INTERNSHIP REPORT ON

PTCL (Pakistan Telecommunication Company Limited)

Presented To:

Prof. Dr Liaqat Ali

Hailey College of Commerce

University of the Punjab

Lahore

Presented By:

Yasir Masood

Roll No 560, Section “F” (Morning)

B.COM (Hons)

2007-2011

Hailey College of Commerce

University of the Punjab

Lahore

Letter of Transmittal

Prof. Dr Liaqat Ali

Hailey College of Commerce

University of the Punjab

Lahore.

SUBJECT: Request For The Submission Of Internship Report

Respected Sir,

I conducted my internship at Pakistan Telecommunication Company Limited

(PTCL). During this internship I prepared a report on the working/ Functioning

and its organization. The management of the organization allowed me and

guided me to work in department that is:

Finance and Accounts Department

I worked in this department with full devotion and concentration. On at the

completion of this internship period, I request you please accept my internship

report for checking and notifying the errors and mistakes.

Yours Obediently,

Yasir Masood

Roll No. 560

Section “F” Morning

Session 2007-2011

Hailey College of Commerce

University of the Punjab

Lahore

TABLE OF CONTENTS

Serial No. Particulars

1. Preface

2. Acknowledgement

3. Subject

4. Executive Summary

5. Introduction

6. Historical Back Ground

7. Current PTCL Network

8. Vision ,Mission

9. Core Values

10. Main Offices

11. Restructuring of PTCL

12. Privatization of PTCL

13. Company Analysis

14. PTCL Core Objectives

15. Finance and Accounting System of PTCL

16. Capital Expenditures

17. Minor Expenditures

18. Human Resource Assessment

19. Special Tasks

20. PTCL Products and Services

21. Services for Corporate Customers

22. Financial Analysis

23. Financial Analysis in Graphics

24. Subsidies and Competitors

25. Competitors

26. SWOT Analysis

27. Strength

28. Weaknesses

29. Opportunity

30. Threats

31. Recommendations

32. Conclusion

33. PTCL Glossary

34. Organization Chart of PTCL

PREFACE

This report is the practical part of the most vital practice of our B.COM (hons)

program. The sole objective is to familiarize the student with the practical

manipulation of business organization. This report has been written to know how

big organizations like PTCL manage their teams to achieve their common goals.

In the first phase of the report there is the general introduction about the

company and then different terms have been explained, then the mission, values,

different services main offices different strategies of the organization have been

explained.

Second part consist departments of PTCL products, its packages and most

important my experience, contributions, suggestions to the departments in which

I remained and learned about how PTCL maintain their accounting and others

systems.

In the next part, SWOT analysis of the firm have been done by the help of which

it is identified that what are the strong areas of the company and where it lacks

so that it can improve, at the end my recommendations, suggestions conclusion

for PTCL .one thing I find necessary to provide glossy for products and words in

used in my report so that a person not aware about these will be able to

understand them in best way.

ACKNOWLEDGEMENT

In the name of ALLAH, who gave me ability and strength to

complete my internship. I owe considerable debt to large number of

persons who either directly or indirectly helped me during various

phases of internship. It was a new experience, exciting but

challenging and indeed guidance rather frequently, which was afford

very generously.

My special thanks to Mr Muhammad Aslam for his guidance and

support during my internship report preparation.

In PTCL I am grateful to all the staff members for providing me an

opportunity to work in the organization at the style and speed of my

convenience. I also wish to record my gratitude for the staff members

for transforming my theoretical knowledge in practical understanding,

despite their heavy commitments they always found time to

answers my questions, resolve queries and never ran out of

patience.

SUBJECT

INTERNSHIP REPORT ON PAKISTAN TELECOMMUNICATION COMPANY

LIMITED

Internship report on any organization is a necessary element to get the B.COM

(hons) degree from any university. I have written an internship report on PTCL

and review its accounts and finance system / procedures adopted for such

purpose. My major recommendation is this: PTCL should improve their contact

with middle & lower level employees’ especially supervisory level and establish

internal performance appraisal system to avoid the future complications & to

evaluate the employee performance & encouraging them. That conclusion was

arrived at after eight weeks extensive practical training/study in the finance

department of the company. In PTCL there is over employment contract

employees are hired on permanent employees who have not good opinion about

them.

In PTCL also there is slow process of promotion; there should be promotion of

employees so that their efficiency could increase. Right person should be hired

right place. There is no proper system to train sales executives also organization

is just focusing on targets it should focus on permanent customer. As for

completing their target they use wrong ways. There is over employment there are

almost 24 persons for marketing team while just 7 persons are enough for that

task.

I am grateful to my seniors, colleges, and subordinates who assist me to

complete this comprehensive report in an excellent way. If the members of the

review committee of this report have any additional questions, I INSHALLAH will

try my best to do it more well way.

EXECUTIVE SUMMARY

PTCL is Pakistanis most reliable and largest service carrier provider to all

telecommunication services from basic telephone data to internet video

conferencing it is everywhere in Pakistan. PTCL is connecting peoples anywhere

from world employee strength of 30,000 and 6 million customers; PTCL is the

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

largest CDMA operator in the country with 0.82 million V-FONE customers. The

company maintains a leading position in Pakistan as an infrastructure provider to

other telecom operators and corporate customers of the country. It has the

potential to be an instrumental agent in Pakistan’s economic growth. PTCL has

laid an Optical Fiber Access Network in the major metropolitan centers of

Pakistan and local loop services have started to be modernized and upgraded

from copper to an optical network.

This report is being started with the brief and complete introduction of

organization, its historical background, its services and its products offerings. In

this report organization structure is discussed as pr the requirement of internship

and at the end organization structure is given.

In report total departments main telecom regions and the products of PTCL and

their availability regarding cities, main cities obviously have all types of products

available, but some products likes As EVO new product and its availability is just

in those areas where there are 1900 MGH frequency towers, how to installed

these packages detail about every product is given al what are packages and

how we can use them.

More over the Financial Analysis is also done which is depicting the financial

position of the organization in the market place.

Whereas SWOT analysis is done which clearly shows what are the strengths,

weaknesses, opportunities and threats in the organization. Finally some

suggestions and recommendations are given to organization.

INTODUCTION

Established on January 1, 1996

Head Quarter: Pakistan Telecommunication Company Limited (PTCL) G-8/4,

Islamabad

The telecommunications industry is at the forefront of the information age

delivering voice, data, graphics and video at ever increasing speeds and in an

increasing number of ways. Whereas wire line telephone communication was

once the primary service of the industry, wireless communication services and

cable and satellite program distribution make up an increasing share of the

industry. In Pakistan has made steady progress in expanding telecommunication

networks and services in recent years. In Pakistan this industry had few big

giants in the past with PTCL being the sole provider of landline telephone service

in the country. At present the organization’s principal activity is to provide

telecommunication services all over the country. It offers both domestic and

international services throughout Pakistan. PTCL also manufactures

telecommunication related equipment.

Pakistan Telecommunication Company Limited had exclusive rights to provide

basic telecom services in Pakistan till the end of year 2002. With the

announcement of Deregulation Policy by the Government of Pakistan in 2003,

PTA has issued licenses for basic telephony to the private sector in Pakistan who

will be competing PTCL, the incumbent. From the humble beginnings of Posts &

Telegraph Department in 1947 and establishment of Pakistan Telephone &

Telegraph Department in 1962, to this very day, ours is a story of commitment

and vision.

PTCL set sails for its voyage of glory in December 1990, taking over operations

and functions from Pakistan Telephone and Telegraph Department under

Pakistan Telecommunication Corporation Act 1991. This coincided with the

Government's competitive policy, encouraging private sector participation and

resulting in award of licenses for cellular, card-operated payphones, paging and,

lately, data communication services. Pursuing a progressive policy, the

Government in 1991, announced its plans to privatize PTC, and in 1994 issued

six million vouchers exchangeable into 600 million shares of the would-be PTCL

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

vouchers were converted into PTCL shares in mid-1996.

In 1995, Pakistan Telecommunication (Reorganization) Ordinance formed the

basis for PTCL monopoly over basic telephony in the country. It also paved the

way for the establishment of an independent regulatory regime. The provisions

of the Ordinance were lent permanence in October 1996 through Pakistan

Telecommunication (Reorganization) Act. The same year, Pakistan

Telecommunication Company Limited was formed and listed on all stock

exchanges of Pakistan.

Since then, PTCL has been working vigorously to meet the dual challenge of

telecom development and socio-economic uplift of the country. This is

characterized by a clearer appreciation of ongoing telecom scenario wherein

convergence of technologies continuously changes the shape of the sector. A

measure of this understanding is progressive measures such as establishment

of the company's mobile and Internet subsidiaries in 1998.

As telecommunication monopolies head towards an imminent end, services and

infrastructure providers are set to face even bigger challenges. Pakistan also

entered post-monopoly era with deregulation of the sector in January 2003. On

the Government level, a comprehensive liberalization policy for telecom sector is

in the offing.

PTCL is in full awareness of the same, and future policies feature a strong

conviction of healthy competition. The company is in process of enhancing

organizational and business proficiency through vertical integration and

horizontal diversification. At the same time, cross-national ownerships,

operations and partnerships are being evaluated with a view to developing and

diversifying the business.

HISTORICAL BACK GROUND

1947 Post and telegraph department established

1962 Pakistan telegraph & telephone department

1990-91 Pakistan telecom corporation

1995 Almost 5% of PTC assets transferred to PTA,FBA& NTC

1996 PTCL formed listed on all exchanges of Pakistan

1998 Mobile internet &internet subsidies were established

2000 Telecom policy finalized

2003 Telecom deregulation policy formalized

2005 26% of shares were sold to ETISALAT UAE through open

biding

Current PTCL Network

Installed capacity 5273091

Working connections 4405161

Total exchanges 2962

Telephone destiny per 100 population 2.9

Countries in ISD 292

Customer service centers 502

Card pay phone 387490

NWD station 2092

UIA station 1898

Total length of optical fiber length 4591 km

V FONE customers 0.8 million

EVO customers 1 million

Smart TV customers .5 million

Vision

To be the leading Information and Communication Technology Service Provider

in the region by achieving customer satisfaction and maximizing shareholders'

value'.

The future is unfolding around us. In times to come, we will be the link that allows

global communication. We are striving towards mobilizing the world for the future.

By becoming partners in innovation, we are ready to shape a future that offers

telecom services that bring us closer.

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

Core Values

Professional Integrity

Customer satisfaction

Team Work

Company Loyalty

Corporate Information

MAIN OFFICES

The Head Office of Pakistan Telecommunication Company Limited

is situated in Sector G-8/4, Islamabad, which is headed by the

“President”. Besides, it has Regional Headquarters like:

Islamabad Telecom Region

Rawalpindi Telecom Region

Hazara Telecom Region Abottabad

Northern Telecom Region-I Peshawar

Lahore Telecom Region (South)

Lahore Telecom Region (North)

Multan Telecom Region

Faisalabad Telecom Region

Southern Telecom Region-I Hyderabad

Southern Telecom Region-II Karachi

Southern Telecom Region-V Sukkur

Western Telecom Region Quetta

Switching network Central region Lahore

These Regions provide Telecommunications services to the customers in their

respective areas. Apart from these, PTCL has an Optical Fibre Construction

Region Lahore and Optic Fibre System Islamabad, each headed by a

General Manager to install, operate and look after optic fibre systems/cables.

BRIEF HISTORY

Over the years, technology has changed the concept of

communication and what was thought to be a fictional only a decade

ago, has actually made its way through to our hands today. This is the

future we dreamt of so fondly. Welcome to the modern age, of

telecommunication, which have become complementary to our lives.

But there must also be an anchor to introduce, allow, improve and

channelize all these services and innovations sweeping through the

globe. In Pakistan same anchor is Pakistan Telecommunication

Company Limited from the humble beginnings of posts &

Telegraph Department in 1947 and establishment of Pakistan

Telephone & Telegraph Department in 1962, to this very day, PTCL is

a story of commitment and vision. Pakistan Telecommunication

Corporation (PTC) set sails for its voyage of glory In December1990,

taking over operations and functions from Pakistan Telephone and

Telegraph Department under Pakistan Telecommunication

Corporation Act 1991. This coincided with the Government’s

competitive Policy, encouraging Private Sector participation and

resulting in award of licenses for Cellular, card-operated Payphones,

paging and, lately, data communication Services. Pursuing a

progressive policy, the Government in 1991, announced its Plans to

privatize PTC, and in 1994 issued six million vouchers exchangeable

into 600 million shares of the would-be PTCL in two separate

placements. Each had a par value of Rs.10 per share. These

vouchers were converted into PTCL Shares in mid-1996. In 1995,

Pakistan Telecommunication (Reorganization) Ordinance formed the

basis for PTCL monopoly over basic telephony in the country. It also

paved the way for the establishment of an independent regulatory

regime. The Provisions of the Ordinance were lent permanence in

October 1996 through Pakistan Telecommunication (Reorganization)

Act. The same

year, Pakistan Telecommunication Company Limited was formed and

listed on all stock Exchanges in Pakistan. Since then, PTCL has been

working vigorously to meet the dual Challenge of telecom

development and socio-economic uplift of the country. This is

characterized by a clearer appreciation of ongoing telecom

scenario where in convergence of technologies continuously

changes the shape of the Sector. A measure of this understanding is

progressive measures such as Establishment of the company’s

mobile and Internet subsidiaries (U-fone & Paknet) in 1998. As

telecommunication monopolies head towards and imminent end,

services and infrastructure providers are set to face even bigger

challenges. Pakistan also entered post-monopoly era with deregulation

of the sector in January 2003. On the Government level, a

comprehensive liberalization policy for Telecom sector has already

been announced now. Now PTA have issued License to two new

telecom companies in Pakistan TELENOR international and WARID

TEL this act will put some challenges for PTCL to cope with. PTCL is

in process of enhancing organizational and business Proficiency

through vertical integration and horizontal diversification. At the same

time, cross-national ownerships, operations and partnerships are being

evaluated with a view to developing and diversifying the business.

RESTRUCTURING OF PTCL

The government’s efforts to restructure and privatize PTCL have been on-again

off-again since 1991. It had an offer in the late 1990s for 26 percent equity,

reputedly totaling $3 billion, but held out in negotiations and ultimately missed the

unique global market window at that time. Since then, it has had difficulty

attracting potential buyers.

Investors have been concerned about political risk, and appropriate support from

the government to transform the utility into a commercially-oriented corporation.

With fortunes rising in the local telecom sector, the government hoped to make

privatization of the company a landmark deal for broader reform of the economy.

A successful deal would demonstrate the government’s increasing support for

market capitalism and, it was hoped to, boost anemic levels of direct foreign

investments.

PTCL and the government were contemplating different strategic options for

restructuring. Plans were vetted for both a geographic and functional split of

operations. Analysts believed the most likely scenario is a break-up into three

new companies, tracking with the firm’s largest business units: local, long

distance and mobile. This approach mirrors the policy environment fashioned for

new competitive entrants. From the government perspective, breaking up PTCL

prior to a sell-off will help curtail the market power of any one single service

provider, thereby stimulating competition.

Unbundling the sale was also likely to increase revenues for the government.

The risk, of course, was that the mobile company, PTML (branded as “Ufone”),

was disproportionately more attractive than the other businesses. According to

AKD Securities, PTML's contribution to PTCL's total revenues was expected to

rise to 12.5% over the next five years − and was assumed to contribute 39% of

PTCL’s overall revenue growth. Future growth of mobile, both in terms of

subscribers and net revenues, was considered to almost certainly outstrip

demand for fixed line services. The target was to sell up to a 26 percent stake in

PTCL; the government held 88 percent of shares. Some estimates placed the

value of the trance at around $1 billion. PTCL’s net profit for the year ending

June 2003 was 23 billion rupees ($400 million).

The new buyer would gain management control.

These people who will be out of work should be encouraged to form companies

and use their know-how in order to bid for new contracts. They should be

supported by the small enterprise loan by banks and other similar organizations.

PTCL will be always in need of software so it can give some contracts to these

companies also.

The telecom business is picking up on a worldwide basis. The PTCL needs to

approach other global companies who may need this type of competence. If

PTCL do not have the requisite resources and the know-how, there are global

companies who help other restructuring organizations, such as British Telecom.

By merely reducing the work-force the PTCL will not be able to deliver the

envisaged benefits to its shareholders and for reason, the PTCL needs to change

its business model and the way of working.

It needs to have new business processes and new information support systems

so that it is able to work with new processes and serve its customers in a better

manner. The PTCL needs to out-source all its non-core activities so that it could

focus on what it knows best. It also needs to have a global competence

management team which manages local and national business. Moreover the

PTCL needs to increase its revenue so that it has enough cash to survive in the

future. In this regard, it may take the following actions ensuring that: their

network has zero defect level and they do not miss a single call at its

international gate way; They have extra capacity available on special days such

as Eid to generate more revenues; Its cost is reduced when the network is not

busy fully so that people would make more calls; They too have companies

where large number of Pakistanis live; They utilize their foreign exchange in a

way that it gives maximum benefit; They have re-routed maximum international

call traffic via Pakistan; They have more value-added services for their

customers. They renegotiate their contracts with suppliers for getting benefits of

scale purchasing at total level. They have reduced the number of suppliers and

work with their core suppliers and have calculated the total life cycle cost and not

just purchasing prices. The world class companies not become world class by

having just a good mission statement. They become world class companies by

delivering world class service. Why should we expect and accept less than world

class performance from PTCL.

PRIVATIZATION OF PTCL

PTCL was sold to ETISALAT at a loss of $394 million with the share price

reduced from the original bid of $1.96 per share to $1.66, according to a report.

The original bid offered in June 2005 by ETISALAT priced PTCL at $ 2.599 billion

while the revised bid approved by the cabinet in March 2006 valued the company

at $2.205 billion. However, the government denied giving any concessions to

Etisalat. Officials aid the price of 26 percent PTCL shares remained the same i.e.

$2.6 billion, and then any lowering of bid price in the revised agreement

approved by the cabinet in March. The official documents state that the

accumulated bidding price in the revised bid came down to $2.205 billion against

the original Etisalat bid of $2.599 billion, said a report in the Gulf Today.

The PTCL privatization agreement with Etisalat allegedly inflicted a further loss of

billions of rupees to the national exchequer besides unprecedented concessions

offered in the long term, in direct conflict with Article 30 of the Public

Procurement Rules 2004, it said. By far, the PTCL has been the highest profit

earning state-owned company with real-estate assets worth billions of rupees

across the country including commercial plazas, residential colonies and

exchanges.

According to the government documents, the Share Purchase Agreement (SPA)

of the PTCL with Etisalat lapsed in September 2005 after the non-payment of the

dues by the winner bidders. After further negotiations with the Etisalat

management, the government agreed to offer additional concessions and

modifications to the transaction structure.

COMPANY’S ANALYSIS

Pakistan Telecommunication Company Limited (PTCL) is the primary provider of

Telecommunication services in Pakistan. The range of services include basic

telephony, telegraph, fax, telex, Public data, Internet, E-mail, ISDN (Integrated

Services Digital Network), Universal Access Numbers (UAN), and other value

added services. Pakistan Telecommunication Company Limited is a

professionally managed company and has initiated measures, with active support

of the Federal Government, to inculcate a corporate culture that benefits

company. Pakistan Telecommunication Company Limited believes that it has an

inherent potential that it can exploit to emerge as an important and active

business entity. Pakistan Telecommunication Company Limited has some basic

strength and the potential that needs to be exploited into real business

opportunities. The Directors of the Company feel that a firm and unwavering

commitment towards provision of a complete range of market driven

telecommunication services to its customers using state of the art technology

proven products and a customer care approach is essential in a rapidly

expanding telecom market. The radical change from a monolith state controlled

culture to a open market competitive environment. The customer is becoming

and more conscious of the value of telecom services in an improving business

environment.

The advent of digital systems, increasing application of computer technologies

and development of wide-band systems has generated new customer needs.

Innovative products and services such as cellular mobile, high-speed data,

Internet etc are much in demand. The current decade has proved to be the

period of sector restructuring and growth globally. To keep pace with the

changes and to meet the emerging new demands, Pakistan Telecommunication

Company Limited has adjusted its programs to meet the requirements of the

market. Traditional telecom monopolies like Pakistan Telecommunication

Company Limited need to explore new avenues of technology and financing to

accomplish a quantum leap in growth and bridge the gap between demand and

supply, still remaining financially viable.

The Company has taken initiatives and a change is gradually becoming visible

through expanded capacity and increasing revenue. Pakistan

Telecommunication Company Limited has taken decisions to cope with the

competition within the next years. The initiatives taken resulted in the

establishment of 100% Pakistan Telecommunication Company Limited owned

subsidiaries like Pak Telecom Mobile Limited. Paknet and Pak Telecom Pay

Phone services limited. These new entities shall provide cellular mobile

information technology, Internet, payphone, prepaid calling cards and other

range of services, Pakistan Telecommunication.

Company Limited made a conscious decision to enter the cellular business as it

has tremendous potential and an accelerated annual growth of about 60% which

is likely to continue for many years. Pakistan Telecommunication Company

Limited has been successful in obtaining a Cellular Mobile License for its

subsidiary and has selected the GSM 900 state -of the—art technology, which is

growing at a much faster rate internationally. Pak Telecom Mobile Limited was

incorporated on 18th July 1998 to establish and run this new business

independent of Pakistan Telecommunication Company Limited with full

accounting separation thus creating a level playing field for industry competitors.

Pakistan Telecommunication Company Limited is following a business-oriented

policy to associate private entrepreneurs in telecom sector development. The

options are based on interconnect and revenue sharing arrangements with

license operators and through out-sourcing revenue sharing with 0 & M

contractors as business partners. PTCL has successfully entered into

arrangements with foreign and local telecom companies and has signed three

contracts prepaid calling card service to promote international traffic. The

Government of Pakistan has encouraged the growth of the telecom sector to

enable Pakistan to keep pace with the rapid technological advancement in the

field of telecommunication. The tariff structure remains under constant review of

the government to rationalize from the point of providing adequate returns to the

telecom operators and to tap the tremendous potential of the growth in the

demand and market for telecom services. The GOP has reduced the CED on

telecom services, encourages the use of value added services with special

emphasis on proliferation of Internet. It has also reduced the import duties on

telecom equipment and allows tax exemption.

Private sector data and Internet services providers are operating under license

and revenue share arrangements. Internet & information technology services are

now very popular in the market and numbers of new entrants are competing,

providing Pakistan Telecommunication Company Limited an opportunity lease

capacity. Its available IT & Internet infrastructure both for private sector licensed

operators. And Pakistan Telecommunication Company Limited own customers.

Pakistan Telecommunication Company Limited is launching a three-phased

project for IT & Internet to expand the service to take care of 300,000 customers

including the needs of private license for infrastructure.

PTCL’S CORE OBJECTIVES

The primary objective of Pakistan Telecommunication Company Limited is to

provide telecommunication services to the people in the country or in short to

satisfy the telecommunication needs of its customers. Responding to the rapid

economic and technological growth, the company is determined to meet the

challenge of expanding needs of telephone and data communication such as

public data network, integrated services digital network and Internet services.

The major focus of attention is to improve and expand the services, minimize the

faults and provide communication facilities to rural areas. It is also one of the

major objectives of management that the company should not improve its

performance but also encourage the private sector to enter the Tele business.

The company has entered the domain of free market economy, which

necessitates the liberal management policies and private sector. The following

basic policy steps have been taken to meet the objectives laid in PTCL Act to

expand and operate telecommunication services in the country. The main

objective of any company is to earn the profit and minimize expenses by winning

goodwill in the market.

The following are the long-term objectives of the organization:

Provision of Telecom services all over the country

Plan, establish and maintain telecommunication

Acquire, promote and manage research and development, transfer of

technology and software development including manufacturing of

telecommunication equipment and plant

Enhance efficiency, improve quality and expand the system to meet

customer satisfaction and provide service on demand

Create congenial climate for binding of human skill and horizon of

employees through training and education

Convert its cash basis single entry accounting system to accrual basis

double entry system meeting the commercial international accounting

standards.

To introduce computerized directory assistance and complaint services

reform billing and a revenue collection system

Strengthen relation with foreign international administration, entities,

services providers, international and regional telecom organizations for

better international communication and technical cooperation in

telecommunication business

Expand customer awareness of all value-added services of PTCL

To improve the efficiency of Customer Service Centers by deputing

qualified persons who are well aware of public relation techniques

FINANCE & ACCOUNTING SYSTEM OF PTCL

The PTCL FINANCE & ACCOUNTING system is actually divided into three

wings.

FINANCE

ACCOUNTS

REVENUE

FINANCE

The SEVP (FINANCE) is concerned with the makeup of the all type of financial

decisions especially in the context of acquisition, financing and management of

all assets with some goal in mind. The EVP (Finance) with the General Manager

(Finance) extend their expertise in the decision making process.

ACCOUNTS

Here the SEVP (Finance) is once again concerned by heading the

EVP(ACCOUNTS) and General Manager (Accounts) to deal with all Accounts

Decision. In PTCL the Finance and Accounting are so correlated but the

difference between finance and Accounting is the method of Funds Recognition

and the decision making. In the Accounting the Director Accounts in the PTCL

Regions assist the higher management.

REVENUE

Here the SEVP (Finance) is once again concerned by heading the EVP

(Revenue) and General Manager (Revenue) to deal with all Revenue matters.

One Director Revenue within the Region assists to implement and control the

inflow of Revenue and reconcile it with the PTCL Headquarters Islamabad.

The PTCL is actually the Revenue Generation organization. PTCL Collect the

Revenue from the following modes.

Revenue from System Billing of Land Line Numbers:

Through Line Rent of Land Line Numbers

Through National wide dialing from LLN’s (Land Line Numbers

International dialing from LLN’s

Providing Value Added services to customers like UAN

(Universal Access Numbers), PABX (Private Auto Branch

Exchanges), and VPN (Virtual Private Network) Bandwidth of

ISP’S (Internet service providers)

PTCL has its three subsidiaries PAKNET (leading ISP in the

country), UFONE (unique cellular phone company in

Pakistan), TF (Telecom Foundation) the leading foundation for

the welfare of employees of Telecom Sector.

ACCOUNTING SYSTEM OF PTCL

In PTCL the rules contained in the special volume of the PTCL under

which the SEVP (FINANCE) is responsible for creating the procedure of

Accounting matters.

CAPITAL RECEIPTS SIDE.

1. REVENUE FROM BILLING SYSTEM

Revenue from Usual customer.

Revenue from DXX System

Revenue from DSL System

Revenue from PABX/PBX System

Revenue from Card Phone Operators

Revenue from IPOs Internet service providers

Revenue from Mobile Phone Operator

Co-location charges from various companies

Revenue from PTCL EVO

Revenue from smart TV

2. REVENUE FROM OTHER

Revenue from Overseas calls (Incoming)

Revenue from Premium PRS (0900) calls

Income from Dismantle Exchanges

Revenue from MDF used by other companies

CAPITAL EXPENDITURES

INSTALLATION OF NEW EXCHANGES

Expenses of installation of new Exchanges are the major capital expense of

PTCL because PTCL purchases the new telephone exchanges from France,

Italy, Germany and China. So heavy cost is to be paid for purchasing process in

order to proper margin. Each exchange having different capacity and due which

each Engineer should has to be trained accordingly so expenses rises on

purchasing of new Telephone Exchanges. This is the main expense of PTCL.

EXTENSION OF EXISTING EXCHANGES

The extension of the existing exchanges is the dire need as the density of the

population is increasing day by day and in order to fulfill the basic communication

and fill the communication gap PTCL has to extend its normal Telephone

Exchanges in accordance with the demand and per paid connection. So PTCL

sustain heavy expenses on the extension of exchanges.

MINOR EXPENDITURES

INTERNAL AUDIT AND TECHNICAL INSPECTION

The PTCL has sustained huge amount in context of internal audit both Accounts

and Technical from various agencies. For example M/s Ferguson conduct both

internal audit and external audit and payment made to auditors in the expenses

of the company.

ADMINISTRATION AND CONTROL EXPENSES

Sometime in the best interest of company, some expenses could be occurred for

example if there is need of induction of a financial analyst in one region or if there

is need of an Engineer then transfer and posting order can be issued and

traveling and training expenses could be realized to employees.

SALARIES OF STAFF

The monthly salary of the staff is rest with the approval of PTCL H.Q Islamabad.

PTCL is spending lot of amount on the salaries.

PRINTING AND STATIONARY CHARGES

On printing of stationery PTCL spends reasonable amount.

CONTRIBUTION IN PROVIDEND FUND

There is also contribution in the provident fund from the PTCL.

FINANCE SYSTEM OF PTCL

PTCL has magnificent finance structure; it is basically Product Oriented

organization so here, the Revenue is the Life Blood as such for any other profit

seeking organization. So we should have isolated the Revenue from Finance

side or either we should consider the Finance in the context of Revenue .Finance

activities can be evaluated in terms of PTCL’s basic financial statements

analyzing through:

FINANCE PLANNING

On PTCL HQ Islamabad, SEVP (Finance) is, who with the concurrence with the

CEO for making all the Finance Planning that’s way the PTCL has to inject the

money in order to boost up the business and in order to complete the stiff

competition faced in the telecomm sector. Before taking any decision regarding

financial planning the draft could be presented before the Board of Governors. In

this section there is need of financing either in the WLL (wireless local loop)

sector or wire-line or mobile operator services.

Managing the PTCL’s Asset Structure

PTCL is very organized organization and it has also its fixed as well with the

current asset. So there are many experts in order to keep the eye watch on the

PTCL infrastructure, for example Director (Fixed Assets) is responsible for the

maintenance and repair of the building and machinery on the Regional level.

Managing the PTCL’s Financial Structure

PTCL financial structure is in the safe hands the basic qualification for the post of

Assistant Accounts Officer is MBA (Finance) and for the SEVP (Finance) the

incumbent should possess the degree of MBA with ACMA & CA. Due to such

fresh blood the young and energetic financial management taking some bold

decision the results of which are awaited up till.

HUMAN RESOURCE ASSESSMENT

It is the department of the PTCL which has been established in 1999 so it is still

in the development stage and there are number of activities which are yet to be

decided to take into the consideration by the HUMAN RESOURCE

DEPARTMENT OF PTCL. It is established to regulate the human resource

activities and to solve number of critical activities and the problems of PTCL.

Regarding the human resource and their critical matters. This department has its

own importance and course of action to resolve and to foresee the future for the

development of the employee and the customers’ interests simultaneously.

A great deal of delay has been there for the establishment of HUMAN

RESOURCE DEPARTMENT. PREVIOUSLY recruitment of the employees was

the responsibility of the RRR DEPARTMENT but now it is to decide that activity

would be given under the supervision of the HUMAN RESOURCE

DEPARTMENT OF PTCL. This is also done in the recent years to cope with the

new market condition of telecommunication industry in PAKISTAN as the

GOVERNMENT has decided to privatize the PTCL. SO to attract the healthy

customer, it was also necessary to make valuable arrangements so that the

company can fulfill all kind of international standards which would be then helpful

to convince the customer about the worth and the value of PTCL. Besides the

functional requirement this was another factor, which played vital role for the

establishment of the HUMAN RESOURCE DEPARTMENT.

THE HUMAN RESOURCE DEPARTMENT is lead by the CHIEF ENGINEER and

he is responsible for the activities carried out by the department. There are four

DIRECTORS working under the supervision of the chief engineers. Then these

DIRECTORS supervise the divisional engineers and assistant divisional

engineers and so on. As it is at its initial stages so authorities and responsibilities

are still under the process of development and precise definition of these are not

finalized by the top-level management. The hierarchy of the human resource

department clarifies the responsibilities and level of authorities between the

different level of the department and also between the persons of human

resource department.

SPECIAL TASKS

There are no defined and precise responsibilities of this department as it has

already been mentioned that this department is still in the development stage.

However some special task has been assigned to the department so that its

activities can be started and the flow of activities and their harmony with other

department can be established. For this purpose numbers of activities are

assigned, out of which some were accomplished and some others are in the

process of accomplishment.

There was confusion about the exact number of PTCL employees. Exact data

was not provided to the top-level management, approximate figure was there.

More over different departments of PTCL claim different number of employees,

which they collected through their own resources. Top level management was

not satisfied which such kind of information, so it assigned the first task to the

HUMAN RESOURCE DEPARTMENT.

The challenge was accepted by the department and was successfully met with in

the given time period. The figure of fifty five thousands three hundreds and eighty

five (55,385) was found for the regular employees and figure eight thousands

(8,000) was found out for the employees on contract basis. This figure is for the

year 2002, so is the latest figure and is accepted by the top-level management.

The organization of data base management system was also assigned to the

HRM department, which was also successfully done by the department. This

helped PTCL to gather the distributed employee data which is then helpful for the

regulation of pay system for the employees and also helpful for the regulation of

seniority system for the employees. These works are done successfully by the

HRM DEPARTMENT. There are some other responsibilities, which are still in

process of accomplishment:

The development of recruitment manager software

Restructuring of organization structure

Revising of performance appraisal process

Establishment of some new rules and regulations to cope new

market conditions

Changes in the salary structure of the employees

Changes in the medical facilities

Establishment of compatibility between the expertise and their

appointment

Reduction of union influence in the company matters

Establishment of programs for the development and training of

employees

GRANT FOR TRAINING PERSONNEL IN INFORMATION

TECHNOLOGY BY SUBSIDIZING INTERNATIONAL

CERTIFICATION FEES

In order to meet the international standards in Information Technology there was

need of certification and qualification improvement by getting training and

passing the examinations of different classifications of IT. So a grant was

approved for the said purpose. The purpose of this grant is to support the

candidates in obtaining specified and internationally recognized certification

relevant to information technology and telecommunication by either completely or

partially subsidizing the fee of examinations.

GRANT FOR HUMAN RESOURCE DEVELOPMENT AND

INSTITUTIONAL UP GRADATION

Capacity-building in science and technology is one of most important aspects of

a viable infra structure. Unfortunately majority of institutions in Pakistan suffer

from a severe lack of human and institutional capacity to conduct any meaningful

research and development projects and to provide quality teaching in the areas

of science and engineering. There was therefore an urgent need to train

manpower and upgrade scientific institution in Pakistan. SO a grant was

approved by PTCL. This grant scheme was thus aimed to train manpower. The

purpose of this grant was fold: to support the candidates in obtaining essential

training/certification

STAFF-WELFARE

PTCL is providing free medical facilities (indoor / outdoor) to both its serving and

retired employees and their dependent family members from panel hospitals as

well as from 42 staff dispensaries / medical centers established in various cities.

The total number of beneficiaries is 296,850. Besides this, employees are given

merit/stipend awards and general education grants for professional and general

studies of their children.

Benevolent grants of Rs. 1 lac as special compensation is paid to the employees

on accidental death. Widows are also financially compensated out of welfare

funds on the eve of Eid. Marriage grant is paid to the employees on the marriage

of their dependent daughters as well. Transportation facilities for the

commutation of staff and school going children are provided on nominal charges.

Schools being run by Telecom Foundation (TF) are providing quality education to

the children / wards of PTCL employees at concessional fees.

Education-Training

At PTCL, special attention and care is given to nurturing potential and building

human assets. Great emphasis is being laid on the inculcation of sense of

responsibility and management of staff. Numerous training courses have been

introduced for all levels of management and staff in order to train and groom the

human capital. The National Post Graduate Institute of Telecom & Informatics

(NPGITI) is also being revitalized. The institute currently offers Masters Programs

in Telecom Engineering and Telecom Management apart from Diploma in

Routing Technology. Engineers and other professionals are sent overseas to

have a greater insight into emerging technologies and grasp latest management

skills. Educational and training institutes that are run by PTCL include Telecom

Staff College, Haripur, Regional Telecom Training Schools and fifteen Divisional

Training Centers spread across the country. These facilities are fully equipped

with all the required paraphernalia and have experienced faculty to groom the

future resources for the organization.

The modern training facilities at National Post Graduate Institute of Telecom &

Informatics are accessible to the whole of the telecom sector. All telecom players

can benefit from our facilities. This open approach gives PTCL the edge of

achieving self-sustenance in its training projects, besides catering to the telecom

sector through trained and efficient human resources, thus catalyzing the growth

and progress. To streamline the existing procedures and processes, further steps

have been taken by integrating Recruitment Management and the Job

Management System into the Human Resource Management Information

System (HR-MIS).

SERVICES OF PTCL

Pakistan Telecommunication Company Limited not only Provides

Conventional telephone facilities, it also offers optical fiber services

to the private sector. We will briefly discuss below the product lines

being offered by the PTCL. Basically PTCL divide their services into

two parts.

1) Services for consumers

2) Services for corporate customers

1) Services for Consumers

These services are basically for the common users

(Individual/home users) those use telephone in their home/work

place and they are basically non business users.

a) New Telephone Connections

As mentioned earlier, PTCL is presently the only telecom

company, who provided fixed-line telephony in the country. So

whenever, any Private business concern or any individual needs a

new telephone connection for provision of telephone service.

b) Value Added Services

CLI (Caller’s Line Identification)

Caller Line Identification (CLI): Calling line Identification (CLI) allow

customers to identify the caller before picking up the phone receiver.

To subscribe to CLI services, a customer needs a telephone set with

display capability or a CLI device attached to the phone.

Advantages

Check on obnoxious calls

Complete record of incoming / outgoing calls with time & date

User Friendly

PREPAID CALLING CARDS

PTCL calling card is the most popular choice of millions of

customers all over the country. It is now available with balance

transfer facility and follow on call facility:

Comes in easily affordable denominations of Rs. 100, 250, 500,

1000 and 2000

Easily available throughout the country

Easy to use from any PTCL digital phone (Dial 1010)

Fast and easy, nationwide and international access

No line rent and no Phone bills

24 hours customer services through toll free number (0800-

80800)

How to use it

Scratch off the security coating on the indicated strip to get your card Pin

Number

Dial PTCL’s toll free number 1010 from any digital phone

Dial 1 for Urdu & 2 for English Instructions; enter your card Number & Press

#

For International Call Dial 00+CountryCode+CityCode+PhoneNumber+#.

E-BILL PAYMENT

Billing system is a part of customer services so providing connivance

to its valuable customers PTCL launched a new billing service which

is available through “ PTCL Calling Card” This is another service from

PTCL. This service is basically providing billing solutions for the users.

How to use it

The basic concept of the service is to provide billing solution to PTCL

customer. The same PTCL Calling cards are used for this purpose.

Through these cards customer can pay his bill on phone. No additional

charges for bill payment transaction.

Advantages

Customer can save his time by paying his bill on phone

Customer can pay his bill whenever he wants

DIGITAL FACILITIES

PTCL offers a variety of features to digital exchange customers like:-

Hotline

Abbreviated Dialing

Call Waiting

Don’t Disturb

Call Transfer on (a) Busy (b) No Reply (c) Immediate

Wake up call

Absent Subscriber

Code Barring

Prepayment Telephony Services (PPT)

With the changing trends most telecoms are diversifying their

services towards Prepaid solutions .one of such modern era

telecommunication service is Prepayment Tele Phone (PPT).It

provides the facility to subscriber to load a prepayment

Telephony card against their telephone number thereby generating

an account on I/N platform and any call made from that telephone

will be charged to this account. The service will provide state of art

technological facilities to the subscribers.

Target market

Target market for the service can be segmented as follow:

Budget conscious subscriber

Subscriber avoiding bill-depositing hassles

People requiring casual connections (on short term bases)

Subscriber not meeting documentation requirement

Students living in hostels

Defaulters

Features

Account number recharging

Outgoing call pin setting

Cancel out going call pin

Balance query

Follow on call

Low balance prompt

Balance shortage warning

Call duration prompt

Call cost prompt

Universal Access Number (UAN)

UAN (Universal Access Number) service is ideal for organizations

Engaged in marketing of products or services. Here is a list of

business that can avail UAN Service.

Banks

Insurance

Newspapers

Credit Card Companies

Airlines

Travel

Hotels

Courier Services

Shipping Lines

Utility Services

Fast Food Outlets

Trading Companies

Consumer

Stock Brokers

Products Companies

Voice Messaging Service (VMS)

With PTCL Messaging Service, you can have all for (or Desired) calls recorded when

you are absent, busy on phone or do not want to attend the calls for any reason.

You can, later on at your convenience, retrieve all recorded messages from any

telephone anywhere in the country. Security of message is ensured against

eavesdropping through subscriber controlled password. PTCLVMS is designed for

those who do not want to miss a call or Fax because that can be beneficial. Great

for anyone owning a telephone or Fax, at home or business. Much more powerful

and flexible than answering machine due to Message options available in your

voice mail system.

Features

Call answer

Fax

Messaging

Notification

Capacity 10 messages

Free for user paying RS. 2000/- or more bill/month.

PTCL Messaging Plus

PTCL MESSAGINH PLUS is designed for small and medium business

enterprises having problems with managing telephone message

PTCL MESSAGING PLUS will definitely handle these problems for you

Advanced messaging features save time, make you truly mobile and

increase productivity

Essential for time-conscious executives, frequent travelers and Professional

groups

Features

Call answer

Co-Location Centers

Pakistan Telecommunication Company has taken land mark decision to establish

co location centers throughout the country.

Service Concept

This service is basically for telecom data and I.T companies. These

companies will install their equipment directly in PTCL premises in

ready fitted environment. The primary purpose is to provide a number

of resilient and centralized connection and control facilities in which

co-location center’s communication can be located.

Benefits

Easy access to local & international

connectivity

Quick deployment of services

Minimum capital investment and cost

saving

Higher reliability and quality of service

Full connectivity under one roof

Just plug in and start business

Target Market

IT companies

Telecom data companies

Universal Internet Number (UIN) 131

UIN 131 numbering scheme for internet services providers, represent

exclusive code to each ISP.

Service Concept

The concept of the service just like toll free 0800 but charges a local

call for each connectivity attempt, UIN involves allocation of numbers

to individual ISP’s who are licensed by PTA.

Functionality

The service functions under single meeting billing system, with

promise of rich dividends in terms of customer care.

Benefits

The benefit goes to the end users who happen to be any ISP customers.

Once subscribed, the service means timeless communication for your customers,

allowing them to pay for a single call irrespective of its duration.

Target Market

ISP’s

Virtual Private Network (VPN)

Communication is the secret of success in today’s highly competitive

market. When it comes to enabling your enterprise, your

communication got to be instant, fast and hassle free. The answer to

this corporate need is virtual private net work.

Service concept

It is an innovative and intelligent private network to integrate

business/enterprises having sub-offices with in a city or nationwide.

Without necessity installation of dedicated resources, VPN enables

organization to create a private network.

Digital Cross Connect (DXX)

Telecommunication networks are the most important infrastructure

elements of any business today. As the businesses increasingly

depend on it, quality of networks is gaining strategic importance.

Service concept

PTCL offers flexible and reliable data services solutions through a

high quality

platform of digital leased line network. PTCL digital cross connect

(DXX) network

provides the most dependable media for WAN connectivity with more

than 200 nodes country wide.

Features

End to end digital connectivity on digital cross

connect network

Country wide as well as global coverage

Flexible bandwidth to suit the requirement

Better quality of services

Target market

Corporate customer

Software exporters

Data network operators

Airlines/travel agencies

ISP’s

Financial institutes

Courier services

ISDN BRI/PRI

It is a near broadband experience suitable for household and

small/medium sized organizations.

Features

Faster and clear voice

Fax and data communication on a single phone

PRI provides thirty 64 kbps user channel plus two 16 kbps signaling

channel

BRI provides two 64 kbps user channel plus one 16 kbps signaling channel

Cost effective

FINANCIAL ANALYSIS

Financial analysis of any organization is very necessary for the evaluation and

assessment of a firm. The information derived from these types of analysis

should be blended to determine the overall financial position. This analysis

includes ratio analysis, common size analysis and the study of differences in

components of financial statement. One of the primary objectives is identification

of major changes in trends, amounts and relationship and investigation of the

reasons underlying those changes.

In the financial analysis of P.T.C.L we will analyze some important information

about the company. As I did my internship in human resource management, but

it has not an independent organization so I have to analyze the P.T.C.L for the

analysis purpose.

Current Ratio

Current Ratio is an indicator to determine the short term debt paying ability or the

liquidity of a company. It tells us that how many current assets are available to

pay for the current liabilities of the company. Current ratio of the company in JUN

30, 2010 is 1.51& this ratio in 2009 was 1.50 is favorable for a company. The

current ratios quite reasonable.

Quick Ratio

Quick ratio or the acid test ratio also performs the same task as is performed by

current ratio but with more sophistication. Quick ratio of the company is 1.37 up

to June 30, 2010 while it was 1.36 in 2009 and 1.58 in 2007 its quick ratio is

increasing. As P.T.C.L is a service organization therefore the quick ratio is very

good because there is no need of inventory as any manufacturing organization

needs.

Ratio Analysis

A)Liquidity Ratios

Liquidity ratios are used to measure firm’s ability to meet short term obligations.

They compare short term obligations to short term current resources available to

meet these obligations from these ratios; much insight can be obtained into the

present cash solvency of the firm and the firm’s ability to remain solvent in the

event of adversity.

1) Current Ratio

Current assets are divided by current liabilities. It shows a firm’s ability to cover

its current liabilities with its current assets.

Formula;

Current ratio = Current Assets / Current liabilities

Interpretation

Comparing internally theses ratios PTCL ratio has decreased from 2.19 to 1.50. It

means that PTCL is depreciating its liquidity position. So PTCL is depreciating its

liquidity position.

2) Quick Ratio

The Acid-test or quick ratio or liquid ratio measures the ability of a company to

use its near cash or quick assets to extinguish or retire its current

liabilities immediately. Quick assets include those current assets that presumably

can be quickly converted to cash at close to their book values. A company with a

Quick Ratio of less than 1 cannot currently pay back its current liabilities.

Formula;

Interpretation

In 2009, quick ratio was 1.211, and in 2010 it is .997. Quick ratio of 1 or greater is

occasionally recommended, what value is acceptable is largely depend on the

industry type. For PTCL, it is a service providing organization its quick ratio is

acceptable.

B) Activity Ratios

Companies will typically try to turn their production into cash or sales as fast as

possible because this will generally lead to higher revenues. Such ratios are

frequently used when performing fundamental analysis on different companies.

1) Total Assets Turnover

Total Assets Turnover Ratio (TATR) is used to measure the firm's ability to utilize

its assets to generate sales. It is an indication to the firm's operation efficiency. A

lower ratio means inefficient utilization of assets.

Formula for the total asset turnover:

Total Assets Turnover Ratio = Net Sales / Total Assets

Interpretation

It basically indicates company’s ability to use its asset base efficiently to generate

revenue. Turnover is decreasing as compared to 2010. It has increased from

0.38 to 16.22. It means that PTCL has utilized its assets efficiently to increase its

revenues.

2) Inventory Turnover

In accounting, the Inventory turnover is a measure of the number of times

inventory is sold or used in a time period such as a year. The equation for

inventory turnover equals the cost of goods sold divided by the

average inventory.

Formula;

Inventory Cost of Goods Sold

Turnover= Average or Current

Period Inventory

Interpretation

In 2009, inventory turnover was 0.171, and in 2010 it is 0.824. It is usually

depend on industry. For PTCL, as a service providing industry it is quite

acceptable.

3) Average Collection Period

Receivable Turnover Ratio is one of the accounting activity ratios, a financial

ratio. This ratio measures the number of times, on average; receivables

(e.g. Accounts Receivable) are collected during the period. A popular variant of

the receivables turnover ratio is to convert it into an Average Collection Period in

terms of days.

Average collection period can be calculated as follows:

Average Collection Period = (Trade Debtors × No. of Working Days) / Net Credit

Sales

Interpretation

The average collection period meaning full only in relation to the firm credit

terms. For PTCL it is receiving in 59.584 in 2010 and was 61.848 in 2009.

4) Average Payment Period

The approximate amount of time that it takes for a business to receive payments owed in

terms of receivables, from its customers and clients.

Calculated as:

Interpretations

PTCL is service providing organization it has no purchases.

C)Debt Ratios

1) Debt Ratio

A ratio that indicates what proportion of debt a company has relative to its assets.

The measure gives an idea to the leverage of the company along with the

potential risks the company faces in terms of its debt-load.

Formula for Debt ratio is;

Interpretations

In 2009, the debt ratio of PTCL was 55% and in 2010 it is 51.1%. This value

indicates the PTCL has financed closed to half of its assets with debt. The higher

the ratio, the greater the firms degree of in debtless and the more financial

leverage it has.

D)Profitability Ratios

1) Gross Profit Margin

Gross margin is the difference between revenue and cost before accounting for

certain other costs. Generally, it is calculated as the selling price of an item, less

the cost of goods sold (production or acquisition costs, essentially).

Formula for Gross Profit Margin is;

Gross margin = (Revenue - Cost of goods sold) / Revenue

Interpretations

The higher the gross profit margin is better. In 2010 the gross profit margin of the

PTCL is 38.6% and in 2009 it was 40.6%. It shows that its gross profit margin is

decreasing.

2) Operating Profit Margin

In business, operating margin, operating income margin, operating profit margin or return

on sales (ROS) is the ratio of operating income (operating profit in the UK) divided by net sales,

usually presented in percent.

Net profit measures the profitability of ventures after accounting for all costs.

Interpretations

The higher the operating profit margin in preferred in 2010 the operating profit

margin of PTCL is 25.6% and in 2009 it was 25.3%. It shows that the PTCL has a

good profit after paying all cost and expenses other than tax, interest etc.

3) Net Profit Margin

Profit margin, net margin, net profit margin or net profit ratio all refer to a

measure of profitability. It is calculated by finding the net profit as a percentage of

the revenue.

Net profit Margin = (Net Income / Revenue) x100

The profit margin is mostly, used for internal comparison. It is difficult to accurately compare the

net profit ratio for different entities.

Interpretations

The net profit margin measures the percentage each revenue remaining after all

costs and expenses, including interest, taxes and dividends. The higher the firms

net profit margin, the better. It has 24.9% net profit margin in 2010.

4) Earnings Per Share

EPS is simply the net income that is attributable to common shareholders divided

by the number of shares outstanding. If a company has a complex capital

structure, it means that a portion of their dilutive securities may be converted to

equity at some point in time. Since EPS basic does not take into account these

dilutive securities, EPS basic will always be greater than EPS fully diluted. 

Formula for EPS,The # of shares outstanding during each month, weighted by the # of months those shares were outstanding.

The EPS of PTCL is 1.82Rs.

5) Return on Total Assets

Where asset turnover tells an investor the total sales for each $1 of

assets, return on assets, or ROA for short, tells an investor how much profit a

company generated for each $1 in assets. The return on assets figure is also a

sure-fire way to gauge the asset intensity of a business. Companies such as

telecommunication providers, car manufacturers, and railroads are very asset-

intensive, meaning they require big, expensive machinery or equipment to

generate a profit.

There are two acceptable ways to calculate return on assets.

Option 1: Net Profit Margin x Asset Turnover = Return on Assets

Option 2: Net Income ÷ Average Assets for the Period = Return on Assets

Interpretations

The higher the firms return on total assets the better. In 2010, it is 2.3% and 2009

it was 8.5%. It shows PTCL is effectively using its asset to generate profit.

E) Market Ratios

1) Price/Earnings Ratio

Chances are you've heard the term price/earnings ratio (P/E ratio) used before.

When it comes to valuing stocks, the price/earnings ratio is one of the oldest and

most frequently used metrics. Although a simple indicator to calculate, the P/E is

actually quite difficult to interpret. It can be extremely informative in some

situations, while at other times it is next to meaningless.

Formula for finding the Price/earnings ratio is;

Price/Earnings Ratio = Market Price / EPS

2) Market/Book Ratio

Market/Book Ratio = Market Price / Book Value per share

Book Value per Share = Common Stock Equity / No of Shares

PREVIOUS FINANCIAL RECORD IN GRAPHIC FORM

SUBSIDIARIES AND COMPETITORS

As already mentioned, presently PTCL has to face war with major competitors in

mobile phone & WLL telephony operators, however, there are also competitors of

its following subsidiaries/products:-

Multimedia & Broad Band (ISP Product)

There is about 100 competitors of product throughout the country to provide

Internet service to the customers. However, some of the major competitor ISP’s

of product are Cyber net, World online, Apollo, World Call, and Comsats WOL

etc.

U-fone (Cellular service provider)

There are five competitors of Ufone in cellular phone industry i.e. Mobilink,

Instaphone and C.M Pak, Telenor, Warid tel.

PTCL Calling Cards (Product)

Hello Cards, Call Point Cards, Call Mate Cards, and Global Telecom Cards.

Wireless Local Loop (V-Fone)

Go CDMA, Wateen Telecom & World Call are the Fixed Wireless Telephone

competitors of V-PTCL.

BRIEF INTRODUCTION OF SUBSIDIARIES

UFONE

Launched on January 29, 2001, Ufone is growing cellular operator in Pakistan.

Ufone services are offered to you by Pak Telecom mobile Ltd., which is a 100%

owned independent subsidiary of Pakistan Telecommunications Corporation Ltd.

U-fone has been a highly successful venture both in terms of subscriber uptake

and coverage. With fastest expanding coverage, unmatched product leadership,

and consistent focus on customers, Ufone has emerged to be the most

prominent player & has 2nd largest customer base in the market in the short

span of its operations.

Current Situation of Ufone

Ufone has started Sales in all the major cities of Pakistan which include Karachi,

Lahore, Islamabad, Peshawar, Rawalpindi, Kohat, Jehlum, Quetta, Sialkot,

Faisalabad, Multan, Sukkur, Gujrat, & Gujranwala including 1500 other small

towns across the country. New Connections are available at all ufone centers

and authorized dealers for just Rs. 50/ which includes Rs. 150/ of airtime. U-fone

is in process of starting the sales of connections in a large number of other

destinations across Pakistan. This expansion will also result in increase of Ufone

coverage in many additional cities and highways. Total User Base of U-fone U-

fone is currently enjoying 20.53% user of Pakistan mobile industry. It means U-

fone has 17,800,424 subscribers.

Main Features both postpaid and prepaid Ufone subscribers can enjoy any/ all

Ufone services including MMS, Ufone Internet, Global SMS, and Pocket Stocks

etc. In order to use any of the GPRS based services just call 333 and activate

your GPRS subscription.

Multi Media & Broad Band (Phone n Net)

Formerly Paknet Limited a fully owned Subsidiary of Pakistan

Telecommunication Company Limited (PTCL) is now merged in PTCL as

Multimedia & Broad Band Region. It was formed in March 1999 and started

commercial operation in January 2000. It is now the biggest Internet Service

Provider of the Country. Besides Internet this region also provides data

communication services like Clear Channel data links, Frame Relay and Digital

Circuits on Optical fiber cross connect systems etc. PTCL was running its

Internet Division through its region by the name of Public Data Network (PDN).

On December 1999 the PDN region was dissolved and all the assets and

Liabilities were transferred to Paknet Limited. Paknet made a fresh start with an

Internet customer base of 6000 as of January 2000 and successfully achieved

the target of its first year business plan of 50,000 Internet customers. Now it

became Multi Media & Broad Band Region which currently has a customer base

of more than 130,218 (Mar31, 2008).

The Company commenced its business in January 2000 with a balance sheet

size of over US $ 7.0 million. Currently it has a revenue base of approximately

US $ 5.0 million per annum and is most likely to double in the next fiscal year

keeping in view the market demand of Data products and expansion plans of the

PTCL. In near future PTCL is introducing a new IPTV service for its valued

customers.

COMPETITOR OF PTCL

There is no meager competitor of PTCL in landline but with the growth of

telecommunication industry of Pakistan competition increasing specially in mobile

phone sector. In total there are more than 800 million subscribers of mobile

phone. There are 05 big players in mobile phone industry but 4 of them are the

competitor of PTCL: Mobilink Telenor Warid ZONG

Other players in Land Line industry:

Operator Customers

NTC 103,059

Brain Limited 7,376

World Call 11,347

Union Communication 3,500

Naya Tel 13,500

Mobilink

Mobilink is a largest mobile phone company of Pakistan. Mobilink is currently

having more than 31,958,597 users base which is the 36% of total cellular

industry of Pakistan. Mobilink is basically competing Ufone which is subsidiaries

of PTCL.

Telenor

Telenor is another cell phone company it have 17,841,074 subscribers which is

20 % of total mobile industry.

Warid Tel

Waridtel is also providing cell phone facilities in Pakistan.Waridtel having more

than 15,114,678 subscribers which is 17% of Pakistan mobile industry.

ZONG

Zong is although new company and offering different packages and attracting

more and more customers and it can be future market leader.

NEW COMPETITORS

Other than mobile & land line PTCL is facing competition in F.W.T (Fixed

Wireless Telephone) product market. Below are the major competitors.

Telecard World Call

This has added competition for PTCL in WLL (Wireless local Loop) field.

SWOT ANALYSIS

Now we move towards the most important part of the internship report the SWOT

analysis after working 6weeks in the company I find some critical issues about

PTCL. After carefully analyzing these true issues of an organization now I am

able to understand the organization in right way so at the end of my report I will

go for SWOT analysis of PTCL.

STRENGTH

These are the few basic strengths of the PTCL

Government support

PTCL enjoy monopoly

State of the Art International Gateway Exchanges & Satellite Earth

Stations

Large earnings

Good quality international connectivity

Customer Base of over 4 million

Exponential growth.

Skilled Human Resource at low-cost.

Access to Infrastructure – optical network and satellite links.

Favorable policies (to some extent) and regulator.

Strong international brand names

Now we look each one in isolation. PTCL Enjoy Monopoly PTCL is sole provider

of land line services in Pakistan .so there is no competition regarding their basic

service. it means that there is a monopoly of PTCL. International Submarine

Cables High Capacity National Fiber Optic Backbone Ring 36 Transit Exchanges

with easy Facility of Expansion About 99% Digitization of Country Network

Strong Platforms & Exchanges for Value added Services Access Network &

Customer Base of over 04 million State Of The Art International Gateway

Exchanges & Satellite Earth Stations PTCL have largest net work with its state of

art technology and new digital exchanges. These are the few important

characteristics of PTCL network. International Submarine Cables High Capacity

National Fiber Optic Backbone Ring 36 Transit Exchanges with easy Facility of

Expansion About 99% Digitization of Country Network Strong Platforms &

Exchanges for Value added Services. Large Earnings As described earlier that

PTCL with more than 4 million users having greet revenues this is another

strength of the company Government support As you know PTCL is government

organization so it has great support and it is strength for PTCL.

WEAKNESS

Image – Government organization

Lack of customer focus

Outdated people and technology (perception)

Lack of aggressive marketing

Lack of customer services

Ambiguous management style

Lack of corporate culture

Social responsibility

Lack of management

Over employment

Quality of Service.

Low revenue per user (ARPU).

Customer retention.

No clear strategic direction.

Poor organizational structure.

No research and development programs.

Employee skill inconsistence

Very low employee morale

OPPORTUNITY

Growth in telecommunication industry

More aware and technology understanding consumer – a base that is

growing at a fast rate

Market open for more number of products – less dependence on single

category or product

Opportunity to introduce High Value Added Products / High margin

products for the new, more aware consumer

Time to establish brand loyalty, Pre-empt competitors, co-opt partners,

invest in technology and networks

Huge market size.

Local handset manufacturing.

Making technology accessible to all (e.g. broadband).

Adopt latest technologies.

Removal of international trade barriers.

THREATS

Strong competitors growth like mobiink.zong ,wrid,telenor.

Internet Telephony & other rapidly evolving technologies.

Expected competition due to the deregulation in December 2003.

New technologies.

Efficient operators.

International players, reduction in settlement rates.

Migration to satellite and cellular telephony.

Recession economy.

Inconsistent decisions from regulatory authorities.

Political Instability, Security issues.

Adverse shifts in trade policies of government.

Conclusion

Right person should be at right time and right palace .the persons conducting

road shows should be properly addressed, all old staff should be trained

according to needs of eta .I founding new employees hardworking and efficient,

but old employees were not efficient but they were satisfied that they are

permanent, also old and permanent subordinates were against their bosses.

Sales persons are not being given bonuses and are not satisfied from their

reward.

PTCL still have a good future. It should train its employees according to needs of

work and also should train them according to the new technology

RECOMMENDATIONS

In finance department a lot of people are working but they do not know how to

work?????? PTCL should hire the people who train them so they can work

properly. PTCL can take work from them. SAP a data base software which is

using by PTCL is a complex software accountant working over their not know

how to work on it. HR department should help the finance department to train the

employee. More training centers should be established. If there is lack of

resources, it is difficult, the training centers of the other organizations in the same

capacity can be utilized by determining the terms and conditions. During the

training by Human Resource Department the ethical values should be more

emphasized. This is the era of Information Technology. The functions and

procedures of the company should be converted from manual to the automatic. It

will enhance the performance & accuracy of the Human Resource Department

and ultimately of the company. Human Resource Department should allocate

resources for this purpose. Human Resource Department may advice and train

employees for one window operation in order to reduce the time and conserve

the resources.

PTCL Glossary

FWP Fixed wireless fone

CSR Customer service representative

BNCC billing and customer care system

WLL warless local Loop

SMS Short message service

CNIC Computerized national identity card

CDR Call data record

MSC MOBLE SWITICHING CENTER

WIN WIRLESS intelligent network

MDN Main directory number

NTC New telephone connection

PSTN Public switching telephone network

HLR Home location register

Ratio Analysis

Balance Sheet

Income Statement

Cash Flow Statement

Fund Flow Statements

Combined Balance Sheet and Income Statement for Working