunication in Pakistan. Pakistan Telecommunication Corporation (PTC) took 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 pay-phones, paging and, lately, data communication services.
In 1995, Pakistan Telecommunication (Reorganization) Ordinance formed the basis for
PTCL monopoly over basic telephony in the country. 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.
PTCL launched its mobile and data services subsidiaries in 2001 by the name of Ufone
and Pak-Net respectively. None of the brands made it to the top slots in the respective
competitions. Lately, however, Ufone had increased its market share in the cellular sector. The
Pak-Net brand has effectively dissolved over the period of time. Recent DSL services launched
by PTCL reflects this by the introduction of a new brand name and operation of the service being
directly supervised by PTCL.
Performance:
Pakistan Telecommunication Company Limited (PTCL), the country’s leading telecom,
information and communication technology (ICT) services provider, announced its financial
results for the year ended on December 31, 2017. Operating profits for the PTCL Group
registered a 53% increase during 2017 as compared to last year.
The group revenue stood at Rs 117.2 billion and with effective cost optimization
measures, the operating expenses of the group were reduced by 3%, with the objective to align
the resources with the current market challenges, PTCL implemented a Voluntary Separation
Scheme (VSS) during 2016 and the related costs of Rs 4.6 billion were accounted for in the
financial results of 2016. Accordingly, PTCL group net profit for the year was Rs. 1.6 billion,
which would have been Rs. 4.7 billion, 152% increase over last year.
PTCL financial position remained healthy and stable during 2016 due to continuous
efforts to optimize costs, resulting in 25% increase in cash-based funds in the form of short-term
investments and cash and bank balances. PTCL’s revenue for the year was Rs 71.4 billion with
growth in fixed line broadband revenue. The company’s operating expenses during the period
were reduced by 7% resulting in 6% growth in operating profits. The net profit for the year was
Rs 6.8 billion after accounting for the VSS cost. Without VSS impact, net profit of the PTCL
would have been Rs. 9.9 billion, 13% increase over last year.
Strategic Posture:
a. Vision:
“To be the leading Information and Communication Technology Service Provider in the
region by achieving customer satisfaction and maximizing shareholders' value'.”

b. 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.
c. Objectives:
The objectives of the Request for Information are given as under:
a) To considerably improve time-to-market of new products offerings.
b) To support flexible bundled offerings across the product portfolio.
c) To consolidate the silos systems for better investment (Capex).
d) To reduce (Opex) for upgrades, changes, resources and other operations.
e) To adopt innovate and best fit roll-out strategies to manage the risks and costs.

Corporate Information:

Board of directors:
 Dr. Daniel Ritz - President & Chief Executive Officer
 Mr. Abdul Rahim A. Al Nooryani - Member PTCL Board
 Mr. Hesham Al Qassim - Member PTCL Board
 Mr. Hatem Dowidar - Member PTCL Board
 Mr. Irfan Ali - Member PTCL Board
 Mr. Mudassar Hussain - Member PTCL Board
 Mr. Arif Ahmed Khan - Member PTCL Board
 Mr. Khalifa Al Shamsi - Member PTCL Board
 Mr. Serkan Okandan - Member PTCL Board

Top Management:
 Rashid Naseer Khan-President & Chief Executive Officer
  Mohammad Nadeem Khan -CFO (Chief Financial Officer)
 Syed Mazhar Hussain-CHRO (Chief Human Resources Officer)
 Sikandar Naqi-CBDO (Chief Business Development Officer)
 Moqeem-UI-Haque-CCO (Chief Commercial Officer)
 Adil Rashid-CBSO (Chief Business Services Officer)
 Saad Muzaffar Waraich-CTIO (Chief Technology and Information Officer)
 Jahanzeb Taj-CBOO (Chief Business Operations Officer)
 Muhammad Shehzad Yousuf-CIA (Chief Internal Auditor)
 Zahida Awan -Legal Advisor - Executive Vice President (Legal)
 Saima Akbar Khattak -Company Secretary

External Scanning:

Pakistan followed a gradual approach to liberalize its telecom market. During 1990s, as a
first step, market was opened for value added services and competition was introduced in cellular
mobile sector as four licenses were issued (PTML, Pak-tel and Insta-phone).
The government monopoly was retained in fixed line services, however, PTCL legal
monopoly ended with effective from 31st December 2002. The government announced Telecom
Deregulation Policy and Cellular Mobile Policy in 2003 and 2004 respectively. The telecom
regulatory, issued new licenses for Long Distance International (LDI) and Local Loop Fixed
(LLF), Wire Local Loop (WLL) and Cellular Mobile. With the issuance of new licenses, the
market is now open for full competition in all segments of the sector.

a. Industrial Structure:
Pakistan’s telecom sector has finally begun moving and looked set for an era of
phenomenal growth. The sector has witnessed tremendous growth in recent years with Tele
density depicting major expansion after deregulation. The primary purpose of deregulation of
the sector was to encourage healthy competition while providing better quality products and
services to customers on lower prices as well providing best technology available worldwide.
Current Tele density in Pakistan has expanded exponentially from 4.3 percent in
2002-03 to stand at 48.4 percent in 2006-07 with currently standing at over 52 percent, with
better services and competitive rates. Also, increasing inflow of foreign investment in the
telecomm sector has resulted in the introduction of new cut throat technologies for provision
of various telecom services including cellular, wireless and internet services.
Cellular segment remained the vital player with increase in total Tele density
contributing 48 percent. In the urban markets introduction of Broadband internet services by
various Telecomm giants such as PTCL, World Call and WA teen has further benefited the
consumers to access timely information over the internet with competitive rates.
b. Market Operation:
Pakistan Telecommunication Company Limited, or PTCL, keeps callers connected
from Karachi to Islamabad. The communications services provider offers consumers and
businesses with basic landline, DSL broadband, interactive television, and IP telephony
 services. The company also provides wholesale services such as traffic routing and call
termination to other carriers. PTCL's subsidiaries include wireless phone services provider
Pakistan Telecom Mobile, which operates as Ufone. In 2006 Emirates Telecommunications
(Etisalat) acquired a 26% stake in PTCL and assumed management control of the company.
Demand is driven by technological innovation and by growth in business activity.
The profitability of individual companies depends on efficient operations and good
marketing. Large companies have big economies of scale in providing a highly automated
service to large numbers of customers, and have the financial resources required building and
maintaining a large network. Smaller companies can compete effectively only in small
markets or by providing specialty services.
Top PTCL Competitors;
• China Mobile
• Orascom Telecom
• Telenor
c. Market Structure

Wireless Local Loop (WLL) is growing at a rate of about 100 percent per annum as
its Tele density has reached to 1.34 percent by end of December 2007. The quarterly addition
of WLL subscriber is approximately 0.14 million on an average.
PTCL is leading in terms of traffic on WLL in Pakistan, which has about 54 percent
market share of total traffic of WLL segment. Two major players, PTCL and Tele card have
lost market share in WLL traffic in quarter ending December 2007 when compared with the
same quarter of the last year. PTCL share came down to 54 percent from 57 percent while
Tele card share in total traffic has come down to 22 percent from 30 percent. World Call has
gained 100 percent and its share reached to 22 percent at the end of 2007 compared to the
same quarter last year.
Great Bear International share is reported to be 3 percent, while WA teen Telecom share
is 0.2 percent, which started their services during the quarter. PTCL has gained over 1 percent
market share compared to the same quarter of last year while Tele card added over 5 percent
market share during this period.
PTCL has already covered over 11,500 cities/towns/villages while other major operators
like World call, Tele card and Great bear are increasing their coverage too.

d. Regulatory Environment
The local telecom market has altered significantly since the creation of PTA as an
independent regulatory agency and had enjoyed sizeable success to open up the local market
to competing operators. With the governments deregulation policies, Etisalat, the UAE based
telecom player being the highest bidder emerged as the buyer of the 26 percent share in
 PTCL in April 2006. PTCL, despite being a giant, had to face many bottlenecks in its
operations with such large network.
PTCL has recently taken an initiative to right size itself by introduction of VSS for its
employees where about 28000 employees are accepted under the scheme. Introduction of
various diversified products and services to sustain its market share, Implementation of ERP
solutions to provide integration of various departments through acquisition of SAP software
and state of the art billing and customer service software, translates PTCL’s long term goals
of operational effectiveness into practice. The telecom giant PTCL has observed cutthroat
competition from various service providers after the implementation of the deregulation
policies by the PTA. However, through the vast infrastructure and being the carriers’ carrier,
PTCL with diversification of its various services has enjoyed well-built position and possess
immense potential for growth, while need for telecom services is on rise as economy
continues to grow on the right track.

Internal scanning:

Being a public limited company whose majority shares are controlled by the Government
of Pakistan, PTCL is responsible to provide telecommunication services in the country on
affordable prices while ensuring that the telecom services become accessible throughout the
country. Since exclusivity of PTCL has ended on 1st Jan 2003, the telecom sector of Pakistan has
entered into a new era and PTCL is slowly moving towards competition in the basic telecom
services. The company’s policy objectives are as follows:
 Increase service choice for all consumers of telecom services at competitive and
affordable prices.
 Increase private investment in the telecom sector and encourage local telecom
manufacturing/service industry.
 Enhance long run benefits to the Government’s financial position by expanding the
taxable revenue base.
 Accelerate expansion of telecom infrastructure to extend telecom services to unserved
and undeserved areas.
 Encourage fair competition among service providers, while maintaining leadership in
the telecom sector.
 Maintain consistency with the Pakistan IT and internet promotion policy of low prices
for Bandwidth and Internet access.

a. Organizational Management Cycle

 The cycle above describes the Organizational Management process at PTCL.
Yellow blocks describe the core functions of the Company performed at all levels in the
Organization. Blue Blocks are the Strategic functions which are performed at the
Strategic level only.

b. Profitability Position
PTCL posted a net profit of Rs 15.64 billion (EPS Rs 3.07) in FY07 against last
year's figure of Rs 20.78 billion. The declining trend in profitability continued during the
financial year ended June 30, 2007 due to structural adjustments brought about in the
telecom sector by competition. Although PTCL maintained its leading market share in
the fixed line, there was a decrease in revenues by 5.5% mainly due to substitution
impact of mobile expansion. There was also an increase in operating expenses by 11.7%
mainly due to prudent provisions for doubtful debts and long term systematic
improvements in operations and customer services.
In spite of decline in profit, the PTCL managed to increase its operating cash
flows to Rs 35.54 billion compared to Rs 35.19 billion last year. Considering the cash
requirements for restructuring and development plan, the company declared a final
dividend of Rs 2.00 per share for the financial year ended June 30, 2007. The total
revenue for FY 2006-07 stood at Rs 65.28 billion against Rs 69.09 billion of FY 2005-06.
The decrease in revenue was mainly in the domestic segment due to competition and
reduction in tariffs. However, PTCL is making all efforts to boost revenue by improving
customer service and launching new services to turn around the situation.
c. Liquidity Position
The liquidity position of the company suffered a setback in FY06. This trend has
been witnessed despite increasing current assets, as current liabilities grew more sharply.
The short term borrowings of the company have been mounting for the last few years and
this has contributed to the current trend of the current ratio. It may be noted that the
company holds large amounts of cash and bank balances compared to the other
companies in the business. This may provide an edge to the company over its
competitors. Although the liquidity stance of the company is fairly satisfactory at the
moment, but a continuation of the current negative trend may spell trouble for the
company.
d. Leverage Position
The debt ratios showed a decreasing trend in the FY07. The debt to asset ratio of
the company had declined considerably in FY05 but the trend reversed in FY06,
declining again in FY07. It is important to note that the company maintains a largely
unleveraged capital structure, with the current trend in debt ratios bought about largely by
changes in current liabilities of the company. This was brought about mostly due to a
decline in current liabilities of the company in FY05 and an increase in the same in
FY06. The absence of the dividends payable portion of current liabilities in FY05 and its
coming back online in FY06 was an important contributor to the trend. Further, the FY06
also saw an increase in short term borrowings of the company, complemented by
increases in other components of current liabilities. Increases in assets, mainly arising
from higher cash and bank balances, could not prevent the trend of the debt ratios.
e. Activity Position
The DSO of PTCL witnessed an upward trend throughout the period under
analysis, except in FY05 when an improvement was marked. The ratio jumped up
considerably in FY06, completely nullifying the effect of the decline in FY05, and
exacerbating the already long collection period of the company. However, DSO showed a
decline in FY07 showing that management of PTCL is constantly striving for
improvement and enhancement despite stiff competition. As a result, the operating cycle
has also decreased in FY07. The total assets turnover and sales to equity ratio of the
company also declined in the FY'06 as revenues shrunk during the period. Sales/equity
declined with the increase in equity of the company.

f. Dividends
PTCL has had a history of paying out significant portion of its earnings to its
shareholders. However, with huge cash requirement for Voluntary Separation Scheme,
PTCL is unlikely to announce any cash payout during FY08. Therefore, once the ongoing
process of VSS is through, which requires a cash outflow of PkR23.2bn, dividend payout
is likely to resume to its initial levels.
g. HR Aspects
The transformation from a legacy public sector organization into a responsive and
competitive enterprise in the deregulated era could not have been possible without
implementing a forward looking Human Capital development and management strategy.
One of the most important objectives of this new strategy was to optimize the workforce
which was implemented by offering the voluntary option of separating from PTCL in
exchange for financial compensation. Around 29,920 employees opted to pursue other
career opportunities after accepting terms of voluntary separation from PTCL.
The VSS marked the single largest most successful exercise in the history of
Pakistan. In the highly challenging marketplace, PTCL HR wing stepped forward to
facilitate the emergence of new Corporate Culture by becoming Equal opportunity
employer, inducting fresh blood from the market, improving the way PTCL runs and
reducing the number of employees having outdated skill set. The Training &
Development wing of the HR Department also organized a comprehensive six months
“Urgent Training Needs” program in technical and managerial fields to enhance soft
skills. An MoU was also signed with Etisalat Academy to benefit from their experience
in training programs.
h. Training and Development
The role of training and development in a service involved organization is
many times more in comparison with what it has in a manufacturing involved
organization. This role becomes more significant in a situation where the need to
transform organizational culture is identified as the most glaring problem and the
most difficult impediment on the way to organizational growth. PTCL employees are
a great asset not only for the company but also for the country. Their marvelous
potential is yet to be exploited. Their skills need to be developed, their expertise need
to be updated for which training and development department is at their disposal to
cater to their training needs.
At PTCL, training and development team would never miss an opportunity to
contribute towards the betterment of the company. Training and Developments is
playing an essential role in changing PTCL from a government sector organization to
corporate sector company. PTCL consider every employee of the company as our
customer and firmly believe that meeting their expectation would help us achieve
customer satisfaction. We look forward to your input for making our endeavors more
effective. The Training and Development has a clear road map of activities and is
committed to provide high quality trainings for the development of every single
employee.
SWOT Analysis:

1. Strengths:
 Largest operational network and infrastructure within ICT (Information &
Communication Technologies) segment.
 An integrated Monopoly.
 Market leadership in Local loop, Wireless local loop (WLL) and Fixed telephony.
 PTCL (Ufone) is market challenger in GSM segment.
 Ufone is performing well though Warid and Telenor are tough competitors. PTCL,
Ufone’s profitability increased by 49.2 percent to Rs 977 million in 1H/FY07 as
compared to Rs 655 million in the corresponding period last.
 Competitors still depend on PTCL network either directly or indirectly.
 Experienced Telecom Resources

2. Weakness:
 Not been able to nurture its growth around customer services oriented strategy
 Internal organizational and business processes issues
 Monopolistic culture has further added to its complexities
 Pak-net, the internet service provider arm of ptcl continues to incur losses due to poor
management and lack of network optimization
 Ptcl-v, the fixed wireless phone service is poor
 Over employment & low productivity.
 Slow decision making including external interferences.
 Corporate culture akin to government departments.

3. Opportunities:
 Low Tele density of Pakistan.
 Have vast infrastructure and real estate assets which can be leveraged further.
 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 in a deregulated environment
 Scope for efficient/cost effective operations.
4. Threats:
 Increased competition in long distance continues to exert pressure.
 VOIP use is increasing despite ambiguous and discriminatory policies.
 Exposure to market competition.
 Migration to Cellular Networks.
 Ability to Attract & Retain Quality Professionals.
 Reduction in International Settlement Rates.
SWOT Matrix:

SO Strategies; Strength-S Weaknesses-W

Use strength to take 1.Best Serve in the nation. 1.No proper maintenance of
advantage of opportunities. 2.Personal network. the installing connections.
Wo Strategies; 3. Nationwide. 2. More cable beaks.
Overcome weaknesses by 4.Low Rates. 3.Uneducated staff.
taking advantage of 4.Unstrined staff.
opportunities.
ST Strategies;
Use strength to avoid threats.
WT Strategies;
Minimize weaknesses and
avoid threats.
Opportunities-O SO Strategies WO Strategies

1.Large market. 1.Do more and more advertising 1.Experts from the market
and marketing to be spreader should be hired to make
2.No competitors. before the competitors arrive. proper procedures and testing
for the new connections.
3. Fresh graduates from the 2.Make more customers before
local universities. the competitors arrive. 2.Repair the cables on the time
to get edge on the upcoming
competitors.

3.Hire the fresh graduates for

more efficiency.
Threats-T ST Strategies WT strategies

1.Potential customers are 1.Experts should be hired to 1. Maintain the proper testing
loosed due to no proper make proper procedure and of lines before installing new
installation procedures of new testing for the new connections. connections.
connection.
2.Use promotion of low rates 2.Repair the cable breaks on
2.Upcoming competitors. and personal network for more time to avoid losing the
edge over the upcoming potential customers.
competitors.

References:
https://en.wikipedia.org/wiki/Ptcl

https://www.scribd.com

https://www.pakistanpressfoundation.org/performance-of-ptcl-reviewed

https://dailytimes.com.pk/30028/ptcl-records-robust-performance

https://ptcl.com.pk/uploads/Q3%20-%202018%20Investor%20Presentation.pdf

https://ptcl.com.pk/Financials

https://ptcl.com.pk/Home/PageDetail?ItemId=345&linkId=900

https://ptcl.com.pk/uploads/Annual%20Report-2017.pdf

https://ptcl.com.pk/Info/Corporate-Information

https://www.google.com/images

https://www.slideshare.net/YameenkhanKhan/ptcl-report2?from_action=save
https://www.ptcl.com.pk
https://www.Wikipedia.com
https://www.Businessrecorder.com
https://www.SecurityandExchangeCommissionofPakistan.com
https://www.Kse.com