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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