CHAPTER # 1

INTRODUCTION
It’s a common practice that students attain practical experience during
or after completing their masters. At Department of Management
Sciences it is an essential degree requirement for the Students of BBA
to complete a Eight weeks internship program in a well-reputed
Organization .Report Writing follows the internship, which is an
integral part of the degree of BBA. The report is encompasses the
Knowledge of the internee that he/she obtains during his course
Studies, his experiences that he has during internship, his learning and
analysis in the light of which recommendations are made These
recommendations may benefit the concerned organization for further
improvement in its performance .The supervisor assigned to internee
guides him during the whole process of report writing. After the
completion of report, it is submitted to the department of Management
Science, The report is properly analyzed and evaluated at institute of
management studies on its descriptions as well as on the analytical
capabilities of the writer, and proper grades are assigned to the
writer.
This internship report has been written on PTCL.

1.1 BACKGROUND OF THE STUDY

The telecommunication Sector around the World is going through a
process of Rapid changes in information technology and with
convergence to focus on mobile, internet and on value added services.
In line with global trends and for meeting the emerging demand, major
initiatives have been taken by PTCL to upgrade its network, introduced
a range of new value added services, developed a portfolio of
information technology; internet and bandwidth related services and
now revising its organizational structure to make it more conductive to

1
deal with the change and commercialization process to enhance the
revenue potential of Company. The Socio-Economic growth of
Developing Country depends mainly on the telecommunication Sector
and its involvement in information Technology, Tele-marketing and E-
commerce makes it an integral part of the overall development of the
country.

1.2 PURPOSE OF THE STUDY

 To fulfill the Requirement of the Degree of Master of
Business University of Science & Technology Bannu To get
Practical experience in field and to apply the knowledge
gained during the Course of studies to real World Situations.
 To understand how various operations are carried in the
Organization of the real world?
 To perform financial analysis of PTCL.
 To make possible recommendations in the Light of these
Analysis
 To improve Long Report Writing Skills.

1.3 SCOPE OF THE STUDY

Students are required to specialize in only one department or to cover the
complete organization in Case of small organization. As for as this report
is concerned it describes Finance Department of PTCL .It was not
possible to go through each and every department of PTCL due to Time
retraction which was officially proclaimed
For eight weeks, however efforts were made to cover it in the best
possible way. Initially this report describes the function and procedures of
Finance Department of PTCL at Peshawar and then financial analysis
were made at national level.

2
1.4 METHODOLOGY OF THE STUDY
The biggest source of information is my personal observation while
working with staff and having discussion with them. Formally
arranged interviews and discussions also helped me in this regard.
Another methodology used for the collection of information and data
was based on the two primary modes of data.

1.4.1 Sources of Primary Data

Data collected for the first time is called primary data1. The sources
used to collect such data include:
 Personal observations
 Interviews of personnel.
1.4.2 Sources of secondary data
The data Collected earlier by someone else and which has gone
through mathematical and statistical techniques after its completion is
called secondary data3. Methods used to collect secondary data
include:
 PTCL annual report
 PTCL brochures
 PTCL manuals
 Journals and Newspapers
 PTCL website.
For analysis following techniques will be used.

• Common size analysis

• Index analysis
• Certain ratios analysis

1.5 LIMITATIONS OF THE STUDY

3
None of human made things can be considered perfect. Only the
Divine created things are perfect and error free .No matter, how
carefully a study is carried out it will not be perfect and complete in all
respects. This study was conducted in conformity with the objectives
of the study; however the study is subject to following Limitation.
 The company officials were not willing to explain all
the things regarding their organization and its
operations, making it difficult to gather information
about and understand different technical operations.
 All the facts regarding company cannot be presented
due to the problem of secrecy.
 Limited duration of internship makes the analysis
restricted because all the technical operations of the
company cannot be understand and analyzed in only
two months.
 Internees are not provided with opportunities of doing
things themselves during internship, making it difficult
for them to understand technical things. This also
affects the quality of the study and resulting report.

CHAPTER # 2

REVIEW OF PAKISTAN
TELECOMMUNICATION COMPANY
LIMITED (PTCL)
2.1 History of PTCL
After the partition of Indo-Pak subcontinent in1947, the areas that
became part of Pakistan were mostly neglected in respect of

4
telecommunication services. The supporting organization and
manufacturing telecommunication equipment were almost non-existent
in Pakistan

2.1.1 The Pakistan posts and telegraphs department (1947 to 1962)

In 1947, the Pakistan Posts and Telegraphs Department was attached
with the Ministry of Communication. During the first fifteen years, a
sound foundation was laid by creating supporting organizations like
telephone stores, workshops, training centers, production and repair of
equipments etc, necessary for running of PT&T Department. However,
telecommunication network systems remained limited to major cities
of the country. The Government of Pakistan started five-year plans to
build a proper base for systematic development of the telecom sector.

2.1.2 Pakistan telegraphs and telephone department (1962-1990)

With the expansion of the postal and telecommunication services,
government decided to split the PP&T Department into two
departments i.e. Pakistan Telegraph and Telephone Department and
Pakistan Post Office Department. The process of bifurcation was
completed by July 1962. Significant developments took place during
the first forty years in terms of infra-structure development and transfer
of technology from EMD to digital switching systems and increase in
telephone lines from 12,000 in 1947 to 922,000 in 1990, besides
establishment of manufacturing facilities of various types.

2.1.3 Establishment of Pakistan telecommunication corporation

(PTC)
In 1990, PT & T department was transformed into a corporation and
titled as Pakistan Telecommunication Corporation. The objective of

5
this initiative was to provide greater autonomy and flexibility to the
organization in achieving its long-term objectives
During the next five years, the telecommunications sector made
tremendous progress in the provision of telecommunication services. It
started manufacturing and production of telecommunication equipment
/ materials by using the latest technologies. During PTC period the
number of lines increased to 21, 26,054 in 1995, an increase of over
230 percent over 1990.

2.1.4 Pakistan Telecommunication Company limited (PTCL)

In December 1995, PTC was converted into a joint stock company
under Pakistan Telecommunication (Reorganization) Ordinance; assets
of the PTC were divided among Pakistan Telecommunication
Company Limited (PTCL), Pakistan Telecommunication Authority
(PTA), National Telecommunication Corporation (NTC) and
Frequency Allocation Board (FAB). While policy was reserved for the
government, the regulation of the sector was entrusted to the Pakistan
Telecommunication Authority (PTA). Frequency Allocation Board
(FAB) was created for the management of the radio frequency
spectrum and National Telecommunication Corporation (NTC) was
created. For government’s telecommunication services PTCL inherited
about 94.8% of PTCL’s assets; including 2.862 million access line
installed (ALI) and 2.228 million subscribers (ALIS). Later, in October
1996, the parliament of Pakistan passed the Pakistan
Telecommunication (Re-organization) Act. PTCL was established in
public sector as a joint stock company in 1996 by enactment of the
parliament of Pakistan. Pakistan Telecommunication Company
Limited (PTCL) was issued a license by Pakistan Telecommunication
Authority (PTA) to provide telecommunication services in Pakistan for
a period of 25 years commencing from January 1, 1996

6
2.1.5 Sale of 26% shares to Etisalat for $ 2.6 billion
The Emirates Telecommunication Corporation (Etisalat) offered the
highest bid of$ 2.6 billion for 26% shares of Pakistan
Telecommunication Company limited (PTCL) on June 19, 2005. On
13th march 2006 the government has signed an agreement with Etisalat
to handover the management of PTCL to them.

Table 2.1 MAJOR EVENTS IN PTCL'S HISTORY

1947 Post & Telegraph Departments established

1962 Pakistan Telegraph & Telephone Department
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 & Internet Subsidiaries established
2000 Telecom Policy finalized
2005 26% shares sold to Etisalat for $ 2.6 billion

2.2 EMIRATES TELECOMMUNICATION COMPANY

“ETISLAT”
Etisalat founded on 30th August 1976, the Emirates
Telecommunication Corporation –Etisalat provides telecommunication
services to the United Arab Emirates and is one of the leading service
providers in the Middle East.
Etisalat is embracing new technology, new philosophies and new ways
of doing business. Their new corporate logo and identity is a catalyst to
this change. The identity has green background, which signifies
solidity, inspires confidence and denotes Etisalat the mother brand.

7
The red dot represents technology and the world of communication.
The 3 curve featured in the design not only represent the letter ‘E’
which stands for Etisalat and the emirates but also signifies an entity
that is growing outside its boundaries and expanding into strategic
business locally and internationally. The red dot and the curve together
represent the image of a stylized of a stylized “human” entity reaching
out for excellence in service levels, receptive to new ideas and
philosophies in a world of dynamic change.
Etisalat deals in voice communication, wireless communication and
data communication. Etisalat was one of the first to introduce mobile
telephones in the Middle East in 1982 and launched the GSM service
in September 1994.
Etisalat celebrated its 25th anniversary in September 2001. The
telecommunication services they have been providing match the
highest standard in the industry.

Etisalat was the highest bidder for the acquisition of 26% stake in
PTCL. This latest win reflects the determination of Etisalat to
strengthen its position as the leading telecommunication in the region.
On 10th December 2007 the government has signed an agreement with
Etisalat to handover the management of PTCL to them. This latest
acquisition further positions Etisalat amongst the leading international
telecom players worldwide. Etisalat offers world-class standards in
customer service and state-of-the-art technology wherever it operates,
a very attractive proposition for strategic partnership and alliances 1.

2.3 MISSION STATEMENT OF PTCL

A company’s mission statement is typically focused on its present
business scope-“who they are and what they do” mission statement

8
broadly describes an organization’s present capabilities, customer
focus, activities and business makeup2.
Pakistan Telecommunication company limited statement is stated as

• An organizational environment that fosters professionalism,

motivation and quality.

• An environment that is cost effective and conscious.

• Services that are based on the most optimum technology.

• “Quality” and “Time” conscious customer service.

• Sustained growth in earnings and profitability3.

2.4 STRATEGIC VISION OF PTCL

Strategic vision is a roadmap of a company’s future- providing
specifics about technology and customer focus, the geographic and
product markets to be pursued, the capabilities it plans to develop, and
the kind of company that management is trying to create4. Strategic
vision of Pakistan Telecommunication Company is “to be the leading
ICT service provider in the region by achieving customer’s satisfaction
and maximizing shareholders value5.

2.5 CORE VALUES OF PTCL

Values are general statements, procedures or understandings that guide
or channel thinking in decision making. It provides direction for action
and regularizes the decision making in certain circumstances.
Pakistan Telecommunication Company limited defines its values as

• Professional Integrity

• Customer Satisfaction

9
 • Teamwork

• Company loyalty 6

2.6 OBJECTIVES OF PTCL

Objectives are the ends towards which activity is aimed. These are the
results to be achieved. Pakistan Telecommunication Company limited
states its objectives as under

1. To provide quality services to its customers in Pakistan.

2. To provide maximum satisfaction to its customers by using the

latest technology.

3. To increase the worth of owners.

4. To lead the telecommunication industry in Pakistan.

2.7 SUBSIDIARIES OF PTCL

2.7.1 Paknet
Paknet is a fully owned subsidiary of PTCL. Technical assets and staff
were carved out of PTCL to Paknet, to help new company to meet the
competitive market. The staff, thus transferred had requisite experience
and expertise in internet and data communication field. However most
of the employees have been hired from private sector. The recently
reconstituted board of directors of Paknet comprises senior and
experienced professionals nominated by PTCL board.1
Amount of investment by PTCL in Paknet Limited is of
Rs.150, 000,000 against which 15,000,000 ordinary shares each of
Rs.10 are issued. The main source of funds of Paknet is its retained
earnings. Permanent capital in the wholly owned subsidiary of PTCL
having an authorized capital of Rs.350,000,000 represented by

10
35,000,000 ordinary shares of Rs.10 each and paid up capital of
Rs.50,000,000.
Paknet has the largest internet infrastructure in the country, with PoP
in 44 locations and internet access availability in over 2,000 cities and
towns. Paknet made its start by inheriting customer base of 6,000
internet users from PTCL and ended its first financial year with
76,000customers against its target of 50,000 customers. Although
having the largest infrastructure, Paknet was unable to fully leverage
its competitive advantage and has incurred losses. Paknet’s revenue for
the financial year ended 30 June 2006 is Rs.169.2 million 7 i.e.21%
lower than last year. The company made a loss of Rs.125.9 million
against Rs.42.2 million losses for the last year.
The main reasons for this loss are poor commercial orientation, lake of
network optimization, excessive overheads and payables to PTCL
amounting to Rs.47.6 million on account of accumulated co-location
charges. The continuous and increasing loses of Paknet makes its
existence a question mark for PTCL because subsidiaries are
maintained to increase the profits of parent organizations.

11
2.7.2 Pak Telecom Mobile Limited (PTML)
In today’s changing trends in the telecom sector, all global telecom
have strong cellular networks either directly or through subsidiaries.
While keeping this in mind there was a need for PTCL to have its own
cellular service. Pak Telecom Mobile Limited (PTML), a wholly
owned subsidiary of PTCL, was created. The company commenced its
operations under the brand name of Ufone from Islamabad in January
2001 and subsequently extended its coverage to other cities. Presently
Ufone’s network covers more than 750 cities, towns and major
highways of the country. During this last year Ufone successfully
completed its US $170 million phase IV network expansion
consequently the asset base of the company has increased from 20
billion to Rs.27 billion.9
As for the company’s approved business plan, Ufone was expected to
close its first financial year (ending June 30, 2001) with about 30,000
customers but Ufone achieved over 100,000 customers by June
2001.Now during this financial year (ending June 30, 2006) Ufone has
increased its customers from 2.58 to 6.34 million.4
Ufone provides international Roaming in partnership with more than
150 operators across 79 countries. It has also introduced the
international Roaming facility for the prepaid customers in the United
Arab Emirates and Saudi Arabia. Ufone at the moment offers very
attractive tariff while does not require a deposit or activation charges.
The operating performance of Ufone has been very encouraging in the
face of strong competition. Its revenue and after-tax profit rose by 87%
and 61% respectively compared to the last year and EPS increased
from Rs.2.94 to Rs4.74.

12
Investment of PTCL in Ufone is an amount of Rs.1, 500 million
represented by 150,000,000 ordinary shares of Rs.10 each. The main
source funds for Ufone are its retained earnings. Authorized capital of
Ufone is Rs.4, 000 million represented by 400,000,000 ordinary shares
of Rs.10 each. Existing paid up capital of PTML is Rs.2000 million
represented by 200,000,000 ordinary shares of Rs.10 each.
The world telecommunication sector is gearing towards wireless
communication. The mobile business in Pakistan has huge growth
potential/ in this background of growth, it was essential for PTCL to
establish itself in the cellular phone business before the exclusivity on
the fixed telephony expires. Introduction of Ufone in the major cities
of Pakistan received an unprecedented response and with in short time
already available capacity exhausted. Ufone customer base grew by
190% from 2.58 to 7.49 million during financial year 2007.
Ufone is awarded a license for providing cellular services in Azad and
Jammu Kashmir and the Northern Areas. But now when two
international cellular companies have entered the market, ufone will
have to improve its services quality to maintain its market shares.

2.7.3 Telephone Industry of Pakistan (Tip)

Telephone industries of Pakistan (Pvt) Ltd Haripur was incorporated as
a private limited company in 1953 by Gop with the collaboration of
Siemens AG.germany.the company is managed by Board of Directors
having 8 directors on the board, six from PTCL and two from Simens
A.G.Germany. The company started production of Telephone sets.
With the passage of time and with the change in technology, its
capacity has increased in addition it was also producing Contains,
Exchanges, distribution boxes, Divisional Cabinets and Drop wire.

13
 The company was having marketing limitations and lakeluster
approach predominantly for reasons of legacy and due to its remote
location.
Paid up capital of the company is Rs.759753 million and turnover was
depending upon orders from PTCL, NTC, SCO and WAPDA.
The company continued to perform poorly during the period up to
April 12, 2007 when PTCL withdrew its investment from the
company. During the period from July 01,2005 to April 12,2006, the
company suffered a loss of Rs.114 million on revenues of Rs.1,142
million9. PTCL management on its part has completed all formalities
pertaining to disinvestment of TIP and transfer of shares to Ministry of
IT and T, Govt of Pakistan.

2.7.4 Carrier Telephone Industries (CTI)

Carrier Telephone Industries (CTI) was incorporated as a private
limited company in the public sector in 1969 in collaboration with
Pakistan telecommunication Company Limited and Siemens AG,
Germany. CTI was established to acquire, develop and produce latest
state-of-the-art equipment in the field of transmission technologies,
electronics and other telecommunication areas. It provides a
sophisticated technology base for the country. Today CTI is
manufacturing SDH transmission equipment, Multiplexing products,
Optical Fiber and Digital Radio Systems. In addition it has also
ventured in the manufacturing of Microwave Gid Parabolic Antennae,
PABX and Pai Gain System. It has recently started assembly of
personal Computers, besides selling other Electro-mechanical
accessories, measuring instruments and other products. The company
employs latest manufacturing techniques i.e. Surface Mounting
Technology (SMT) for mounting components and its robotics

14
arms/machines provides excellent support for after sales services. It is
equipped to train and fully support its customers.
CTI was privatized in November 2005 as part of the PTCL
privatization commitment. PTCL’s equity investment of Rs.8 million
was sold for Rs.500 million to Siemens AG.the privatization
commission has not yet released the proceeds of this sale to PTCL. The
company had earned a current year profit of Rs.2 million before
privatization in November 200510.

References
1. An internship report on PTCL by MR. Zahid.
2. Thompson S.L. strategic Management concept& cases,
New Delhi Tata Megra-Hill publishing Company Ltd p-7
3. PTCL ,2007 Annual report p-2
4. Thompson S.L. strategic Management concept& cases,
New Delhi Tata Megra-Hill publishing Company Ltd p-2
5. PTCL, 2007 Annual report p-4.
6. PTCL, 2007 Annual report p-5.
7. PTCL, 2007 Annual report p-21.
8. PTCL, 2007 Annual report p-27.

15
CHAPTER # 3
ORGANIZATIONAL STRUCTURE OF PTCL
Organization is the end result of organizing. So organizing is the part
of management that involves establishing intentional structure of roles
for the people to fill an enterprise. It is process of breaking down the
overall tasks of an enterprise into individual assignments/activities and
then getting them put together in units, departments or in groups along
with the delegation of authority to the manger. Organizational structure
implies a formalized intestinal structure of roles/positions.
A well-developed and properly coordinated structure is an important
requirement for the successful operation of any organization. It
provides the basic framework with in which functions and procedures
are performed. In PTCL the functions of planning and policy
formulation are carried out by the Board of Directors whereas the
management of the organization is carried out by the executive
management.

3.1 BOARD OF DIRECTORS

It is the highest body of PTCL, which has been vested with the
function of policy formulation. The first Director was elected by the
subscribers in their first meeting. Under the rules, the directors
appointed are not being less than sever in numbers.
There is general body meeting once a year of all the shareholders to
elect the members of board of directors. A director once elected, holds
office for a period of three years unless he resigns, becomes
disqualified from being a director or otherwise ceases to hold office. A
retiring director is eligible for re-election.

16
Presently the board of directors has Ten members, As follow

Mr. Hafeez-ur-Rehman
Chairman PTCL Board
Secretary IT&T
Ministry of Information Technology
Government of Pakistan
Islamabad

Mr. Abdulrahim Abdullah Abdulrahim Al Nooryani

Executive Vice President
Contracts and Administration
Etisalat, UAE

Mr. Ahmad Waqar

Secretary Finance,

Ministry of Finance
Government of Pakistan
Islamabad

Mr. Abdulaziz Ahmed Saleh Ahmed Al Sawaleh

Chief Human Resource Officer
Etisalat, UAE

Mr. Noor-ud-Din Baqai

Member (Telecom)
Ministry of Information Technology
Government of Pakistan
Islamabad

17
Mr. Ahsanullah Khan
Ambassador
Embassy of Pakistan
Abu Dhabi, UAE

Mr. Fadhil Al Ansari

Executive Vice President En gineering
Etisalat, UAE

Mr. Abdulaziz Hamad Omran Taryam

General Manager
Northern Emirates
Etisalat, UAE

Ms . Farah Qamar
Company Secretary
PTCL Headquarters, G-8/4
Islamabad

Mr. Saood Al Junaibi

Executive Vice President
Portfolio Management Etisalat,
UAE

3.2 CHAIRMAN PTCL

Mr. Walid Irshaid is the Chairman of PTCL. The Chairman advises the
members of the board of directors on policy matters, directs and
monitors the business activities of the PTCL. He also ensures the best
utilization of the material and human resources. The board of directors
determines the period for which the Chairman to hold office. The
Chairman presides over meetings of the board.

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1.3. SECRETARY PTCL
A secretary may be appointed by the directors, and any secretary so
appointed may be removed by them as and when they deem fit.
Secretary manages the co- ordination and communication of strategies
and policies between various departments of the company. Secretary
sets agenda for monthly meeting of the board and informs members for
meeting and keeps record of the decisions taken.
Presently Miss Farah Qamar is the company secretary.

Chapter #4
PRODUCTS AND SERVICES
After the deregulation of the telecommunication sector PTCL has
brought a lot of variety in its products and services to face the
challenging task in the new environment in order to sustain profit
margin at the current level. PTCL is trying to improve its products and
services and make it more cost effective for the customers. The product
and services that PTCL is providing to its customers are as follows.

3.4.1 Prepaid calling cards

PTCL prepaid calling cards gives nationwide access with international
facility. It comes in easily affordable denominations of Rs.100, 250,
500, 1000 & 2000. These cards are easily available throughout the
country and it is easy to use it from any PTCL digital phone. Customer
has to pay neither line rent nor bill. In November 2003 PTCL launched
100 denomination prepaid calling card with advanced features.
3.4.2 Aasan prepaid telephony
Aasan phone is a landline prepaid telephony service, launched in May
2004. This service works just like the other prepaid services where

19
accounts are recharged with a prepaid phone card. The prime objective
of this service is to facilitate the customer in getting a new connection
with minimal documentation. Aasan cards are available in Rs.500,
1000 and Rs.2000 denominations.

3.4.3 Toll Free Service (0800)

This service is available to corporate customers for their customer’s
convenience. It provides corporate customers with effective and
dynamic telemarketing tool. Telemarketing is becoming the most
popular way of marketing around the world as selling products and
services on the phone is the most economical i.e. you reach more
customers in minimum time. Toll free numbers start with 0800.
Customers can call the company on toll free number with out any cost.

3.4.4 Universal Access Number (UAN)

UAN allows the customers to call different offices of a company in the
different cities by the same number. UAN consists of six digits
preceded by three digit code of 111, common to all UANs e.g.
111202020. UAN operates on existing telephone connection without
disturbing normal phone number. UAN service is ideal for
organizations engaged in marketing of products or services. UAN
enables quick and easy access to make queries and complaints,
increases customer satisfaction. It is time saving, convenient and cost
saving for customers. PTCL has the policy of “First come, first served”
i.e. customers can choose UAN of their own choice which is simple
and memorable. UAN service is available in 50 major cities of
Pakistan.

For installation of UAN one has to fill a form and submit it to that very
office. Its installation fee for one office is Rs.20, 000, 40,000 for two

20
offices and 60,000 for three offices while further 15,000 for additional
office. Customer has to pay its recurring charges in advance on quarter
basis i.e. Rs.3000 per quarter per office.
NTR-1 has shown billing of Rs.255, 000 for the last quarter of 2006
from 36 customers.

3.4.5 Universal Internet Number (UIN)

Due to the boom in telecom sector ISPs continue to mushroom at
around the country. UIN is a number starting with 131 used for
accessing internet e.g. 13199199. UIN number is assigned to each ISP
by PTA. The call dialed is charged as one local call irrespective of its
duration. Internet service in Pakistan has constantly improved due to
the technological advancements.
Installation charges for UIN is Rs.20, 000 while recurring charges are
received in advance on quarter basis at Rs.3000 plus 15% GST per
quarter per number. NTR-1 has shown billing of Rs.255, 000 while
received Rs.96, 000.

3.4.6 Premium rate service (0900)

0900 numbers are used throughout the world to provide information
via telephone at a premium rate higher the regular call charges. In case
of these calls 60% of the total revenue goes to the company called
while 40% is transferred to PTCL.

3.4.7 Virtual Private Number (VPN)

VPN is another service that provides convenience to corporations and
business with multiple-location offices or branches. Users of VPNs can
establish private net works on PTCL lines without having to install
their own dedicated network resources. PTCL’s installed capacity for

21
VPNs by the end of Jun 2005 was 1000 lines while 978 lines were
provided to 65 customers.
3.4.8 ISDN (BRI/PRI)
Broadband services to household and small medium sized
organizations are also provided through Integrated Service Digital
Network (ISDN). It transfers the data in digital form. This service has
now been available for some time and its users are benefiting from the
advantageous features like faster data communication, high-speed
Internet and clearer voice through International Gateway Switches
installed at Islamabad and Karachi.
Basic Rate Interface (BRI) has three channels, two for the data transfer
and one for security. PTCL charges only for 1.5 channels at the rate of
Rs.174 per channel.
Primary Rate Interface (PRI) has 30 channels for data transfer and
PTCL charges ISPs only for 20 channels at the rate of Rs.174 per
channel. The rest 10 channels are their sole profit.
There are two types of charges in case of PRI
• Hunting charges:- At the rate of Rs.25 per channel i.e.
25*20=Rs.500 per PRI
• Rent charges:- At the rate of Rs.174 per channel i.e.
174*20=Rs.3480
15 % general sales tax is charged on the above two charges. And if an
ISP doesn’t pay their dues before due date, is charged for 5 %
surcharges on the current dues.

3.4.9 Digital Subscriber Line (DSL)

DSL stands for digital subscriber line. With the help of DSL a
customer can enjoy Fax and Internet facility without keeping their
normal telephone number busy. Customer can enjoy voice chat from
telephone with high speed. It is of different band width 64kbps, 128,

22
256 and of1024kbps. PTCL does not sells this directly to the ultimate
customers but sell it to the ISPs like Paknet, Comsat, Micro net, Cyber
net, Dancom etc. PTCL charges ISPs on the basis of their customers.
PTCL charges either Rs.217 per connection per month from ISPs when
they give connection or 5 % of the total bill for which ISPs charge
their customer depending upon the contract signed between PTCL and
ISP. In the second case the ISP is required to send a copy of all the
customers’ bills to the PTCL revenue department.

3.4.10 Digital Cross Connect (DXX)

DXX service is used for data connectivity. PTCL charges their
customers in advance on the quarter basis. PTCL charges their
customers for three types of charges.

• Equipment charges: - PTCL charges for Rs.3636 for DXX of

64kbps and Rs.7272 for 128kbps or 192kbps.

• Line charges: - PTCL charges Rs.142 per annum per km for

64kbps, Rs.277 per annum per km for 128kbps and Rs.350 per
annum per km for 192kbps.

Installation charges for DXX are Rs.50, 000 for 64kbps, Rs.100, 000
for 128kbps and for 192kbps.

3.4.11 Local lead

Local lead is used for data transfer. PTCL charges yearly billing of
Local Lead. PTCL charges Rs.1440 per annum per km i.e. Rs.120 per
month per km. Its billing format is
Total dues=no of PRIs*120* no of months*distance in kms+15% GST

23
3.4.12 2MB
PTCL charges Rs.2536 per annum per kilometer. A customer is
charged by the formula
Total dues= 2536/12 *no of months *distance in km+15% GST
Its billing is also received quarter wise. 2MB bill contains details like
name & address, name of circuit, installation Date, Circuit speed,
Distance in km and period of billing.

3.5 DIGITAL FACILITIES

3.5.1 Call waiting

Through this facility a customer during conversation can hear a beep

indicating that another call is coming. A new incoming call can be
attended by tapping which will put present call on hold, and next
incoming call can be attended. This service can be availed free of cost
through dialing customer access point by UAN 111465465.

3.5.2 Code barring

Customers can prevent misuse of their telephone with the help of code
barring facility. This can be changed by the customer if need arises.
Customers can activate and deactivate this facility from their telephone
sets.

3.5.3 Call transfer

3.5.3.1 Immediate Transfer
A customer with this facility may transfer his calls to another
predefined desired number. A change in dial tone will be observed.
3.5.3.2 Call Transfer on Busy
In case the customer number is busy, an incoming call will be transfer
automatically to another predefined specified number.

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3.5.3.3 Call Transfer on No Reply
In case there is no reply, call will be transferred automatically to
another predefined desired number.

In such cases Customer is required to feed desired telephone number

on which call transfer is required. 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. It is offered free of cost by PTCL.

3.5.4 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. PTCL charges Rs.25 per month for this
facility.

3.5.5 Absent Customer

A customer with this facility may inform the calling person about his
non availability at the home or office. This calling person will get an
announcement or a special tone. The facility can be availed at the cost
of Rs.25 per month 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.

3.5.6 Caller Line Identification (CLI)

CLI allows you to identify the caller before picking up the phone. The
customer can check obnoxious calls and can keep the complete record
of all incoming / outgoing calls

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With time and date to take any action. This facility can be obtained by
dialing UAN 111 465 465 and where this number is not available, by
contacting the concerned DE Phones. PTCL charges Rs.30 per month
for this facility.

3.5.7 Don't disturb

Activating of 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. The facility can be availed through a written
application to the concerned DE Phones along with copy of NIC.
PTCL charges Rs.25 per month for this facility. The customers can
activate or deactivate the facility from their own telephone sets.

3.5.8 Hot line

This service enables customer to be in contact just by lifting the
handset and without dialing the number. System automatically dial a
preprogrammed number (after 5 seconds delay), most appropriate for
frequently dialed numbers. The facility can be activating 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. It costs Rs.25 per month to the customers.

3.5.9 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. You can obtain this by
dialing 14.each time you dials it, One Local call is charged at the rate
of Rs.2.01.

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3.6 MARKETING STRATEGIES
3.6.1 Marketing position
PTCL is a market leader in the telecommunication industry. It holds
the largest market shares. Till January 2003 PTCL had monopoly in
the telecommunication industry, but in January 2003 the deregulation
policy of Government; gave an end to the PTCL monopoly.

3.6.2 Strategies
PTCL is following the strategy of expanding the total market. It is
trying to expend the total market through new users and new uses.

3.6.2.1 Through New Users

New user’s means to convince the non users to enjoy services of
PTCL. This job is done by PTCL through
a. By lowering the installation charges: To increase the market
shares and convince the non users, PTCL lowers the
installation charges for short period. The PTCL installation
charges were Rs.4000 and have lowered these to Rs.1000 in a
short period.
b. Decreasing the connection time: This is another incentive to
convince the non users. PTCL give the connection within
eight hours. This is also for short period of time.
c. More locations for registration: This is also short term
incentive offered by PTCL. PTCL establishes temporary tents
in the different areas even on the road sides. The purpose of
this is that the customers can easily submit their forms for
registration.

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3.6.2.2 Through New Uses
PTCL is increases the uses of the current products in order to increase
the market shares. PTCL phone set is not only use for calling but it is
also used for.

3.6.2.2(a) Stock Exchange Report

This feature of PTCL phone set is especially for those businessmen
who are abroad from stock exchange and restless about stock exchange
situation. Those businessmen can easily get information about stock
exchange by dialing a number on PTCL digital phone set.

3.6.2.2(b) Stories
This feature is specially added for children. They enjoy their favorite
stories by dialing a specific number on PTCL digital phone set. This
means that PTCL is also creating an attraction in services for children.

3.6.2.2(c) Songs
One can also enjoy one’s favorite songs on PTCL digital phone set.
Just dial a specific number and enjoy the sweat songs.

3.6.2.2(d) Stars
This is another attractive feature of PTCL digital phone set. By dialing
a specific number one can easily check one’s star.

3.6.2.3 Through Usage Rate

Usage rate means consumption frequency or to use the product again
and again. In order to capture more and more market shares PTCL is
trying to increase consumption frequency of the services. PTCL is
doing this job by offering the new prime rates.

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PTCL is the market leader and to maintain the current position and
market shares, it takes serious notice of any attack technological
change in the market. PTCL is following counter offensive attack
strategy. It means when competitors attack the leader then leader
responds with counter attack. As PTCL’s main competitors are in
prepaid calling cards. When PTCL’s competitors started capturing
market shares, PTCL took serious of it and launched PTCL calling
cards. Similarly when mobile phone got popularity and was capturing
the market shares PTCL launched Ufone as counter attack.

3.6.6 Differentiations
It is the act of designing meaningful differences to distinguish the
company’s offering from competitor’s offerings. As PTCL main
competitors are in prepaid calling cards and in mobile phones so PTCL
is mostly doing differentiation in these two areas. Differentiation is
done through the following ways.

3.6.3.1 Transferring the Balance

It is the main feature of PTCL calling cards that the balance of card can
be transfer into another card. This facility is provided by PTCL only.
Now GT calling cards also follow this strategy.

3.6.3.2 Using Process

PTCL cards can be used everywhere. It is the unique feature of PTCL
calling cards these need no special both or phone set. It can be used
from any digital phone by just dialing 0800-80800 and then you will
have to dial the card number.

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3.6.3.3 Durability
PTCL cards are durable. These cards are valid for six months after
using the card for the first time. This is another value added service
provided by the PTCL.

3.6.3.4 Calling Line Identification

PTCL is continuously providing new value added services for
customer convenience. Calling Line Identification (CLI) allows you to
identify the caller before picking up the phone. For a customer to enjoy
this service needs a telephone set with display capability. CLI keeps
complete record of outgoing and incoming calls with time and date.

3.6.3.5 Internet Accessibility

Ufone is the subsidiary of PTCL. In mobile phones Ufone was the first
to provide internet accessibility through GPRS. One can send and
receive a message through Ufone by e-mail address.

References

1. Hienz Weihrich and Harold Koontz. Management, 10th

edition, New York: Mc Graw-Hill Inc.1994: p-122.
2. Internship report by Mr.Zahid .
3. PTCL 1995 by “The Companies Ordinance 1984
Islamabad p-35
4. PTCL 1995 by “The Companies Ordinance 1984
Islamabad p-35
5. www.ptcl.com.pk/degitalfaciliteis
6. PTCL Annual Report 2006.

CHAPTER # 5

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 SWOT ANALYSIS
PTCL is a big organization regarding all the departments including
Finance, Operations, Human resource etc. there are several &
weakness of these departments, which will be discussed as follow:

STRENGTHS
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.

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 difficult.

FREE FROM COMPETITIVE PRESSURE

PTCL has no competitor in the market and other companies are legally
not allowed enter in competition with PTCL before 2003.So PTCL is
performing its activities freely without any pressure.

LEADERSHIP IN THE MARKET

PTCL is leading Company to provide telecom facilities 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.

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 ADEQUATE FINANCIAL RESOURCES
PTC learns billion of rupees as profit per year and has enough money
in its general reserve. It also has debit as a major source of capital.
These adequate financial resources not only enable the Company to
cope with any unexpected event but no deploy its resources to increase
its product line.

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.

OPTIONAL POLICES AND

COMPENSATION
Best and optional policies and attractive compensation packages for
employees, which has really improved their commitment, dedication
and hard work towards the achievement of organization goals.

HUMAN RESOURCE DEVELOPMENT

Human resource development and employment of technology towards
modern development.

WIDE DISTRIBUTION CHANNELS

Easy access to the customers at their residential localities through wide
distribution channel.

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 WEAKNESSES
AMBIGUITY IN STRATEGIC DIRECTION
PTCL is doing business very well but only to that extend to which
customers respond. Although PTCL is generating revenue from its
value added services but it doesn’t have any solid financial strategic
outline, which can cope the entire complex financial situation, and also
ambiguity exists in implementation strategic financial plans.
Externally, PTCL has no competitors so it has no benchmark to gauge
financial performance of its different departments with those of
competitors.

SENIORITY BASES PROMOTIONS

PTCL is leading information technology but it is not knowledge
oriented so far as promotions of its employees are concerned.
Promotions of PTCL employees are seniority based. Most of
employees are concerned. Promotions of PTCL employees, who get
promoted on seniority basis, are less knowledgeable and non-
professional and cannot cope with the challenges of this ever-growing
field. On the other hand most of its knowledgeable and well-educated
employees have no chance of getting higher Positions. They have to
work under their boss who has more experience but less knowledge
about Information Technology and Telecommunication.

LACK OF HUMAN RESOURCES

MANAGEMENT
PTCL has no human resources management department. 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.

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 LACK OFF 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.

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.

INEFFECTIVE HUMAN RESOURCE

MANAGEMENT
PTCL has although now set up a HRM department but still it is not
functioning as per the requirement of the competitive environment.
Most of the jobs have no proper job description and specification.

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.

ABSENCE OF COMPANY CULTURE

There is no inclusion or company culture and approaches among the
officers of PTCL and mostly their behavior with general public is still
bureaucratic and their approach is not objective or profit-oriented.

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 OPPORTUNITIES
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 & it will be help full in the
expansion of PTCL business.

SKILLFUL HUMAN RESOURCES:

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.

ENTERING THE NEW MARKET

PTCL recently is starting 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.

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.

RECRUITMENT
PTCL can also improve the human resources by the selection of
competent person for different departments and this can only possible
by discouraging the corruption and favoritism.

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 ADDITION TO THE PRODUCT LINE
Top management of Organization can make additions to its existing
product line by providing more services. In this way it can increase its
revenue and customer satisfaction. This requires market research.
PTCL has already captured the industry so all kind of the opportunities
are for PTCL till the end of monopoly.

THREATS
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.

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.

TURNOVER
At the end of the monopoly, competitors will enter the industry and the
completion 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.

36
 DECREASE IN MARKET SHARE DUE TO
COMPETITION
After the end of monopoly, dissatisfied customers may shift to those
telecom services providers who they think would offer better services
than PTCL, and will increase customer satisfaction. Decrease in
market share would decrease the profitability of PTCL, which will be a
real threat in near future.

37
RECOMMENDATIONS
Keeping in view the aforementioned hurdle / problems the following
are some remedial measures, which help to create a better system.
 This study shows that existing system is not up to the slandered
and must be replacing with an efficient one.
 A comprehensive financial information system is required to be
streamlined, so that availability of accurate data records may be
insured.
 It is proposed that the system of funds allotment may
immediately be discontinued and the Regional Offices may be
allocated lump sum fund. This will surely help to speed up the
execution of the work.
 All the tool of enforcement of strict financial discipline may be
under taken in order to monitor the whole system.
 All the records should be computerized and for this purpose
special computer program should be used.
 Employees should be equipped with up to date IT skills and for
this purpose refresher & training courses should be designed.
 There should be a total computerized accounting system to save
the precious time.
 The officer may be trained to adopt company culture soft-spoken,
good relations with customers and target oriented.
 Finance and marketing offices and engineers may be sending to
international seminars/ workshops to get knowledge of new
technique and procedures.
 There should be effective human resource department in order to
get right people on the right job. Promotion should be made the
basis of performance rather than seniority.

38
 Moreover, the element of corruption exists throughout the
operation and finance department, which must be checked to get
high performance.
 Strategic planning and especially long term planning should be
done in a way, which doesn’t only fulfill the requirement of
today, but also those of future.
 Most of the PTCL personnel are non-professional; I suggest that
the competent authority of PTCL should be appointing
professionals.
 Almost all employees of PTCL are worried about their jobs the
competent authority should immediately announce the policy of
PTCL in this regard.
 There should be effective human resource department in order to
get right people on the right job.

 Over staffing and unbalanced distribution of employees in

departments. Like all the government and semi government
institutions PTCL has also excessive staff than required. In order
to increase the efficiency of worker job is assigned to its caliper
to develop his interest in work that increase the out put and
decrease the overall cost of organization.

 In the company there is an unnecessary emphasis on

documentation. In transitions a lengthy procedure of paper work
is involved that decrease the efficiency and results in wastage of
time. It should be the duty of management to automate the
documentation of record on line to all offices at same time.

 There are very few programs for career development of the

employees. People working in one section or department from
years are still with the same knowledge and style of doing job.
There should be proper career planning of employee that not only

39
 sharpens the skills of the employee & improve its efficiency but
also results in better and improved output for the organization.

 Some employees are working in the same department or section

since they are appointed.

40
CONCLUSIONS

The overall performance of PTCL has been declining after

privatization. The main signals of performance trend are summarized
below:
• There is an increasing trend in the revenue until 2005 after
which it has declined significantly.
• There is no further increase in the general reserve after the year
2004.
• Operating profit margin shows increase in trend for years 2003,
2004, 2004 but it decrease for 2005 and further decrease for
year 2006.
• Operating cost for year 2005 was higher by 23% while for the
year 2006 was 5.25% higher than last year,
• Return on equity started decreasing after privatization, while
amount of dividend, after decreasing in year 2005, raised in
2006 and again decreased in 2007

• The property, plant and equipment of the company is in

increasing trend
• Debt to equity ratio is increasing from 2005 to 2007.

Aside from the numerical performance indicators, PTCL took several

steps to commence the journey to bring a culture charge in the
organization. This entails putting greater focus on customer service and
emphasizing merit, integrity and openness in the Company’s business
practices and process. So there is a hope that numerical performance
positive results in near future.

41
Moreover since the tele-density of mobile phones has grown a lot, so
there are no further chance of huge increase in tele-density for mobile
companies.

42
SUGGESTIONS

On the basis of conclusion interence draws the following suggestions

1- It is suggestion that the process should be short in order in save

time money energy and stationary etc.

2- It is proposed that proper training be provided to the staff

members that will ultimately increase the performance of PTCL
over all.

3- It is advised that promotion be given in due time because of

interest to work satisfactory.

4- It is consulted that PTCL should reduce its large expenses in

order to increase the value of PTCL.

5- It is suggested that reasonable steps should be taken to recover

all absolute advances.

6- The PTCL should introduce the use of computers in order to

confront with the nectic business activities. it will also help to
reduce the extra load of manual work.

7- Extra counters should be brought in order to facilitate during

the rush days the difficulties faced by the PTCL staff as well as
the customers.

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