Pakistan Telecommunication Company Lt.

INTRODUCTION

Pakistan Telecommunication Company Limited (PTCL) is a mega corporation and a leading

telecommunication authority in Pakistan. The corporation provides telephonic and internet

services nation-wide and is the backbone for country's telecommunication infrastructure

despite arrival of a dozen other telecommunication corporations. 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, CDMA, Broadband Internet,

IPTV , wholesale are an increasing part of its business.

PTCL is the largest telecommunications provider in Pakistan. PTCL also continues to be the

largest CDMA operator in the country with 0.8 million V-fone customers. The company

maintains a leading position in Pakistan as an infrastructure provider to other telecom

operators and corporate customers of the country. It has the potential to be an instrumental

agent in Pakistan’s economic growth. PTCL has laid Optical Fibre Access Network in the

major metropolitan centres of Pakistan and local loop services have started to be modernized

and upgraded from copper to an optical network. On the Long Distance and International

infrastructure side, the capacity of two SEA-ME-WE submarine cable is being expanded to

meet the increasing demand of International traffic

Originally one of the state-owned corporations (SOEs), the share holding of the PTCL has

been reduced to ~62%, when 26% of shares and control was sold to Etisalat

Telecommunications and the remaining 12% to the general public in 2006 under an

intensified privatization programme of Prime minister Shaukat Aziz. However, the 62%

shares are still remains under the management of government-ownership of state-owned

corporations (SOEs) of Pakistan

2

HISTORY

From the of beginning Posts & Telegraph Department in 1947 and establishment of Pakistan

Telephone & Telegraph Department in 1962, PTCL has been a major player in

Telecommunication in Pakistan. Despite having established a network of enormous size,

PTCL workings and policies have attracted regular criticism from other smaller operators and

the civil society of 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.

Pursuing a progressive policy, the Government in 1991, announced its plans to privatize

PTCL, and in 1994 issued six million vouchers exchangeable into 600 million shares of the

would-be PTCL in two separate placements. Each had a par value of Rs. 10 per share. These

vouchers were converted into PTCL shares in mid-1996.

In 1995, Pakistan Telecommunication (Reorganization) Ordinance formed the basis for

PTCL monopoly over basic telephony in the country. 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

PakNet 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 PakNet brand has effectively dissolved over the period of time. Recent DSL services

launched by PTCL reflect this by the introduction of a new brand name and operation of the

service being directly supervised by PTCL.

3

As telecommunication monopolies head towards an imminent end, services and infrastructure

providers are set to face even bigger challenges. The post-monopoly era came with Pakistan’s

Liberalization in Telecommunication in January 2003. On the Government level, a

comprehensive liberalization policy for telecoms sector is in the offering.

In 2005, Government of Pakistan decided to sell 26 percent of this company to some private

corporation. There were three participants in the bet for privatization of PTCL. Etisalat, an

Abu Dhabi based company was able to get the shares with a large margin in the bet.

Government's plans of privatizing the corporation were not welcomed in all circles;

countrywide protests and strikes were held by PTCL workers. They disrupted phone lines of

institutions like Punjab University Lahore along with public sector institutions were also

blocked. Military had to take over the management of all the exchanges in the country. They

arrested many workers and put them behind bars. The contention between Government and

employees ended with a 30% increase in the salaries of workers.

4

PRODUCTS & SERVICES

The range of services and products introduced by PTCL for its wireline and wireless services

provided the impetus to establish the Company as the foremost Information Communication

Technology (ICT) service provider of the country. PTCL is facilitating both enterprise and

household consumers by offering them multiple solutions for their ICT needs. Our focus

continues, to enhance customer experience through innovative and futuristic suite of products

and services as we take the lead in driving the digital revolution in the country.

An overview of the main products and services offered by PTCL are as follow

Business Services

Carrier Services & Wholesale

Home and Personal Services

1) Business Services

a. Business Connectivity:

PTCL’s business connectivity offers secure, reliable and integrated end to end

domestic and global connectivity solutions to cater for the demands of corporate and

enterprise users.

5

b. Business Communication:

PTCL’s communication product portfolio is tailored to help business enterprises gain

productivity advantages by offering a suite of powerful convergence and presence-

enabled applications.

Audio Conferencing

Personal Collaborator

Video Conferencing

c. PTCL Cloud:

PTCL offers Public / Private Server’s (Virtual / Physical) on Cloud along with Managed Solutions for Messaging & Collaboration, Disaster Recovery, File Store in ‘Pay as you Use’ fashion.

d. Business Security:

Video surveillance cameras are essential of business security. Before to begin a

surveillance project several technical and policy matters must be considered; PTCL

Corporate Services take care of all these issues in light of its vast experience in this

field of Video Surveillance.

e. Managed Services:

PTCL’s Managed Network Services is a comprehensive solution for those corporate

customers which are aimed at satisfying the essential needs of telephony/voice, data

and security needs.

Business-in-Box

Managed WAN

6

2) Carrier Services & Wholesale

a. Wholesale Service:

PTCL customers can now provide services to their clients without undertaking large

scale investment in infrastructure or developing expertise in running their own

networks.

Calling Cards & LDI

Payphones

Network Capacity Services

Broadband

b. Telecom Operators:

Leased Circuits (IPLC / DPLC)

International IP Services

PTCL Metro Fiber Network

Interconnection Services

Wavelength Services

3) Home and Personal Services:

a. Broadband:

PTCL Broadband is the largest and the fastest growing Broadband service in Pakistan

Broadband Static IP

FREE Broadband Wi-Fi Modem

PTCL Video Con

Broadband Pakistan (DSL)

7

b. EVO 3G Wireless Broadband

EVO 3G Wireless broadband is the pioneer of 3G Wireless Broadband service in

Pakistan. Launched in June 2009 - Evo has started the revolution of the internet

evolution in Pakistan.

3G EVO Wi-Fi Hotspot

EVO Easy Paisa Recharge

EVO Wi-Fi CLOUD

Public Cash Payment Machine

EVO Widest Wireless Coverage

Smart TV Application for EVO Wireless Broadband

c. Smart TV:

Employing the IPTV (Internet Protocol TV) technology, PTCL brought Pakistan in

the list of a few countries across the globe that offers this state of the art interactive

TV service to its subscribers.

d. EVO Wingle 9.3Mbps

Pakistan’s first 3G USB modem with built-in Wi-Fi hotspot; EVO Wingle is all out &

about! The most talked about futuristic Wi-Fi tool that lets you effortlessly connect

multiple Wi-Fi gadgets simultaneously at Hyper Speeds of up to 9.3 Mbps.

e. Landline:

Maintaining the tradition of introducing affordable and simple packages, PTCL

revised its international call packages offering more value to subscribers. Special

packages designed for high volume traffic international destinations at fixed monthly

rate helped increase the revenue. 'Freedom Package' with unlimited on-net calls at

fixed monthly rate with no line rent further stabilized on-net calls revenue stream.

Also, a synergy initiative offering reduced rates for mobile calls to all Ufone

subscribers was undertaken resulting in increased PTCL Group revenue.

f. 3G EVO Tab

8

PTCL has introduced Pakistan’s First 3G Enabled Android Tablet which is in-built

3G EVO wireless broadband technology with the ability to create personal Wi-Fi

hotspot anywhere anytime, a 5MegaPixel autofocus camera; an enhanced IPS screen

with a 180 degrees viewing angle for a richer multimedia and gaming experience, an

in-built 4GB Flash memory that lets you freely download and use Apps without

worrying about space limitations.

g. V-foneVarious win-back and customer retention initiatives at regional and country level

were introduced. These included A-ME-WE3 and Double Balance Promotion, Islamic

Portal VAS Services, Eid offer, Hello Ufone Offer, V-fone Family package, air time

incentives on purchase of V-fixed wireless phones and various regional packages.

These initiatives helped in customer retention and consequent revenue stabilization

h. EVO 3G Nitro 9.3

PTCL has introduced Evo 3G Nitro in Pakistan; “The World’s first & most cutting edge EV-

DO Rev.B commercial network”. PTCL is the first operator in the world to commercially

launch EV-DO Rev.B products which offer blazing fast speeds of up to 9.3 MBPS.

9

INTERNAL CONTROL SYSTEM OF PTCL

Management acknowledges its responsibility for establishing and maintaining a system of

internal control directly related to and designed to provide reasonable assurance to achieve

the following objectives:

Efficiency and effectiveness of operations

Compliance with applicable laws and regulations

Reliability of financial reporting

The PTCL is continuously adding to its internal control systems by enhancing the quality of

processes, staff and IT infrastructure and will continue to do so to strengthen internal controls

as it grows its business volumes and activities.

PTCL is committed to sustaining the utmost level of integrity in business through compliance

with the highest standards of ethical conduct which is critical to maintain the trust and

credibility with customers, partners, suppliers, and employees. This document outlines these

fundamental principles applicable throughout the Company and affirms the commitment of

every member of the Company towards upholding of these valued beliefs through their

genuine enactment in daily roles and responsibilities.

10

The company is pleased to make the following disclosures on the components of internal

control system:

Treating Customer and Employees with Respect & Preventing Harassment: 

All customers and employees will be treated with dignity and respect. There won’t be any

interference for prejudicial reasons. All employees will be entitled to freedom of thought,

conscience, religion, and expression as long as these do not interfere with the rights of others.

No employee will be discriminated against or harassed by means of any action that creates an

intimidating, hostile or offensive environment including disparaging remarks based on

gender, religious, race, age, disability, political opinion or ethnicity.

Compliance to Merit, Transparency Values, Legal and Regulatory Laws: 

PTCL, being a commercial entity, is working in a competitive, challenging, and liberalized

telecom environment where success comes from hard work, competence, and fairness. The

employees will, therefore, ensure adherence to the values based on merit, performance, and

transparency and refrain from seeking any political support for gaining undue advantages.

They will also abide by all legal and regulatory laws applicable.

Confidential and Proprietary Information:  

PTCL employees will take every appropriate action to preserve and enhance the Company’s

Intellectual Property including respecting and maintaining privacy of customer’s information,

while respecting the Intellectual Property rights of others. The proprietary and commercial

information, under no circumstances, shall be disclosed, either during or after employment,

without Company authorization to do so.

11

Physical Assets: 

Equipment, materials and other physical assets of the company will be handled with care and

not be misused under any condition. PTCL employees will take all possible steps to ensure

the safety and security of these assets under all conditions. They will be utilized for PTCL’s

business purposes with due authorization.

Conflicts of Interest: 

PTCL employees will always be expected to act in the Company’s best interest by basing

their decisions and actions purely on the professional business requirements. Personal

relationships or benefits will not impact employees’ judgment or lead to any activity resulting

in a conflict of interest.

Prohibition of Corrupt Practices: 

PTCL employees will not demand or accept any kind of bribery, kickback, payoffs or any

other illegal or unethical benefits, and will never be involved in any corrupt business

practices. The use of Company funds for political contributions to any organization or to any

candidate for public office will be strictly prohibited

12

PTCL AUDIT FIRMS

Auditor of Firm:

A.F. Ferguson & Co., Chartered Accountants

Ernst & Young Ford Rhodes Sidat Hyder, Chartered Accountants

A. F. Ferguson & Co.

A. F. Ferguson & Co. (a member firm of PricewaterhouseCoopers network) is the largest

firm of professional accountants in Pakistan, operating in three metropolitan cities viz

Karachi,  Lahore and Islamabad. The firm also has an office in Kabul, Afghanistan. The firm

operates under international membership of PricewaterhouseCoopers and is also known

internationally as PricewaterhouseCoopers Pakistan (PwC Pakistan).

Broadly, the firm offers professional services in the fields

of Accounting, Audit and Assurance, Taxation, Transaction Advisory, Risk Advisory

Services, SPA and HR Consultancy. Internally, the firm is organized along two separate

service lines- Assurance and Business Advisory Services (ABAS), Tax and Legal Services

(TLS) which are equally split into 8 'sections.' Each service line has its own leader (partner)

The firm currently employs nearly 1600 people: partners, senior managers, managers,

assistant managers, and professional trainees. Firm's clientele includes leading groups/

companies of Financial and Non-Financial sectors.

The head office of the firm is situated in Karachi, Pakistan.

Ernst & Young Ford Rhodes Sidat Hyder & Co

13

Ford Rhodes Sidat Hyder & Company, Chartered Accountants is one of the largest

professional services firm in Pakistan and has been in existence for over eighty years. They

provide a host of professional services to the clients which include Audits, Accounting,

Taxation, IT audits, Transaction Advisory, Human Capital etc. to organizations all over

Pakistan. Ford Rhodes Sidat Hyder & Company is a member of Ernst & Young Global,

which is one of the top four professional services firms of the world. Ernst & Young has

offices in over 140 countries around the world

14

15

PTCL AUDIT REPORT

16

17