LIST OF CONTENTS

SECTION 1 INTRODUCTION

1.1 Background of Study

1.2 Purpose of Study
1.3 Scope of Work
1.4 Methodology of Research
1.5 Scheme of Report

SECTION 2 OVER VIEW OF TELECOM SECTOR AND PTCL

2.1 Advancement of Telecom Sector in Pakistan

2.2 Growth of Telecom Sector in Pakistan
2.3 Pakistan Telecommunication Limited
2.4 Organizational Structure

SECTION3 WORKING OF FINANCE DEPARTMENT OF PTCL

3.1 Functions of Finance Department.

3.2 Different Sections of Finance Department

SECTION 4 ANALYSIS, FINDINGS AND RECOMMENDATIONS

4.1 Financial Ratio Analysis

4.2 SWOT Analysis

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 4.3 Findings

4.4 Recommendations

SECTION 5 IMPLEMENTATION PLAN

5.1 Implementation plan for Over- Dues

2
LIST OF TABLES

Table-1 Summary of Chronology of Events

Table-2 Brief Summary of Pak Telecom Mobile Ltd. (Ufone)

Table-3 Brief summary of Paknet

Table-4 Brief summary of CTI

Table-5 Brief summary of TIP

LIST OF FIGURES

Figure-1 Share in mobile market by operators (Jan-08)

Figure-2 Teledensity of WLL/ cellular/ fixed Sector

Figure-3 Fixed line market share March 07

Figure-4 WLL subscribers

Figure-5 Organizational structure (headquarters) as of April 07,2007

Figure-6 Organizational chart of finance department

Figure-7 Structure of capital budgeting department

Figure-8 Flow of activities in capital budgeting department

Figure-9 Structure of operating budgeting department

Figure-10 Flow of activities on operating budgeting department

Figure-11 Structure of corporate finance department

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Figure-12 Structure of treasury department

Figure-13 Flow of activities in cell allocation/ limited based funds transferred

Figure-14 Flow of activities in finds placement

Figure-15 Flow of activities

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SECTION 1

1. INTRODUCTION
In this section I will discuss the background of the report, purpose of this study
and I will also present the Scope of the work as well. Then research methodology
and finally I will present the scheme of the report.

1.1 BACKGROUND OF STUDY

According to Tahir & Umar (2007) world has become a global village and this is
because of prompt, easy and accessible communication. Telecom sector has
changed the nature of communication everywhere and this is a burning issue in
Pakistan now a days. This sector has emerged as a fast growing industry during
past couple of years and now Pakistan is showing potential as one of the most
progressive country where the figure of mobile phone subscribers has reached 40
million. On these grounds different companies are being attracted to invest a lot in
this division.
As expressed in The News (n.d.), PTCL is the one and only technology partner
for the Pakistani nation for the last sixty years. It has taken revolutionary steps
during the different phases of national development to make sure a trustworthy
technology and communication system. Trends and means of communication
have changed enormously during the last eight years. The revolutionary
development in the Pakistan telecom market could not have been realized in the
absence of nonstop commitment and support of PTCL.

(Blurtit, 2007) contributes that, the shares of Pakistan telecommunications has

been sold out and were purchased by a UAE company. There are different aspects
regarding the privatization. It is observed that the quality of the service will be
improved as all over the world, it is also observed that private companies provide
better services than the government companies, but there is a common
observation is that the cost of the services will increase. So the cost of the services
provided by PTCL may be increased because of privatization. One more observed

5
fad is that during the privatization, thousands of old employs have been released
and new employs are being admitted. This would cause a serious wave of
unemployment. But on the part of PTCL this may also decrease the burden. The
change in the management of PTCL has brought in some change in the financial
position of the company, Although PTCL has a monopoly in the landline
telephones, but still its is facing a high competition from other cellular phone
companies. Now we have to see that what changes have been adopted by the
finance department of the company because of the change of management.

1.2 PURPOSE OF STUDY

The main purpose of this study is to observe and review different sections of
Finance department of PTCL. The procedures of different activates performed
over there. As an internee what I have observed, worked performed and analyses
the finance section of the company in view of the work performed over there.

1.3 SCOPE OF WORK

As PTCL is one of the largest organizations of the country with nine major
departments each having three to four sub departments and about 30,000
employees working in the organization, where regular employee are about 20,000,
NTC are about 2600 and NCPG are about 8400. Therefore we have covered only
the finance section of the company. What type of financial activates are
performed, how many different sub departments it has and how they are
functioning as explained by Maheen Y. (Personal Communication, July 14, 2008).
As mentioned that PTCL is a very large organization, it has an expanded finance
department which is divided into five sections headed by the SEVP Finance,
each section has a different EVP. All these five sections have further sub-sections
headed by different EVP. Keeping this in view we have covered the Financial
Planning and Treasury Department.

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1.4 METHOLODOLOGY OF RESEARCH
Using the theoretical data, we have presented our research with good solid
background and then through seek advice from different people and different
written material including financial reports, gathered the data to analyses the
Finance Department of PTCL headquarters.

1.5 SCHEME OF REPORT

Section 1: We explain the background and purpose of writing this thesis. We

identify the scope of the work, describe the methodology of research and present
the structure of the thesis.
Section 2: We will present here the theoretical frame work regarding to our
research area. The review of literature, advancement of telecom sector in
Pakistan, presents the growth in the telecom sector, brief narration about Pakistan
Telecommunication limited and explains the role of PTCL in the telecom sector.
Section 3: This section will include the review and analysis of the Finance
department of PTCL, which is done through financial ratios and results are also
shown on Charts.
Section 4: We draw a conclusion and make recommendations on the basis of our
statement analysis, review knowledge and theoretical frame work.
Section 5: In this chapter we will present the action plan, giving time frame along
with other plans as to how can recommendations can be implemented.

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SECTION 2

2.1 ADVANCEMENT OF TELECOM SECTOR IN

PAKISTAN.
From the humble beginnings of Posts & Telegraph Department in 1947 and
establishment of Pakistan Telephone & Telegraph Department in 1962, to this
very day here is a story of commitment and vision .  The history of
telecommunication in the Sub-Continent is as old as the history of our slavery. In
the subcontinent, before Independence this sector was under the Indian Post &
Telegraph Department and developed as a successful industry.

The role of telecommunication in Pakistan can be broadly divided into four

phases:

2.1.1 Pakistan Post & Telegraph (P&T)

This department started its telephone service with only 12346 telephone lines and
seven telegraph offices all over Pakistan. All the telephone system at that time
was manual. This department continued its business up to 1962. At the time of
independence the postal and telecommunication services were performed by a
single department known as Pakistan Post & Telegraph (P&T). The Government
of Pakistan adopted the Government of India Telegraph act 1885 to control and
direct the activities of telecommunication.

2.1.2 Pakistan Telephone & Telegraph (T&T)

Pakistan Post and Pakistan Telephone & Telegraph (PT&T) under the presidential
ordinance was the first step towards reforms in the telecommunication sector. It
was made in 1962, splitting up the P&T department into two separate
departments. Director General headed this department. The PT&T were in fact a
civil service department under the ministerial control. The PT&T organizational
structure had 20 Chief Engineers and General Managers reporting directly to the

8
Director General. The centralized structure of PT&T caused inefficiency in
operations and long delay in implementing decisions. At the time of inception of
PTC the total number of employees working in PT&T was 45686 and the total
network comprised of 922,000 telephone lines.

2.1.3 Pakistan Telecommunication Corporation (PTC)

The decade of 1990s brought about many changes in the economic structure of
Pakistan. The objective was to reduce the burden of the government, minimize the
bureaucratic influence and improve the efficiency of these departments.

A major breakthrough in the history of telecommunication in the country occurred

with the gradual deregulation and privatization of T&T. At the first stage Pakistan
Telephone & Telegraph Department (T&T) was converted into a statutory
corporation Pakistan Telecommunication Corporation. On December 15, 1990
the PT&T department was transformed into Pakistan Telecommunication
Corporation with a legal identity separate from the Government. This change in
the statute, introduced by the Government of Pakistan enabled PTC to move from
administrative to contractual relationship with its customers. It provided the
opportunity for the development of telecommunication facilities to an
unprecedented level and also for an increased customer satisfaction as contributed
by (Khilda, 2007)

(Wilson, 2007), in his report explains that under the PTC Reorganization Act,
1996 the telecommunication sectors was split up into four bodies.

 Pakistan Telecommunication Company Limited (PTCL)

 Pakistan Telecommunication Authority (PTA)
 National Telecommunication Corporation(NTC)
 Frequency Allocation Board (FAB)

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2.1.4(a) Pakistan Telecommunication Company Limited
“The Company is incorporated as public company under the Companies
Ordinance of 1984, and officially came into being on January 1; 1996.The
principal object of the Company is to provide domestic and international
telecommunications and related services consistent with the provisions of the Act.
Initially, all shares of PTCL were issued to, or held in trust for, the President of
the Pakistan. Section 34 prohibits, unless Articles of Association of the Company
provides otherwise, any person to control, directly or indirectly, ten per cent or
more of the votes on a poll at a general meetings of the Company. Indeed, the Act
was promulgated with a view to sell and/or transfer shares of the Company to
private investors and general public. The majority of shares of the PTCL were
bought by Etisilat, in 2006, who now manages the PTCL” (Wilson, 2007).

2.1.4(b) Pakistan Telecommunication Authority

Pakistan Telecommunication Authority is a regulatory body which is responsible

for monitoring the telecommunication business in Pakistan. It frame rules and
regulations for the private telecommunication companies including mobile phone
companies, Internet service providers, paging companies and pay card phone
companies. It also issues licenses to the new companies entering into this
industry. (Khalida, 2007)

2.1.4(c) National Telecommunication Corporation

“National Telecommunication Corporation officially came into being on January

1, 1996, and is granted a license by the Authority on a non-exclusive basis to
provide telecommunication services within Pakistan to the armed forces, defense
projects, Federal Governments, Provincial Governments, or such other
Governmental agencies or Governmental institutions as the Federal Government
may determine. NTC is not allowed to sell its capacity on the telecommunication

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system to any person other than the Government agencies and PTCL, during the
period when PTCL enjoys the exclusive rights of providing basic telephone
services, which were terminated at the end of 2003.” (Wilson, 2007).

2.1.4(d) Frequency Allocation Board

“The Board has exclusive right to allocate and assign portions of the radio
frequency spectrum to the Government, service providers, telecommunications
system providers, radio and television broadcasters, and public and private
wireless operators. However, an application for allocation and assignment of
radio frequency spectrum is first made to the Authority, which refers the
application to the Board after making such inquiry as it deem fit. The Board is
composed of six members, four of which are the nominees each of the Federal
Government, Ministry of Defense (Corps and Signals), Ministry of Information
and Broadcasting, and Ministry of Interior. The other two members are the
chairman of the Authority and the Secretary of the Ministry of Communications.”
(Wilson, 2007).

2.2 GROWTH OF TELECOM SECTOR IN PAKISTAN

Telecom sector is on the rise at an outstanding pace where all stakeholders are
getting due profit out of it. PTA is fully side by side of the rapidly developing
technological advancement at the global telecom prospect. The objective of the
Pakistani regulator is to anticipate and be positive in providing conductive
environment for the operators in order to facilitate them and bring in state of the
art telecom amenities in the country. Telecom sector is contributing about 2% in
GDP directly and if we take account of its indirect input in other sectors this share
comes to about 5%. It is expected that fixed as well as wireless sectors will grow
significantly in next future years as articulated by (Scribd, 2008)
In 2003, Pakistan opened the telecom market to private operators in the sector of
fixed line and cellular as well. Telecom supervisory body also introduced wireless

11
local loop technology in the country. Because of these regulatory policies,
competition occurred in the all segments of the telecom sector and which resulted
in lower tariffs and cheaper handsets. Keeping this in view, Pakistani people
jumped on to the cellular services. (Sargana, 2006)
A brief account of the growth in telecom sector is given below.
2.2.1 Mobile Sector
Umar and Tahir (2007) explains that , in the year 2005 four old companies
including Mobilink, Ufone, Paktel and Instaphone and one new i-e Telenor were
providing Cellular services in Pakistan. Mobilink was standing as the Significant
Market Power (SMP), with 6.019 million subscribers and Ufone with 2.147
million of subscribers was number two in the row. Paktel switched over from
AMS to GSM system and was trying hard to capture his market share. Insta was
having 0.453 million, Paktel (AMS) 0.337 million and Paktel GSM 0.448 million
subscribers. With the cellular mobile phone subscribers of 9.732 million, market
was growing at a miraculous rate. As explained in the industrial analysis made my
PTA, in the year 2007 the share of each company in mobile market showed a
change, apart from Ufone whose subscriber share remained more or less the same.
Mobilink is losing its share for another year in favor of Telenor and Warid
regardless of its secure subscriber base, whereas Paktel and Instaphone share in
the market also dropped according to (Scribd, 2008)

Figure-1 Share in Mobile Market by Operators (Jan-08)

Source: Scribd (2008)

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2.2.3 Fixed Line Growth
From year 2001 to 2006 there was increasing trend in fixed line connection but
dropped in 2007, bringing the ALIS to a mere 4.8 million across Pakistan. During
2007 fixed teledensity dropped from 3.04% to 2.99% where as WLL and Cellular
teledensity is increasing which can be seen in Figure-2

Figure-2 Teledensity of WLL Cellular/ Fixed Sector

Source: Scribd (2008)

PTCL enjoys complete monopoly in the fixed-line telephony, with a market share
of 98%. In recent times, PTA has invited applications for long distance
international (LDI) and local licenses (LL) for services to be provided in the Azad
Jammu and Kashmir, and Northern Areas of Pakistan. To encourage companies to
apply, the application processing fee and initial license fee are considerably
reduced to US$100 and US$2000, respectively as contributed by (Wilson, 2007).
Figure- 3 Fixed Line Market Share March 07

Source: Wilson (2007)

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2.2.4 Wireless Local Loop (WLL) Sector
As explained in the PTA industrial analysis report 2008 (Scribe, 2008), after
deregulation of local loop sector in 2004 Wireless Local Loop services (WLL),
were introduced in Pakistan. WLL licenses were issued out of which PTCL,
World call, Telecard, Great Bear, Burraq, Mytel and Wateen are operational.
WLL customers have shown rapid growth since 2003. There are about 2.1 million
subscribers of WLL services which can be seen in Figure-4.

Figure- 4 WLL Subscribers

Source: Scribd (2008)

2.2.5 Internet Services

(Scribd, 2008) contributes that, Internet service is becoming an essential part of
life in Pakistan especially in urban areas where large segment of the businesses
are using it for diverse purposes. Domestic air lines including PIA and Air Blue
have started e-ticketing through internet to offer better and efficient services to its
clienteles. According to an estimate of ISPAK (Association of Pakistani ISPs), at
present there are about 3.5 million internet subscribers all across in Pakistan.
Currently around 3,002 cities are connected to internet.
PTCL started offering its DSL services since June 2007 in major cities for home
users with free installation services. It is anticipated that steps taken by PTA will
ensure better and economical broadband services in Pakistan. Broadband

14
connection is available in Pakistan for as low as Rs. 1200 for a 512Kbps
connection with unlimited download.

2.3 PAKISTAN TELECOMMUNICATION LIMITED

The hub of all activities from various types of landline communication to satellite
communication is Pakistan Telecommunication Company Ltd. (PTCL). It is the
only telecom giant, which can meet the ever growing needs of IT sector according
to (Pasha, 2002)

2.3.1 Company Profile

As stated in the Employee Orientation Handbook (2007, p. 6) “PTCL is the
largest telecommunications supplier in Pakistan with employee strength of around
30,000 and 5.7 million customers. PTCL also continues to be the largest CDMA
operator in the country with 0.8 million V-fone customers. The company
maintains a leading position in Pakistan as an Infrastructure Provider to other
telecom operators and corporate customers of the country. It has the Potential to
be an instrumental agent in Pakistan’s economic growth. PTCL under the
leadership of Etisalat is aggressively progressing to achieve the pinnacle of
success in the Telecom sector.”
2.3.2 Company Vision
Employee Orientation Handbook (2008, p. 8) states the Vision of PTCL as
follows:

‘To be the leading Information and Communication Technology Service Provider

in the region by achieving customer satisfaction and maximizing shareholders'
value’.

2.3.3 Company Mission

Employee Orientation Handbook (2008, p. 8) also defines the mission of the

company as to achieve our vision by having:

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  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.

2.3.4 Company Core Value

According to the (Employee Orientation Handbook, 2008), following are the core
values of PTCL

 Professional Integrity
 Customer Satisfaction Corporate Culture
 Team Work
 Company Loyalty (Employee Orientation Manual, 2008)

2.3.5 Glorious Journey of Pakistan Telecommunication Limited

Employee Orientation Handbook (2008, p. 6) explains the triumphant journey of
PTCL as follows:
“PTCL has a very rich legacy owing to its extensive transformation stating from
Posts and Telegraph department in 1947 to this very day, which depicts a story of
commitment and vision Pakistan Telecommunication Corporation (PTC)took over
operation and functions from Pakistan Telephone and Telegraph department
(established in 1962) under Pakistan Telecommunication Corporation
Act1991.This coincided with Government competitive policy, encouraging
private sector participation and resulting in award of licenses. In 1991 the
government announced its plan to privatize PTCL, in 1994 issued six million
vouchers exchangeable into 600 million shares of the would- be PTCL in two
separate placement at a par value of Rs. 10 per share. In 1995, Pakistan
Telecommunication (Reorganization) Ordinance formed the basis for PTCL
monopoly over basic telephony in the country. The same year, Pakistan

16
Telecommunication Company Limited was formed and listed an all stock
exchanges of Pakistan.
The company expanded through establishment of the company’s mobile and
internet subsidiaries in 1998. Pakistan also entered post- monopoly era with
deregulation of the sector in January 2003.
In April 2006, Emirates Telecommunication Corporation, which is commonly
known as Etisalat, assumed management control of Pakistan Telecommunication
Corporation Ltd- part of the $ 2.6bn deal to buy a 26% stake in PTCL. The
successful privatization of PTCL, and consequently Ufone, is hailed as ushering
in a new era for telecommunications in Pakistan.”

2.3.6 Emirate Telecommunication Company Etisalat

We can get information about the Etisalat from Employee Orientation Handbook
(2008, p. 7) according to it, “Etisalat has been the telecommunication service
provider in the UAE since 1976 and stands 140th among the Financial Times Top
500 Corporations in the world in terms of market capitalization, and is ranked by
The Middle East magazine as the 6th largest company in terms of capitalization
and revenue.
Mr. Obaid Saeed Bin Mes’har, Chief Executive officer, Etisalat says that the new
Management will take steps for improving quality, reorganization and extension
of PTCL service to more areas, he further added that technical staff might be sent
to Africa and other countries after imparting additional training to them. Mr.
Obaid aimed at utilizing the expertise the skills of PTCL employees in a proper
way and that no PTCL employee would be relieved.
Emirates Telecommunications Corporation (Etisalat) was the highest bidder for
the acquisition of a 26 per cent stake in Pakistan Telecommunication Corporation
Limited (PTCL). This latest win reflects the determination of Etisalat to
strengthen its position as the leading telecommunications company in the region.”

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Table-1 Summary of Chronology of Events

Pakistan Telecommunication ordinance, 1994 promulgated to

1994 privatize PTC and incorporate (PTCL) and other players in
the telecom sector (PTA, NTC, FAB)-offer for sale of 100M
shares in the form of 1M vouchers locally at a price of Rs.30
per share.

1995 Appointment of Deutsche Morgan Grenfell as the financial

advisor. Other consortium members included Coopers &
Lybrand, Denton Hall, Muslim commercial Bank limited,
Deutsche Bank AG, Abacus Consulting, Asad Ali Khan &
Co. and Rizvi, Isa & Kabraji.

1996 Expressions of Interest (EOI) invited for the sale of PTCL

strategic shares.

1997-1998 Bids invited for appointment of new financial advisors.

Agreement was signed with Goldman Sachs international
leading a consortium of financial advisors.

1998-2001 Goldman Sachs, Global securities Pakistan limited, Analysis

and Allen & Overy and Rizvi isa & Co worked closely with
the GoP prepare a robust regulatory regime in the telecom
sector.

2001-2003 JPMorgan joined the FAC and took the lead on marketing and
executing the transaction. The transaction was aggressively
marketed.
Transaction was once again shelved, as 2 out of 3 pre-
qualified bidders did not proceed further. This was in the
context of heightened country risk in the post September 11
scenario.

2003-2004 Discussions on restructuring PTCL prior to privatization.

President of Pakistan’s formal decision to sell PTCL as an
integrated Telecom Operator.

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 2004-2005 Teaser distributed followed by one-on-one meetings with
potential buyers (Singapore, Kuala Lumpur, Beijing and Abu
Dhabi). PC Board pre-qualifies 10 potential buyers to conduct
due diligence.
Confidentiality Agreement distributed. Information
Memorandum distributed.
Due diligence commences (virtual data room (VCR) opens
up); Management presentations to pre-qualified bidders held
at the beginning of each due diligence week; three bidders
invited each week to attend management meetings and
conduct site visits; Completion of due diligence.
Investors, Forum held.

Source: Khilda (2007)

2.3.7 Subsidiaries of PTCL

There are four subsidiaries of Pakistan Telecommunication Limited(PTCL)
including,
 Ufone(Pak Telecom Mobile Limited)
 Paknet
 Carrier Telephone Industry (CTI)
 Telephone Industries of Pakistan (TIP)

2.4.11(a) Pak Telecom Mobile Limited (PTML)

As mentioned in the Annual report of PTCL (2007, p. 27) “Ufone, is one of the
largest cellular service providers, initiated country’s largest ever expansion
project amounting to US$ 525 million. With the Phase V expansion project
underway, the network expansion will cover over 2,000 cities, towns, villages and
all major highways in the country. The subscriber base was 14 million at June 30,
2007, which represents 87% increase over the same period last year. During the
year ended June 30, 2007, Ufone managed to improve its operational and

19
financial figures and it reported strong revenue and operating profit growth of
43% and 36% respectively over the previous year.
The management sees both greater opportunities and greater challenges as the
potential for growth in voice and data is significant. The management’s emphasis
will be on increasing number of subscribers, market share and profitability. The
management believes that revenues are expected to follow the same trend whereas
overall EBITDA margins are expected to remain stable.”

Table- 2 Brief Summary of Pak Telecom Mobile Ltd. (Ufone)

Year of Establishment 1998

Shares PTCL 100%
Business Operation of Cellular Mobile telephone service
through GSM system
Source: Telecom Knowledge Center (n.d.)

2.4.11(b) Paknet

According to the annual report of PTCL (2007, p. 28) “In year 2000, Paknet was
formed as an independent subsidiary of PTCL for providing internet related
services in the country. Although the company had the largest ISP infrastructure
reach in the country but still it gave a poor performance, with an accumulated
losses of over Rs. 350 million at the end of year 2005-06. In 2006-07, a new
management was put in place by the Board of directors to rectify the situation and
come up with a way forward. The new management began to clean up of
operations by reducing company’s nine Network Operating Centers to two,
making new market based inductions and approving an increase in Broadband
capacity from mere 1500 to 15000 ports as a start.”

Table- 3 Brief summary of Paknet

Year of Establishment 2000

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 Shares PTCL 100%
Business Operation of Internet/E-mail, Information
Technology services
Source: Telecom Knowledge Center (n.d)

2.4.11(c) Carrier Telephone Industry (CTI)

Khalida (2007) has explained the Carrier Telephone Industries (CTI) as a

manufacturer of telecom transmission equipment. The company has maintained
its business momentum of more than one billion rupees during the year 2003-
2004, despite destructive market conditions and tough competition among
domestic industries. It has registered a sales turnover of Rs. 1.004 billion during
the year 2003-2004 as compared to Rs. 1.107 billion last year.

Table- 4 Brief summary of CTI

Year of Establishment 1974

Shares PTCL 52.5% and Siemens 47.5%
Business Manufactures digital transmission & fiber optic
equipment. Provides repai and maintenance.
Source: Telecom Knowledge Center (n.d)

2.4.11(d) Telephone Industries of Pakistan (TIP)

Khilda (2007) describes that “PTCL owns 70% shares of TIP, in addition to
digital switches, which are principally produced in TIP, other products include
energy meters, fire alarms, cross connect cabinets, container shells & Drop wires
etc. TIP manufactured 200,000 digital ports in the year 2003-2004 for PTCL and
NTC. In addition to that 100,000 telephone sets, 50,000 energy meters, 50,000 DP
boxes, 1,500 cross connect cabinets and around 20,000 kilometers of drop wire
were also produced. The auditors of TIP have included a crucial matter in their
report on significant uncertainty about the company ability to continue as a going
concern.”

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Table- 5 Brief summary of TIP

Year of Establishment: 1952

Shares: PTCL 72.6%, Siemens 27.4%
Business Manufactures digital switches,
telephone energy meters, PABX etc
Source: Telecom Knowledge Center (n.d)

2.4 ORGANIZATIONAL STRUCTURE

The structure of PTCL is stretch over the entire country which helps the company
in providing services to the valued customers allover Pakistan. Geographically
the company is divided into:

1. Headquarters
2. North Zone
3. South Zone
4. Central Zone
5. West Zone
Each zone is headed by the EVP Business Zone according to PTCL Financial and
Accounting manual (2007: 31)

2.4.1 Functional Overview at Headquarters

At the headquarters the company is structured around the following departments
according to the Employee Orientation Handbook (2008, p. 11- 13)
Commercial
“The commercial department develops strategic business plans, sales strategies,
budgets, policies and procedures, relations with major accounts and marketing
plans for PTCL. “

HR & Administration

22
“The functional responsibility of this department include core human resource
areas human resource areas like Recruitment and Manpower Planning, Training
and Development, Performance Management, Succession Planning,
Organizational Restructuring, building competitive market pay structures,
developing the HR policies, Procurement etc.”

Corporate Development
“This department formulates master plan with short, medium and long term
objectives, strategies based on available market data, competitive/ strategic
landscape, input from internal stakeholders. Choosing strategic projects and
closely monitoring domestic and international market for new investment
opportunities is also part of the responsibilities.”

Finance
“This department drives financial vision and direction of the company in line with
the overall business strategies. It delivers increasing shareholders’ value, directs
and monitors financial system and strategies. The principal functions include
Financial Policies, and Procedures, Costing and Regulatory Affairs, Budget
Control, Treasury, Revenue Accounts.”

Operations
“It is one of the core functions of PTCL and focus on activates related to IP
Services, Switching and Transmission. This key area indulges in the day to day
operational; engineering activates and makes sure that the processes are
streamlines so as to provide best services to the valued customers.”
Technical
“Technical department deals with the preparation of annual and five year
technical plans. It ensures the engineering standards and practices are executed
properly; the technical specifications are met for telecom equipment used in

23
PTCL and cost effective technologies are introduced. This department is
responsible for final technical evaluation”

Legal Affairs
“This department handles Commercial and Corporate Regulatory, Employment
Laws and HR, Litigation and Subsidiaries Affairs.”

Internal Audit
“Internal audit is not just confined to its traditional role but plays a prvotal role in
assuring the achievement of the corporate objectives. The department carries out
the General Internal Audit and IT Audit. It performs a wide range of services
including Financial Audit, Compliance Audit, Operational Audit and Information
Technology Audit.”

Revenue Assurance
“The function of this department is to effectively manage the high risk areas of
PTCL to reduce the possibility of revenue leakage and bad debts, identify revenue
generation streams, ensures revenue generation & billing and identify cases of
loss opportunities. Other responsibilities includes formulation and implementation
of Strategies, network surveillance etc.”

Each of the above department is headed by the Senior Executive Vice President
(SEVP) or Executive Vice President (EVP) as defined in the PTCL finance and
Accounting Manual (2007)

24
 Source: PTCL finance and Accounting Manual (2007:33)

SECTION 3
WORKING OF FINANCE DEPARTMENT OF PTCL

25
The Finance department is responsible for the financial, accounting and budgeting
activities of the company. The department also provides technical assistance in
financial management and accounting to various departments, Zones and Regions.
Finance and accounting activities include the processing of financial data,
preparation of financial reports, supervision and monitoring of financial activities,
maintenance and development of the accounting system and implementing
controls to safeguard company’s assets. The budget function includes collecting,
preparing and consolidation of data in the development of the annual corporate
budget according to the orientation report prepared by Asma (2007).

3.1 FUNCTIONS OF FINANCE DEPARTMENT

The following are some of the major functions of the Finance Department:

• Compilation, provision and revision of various finance and accounting policies

and procedures and their implementation;

• Collecting budget data, preparing, consolidating, re-appropriating budgets and

reporting variances against budgets, vetting and appraisal of capital expenditure /
investment proposals to ensure their financial viability;

• Costing of various services provided by the company;

• Billing of all services to customers, timely deposit of cash receipts into company
accounts, assisting in the administration of international agreements and
settlement of accounts with bilateral partners;

• Maintaining accounts payable ledger and processing all departmental requests

for all payments;

• Store accounting and materials valuation;

• Ensuring the accurate and timely payment of employee payroll;

26
• Maintaining fixed asset records including the recording of capital work in
Management tools e.g. preparation of reconciliation statements for all bank
accounts;

• Preparing financial and ancillary statements for internal and external

(regulatory) purposes;

• Collection of company’s receivable from customers, employees, and outside

parties;

• Providing loans to subsidiaries and associates and collection of the company’s

receivable;

• Opening of letters of credit and issuance of letters of guarantee;

• Providing financial information for management decision support;

• Coordinating the annual audit and preparation of the quarterly, half yearly and
annual financial statements;

• Maintaining general accounting and tax records as per the relevant laws;

• Assisting in contracts administration and tender evaluation and participating in

tender committees; and

• Providing financial information, guidance and advice to other departments.

As explained by Amina OD Department

Figure- 6 Organizational Chart of Finance Department

27
 SEVP
Finance

GM International Revenue
GM Interconnect Revenue
EVP EVP
EVP Financial Planning and Treasury
Financial System and Development Accounts Service

GM GM GM GM GM GM GM
Financial Policies and Procedure Regulatory Affairs Budgetary Control Treasury and Purchase Revenue Accounts Asset Management Financial Accounts

Senior Manager
Senior Manager Senior Manager Senior Manager Senior Manager Senior Manager Senior Manager
Costing
Financial Policies and training Operating Budget Treasury Revenue Control Corporate Tax Financial Reporting

Senior Manager Senior Manager Senior Manager Senior Manager Senior Manager Fixed Assets and Senior Manager
Senior Manager Purchase Contract and Control
Financial Control Regulatory Accounting Capital Budget Billing Control; CWIP Control Nominal Ledger

Senior Manager Senior Manager

Information System Control Payment

Source: PTCL Finance and Accounting Manual (2007: 34)

All these sections are headed by different EVP’s and these are different
subsection of each section.

3.2 DIFFERENT SECTIONS OF FINANCE DEPARTMENT

28
The Finance Department of PTCL is controlled by Senior Executive Vice
President (Finance), who looks after three sections:

1) Financial System and Development.

2) Financial Planning and Treasury.
3) Accounts Services.
i. International Revenue.
ii. Interconnected Revenue.

As the Finance department of PTCL is expanded and there are different sections
and sub-sections of the finance department therefore during my 6 week of
internship I had covered only the Financial Planning and Treasury section of the
Finance Department. The Financial Planning and Treasury department consists of
following sub- departments, which come under SEVP Finance as we have
mentioned before.

 Budgetary Control.
 Capital Budgeting.
 Operating Budget.
 Corporate Finance.
 Treasury.

3.2.1 BUDGETARY CONTROL

This department is further divided into 2 sub departments:

a) Capital Budgeting
b) Operation Budget

3.2.1(a) Capital Budgeting

The function of capital budgeting is to prepare the financial feasibility to
determine the companies long term investments such as new machinery,

29
replacement of old machinery, new plants, new products and services or any other
project that requires a capital expenditure and generates a future cash flows.

Figure-7 Structure of Capital Budgeting Department

Objective of the Capital Budgeting

The basic objectives of the capital budgeting department as explained by Sumaira
(Personal Communication, June 13, 2008) are
o The formulation of long- term goals
o Identification of new investment opportunities
o To access the projects financial worth and verification of the projection
made for the project.
o The estimation and forecasting of current and future cash flows
o The suitable financial framework for capital expenditure projects capable
of transferring the required information to the decision level.
o The monitoring the significant period of time between the investment
outlay and the receipt of the benefits as well as the risk associated with it.
Process Flow:

Nida (2008) in her Orientation report has contributed that the projects are
approved by the management are part of capex (capital expenditure). For every
project Technical and financial analysis is done, before approval which is a duty

30
 of this department. Instructions are issued at the beginning of financial year in
which the capital budgeting department mention the parameters on the base of
which new project would be made. That instructions are sent to EVP Planning and
GM Strategy and Planning. Than the planning department make project approval
forms, for the new projects and sends them to SM Capex. Then there is a process
of financial vetting, which include following activated:

 The cost of the project is checked by the capital budgeting department, it

looks if a related equipment was purchased before, if yes, at what price.
Then a comparison is made between the two prices.
 In the second step, feasibility report is made for that particular project with
the help of Commercial department.
 In this step, a complete business case is prepared for the project with
complete expenditure, Profit and loss statement, NPV, IRR and other
calculations.
 After doing all the above analysis, the file is sent back to Planning where
all the projects are consolidated into one Annual Development Program,
for the next year.
Figure-8 The flow of Activities in Capital Budgeting

Prices Comparison

Project received from Planning Feasibility Report

Data forwarded to Planning Dept.
NPV, IRR and other cal.

Consolidated
Forw into one Annual Development Program
SEVP Finance EVP Finance arded
to

Presented in board of meeting for final approval Source: Nida (2008)

3.2.1(b) Operating Budget

31
“The function of this department is to prepare the operating budget of PTCL for
the coming fiscal year, as well as preparing the budget of different department
especially for the HR- Department. This department also prepares and updates the
monthly cash flow of the company. When any department wants some amount for
their operations they send their request to the operating budget which approves it
and prepare the final budget for that department.” (Nida, 2008)

Figure- 9 Structure of Operations Budget

Process Flow:
This department performs the following activities:

 Budget preparation starts in November and continues till May. BIA

(Budget input forms) is distributed to all the departments to fill in their
budget requirement for the next fiscal year. Budget is then prepared and
presented to EVP Finance, CFO, President and finally to the Board of
Directors for authorization.
 Budget is then allocated quarterly by the sub-department that is Budget 2.
The allocated budget is then sent to ceiling which is also known as
Treasury Department.

32
  Monthly cash flows are prepared by the sub department that is Budget 1
which help in forecasting the funds requirement for future. Cash flows are
prepared and then sent to the EVP Finance for review. As described in the
Orientation report of Nida (2008)

Figure- 10 The Flow of Activites in Operations Budget Department

3.2.2 CORPORATE FINANCE

In the Orientation report Asma (2008) explained that in PTCL Corporate finance
department plays a supportive role for the procurement department through the
following main function:

In procurement department, there are 2 GM supply & 2 GM Turn key. In supply,

the contractor has to supply the requested goods only. But in case of Turn-key,
contractor is liable to provide other services also, like installation, testing & then
commissioning.

GM-Supply: Deals contracts amounting less than 50 Million.

33
GM-Supply: Deals contracts of amount 50 Million & above.
GM-Turn key: Deals switching contracts.

Figure- 11 Structure of Corporate Finance Department

Source: Asma (2008)

Process-Flow:

The flow of activates at the Corporate Finance Department as explained by Asma

(2008)

 End user will send his application to EVP of this department. After
approval from EVP, the application is sent to EVP-Procurement, who will
forward it relevant GM. For example the request amount is less than 50
Million. Now GM supply, who deals contracts amounting less than 50
Million will further process the issue.
 GM supply makes RFP (request for proposal) & send it to GM corporate
finance through e-mail.
 Corporate finance department will check commercial clauses of RFP. This
is called RFP wetting. They will check BoQ, Incoterms etc.

34
  Then tender is floated & bids are invited from contractors.

 Technical Bid opening

 Commercial Bid opening
 Participants will put forward bid security in form of bank guarantee at
least 2% of bid price.
 Once technical assessment team found the bid technically compliant,
commercial assessment team will do commercial evaluation of the bid.
Evaluation teams will open technical bid first & if they found it
technically compliant then commercial evaluation team will open the
commercial bid. The bidders whose offers are rejected, their commercial
bids are delivered to them un-opened.
 Award criteria:
 Commercially lowest & technically compliant.
 Negotiation committee will do some negotiation with the short listed
bidders and will finally select one final bidder.
 Letter of award is issued to that bidder.
 Performance guarantee will be paid by bidder which is 10% of the bid
price.
 At this stage the bidder will be the contractor for PTCL.
 Finally “contract wetting”, will be done by the corporate finance team, in
order to check terms & conditions from finance point of view.
 Final approval will be given by the EVP Finance.

3.2.3 TREASURY
“The Treasury department is responsible for maintaining an adequate level of
liquidity in accordance with the requirements of the PTCL as a whole and
investing surplus funds to achieve maximum returns. Proper documentation of all
treasury related processes and transactions is essential for the implementation of
the PTCL strategic plans and in carrying out its day-to-day activities.

35
 The very nature of transactions and the complexity of managing treasury
operations require capable resources. Moreover, the financial markets in which
the treasury division deals in are more often prone to rapid unforeseen changes
making treasury operations sensitive to significant external factors and exposing
them to considerable market risk. A continuously intelligent monitoring of
financial markets therefore becomes essential to ensure effective risk management
activities in treasury operations.” (Sadia, 2008)

Figure- 12 Structure of Treasury Department

Note: Temporary GM Corporate Finance is assigned with the duties of GM Treasury.

Main Functions Performed by the Treasury Department

o Ceiling Allocation / Limit based fund transfer

o Funds Placement
o Funds Transfer
o Accounting
o Reporting

Reports Prepared by Treasury Department

Sadia (2008) in her report list down the reports prepared in treasury department:
 Limit in Transit Report

36
 Cash in transit report
 Daily Fund Status Report
 Statement of comparison of ceiling issued vs. ceiling utilized
 Foreign exchange rates analysis report
 Interest rate analysis report
 Detail of present investment/placement report
 Management Accounts Details

37
SECTION 4
ANALYSIS, FINDINGS AND RECOMMENDATIONS

4.1 Financial Ratio Analysis

The analysis of the financial statements is a hypercritical method. The most important
objective is to find out the major changes in the trends and study of the reasons which
are the cause of those changes. The method can be improved by experience and by the
use of analytical tools. Most commonly used financial analysis technique is ratio
analysis that is the relationship of the two or more procession items on the financial
statement. Mostly these ratios are expressed in terms of percentages or times. The
financial ratio analysis consists of following ratios.

 Liquidity ratios
 Profitability ratios
 Leverage ratios
 Efficiency, activity or turnover ratios

Keeping in view the data of past five years the ration analysis of Pakistan
Telecommunication Department is as follows.

4.1.1 Profitability Ratios

These ratios help to measure the ability of the company to make profit

1. Gross Profit Margin

This is calculated as follows.

Sales- COGS
Sales

Year 2003 2004 2005 2006 2007

Gross Profit Margin 52.24% 56.58% 47.86% 39.66 28.67%
%

38
 Gross Profit Margin
60.00%
50.00%
40.00% Gross Profit Margin
30.00%
20.00%
10.00%
0.00%
2003 2004 2005 2006 2007
This ratio measures the
efficiency of the company and indicates the profit of the company relative to
The trend from the past 5 years shows that the is a declining trend in the profit
margin of PTCL since year 2005 i.e. it declined from 47.86% to 28.67%, which is
the time period when the company was privatized. In the year 2007, the gross
profit margin was 28.67% which is lowest. In 2004 it was highest i.e. 56.58%.
The reason behind this decline in the profit is because of the increased cost of
operating activities as the company is going through change management process.
It is expected that the company will show the increasing profit margin in coming
years.

2. Operating Profit Margin

This can be calculated as:

Year 2003 2004 2005 2006 2007

Operating Profit Margin 55.93% 59.40% 52.32% 45.32% 37.16%

Operating Profit Margin

70.00%
60.00%
50.00% Operating Profit
40.00% Margin
30.00%
20.00%
10.00%
0.00%
2003 2004 2005 2006 2007

39
We can also see a declining trend in the Operating profit margin of PTCL same as that
of gross profit margin. In the year 2007 the company experienced the lowest operating
margin i.e. 37.16% which shows a decrease of 22.24%ascompare to the highest
operating profit of the year 2004.

3. Net Profit Margin

Year 2003 2004 2005 2006 2007

Net Profit Margin 34.35% 39.35% 35.02% 30.07% 23.96%

Net Profit Margin

50.00%
40.00%
30.00% Net Profit Margin
20.00%
10.00%
0.00%
2003 2004 2005 2006 2007

We will observe a declining trend in the net profit margin in the past few years the
company did make some improvement in the net profit margin in the year 2004 i.e.
39.35%, but since that time period the company is facing a declining net profit margin
and the lowest was observed in year 2007 that is 23.96%. Whereas it is advantageous
for PTCL that the Gross profit ratio should be high.

4. Return on Total Assets

Year 2003 2004 2005 2006 20007
Return on Total Assets 17.64% 20.60% 19.55% 13.65% 10.23%

40
 Return on Total Assets
25.00%
20.00%
Return on Total
15.00% Assets
10.00%
5.00%
0.00%
2003 2004 2005 2006 2007

ROA shows the amount of income for every dollar tied up in assets. The higher the
company returns on assets, the better. Year to year trends may be an indicator. Return
on Assets for PTCL is lowest during the year 2007 which is 10.23%, the ratio has
shown a decreasing trend over the years. Return on Assets was highest during the year
2004 which is 20.60%.

5. Return on Shareholders' Equity

Year 2003 2004 2005 2006 2007

24.75% 28.20% 25.43% 20.21 14.45%
Return on Shareholders'
Equity %

Return on Shareholders' Eqiuty

30.00%
25.00%
20.00% Return on
Shareholders' Eqiuty
15.00%
10.00%
5.00%
0.00%
2003 2004 2005 2006 2007

41
This ratio helps to determine the rate of return on owner’s investment in the
business. This is one of the most important ratios as it shows the hard fact about
the business that is either the business is making enough of a profit for the risk of
being in business? Normally, the higher these returns, the better off are the
owners.

Return on Equity is lowest during the year 2007 which is 14.45%, this ratio has shown
a decreasing trend over the years, year 2004 shown the highest rate of return on equity
which is 28.20%.

6. Earnings per share

Year 2003 2004 2005 2006 2007

Earnings per share 4.53 5.72 5.22 4.07 3.07

Earning per share

Earning per share

5.72
5.22
4.53
4.07
3.07

2003 2004 2005 2006 2007

The graph shows that there has been decrease in earning per share of the company
over the years. The declining profit lowered the earnings per share from Rs. 5.72
for year 2004 to Rs. 3.07 for the year 2007.

4.1.2 Liquidity Ratios

These ratios help in measuring the company’s ability to meet its current
obligations. These include:
1. Current ratios
42
 The current ratio involves the current assets and current liabilities of the
company.
Year 2003 2004 2005 2006 2007
Current Ratios 2.02 2.78 1.91 1.66 2.22

Current ratios
Current ratios
2.78
2.22
2.02 1.91
1.66

2003 2004 2005 2006 2007

In the year 2005 and 2007 the company faced the lowest current ratios, whereas
we can observe some boost in the current ratio in the year 2007 which is 2.22. We
can figure that there is an increase of 0.56. It is a good sign in a way that if a
company need short term financing it will be helpful for the company. Although
PTCL is self- financing most of its projects but still if a company need short term
financing this increase in current ratio can be useful.

4.1.3 Activity Ratios

Activity ratios are used to determine how quickly various accounts are converted
into sales or cash. It involves various ratios to measure the activities of
receivables, inventory and total asset.

Account Receivable in Days:

Gross Receivable
Net sales/365

Year 2003 2004 2005 2006 2007

43
 Account Receivable in days 19.16 25.45 37.66 30.49 29.24

Account Receivable in days

40
30 Account Receivable
in days
20
10
0
2003 2004 2005 2006 2007

We can observe that there is a decrease in the account receivable in days. In the
year 2005 it was 37.66 whereas in year 2007 it is 29.24 but still it is more than
that of 19.16 and 25.45 which were in the year 2003 and 2004.

Account Receivable Turnover

Year 2003 2004 2005 2006 2007

Account Receivable Turnover 19.0 8.52 5.84 5.58 5.93

Account Recivable Turnover

20

15 Account Recivable
Turnover
10

0
2003 2004 2005 2006 2007

It gives information that how much number of receivables is collected during a

year. We can see a tremendous decrease in the account receivable turnover of the
company which is not a good for the company it shows that each year the number
of receivables collected by the company is decreasing; it shows that the company

44
credit policy is too stringent, with the company not tapping the potential for profit
through sales to customers.

4.2 SWOT Analysis

Strengths
 Pioneer of telecommunications in Pakistan.
 Highly Qualified Professional at high executive level both from PTCL and
Etisalat.
 Widespread geographic coverage and access.
 Well developed infrastructure which is spread nation- wide.

Weaknesses
 Deregulation policy by the government regarding telecommunication. It
has affected the position of PTCL. PTCL was enjoying Monopoly before
the implementation of such policy which is no more possible because of
strong competition.
 Decline in the Gross Margin to 28.67% in year 2007 as compare previous
years. It is continuously declining from the past 5 years which is not a
good sign for the company.
 There is also decline in the return on assets and return on equity.
 Absence of frequent training programs at lower managerial level and at
technical level.
 Weak system for recovery of accounts receivables.

Opportunities
 Establishment of a complete organizational database in order to fast the
process of file transfer.

45
  Making investment decisions by getting PTCL projects financed from
some financial institutions instead of doing only self- financing.
 A well developed plan for over-due accounts can help in overcoming
accounts receivables problems.
 Network expansion can help in boosting customer’s confidence.
 Increased competition and deckling revenues can be prevail over by
improving customer services and introducing more value added services.

Threats
 Increased in the numbers of competitors in the telecom industry including
Warid, Mobilink, Telenor, Wateen (DSL) etc. because of deregulation.
 Increased in the tariffs introduced by government
 Change in the taste of the people for mobile phones as compare to landline
phones.
 Political Instability, although PTCL is not an autonomous body but still
we believe as government of Pakistan has about 74% shares of PTCL,
therefore in one way or another it can affect the decisions of the company.
 The poor economic conditions in the country is a threatening factor.

4.2 Findings
As we can observed that there is an increased in the expenses of the company in
last year and it was because of the large number of employees working at PTCL
but now because of the decrease in the number of employees because of VSS it

46
will also help the company in reducing it expenses in term of payment to the
employees. According to Mr. Nasir (Personal Communication, July 28, 2008).

“There is a decrease in the expenses in term of payment to the employees as

previously there were 60,000 employees working for PTCL, whereas now they
have reduced to 30,000 because of VSS. As 50% of the company budget goes to
the payment of the employees therefore this reduction in the number of employees
will reduce the expenses of the company”.

As most of the employees of the company left by availing the opportunity of VSS
therefore payment of VSS is also covering one of the major portion of PTCL
budget but now about 90- 95 % employees have been paid therefore this major
section will also be deducted from the company’s expenses, which will be helpful
for company in increasing its profit.

We can also observe that is decrease in the revenues of the company this is
because of the expansion in the use of the mobile phones and as PTCL major
source of revenue is from its landline telephony therefore this dramatic change in
the taste of the people of using mobile phones as compare to the landline phones
have reduced the revenues of PTCL. Along with this one of the reasons of these
declining revenues is also because of increased competition and increased tariff
introduced by the government and the government is also planning to further
increase in the tariff.
According to Mr. Haddiyat (Personal Communication, August 6)
“Although the company has faced a declining profit in the last fiscal year but has
also been able to manage to increase its cash flows to Rs. 35.54 billion, whereas
in the year 2006 it was Rs. 35.19 billion of last year, which is a positive sign for
the company. To overcome the competition and to boost up the revenues, the
company is improving its customer services and launching new services like iPTv
to cope up with the competitive environment.”

47
We can also say that the major reason of the decline in the profit of the company
is also because of the structural changes taking place within the company, which
has also reduced the dividend of the company to Rs.2 per share. But it is expected
that the company will bring in new development plans and strategies to improve
the revenues of the company and to reduce that cost.

To build on the revenue streams and preserve the position as a market leader
PTCL has a well developed infrastructure, several structural changes have taken
place and many are some are in progress which will be helpful in boosting the
position of the company

I also observed that there was no proper database system within PTCL, because of
which it was difficult to collect data. As shared by Miss Sumaira (Personal
Communication, July 14, 2008)
“If I need any information from planning department it is very difficult for me to
first locate the person who has the required data and if I am able to locate the
desired person still it takes lot of time to get the information from him/her.”
Therefore the company should have a proper database system to save time and
make the work more effective

4.3 Recommendations

48
  One of the major problems the company is facing is related to the issue of
receivables. Therefore company should introduce a proper system
regarding account receivables to overcome this issue.
 PTCL does self- financing for most of its projects in which accounts major
portion of its expenditures and as the company is facing the problem
related to its revenues and low profitability ratios therefore it is suggested
that it recommended that PTCL get financing for its major projects. It will
also help company in reducing its tax rate.
 The new management has brought about tremendous changes in the
company but it has also created the environment of inequality among the
employees regarding salary packages and perks which raise the conflict
among employees and management.
 One of the problems faced by the finance department is related to the data
collection. There should be a proper database of the organization which
will help in increase the flow of information between the departments
because manual processing of files is very slow and takes lot of time.
There should be in improved MIS system with an internal database
system.

 Excess expenditure on unnecessary perks should be reduced.

 Major competition the company is facing is because of cellular phone companies;

therefore PTCL should explore those areas which don’t have landline
connections. Therefore to increase the number of customers and overcome
decreasing profitability, to increase the EPS and regain the image in the mind of
Consumers Company should emphasis on the exploration of new areas.
 Because of the competitive environment PTCL should decrease its line rent to
retain its customers, which will help to increase the revenues of the company.

SECTION 5

49
 5.1 IMPLEMENTATION PLAN FOR OVER-DUE
ACCOUNTS
Major issue PTCL is facing is related to its over dues in order to overcome this
problem the company can allocate a manager with the title of over-due manager
with the team of workers who will work under this manager with different
functions which are explained in the following chart, which clearly explains that
how the company will be able to solve this problem

Over-Due Account Function

Manger Overdue
Accounts
50
Team Leader Team Leader Team Leader Team Leader
Matching Follow up /CFY Follow up /LFY Legal
& CC
LIST OF PERSONS INTERVIEWED
51
 Name of Name of
Organization Designation Person Section

PTCL GM Mr. Haddiyat Capital Budgeting

PTCL Senior Manager Mr. Nasir Operating Budgeting

PTCL Financial Specialist Ms. Sumaira Capital Budgeting

PTCL Financial Analyst Ms. Asma Advisory

PTCL Financial Specialist Ms. Sadia Treasury

PTCL Management Trainee Mr. Ahmar Corporate Finance

PTCL Financial Analyst Ms. Raffat Operating Budgeting

PTCL Consultant Ms. Hina Human Resource

PTCL Consultant Ms. Maheen Human Resource

PTCL HR. Specialist Ms. Amina Human Resource

REFERENCE:

52
Asma, J. (2008).Orientation Report. Pakistan Telecommunication Limited.
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Blurtit (2007). Discuss the role of Pakistan Telecommunication (PTCL) after

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http://www.blurtit.com/q617138.html

Khalida, A. (2007). Internship Report. Quaid-e-Azan University, Islamabad.

Nida, K. (2008). Orientation Report. Pakistan Telecommunication Limited.

Islamabad.

Pasha, K., M. (2002). Can PTCL be a Partner in Unleashing Growth Process in

Pakistan?. Retrieved June 24, 2008, from
http://www.pakistaneconomist.com/issue2002/issue35/i&e5.htm

Sadia, M. (2008). Orientation Report. Pakistan Telecommunication Limited.

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Sargana, M., A. (2006). Recent Growth trends in the telecom sector of

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Scribd. (2008). Growth in the Telecom Sector. Retrieved July 15,2008, from
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2007

Tahir, M., Umar, M. (2007). Boom of Telecom Sector in Pakistan and Its Impacts
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 cuppsats.nsf/all/e6677b831b87c354c125736300055ce2/%24file/thelast.pd
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Wilson, J. (2007). Liberalizing the Telecommunications Sector: Making

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pakistan.pdf

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