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: 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 Request For The Submission Of Internship Report

TABLE OF CONTENTS

Serial No. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27. 28. 29. 30. 31. 32. 33. 34.

Particulars Preface Acknowledgement Subject Executive Summary Introduction Historical Back Ground Current PTCL Network Vision ,Mission Core Values Main Offices Restructuring of PTCL Privatization of PTCL Company Analysis PTCL Core Objectives Finance and Accounting System of PTCL Capital Expenditures Minor Expenditures Human Resource Assessment Special Tasks PTCL Products and Services Services for Corporate Customers Financial Analysis Financial Analysis in Graphics Subsidies and Competitors Competitors SWOT Analysis Strength Weaknesses Opportunity Threats Recommendations Conclusion PTCL Glossary 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 patience. queries and never ran out of

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 Pakistans 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 organizations 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 1962 1990-91 1995 1996 1998 2000 2003 2005

Post and telegraph department established Pakistan telegraph & telephone department Pakistan telecom corporation Almost 5% of PTC assets transferred to PTA,FBA& NTC PTCL formed listed on all exchanges of Pakistan Mobile internet &internet subsidies were established Telecom policy finalized Telecom deregulation policy formalized 26% of shares were sold to ETISALAT UAE through open biding

Current PTCL Network

Installed capacity Working connections Total exchanges Telephone destiny per 100 population Countries in ISD Customer service centers Card pay phone NWD station UIA station Total length of optical fiber length V FONE customers EVO customers Smart TV customers

5273091 4405161 2962 2.9 292 502 387490 2092 1898 4591 km 0.8 million 1 million .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 systems/cables. install, operate and look after optic fibre

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 Company Limited from the Pakistan Telecommunication beginnings of posts & humble

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 Governments 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 companys 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 governments 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 governments 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 firms 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 PTCLs 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. PTCLs 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 modifications to the transaction structure. offer additional concessions and

COMPANYS 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 theart 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.

PTCLS 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 LLNs (Land Line Numbers International dialing from LLNs Providing Value Added services to customers like UAN (Universal Access Numbers), PABX (Private Auto Branch Exchanges), and VPN (Virtual Private Network) Bandwidth of ISPS (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 PTCLs 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 thats 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 PTCLs 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 PTCLs 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 BY

PERSONNEL SUBSIDIZING

IN

INFORMATION INTERNATIONAL

TECHNOLOGY

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 two parts. divide their services into

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 (Callers 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 PTCLs 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 Dont 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 Phone (PPT).It telecommunication service is Prepayment Tele

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 centers 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 ISPs 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 ISPs

Virtual Private Network (VPN)

Communication is the secret of success in todays 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 (DXX) than 200 nodes country wide. Features quality network platform of digital leased line network. PTCL digital cross connect provides the most dependable media for WAN connectivity with more

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 ISPs 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 firms 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 firms ability to remain solvent in the event of adversity.

1) Current Ratio
Current assets are divided by current liabilities. It shows a firms 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 companys 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 Formula; Inventory
Cost of Goods Sold

turnover

equals

the

cost

of

goods

sold

divided

by

the

average inventory.

Average or Current

Turnover= Interpretation

Period Inventory

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 terms of receivables, from its customers and clients. Calculated as:

to receive payments owed in

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 assetintensive, 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 ISPs 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 Ufone is currently enjoying 20.53% user of Pakistan mobile industry. It means Ufone 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 Brain Limited World Call Union Communication Naya Tel 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. 103,059 7,376 11,347 3,500 13,500

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 CSR BNCC WLL SMS CNIC CDR MSC WIN MDN NTC PSTN HLR Fixed wireless fone Customer service representative billing and customer care system warless local Loop Short message service Computerized national identity card Call data record MOBLE SWITICHING CENTER WIRLESS intelligent network Main directory number New telephone connection Public switching telephone network Home location register

Ratio Analysis
F inancial Analysis
P C Annua Ra R TL l tio eport Yea endedJune 30 r
L iquidity R atios Current Ratio Quick Ratio Cash Ratio Working Capital Ratio Operating R atios Asset Turnover Tim es Days in Inventory Tim es Days in Receivables Tim es Working Capital Turnover Tim es Profitability R atios Gross Margin EBIT Margin Return on Equity Return on Assets Operating Expense/Sales L everag R e atios Long-TermDebt/Equity Total Debt/Equity % % 0.179 0.016 0.099 0.511 -0.039 -0 .070 0.163 0.550
See comment See comment

C urrent Yea r
June 30, 2010

P rior Y r ea
Cha e %Cha e June 30, 2009 ng ng
Defin n itio

Tim es Tim es Tim es Tim es

1.505 0.003 0.002 0.997 -0.214 -0 .177 0.213 -0.117 -0 .355 0.101 -0.017 -0 .140

1.503 1.211 0.330 0.118

See comment See comment See comment See comment

0.409 -0.003 -0 .008 38.885 -11.4 36 -0 .227 59.584 -2.265 -0 .037 0.824 0.120 0.171

0.412 50.321 61.848 0.703

See comment See comment See comment See comment

% % % % %

0.386 -0.020 -0 .049 0.236 0.001 0.002 0.143 0.002 0.017 0.023 -0.062 -0 .733 0.150 -0.020 -0 .120

0.406 0.235 0.141 0.085 0.171

See comment See comment See comment See comment See comment

Balance Sheet

Income Statement

Cash Flow Statement

Fund Flow Statements

PTC L Fun Flow S d tatem t en As at Jun 30 2 0 e , 01
C r e tY a ur n e r B L N ES E T AA C H E 6 0 00 /3 /2 1 Pio Y a r r er 6 0 09 /3 /2 0 In /D c s e S uc s ore Ue ss

C ash Marketable S urities ec Accounts Receiv able (net) Q IC A S T U K SES Inv entory Prepaid Assets Other C urrent Assets T T LC R E TA S T OA U RN SES Property Plant & Equipm (net) , ent Intang ible Assets Inv estm in S ent hares Other L -TermAssets ong T T LA S T OA SES Trade Pay ables Other C urrent L iabilities L -TermDebt (ex l. D Tax ong c fd. es) Defferd tax T T LL B IT S O A IA IL IE Preferred S k toc C m Equityor Paid in C om on apital Retained Earning s T T LE U Y O A Q IT T T LL B IT S&E U Y O A IA IL IE Q IT

6 2 ,1 4 0 ,4 2 4 ,0 0 1 ,4 3 6 ,0 0 3 9 ,8 5 0 1 ,1 1 3 ,0 0 0 7 ,5 0 0 3 ,0 7 3 ,0 0 0 8 ,5 9 0 4 7 ,8 3 0 ,0 5 6 ,0 0 0 1 ,2 6 3 ,0 0 1 8 ,8 4 0 1 ,3 2 9 ,0 0 5 6 ,6 7 0 8 ,2 9 8 ,0 0 8 1 ,2 5 0 3 7 ,0 1 0 ,0 9 3 ,0 0 6 8 ,9 5 0 ,6 1 6 ,0 0 7 3 ,2 0 0 ,3 7 1 ,0 0 1 0 6 ,7 7 0 5 ,7 7 2 ,0 0 2 ,9 2 9 ,0 0 4 2 ,1 7 0 5 7 ,5 1 0 ,2 0 8 ,0 0 1 ,8 6 6 ,0 0 7 6 ,4 8 0 2 4 ,7 0 0 ,9 9 7 ,0 0 5 ,0 9 1 ,0 0 1 0 ,0 6 0 0 8 ,6 3 0 ,0 0 3 1 ,7 4 0 1 ,1 5 0 ,0 0 6 4 ,0 7 0 9 ,7 8 1 ,0 0 9 5 ,7 1 0 1 0 6 ,7 7 0 5 ,7 7 2 ,0 0 balanc ed

1 ,9 6 4 ,0 0 1 0 ,4 8 0 2 ,0 7 9 ,0 0 1 1 ,7 0 0 1 ,7 0 7 ,0 0 0 6 ,9 4 0 4 ,6 5 1 ,0 0 3 8 ,2 2 0 5 0 ,9 1 0 ,2 1 9 ,0 0 0 5 3 ,0 8 0 ,3 3 3 ,0 0 5 ,2 0 4 ,0 0 4 2 ,2 1 0 8 ,5 7 5 ,0 0 7 6 ,3 1 0 3 2 ,6 0 0 ,3 0 7 ,0 0 5 0 ,4 9 0 ,6 7 3 ,0 0 3 3 ,3 8 0 ,3 2 7 ,0 0 1 4 4 ,0 9 0 5 ,0 8 7 ,0 0 2 ,1 4 7 ,0 0 6 1 ,1 1 0 9 7 ,1 1 0 ,9 2 5 ,0 0 1 ,1 3 9 ,0 0 6 9 ,1 8 0 2 7 ,0 0 0 ,3 9 0 ,0 0 5 ,6 8 2 ,0 0 4 5 ,5 0 0 0 8 ,1 3 7 ,0 0 3 8 ,0 4 0 1 ,2 6 8 ,0 0 6 0 ,4 5 0 9 ,3 9 5 ,0 0 9 8 ,5 9 0 1 4 4 ,0 9 0 5 ,0 8 7 ,0 0 balanced

Decrease Decrease Decrease

5 8 ,3 4 0 ,4 4 0 ,0 0 7 2 ,9 5 0 ,5 3 2 ,0 0 5 9 4 ,0 0 8 ,4 4 0

Decrease Increase

1 2 ,1 8 0 ,1 6 2 ,0 0 5 5 ,7 6 0 ,9 3 9 ,0 0

Increase Decrease Increase Increase

6 1 3 ,0 0 5 ,9 4 0 2 1 3 ,0 0 4 ,6 9 0 1 7 ,5 6 0 ,0 4 2 ,0 0 4 0 ,8 2 0 ,0 4 3 ,0 0

Decrease Decrease Increase Increase

1 9 ,9 4 0 ,1 1 7 ,0 0 4 0 ,5 0 0 ,7 1 7 ,0 0 1 7 ,2 0 0 ,6 3 7 ,0 0 5 0 7 ,0 0 7 ,7 0 0

Increase Decrease 4 0 3 ,0 0 3 ,6 0 0 6 ,4 8 0 1 7 ,0 0

1 ,6 0 1 ,0 0 7 4 ,1 0 0

1 ,6 0 1 ,0 0 7 4 ,1 0 0

Combined Balance Sheet and Income Statement for Working

PTCL Statement of Financial Position A at June 30, 2010 s C urrent Y ear B LA C SH E A N E ET 6/30/2010 Prior Y ear 6/30/2009 D ifference % D ifference A ount m

Cash M arketable Securities A ccounts Receiv able (net) Q IC A U K SSE S T Inv entory Prepaid A ssets O ther Current A ssets TO L C R E T A TA U R N SSE TS Property Plant & Equipment (net) , Intangible A ssets Inv estment in Shares O ther Long-Term A ssets TO L A TA SSE TS Trade Pay ables O ther Current Liabilities Long-Term Debt (ex Dfd. Tax cl. es) Defferd tax TO L LIA ILITIE TA B S Preferred Stock Common Equityor Paid in Capital Retained Earnings TO L E U TA Q ITY TO L LIA ILITIE & E U TA B S Q ITY

6,422,144,000 13,493,865,000 10,171,530,000 30,087,539,000 4,075,863,000 0 9,124,926,072 43,288,328,072 88,219,285,000 3,079,031,000 6,681,965,000 7,337,210,000 148,605,819,072 24,922,197,000 5,270,581,000 17,866,468,000 2,949,770,000 51,009,016,000 0 83,613,704,000 16,145,007,000 99,758,711,000 150,767,727,000 balanced

11,906,448,000 21,017,790,000 10,760,974,000 43,685,212,000 5,201,991,000 0 5,333,038,000 54,220,241,000 87,567,351,000 3,320,670,000 5,607,439,000 3,332,378,000 154,048,079,000 26,114,171,000 9,972,151,000 16,193,198,000 2,379,000,000 54,658,520,000 0 83,183,074,000 16,206,485,000 99,389,559,000 154,048,079,000 balanced

46.1% 35.8% 5.5% 31.1% 21.6% 71.1% 20.2% 0.7% 7.3% 19.2% 120.2% 3.5% 4.6% 47.1% 10.3% 24.0% 6.7% 0.5% 0.4% 0.4% 2.1%

(5,484,304,000) (7,523,925,000) (589,444,000) (13,597,673,000) (1,126,128,000) 3,791,888,072 (10,931,912,928) 651,934,000 (241,639,000) 1,074,526,000 4,004,832,000 (5,442,259,928) (1,191,974,000) (4,701,570,000) 1,673,270,000 570,770,000 (3,649,504,000) 430,630,000 (61,478,000) 369,152,000 (3,280,352,000)

PTCL Statement of Financial Position A at June 30, 2010 s C urrent Y ear B LA C SH E A N E ET 6/30/2010 Prior Y ear 6/30/2009 D ifference % D ifference A ount m

Cash M arketable Securities A ccounts Receiv able (net) Q IC A U K SSE S T Inv entory Prepaid A ssets O ther Current A ssets TO L C R E T A TA U R N SSE TS Property Plant & Equipment (net) , Intangible A ssets Inv estment in Shares O ther Long-Term A ssets TO L A TA SSE TS Trade Pay ables O ther Current Liabilities Long-Term Debt (ex Dfd. Tax cl. es) Defferd tax TO L LIA ILITIE TA B S Preferred Stock Common Equityor Paid in Capital Retained Earnings TO L E U TA Q ITY TO L LIA ILITIE & E U TA B S Q ITY

6,422,144,000 13,493,865,000 10,171,530,000 30,087,539,000 4,075,863,000 0 9,124,926,072 43,288,328,072 88,219,285,000 3,079,031,000 6,681,965,000 7,337,210,000 148,605,819,072 24,922,197,000 5,270,581,000 17,866,468,000 2,949,770,000 51,009,016,000 0 83,613,704,000 16,145,007,000 99,758,711,000 150,767,727,000 balanced

11,906,448,000 21,017,790,000 10,760,974,000 43,685,212,000 5,201,991,000 0 5,333,038,000 54,220,241,000 87,567,351,000 3,320,670,000 5,607,439,000 3,332,378,000 154,048,079,000 26,114,171,000 9,972,151,000 16,193,198,000 2,379,000,000 54,658,520,000 0 83,183,074,000 16,206,485,000 99,389,559,000 154,048,079,000 balanced

46.1% 35.8% 5.5% 31.1% 21.6% 71.1% 20.2% 0.7% 7.3% 19.2% 120.2% 3.5% 4.6% 47.1% 10.3% 24.0% 6.7% 0.5% 0.4% 0.4% 2.1%

(5,484,304,000) (7,523,925,000) (589,444,000) (13,597,673,000) (1,126,128,000) 3,791,888,072 (10,931,912,928) 651,934,000 (241,639,000) 1,074,526,000 4,004,832,000 (5,442,259,928) (1,191,974,000) (4,701,570,000) 1,673,270,000 570,770,000 (3,649,504,000) 430,630,000 (61,478,000) 369,152,000 (3,280,352,000)

Current Year INCOME STATEMENT 6/30/2010

% of Net Sales

Prior Year 6/30/2009

% of Net Sales Difference % Difference Amount

Net Revenue / Sales

62,309,173,000

100% 63,506,173,000 -61% (37,732,282,000)

100% -59%

1.9% (1,197,000,000) 1.4% (526,429,000)

Cost of Sales / Cost of Goods Sold (38,258,711,000)

GROSS PROFIT

24,050,462,000

39% 25,773,891,000

41%

6.7% (1,723,429,000)

Administration Selling and Marketing Other Operating Expenses Depreciation / Amortization

(7,223,780,000) (2,142,324,000) 0 0

-12% -3% 0% 0%

(8,935,261,000) (1,817,071,000) (92,118,000) 0

-14% -3% 0% 0%

19.2% 17.9% 100.0% -

1,711,481,000 (325,253,000) 92,118,000 -

OPERATING INCOME

14,684,358,000

24% 14,929,441,000

24%

1.6%

(245,083,000)

Interest Expense

(403,240,000)

-1%

(908,524,000)

-1%

55.6%

505,284,000

INCOME BEFORE TAXES

14,281,118,000

23% 14,020,917,000

22%

1.9%

260,201,000

Income Taxes

(4,986,966,000)

-8%

(4,869,732,000)

-8%

2.4%

(117,234,000)

NET INCOME

9,294,152,000

15%

9,151,185,000

14%

1.6%

142,967,000