http://www.scribd.

com/doc/67199489/PTCL-Haseeb
http://www.scribd.com/doc/24530746/PTCL-Managment-Project-by-Aamir
http://www.scribd.com/doc/11170075/PTCL-Company-Analysis

ore Values

Professional Integrity

Customer Satisfaction

Teamwork

Company Loyalty

Corporate Information
PORTERS FIVE FORCES FOR PTCL

Porter five forces for Pakistan Telecommunication Company limited are as fallows,
Threat of new entrant Power of suppliers Power of buyers Threat of substitutes
Competitive Rivalry
The five forces for Pakistan Telecommunication company limited are now discussed
in detail.
Threat of New Entry
As government of Pakistan is showing liberalism in case of telecommunication
sector and opened its policies to award new licensees to new mobile service
providers so threat of new entry is high. As set-up cost is in billions of dollars so in
this case threat of new entry is low, but there are companies who are working to
achieve licenses and approaching PTA to know terms and conditions for this. As for

this business companies need a well established distributions and franchises

network so threat of new entrant is high in this case.
Bargaining Power of Buyers
Power of buyer is high in telecommunication sector. There are six market players
and players are offering different packages at different prices and a situation of
price war is running. Buyers have a power to buy any package which is suited to
them. Cost of switching from one company package to other company package is
low. Hence, power of buyers is high.
Bargaining Power of Suppliers
The power of suppliers is low in case of telecommunication sector. But the fact is
that numbers of suppliers are few in the market but they are competing in the
market to make agreements with mobile service providers.
Threat of Substitute Products
Government also gave so many land lines and wireless local loop licenses to
different companies like PTCL wireless local loop, GO CDMA etc. these services in
future will be like mobile phone services like they are planning to offer services a lot
but currently they are offering SMS and CLI services to their customers.
Competitive Rivalry
Currently there are six market players but in future they will be eight and nine or
even more. Thruway satellite service is offering subscribers freedom of mobility and
uninterr
upted service. Thruways satellite technology supplements of existing
mobile service providers, overcoming the challenges of large geographical areas
and insurmountable terrain.

AAMIR ATTAA

JUN 20, 2011

34 COMMENTS

Financial Tale of PTCL During Last 5 Years

We have discussed before the expanding portfolio of PTCL and its connection
with landline giants decreasing revenues over the time.
We also keep you posted about the financial performance of telecom
companies, whenever they are available to the public.

Ads by Plus-HD-V1.9cToday, we thought of bringing you the financial stats of PTCL for
last five years. We wont add much words to this story instead we will try to
narrate the financial state of this national asset through graphs and figures.
You can see the performance and share your thoughts in below section.

CATEGORIES: FINANCIAL REPORTS, PTCL, PTCL

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ig Below: 5 years Financial Analysis of PTCL\

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.

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.

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.

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.

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.

DEPARTMENTS OF PTCL
Engineering:
Engineering Department of PTCL is responsible for: Maintenance department
Operations department Research and Development
Marketing:
Marketing department is concerned to create the value for the customer and
capture value in return.
Finance
Finance department deals with Accounts department Revenue department Taxation
department
Human Resource Department
HR department is responsible for the management of human resources needed in
the organization efficiently and effectively. It includes; Training and Development