In The Name of ALLAH, The Most Merciful, The Most Beneficial.

PROJECT OF MANAGEMENT

Presented By,

AAMIR RAZA

SADIA GULL

MARRIYUM KHALID Presented To,

SAMRA WARSI Sir Kashif Ammar

SADIA KIRAN University of Sargodha

QALB ABBAS

Group (D)

M.B.A. Regular “A”

DEDICATION

We would like to thank our professor Mr. Kashif Ammar who was always there

to help and guide us when we needed help. His perceptive criticism kept us working to

make this project more full proof. We are thankful to him for his encouraging and

valuable support. Working under him was an extremely knowledgeable and enriching

experience for us. We are very thankful to him for all the value addition and enhancement

done to me.

No words can adequately express my overriding debt of gratitude to my parents whose

support helps me in all the way. Above all I shall thank my friends who constantly

encouraged and blessed me so as to enable me to do this work successfully.

ACKNOWLEDGEMENT

“To Him belongs the dimension of the Heavens and the earth, it is He who gives Life

and death and He has power over all things.”

(Al-Quran)

All acclamation to Allah who has empowered and enabled us to accomplish the

task successfully. First of all we would like to thank our Allah Almighty who really helps

us in every problem during the project. We would like to express our sincere and humble

gratitude to ALLAH almighty who‟s Blessings, help and guidance has been a real source

of all our achievements in our life. We would like to admit that we completed this project

due to parents who pray for our success. We also wish to express our appreciation to our

supervisor Mr. Faheem Athar Haqani who help us a lot and introduce us to new

dimensions of knowledge. And we would like to acknowledge all our work to our parents

and friends who guided to accomplish this never forgetting task. Last but not the least our

team efforts, support, cooperation and encouragement showed by each members in the

group with each other.

TABLE OF CONTENTS

Executive summary 05

Introduction of Research Methodology 06

o Primary data collection

o Secondary data collection

o Limitations

Introduction of Telecom industry 08

Introduction of PTCL

o Company Introduction 09

o Brief history of PTCL 10

o PTCL subsidiaries 13

o President of PTCL 14

o Board of directors 14

o Mission statement 16

o Vision 16

o Core values 16

o Registered office 17

o Auditors of PTCL 17

o Bankers of PTCL 17

SWOT analysis 18

o Strengths

o Weaknesses

o Opportunities

o Threats

Porter five forces for PTCL 21

Analysis of external environment 23

o Industrial structure 23

o Market operation 24

o PTCL competitors 25

o Market structure 25

o Regulatory environment 26

Analysis of internal environment 28

o Organizational management cycle 29

o Financial aspects 29

Profitability ratio

Liquidity ratio

Leverage ratio

Activity ratio

Dividends

Business strategies 34

Organizational structure 38

o Organizational hierarchy 39

o Departments of PTCL 40

o Chain of command 41

o HR department 42

o Chain of command of HR 43

o Mail pillars of HR 44

Role of Human Resource (HR) 47

Conclusion 49

EXECUTIVE SUMMARY

his project is about management affairs and management hierarchy of PTCL. PTCL is

the largest and solely line based communication system in Pakistan. The purpose of

this project is to practically know about all the aspects of management of PTCL.

This is a report on PTCL (Pakistan Telecommunication

Company Limited). This assignment is assigned to us by Sir Kashif Amaar. In

this report there is a detailed introduction of the PTCL and its top management,

middle management and lower management and their functionality as well

services.

V fone

PAK Net

Smart Services

We also discussed its financial aspects in which we took the analyzed is liquidity

and its profitability position. We got information about PTCL business strategies,

Motivations procedures and its internal and external resources and departmentalization,

(engineering finance, marketing and also the HR department of the PTCL. It also

includes the functions of HRM e.g. selection, training and development, motivation,

maintenance and other functions of HR department. At the end of this project we have

written down the SWOT analysis of PTCL Company and HR department.

INTRODUCTION OF RESEARCH

T

Today, the telecommunications industry is exposed to fierce competition.

National and geographical borders no longer coincide with those of telecommunications.

The same products and services are developed and offered in a number of different

countries.

Since, the invention of telephone as a medium of communication, the

telecommunication has been growing by leaps and bounds. Competition among different

firms has led to creative and innovative solutions regarding the usage of phones all over

the world. Mobile phones is one such creation, in this regard, that had taken the

telecommunication industry to new heights.

We would be particularly focusing on the organizational structures, strategies and

organizational culture of this organization. In the upcoming chapters we have given a

brief history of the both organization and a little detail about its products and services. On

the basis of our findings we have done our analysis and in the end we have recommended

few changes in all aspects related to our study.

RESEARCH METHODOLOGY

The research techniques that are adopted for the purpose of this study are as follows:

Primary Data Collection

Formal Interviews

Informal Interviews

The formal interviews include people from the top management and the informal

interviews included people from middle and lower management.

Secondary Data Collection

Internet search

www.ptcl.net.pk

Newspapers

References books and other literature

Annual reports of the organizations

LIMITATIONS

One of the major limitations while carrying out this research was the lack of

cooperation on the part of the management of the PTCL in providing the data regarding

the company and its policies.

INTRODUCTION OF TELECOM INDUSTRY

Since the independence of Pakistan, basic telecom services were being provided by a

monopolist, previously called as Telephone and Telegraph department (T&T). The

department was being run by the government and played multiple roles as regulator,

policy maker, operator and service provider in the country. The T & T department was

later converted into a corporation. Although the corporation was earning huge profits

from the services, it was re-investing the same profits into the sector for the provision of

more telecom service but the investment was not enough.

Further, with the technological advancement, more and more telecom services were

becoming available but there was not enough money available with the corporation to

install new telecom systems for the provision of modern services. Resultantly, a digital

divide prevailed in Pakistan keeping it behind its neighbors and other comparable

countries in terms of telecom access. The Telecom Sector has contributed 2 percent

towards the overall GDP growth with revenues of over PKR 235bn.

PAKISTAN TELECOMMUNIUCATION COMPANY LIMITED

Introduction

With employee strength of 35,000 and 5.7 million customers, PTCL is the largest

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

operator in the country with 1.1 million V-fone customers.

Pakistan Telecommunication Company Limited (PTCL) is proud to be

Pakistan‟s most reliable and largest converged services carrier providing all

telecommunications services from basic voice telephony to data, internet, video-

conferencing and carrier services to consumers and businesses all over the country.

PTCL is the largest telecommunications provider in Pakistan. The company

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

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

instrumental agent in Pakistan‟s economic growth. PTCL has laid an Optical Fiber

Access Network in the major metropolitan centers of Pakistan and local loop services

have started to be modernized and upgraded from copper to an optical network. On the

Long Distance and International infrastructure side, the capacity of two SEA-ME-WE

submarine cable is being expanded to meet the increasing demand of International traffic.

With the promulgation of Telecommunication (Re-Organization) Act 1996, the

Pakistan Telecommunication Authority was established as the Telecom Regulatory body.

Following the open licensing policy in BUY @ PKR 45.40 accordance with the

instructions of Government of Pakistan and in exercise of powers conferred by Pakistan

Telecommunication (Re-Organization) Act 1996, the basic telephony was put under

exclusivity and PTCL was given a seven years monopoly over basic telephony which

ended by December 31, 2002. The year 2006-07 in the telecom sector witnessed a

phenomenal growth in the mobile phone sector in Pakistan, which doubled its subscriber

base to 60 million. The Teledensity increased from 26% to 40%, helping to spread the

benefits of communication technology across the country. PTCL's mobile phone

subsidiary Ufone's subscriber base grew by more than 87%, from 7.49 million to 14

million.

The year also witnessed the entry of major telecom companies, most notably China

Telecom and SingTel, into the market. Restructuring and re-engineering are in their final

stages along with the implementation of ERP system. From the end customer's

perspective, a major initiative was put in place in the shape of 'Broadband Pakistan'

service launch as a first step towards providing its customer with more value added

service and convenience. The company also continued to invest in infrastructure

development and addition of network capacity with a view to enhance services and to

expand its reach across the country.

HISTORY OF PTCL

From the humble beginnings of Posts & Telegraph Department in 1947 and

establishment of Pakistan Telecommunication Company Limited, to this very day, ours is

a story of commitment and vision.

PAKISTAN POST & TELEGRAPH (P&T)

The postal and telecommunication services were performed by a single

department known as Pakistan Post & Telegraph (P&T). This department started its

telephone service with only 12346 telephone lines and seven telegraph offices all over

Pakistan. This department continued its business up to 1962. The Government of Pakistan

adopted the Government of India Telegraph act 1885 to control and direct the activities of

telecommunication.

PAKISTAN TELEGRAPH AND TELEPHONE DEPARTMENT (T&T)

Pakistan Telegraph and Telephone Department inherited a small

telecommunication network consisting of only 12,000 lines in 1947. It was the sole

Department responsible for providing telecommunication facilities to whole country. In

fact postal services were also included in its responsibilities. The Pakistan Postal

Department was separated from Pakistan Telegraph and Telephone Department in the

year 1962. Like all other field of newly born nation, there was no established system of

telecommunication, available in the country. However the present system, as well as new

installations was managed by the T&T quiet efficiently.

PAKISTAN TELECOMMUNICATION CORPORATION (PTC)

The erstwhile Telegraph and Telephone (T&T) Department was converted into a

Statuary Corporation on 15-12-1990. It has its own legal identity totally separated from

Government of Pakistan.

R E - S T R U C T U R I N G O F P T C

The P.T.C. was further segregated into four separate units in 1996.

P.T.C.L.

P.T.A.

N.T.C.

F.A.B.

PAKISTAN TELECOMMUNICATION COMPANY LIMITED (PTCL)

PTCL was incorporated on December 31st 1995 and commenced business on

January 1st 1996. The idea behind this was to provide better services to its customers.

This was established to undertake the telecommunication business formally carried out

by Ex-PTC. It was responsible for carrying out all kinds of telecommunications activities

in the country. It was required to look after the existing telecom installations and their

automation and development. It was also to under take development program in telecom

field. All properties, assets, obligations and liabilities of PTC were accordingly

transferred to the PTCL on the January 01st 1996.

P.T.C.L. is a prestigious organization and telecom services in the country are

getting better and better, since its incorporation.

PAKISTAN TELECOM AUTHORITY (PTA)

Pakistan Telecom Authority (PTA) was established in 1996. It falls under the

preview of Government of Pakistan. It issues licenses to various companies for carry out

certain activities. This authority is responsible to monitor the establishment of telecom

related firms, companies, the import of telecom equipments etc in the country. It is a

regulatory body formed to accomplish rules and regulations relating to the

telecommunication matters.

NATIONAL TELECOM CORPORATION (NTC)

It has been established for installation of telecommunication facilities to the

Governmental organizations. A portion of working lines was initially transferred to

N.T.C. from the P.T.C.L. but now they have established their network. They are totally

independent in providing telephones connections, their look after and generation of

revenue there from.

FREQUENCY ALLOCATION BOARD (FAB)

This organization has been established to allocate Radio and Wireless telecom

frequencies to various organizations/companies within the country. The latest

development in this regard is that F.A.B. is establishing Monitoring Stations in order to

check the validity and legality of the utilization of circuits.

N A T U R E O F B U S I N E S S

Pakistan Telecommunication Company Limited (PTCL) was incorporated in

Pakistan on December 31, 1995 and is listed on Karachi, Lahore and Islamabad stock

exchanges. It was established to undertake the telecommunication business firmly carried

on by Pakistan Telecommunication Corporation (PTC). The business was transferred to

the company on January 1, 1996 under the Pakistan Telecommunication (Reorganization)

Act, 1996 at which date PTCL took over all the properties, rights, assets, obligations and

liabilities of PTC except those transferred to National Telecommunication Corporation

(NTC) , Frequency Allocation Board (FAB), Pakistan Telecommunication Authority

(PTA) and Pakistan Telecommunication Employees Trust (PTET). The company

commenced business on January 1, 1996. The registered office of the company is situated

at Block-E, PTCL Headquarter, G-8/4 Islamabad.

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

Telecommunication services in Pakistan. It owns and operates a substantial part of the

telecommunication facilities and provides domestic and international telephone services

and other communication facilities throughout Pakistan.

P T C L ’ S S U B S I D I A R I E S

Pak Telecom Mobile Limited (PTML)

PTML is a wholly owned subsidiary of PTCL established to operate cellular

Telephony under the brand name of UFONE.

The company‟s performance during the current year has been very encouraging

despite the stiff competition in Pakistan‟s cellular market especially after the emergence

of two new international players in the last quarter of the year. Throughout the year,

UFONE pursued a growth strategy and managed to almost double its revenue compared

to last year. The company successfully increased UFONE‟s market share from 16% to

22%, a significant achievement. On June 30, 2007 the total number of subscribers of

UFONE was 4.6 million versus 2.8 million at the same year.

During the year PTML successfully launched its Phase-IV network expansion

project costing more than US$ 160 million. UFONE now covers more than 200 cities and

towns, prominent highways and caters for international roaming with 135 operators

worldwide.

Pak net Limited

The fully owned subsidiary of PTCL owns the largest ISP network spread over

2,900 cities/locations with 43 POPs. It has extensive data transmission capabilities but

has been incurring losses due to poor business orientation and excessive overheads.

During the year Paknet recorded sales revenue of Rs. 213.9 million, which is 19% loser

than last year. The company posted a loss of Rs. 42.2 million vs a loss of Rs. 111.5

million last year. The quantum of loss is lower as compared to last year mainly due to

reversal of provisions against doubtful debts of Rs.44.1 million made in prior years and

reversal of deferred tax asset of Rs. 34.9 million in the last year.

PTCL as the sole shareholder of Paknet is highly concerned with the poor

performance of this subsidiary and is currently undertaking a strategic review of this ISP

subsidiary of determine the future course of action

In spite of these subsidiaries there are following product lines.

Fixed Telephone ( Analog & Digital)

DSL ( Digital Subscriber Line)

IN Products (Pre-Paid Cards, Calling Cards, Apna Das Calling Card, Phone Bill

Card etc.)

PTCL Wireless.

PRESIDENT & CEO of PTCL

MR. WALID IRSHAD

President & chief executive officer

BOARD OF DIRECTORS

• HIFZ-UR-REHAMN

Chairman PTCL Board

• ABDULRAHIM A.AL NOORANI

Chairman & chief executive officer

• NOOR-UD-DIN-BAQAI

Member (Telecom)

• AHSANULLAH KHAN

Ambassador (U.A.E.)

• FARRAKH QAYYUM

Secretary (Govt. of Pakistan)

• ABDULAZIZ A. AL SAWALEH

Human Resource Officer

• FADHIL AL ANSARI

Executive Vice President

• ABDULAZIZ H. TARYAM

General Manager

• DR. AHMED AL JARWAN

General Manager

• FARAH QAMER

Company Secretary

MISSION STATMENT

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.

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. 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.

CORE VALUES

Professional Integrity

Customer Satisfaction

Teamwork

Company Loyalty

Corporate Information

REGISTERED OFFICE

PTCL Headquarter

Block-E, sector G-8/4, Islamabad, Pakistan

AUDITORS OF PTCL

Auditors of PTCL are the fallowing.

A.F. FERGUSON & CO.

Chartered Accountants

KPMG TASEER HADI & CO.

Chartered Accountants

BANKERS OF PTCL

Habib Bank Limited

United Bank Limited

MCB Bank Limited

National Bank of Pakistan

Askari Bank Limited

Citibank N.A.

Faysal Bank Limited

Standard Chartered Bank Limited

SWOT ANALYSIS

PTCL strenghts and weakneses are discussed in detail below. Which

will define our work regarding to PTCL company affairs.

Strengths

Largest operational network and infrastructure within ICT (Information &

Communication Technologies) segment.

An integrated Monopoly

Market leadership in Local loop, Wireless local loop (WLL) and fixed telephony.

PTCL (Ufone) is market challenger in GSM segment

Ufone is performing well though Warid and Telenor are tough competitors.

PTCL, Ufone‟s profitability increased by 49.2 percent to Rs 977 million in

1H/FY07 as compared to Rs 655 million in the corresponding period last.

Competitors still depend on PTCL network either directly or indirectly

Experienced Telecom Resources

Weakness

Not been able to nurture its growth around customer services oriented strategy

Internal organizational and business processes issues

Monopolistic culture has further added to its complexities

Paknet, the internet service provider arm of Ptcl continues to incur losses due to

poor management and lack of network optimization

Ptcl-v, the fixed wireless phone service is poor

Over employment & low productivity.

Slow decision making including external interferences.

Corporate culture akin to government departments.

Opportunities

Profit taking growth of subsidiaries

Low Teledensity of Pakistan.

Have vast infrastructure and real estate assets which can be leveraged further.

Global connectivity reliability has been improved. PTCL is expanding the long

distance and infrastructure side through spreading out two sea-me-we submarine

cables..

Partnership with new entrants in a deregulated environment.

Scope for efficient/cost effective operations.

Threats

Increasing Number of competitors

Cellular company‟s rates

Increased competition in long distance continues to exert pressure.

Exposure to market competition

Migration to Cellular Networks

Ability to Attract & Retain Quality Professionals

Organizational Management Cycle

PORTER’S FIVE FORCES FOR PTCL

Porter five forces for Pakistan Telecommunication Company limited are as fallows,

Threat of new entrant

Power of suppliers

Power of buyers

Threat of substitutes

Competitive Rivalry

The five forces for Pakistan Telecommunication company limited are now discussed

in detail.

Threat of New Entry

As government of Pakistan is showing liberalism in case of telecommunication

sector and opened its policies to award new licensees to new mobile service

providers so threat of new entry is high.

As set-up cost is in billions of dollars so in this case threat of new entry is low,

but there are companies who are working to achieve licenses and approaching

PTA to know terms and conditions for this.

As for this business companies need a well established distributions and

franchises network so threat of new entrant is high in this case.

Bargaining Power of Buyers

Power of buyer is high in telecommunication sector. There are six market players

and players are offering different packages at different prices and a situation of

price war is running. Buyers have a power to buy any package which is suited to

them.

Cost of switching from one company package to other company package is low.

Hence, power of buyers is high.

Bargaining Power of Suppliers

The power of suppliers is low in case of telecommunication sector.

But the fact is that numbers of suppliers are few in the market but they are

competing in the market to make agreements with mobile service providers.

Threat of Substitute Products

Government also gave so many land lines and wireless local loop licenses to

different companies like PTCL wireless local loop, GO CDMA etc. these services

in future will be like mobile phone services like they are planning to offer services

a lot but currently they are offering SMS and CLI services to their customers.

Competitive Rivalry

Currently there are six market players but in future they will be eight and nine or

even more.

Thruway satellite service is offering subscribers freedom of mobility and

uninterrupted service. Thruway‟s satellite technology supplements of existing

mobile service providers, overcoming the challenges of large geographical areas

and insurmountable terrain.

ANALYSIS OF EXTERNAL ENVIRONMENT

Pakistan followed a gradual approach to liberalize its telecom market. During 1990s,

as a first step, market was opened for value added services and competition was

introduced in cellular mobile sector as four licenses were issued (Mobilink, PTML,

Paktel and Instaphone). The government monopoly was retained in fixed line services,

however, PTCL legal monopoly ended with effective from 31st December 2002. The

government announced Telecom Deregulation Policy and Cellular Mobile Policy in 2003

and 2004 respectively. The telecom regulatory, issued new licenses for Long distance

International (LDI) and Local Loop Fixed (LLFixed), Wire Local Loop (WLL) and

Cellular Mobile. With the issuance of new licenses the market is now open for full

competition in all segments of the sector.

Industrial Structure

Pakistan‟s telecom sector has finally begun moving and looked set for an era of

phenomenal growth. The sector has witnessed tremendous growth in recent years with

Teledensity depicting major expansion after deregulation. The primary purpose of

deregulation of the sector was to encourage healthy competition while providing better

quality products and services to customers on lower prices as well providing best

technology available worldwide.

Current Teledensity in Pakistan has expanded exponentially from 4.3 percent in 2002-03

to stand at 48.4 percent in 2006-07 with currently standing at over 52 percent, with better

services and competitive rates. Also, increasing inflow of foreign investment in the

telecomm sector has resulted in the introduction of new cut throat technologies for

provision of various telecom services including cellular, wireless and internet services. In

recent times, the focus has increasingly shifted from Fixed Lines to Cellular and Wireless

Fixed Lines (WLL), with better portability and convenience. WLL has shown an

improvement from 0.7 percent to 1.1 percent in 2006- 07 from last year with subscribers

of 2 mn.

Cellular segment remained the vital player with increase in total Teledensity

contributing 48 percent. In the urban markets introduction of Broadband internet services

by various Telecomm giants such as PTCL, World Call and Wateen has further benefited

the consumers to access timely information over the internet with competitive rates. The

broadband penetration however has not depicted as much growth as expected growing

with 3.5mn subscribers in 2007 against 2.4mn subscribers in 2006. PTA estimates

broadband subscribers to grow to over 5mn by 2010. World Call has initiated cable

television services with PTCL expected to follow suite by providing IPTV services

through its Triple Play services, ensuring diversification of products and services. Recent

conducive environment provide by PTA has resulted in increased FDIs in the sector with

investments of USD2.7 bn during the last five years making it the largest recipient of

highest FDI during the past few years. The future for telephony lies amongst unexplored

rural regions of Pakistan with all major telecom operators looking forward to tap these

markets with a major contribution by WLL and Cellular segments due to cheaper

installation costs. With healthy competition instigating lower local and international

tariffs and availability of alternative services has progressively benefited the consumers

overall.

Market Operation

Pakistan Telecommunication Company Limited, or PTCL, keeps callers connected

from Karachi to Islamabad. The communications services provider offers consumers and

businesses with basic landline, DSL broadband, interactive television, and IP telephony

services. The company also provides wholesale services such as traffic routing and call

termination to other carriers. PTCL's subsidiaries include wireless phone services

provider Pakistan Telecom Mobile, which operates as Ufone. In 2006 Emirates

Telecommunications (Etisalat) acquired a 26% stake in PTCL and assumed management

control of the company.

Demand is driven by technological innovation and by growth in business activity.

The profitability of individual companies depends on efficient operations and good

marketing. Large companies have big economies of scale in providing a highly

automated service to large numbers of customers, and have the financial resources

required building and maintaining a large network. Smaller companies can compete

effectively only in small markets or by providing specialty services.

PTCL Competitors

Mobilink Gsm

Warid Tel

China Mobile

Telenor

Market Structure

Wireless Local Loop (WLL) is growing at a rate of about 100 percent per annum as

its Teledensity has reached to 1.34 percent by end of December 2007. The quarterly

addition of WLL subscriber is approximately 0.14 million on an average.

PTCL is leading in terms of traffic on WLL in Pakistan, which has about 54

percent market share of total traffic of WLL segment. Two major players, PTCL and

Telecard have lost market share in WLL traffic in quarter ending December 2007 when

compared with the same quarter of the last year. PTCL share came down to 54 percent

from 57 percent while Telecard share in total traffic has come down to 22 percent from

30 percent. World Call has gained 100 percent and its share reached to 22 percent at the

end of 2007 compared to the same quarter last year.

PTCL, the incumbent operator in fixed line in Pakistan has also emerged as market

leader with 57 percent market share followed by Telecard and World call with 19.6

percent and 20.2 percent market share at the end of December 2007.

Great Bear International share is reported to be 3 percent, while Wateen Telecom

share is 0.2 percent, which started their services during the quarter. PTCL has gained

over 1 percent market share compared to the same quarter of last year while Telecard

added over 5 percent market share during this period. Great Bear International though a

smaller shareholder in WLL market but its share is increasing due to its quality of service

as it reached to 3 percent as compared to 2 percent in December 2006.

It is believed that fixed-line Tele-density will recover with WLL taking off due to

its cost effectiveness and in particular this technology suits for the hilly areas and far-

flung regions in the country. The estimated WLL per line cost is around US$ 100-150 in

comparison to wire line cost which still remains to be more than US$ 250-350 per line.

PTCL has already covered over 11,500 cities/towns/villages while other major operators

like World call, Telecard and Great bear are increasing their coverage too.

WLL system is used when low to medium subscribers densities are located apart

from each other and deployment of primary or secondary copper network is difficult.

WLL system is best suited for rural, sub urban areas and very congested metropolitan

areas.

Regulatory Environment

The local telecom market has altered significantly since the creation of PTA as an

independent regulatory agency and had enjoyed sizeable success to open up the local

market to competing operators. With the governments deregulation policies, Etisalat, the

UAE based telecom player being the highest bidder emerged as the buyer of the 26

percent share in PTCL in April 2006. PTCL, despite being a giant, had to face many

bottlenecks in its operations with such large network.

PTCL has recently taken an initiative to right size itself by introduction of VSS for

its employees where about 28000 employees are accepted under the scheme. Introduction

of various diversified products and services to sustain its market share, Implementation of

ERP solutions to provide integration of various departments through acquisition of SAP

software and state of the art billing and customer service software, translates PTCL‟s

long term goals of operational effectiveness into practice. The telecom giant PTCL has

observed cutthroat competition from various service providers after the implementation

of the deregulation policies by the PTA. However, through the vast infrastructure and

being the carriers‟ carrier, PTCL with diversification of its various services has enjoyed

well-built position and posses immense potential for growth, while need for telecom

services is on rise as economy continues to grow on the right track.

The telecom De-regulation and Cellular Mobile Policies announced by the Federal

Government place certain obligations on Pakistan Telecommunication Company Limited

(PTCL) to facilitate market liberalization. PTCL is bound to comply with these

obligations within a stipulated time frame. These obligations are of paramount

importance for successful implementation of the policy and failure or any deviation

thereof may result in substantial damage to the deregulation process/liberalization

program. Similarly Defense, NTC and SCO also depend on PTCL for many facilities.

Therefore, PTCL has important obligations towards Defense of the country and other

existing operators. In addition, PTCL has been declared SMP operator. Under the status

of SMP also, PTCL has certain obligations. PTA, as regulator, has to ensure that new

management of PTCL fulfils all these obligations.

ANALYSIS OF INTERNAL ENVIRONMENT

Being a public limited company whose majority shares are controlled by the

Government of Pakistan, PTCL is responsible to provide telecommunication services in

the country on affordable prices while ensuring that the telecom services become

accessible throughout the country. Since exclusivity of PTCL has ended on 1st Jan 2003,

the telecom sector of Pakistan has entered into a new era and PTCL is slowly moving

towards competition in the basic telecom services. The company‟s policy objectives are

as follows:

Increase service choice for all consumers of telecom services at competitive and

affordable prices

Increase private investment in the telecom sector and encourage local telecom

manufacturing/service industry

Enhance long run benefits to the Government‟s financial position by expanding

the taxable revenue base.

Accelerate expansion of telecom infrastructure to extend telecom services to

unserved and undeserved areas.

Encourage fair competition among service providers, while maintaining

leadership in the telecom sector

Maintain consistency with the Pakistan IT and internet promotion policy of low

prices for Bandwidth and Internet access.

ORGANIZATIONAL MANAGEMENT CYCLE:

The cycle above describes the Organizational Management process at PTCL.

Yellow blocks describe the core functions of the Company performed at all levels in the

Organization. Blue Blocks are the Strategic functions which are performed at the

Strategic level only.

FINANCIAL ASPECTS

The structural adjustments undertaken by the company in response to the increased

competition and substitution impact of mobile expansion has adversely hit the

profitability of PTCL in the short run. The first quarter of FY'08 recorded a drop in

profitability of PTCL, as the company's profit after taxation declined 41.5% over the

three months period to September 2007, as compared to the same period last year. Sales

revenue dwindled during three months period, reaching Rs 14.4 billion, compared to Rs

16.9 billion last year, depicting a decline of 15%. A 6% rise in operating expenses as a

result of high provisioning against doubtful debts and infrastructure development for high

speed DSL connections, combined with a 32% increase in financial charges, provided a

further blow to the bottom line. Consequently, operating profit declined 46%. However

the effect on net profit was somewhat diluted by a 14% increase in non-operating income

of the company so that the company posted profit after tax of Rs 3.01billion, compared to

Rs 5.15 billion in1Q'07.

At the end of first quarter, the company stock was trading at a P/E ratio of 18.20.

As illustrated by the graph, the stock has performed remarkably well relative to the

market. The stock has shown consistent performance over the three months, dropping

only slightly as the rest of the market dipped sharply during August. As a consequence of

the fading sales revenue for the period, the profit after tax of the company in FY06

declined by 21.91% over FY05. The net profit margin has also been declining since the

FY'04 and the trend persisted in FY06. The decline in profit margin may be attributed to

a 5.25% increase in operating expenses for the year.

Fig Below: 5 years Financial Analysis of PTCL

Profitabi lity Position

PTCL posted a net profit of Rs 15.64 billion (EPS Rs 3.07) in FY07 against last

year's figure of Rs 20.78 billion. The declining trend in profitability continued during the

financial year ended June 30, 2007 due to structural adjustments brought about in the

telecom sector by competition. Although PTCL maintained its leading market share in

the fixed line, there was a decrease in revenues by 5.5% mainly due to substitution

impact of mobile expansion. There was also an increase in operating expenses by 11.7%

mainly due to prudent provisions for doubtful debts and long term systematic

improvements in operations and customer services.

In spite of decline in profit, the PTCL managed to increase its operating cash

flows to Rs 35.54 billion compared to Rs 35.19 billion last year. Considering the cash

requirements for restructuring and development plan, the company declared a final

dividend of Rs 2.00 per share for the financial year ended June 30, 2007. The total

revenue for FY 2006-07 stood at Rs 65.28 billion against Rs 69.09 billion of FY 2005-06.

The decrease in revenue was mainly in the domestic segment due to competition and

reduction in tariffs. However, PTCL is making all efforts to boost revenue by improving

customer service and launching new services to turn around the situation.

Liquidity Position

The liquidity position of the company suffered a setback in FY06. This trend has

been witnessed despite increasing current assets, as current liabilities grew more sharply.

The short term borrowings of the company have been mounting for the last few years and

this has contributed to the current trend of the current ratio. It may be noted that the

company holds large amounts of cash and bank balances compared to the other

companies in the business. This may provide an edge to the company over its

competitors. Although the liquidity stance of the company is fairly satisfactory at the

moment, but a continuation of the current negative trend may spell trouble for the

company.

Leverage Position

The debt ratios showed a decreasing trend in the FY07. The debt to asset ratio of

the company had declined considerably in FY05 but the trend reversed in FY06,

declining again in FY07. It is important to note that the company maintains a largely

unleveraged capital structure, with the current trend in debt ratios bought about largely by

changes in current liabilities of the company. This was brought about mostly due to a

decline in current liabilities of the company in FY05 and an increase in the same in

FY06. The absence of the dividends payable portion of current liabilities in FY05 and its

coming back online in FY06 was an important contributor to the trend. Further, the FY06

also saw an increase in short term borrowings of the company, complemented by

increases in other components of current liabilities. Increases in assets, mainly arising

from higher cash and bank balances, could not prevent the trend of the debt ratios.

Activity Position

The DSO of PTCL witnessed an upward trend throughout the period under

analysis, except in FY05 when an improvement was marked. The ratio jumped up

considerably in FY06, completely nullifying the effect of the decline in FY05, and

exacerbating the already long collection period of the company. However, DSO showed a

decline in FY07 showing that management of PTCL is constantly striving for

improvement and enhancement despite stiff competition. As a result, the operating cycle

has also decreased in FY07. The total assets turnover and sales to equity ratio of the

company also declined in the FY'06 as revenues shrunk during the period. Sales/equity

declined with the increase in equity of the company.

Dividends

PTCL has had a history of paying out significant portion of its earnings to its

shareholders. However, with huge cash requirement for Voluntary Separation Scheme,

PTCL is unlikely to announce any cash payout during FY08. Therefore, once the ongoing

process of VSS is through, which requires a cash outflow of PkR23.2bn, dividend payout

is likely to resume to its initial levels.

BUSINESS STRATEGIES

As part of the Company‟s vision of maintaining and growing its position as the

leading ICT service provider and a profit leader, a five year Strategic Master Plan for the

Company, with defined corporate KPI targets, timelines and ownerships was developed

by the PTCL management. Defining yearly targets on market shares for various voice and

data services, introduction of a corporate KPI based performance measurement system,

Restructuring of the organization, formulation of IPTV, Triple Play and converged

services, migration to an end to end IP based network, Investment strategies such as

Assets Management for risk diversification and improved Return on Investments, were

all part of the master plan. The five year master plan will be reviewed and updated on an

annual basis.

PTCL chose August 14th, the Independence Day, to launch its new logo and theme

of „feel the difference‟. To support the new spirit and to reinforce its commitment, PTCL

offered „free‟ nationwide calls to the people of Pakistan. The traffic on 14th August 2007

jumped to 4 times the level on a similar holiday to give credence to our hypotheses that

the „good old telephone‟ Company is still the trusted landmark of the people of Pakistan.

This unprecedented response to free calls on 14th August was a heart warming

experience as it reassured the faith of our customers in our services, making us even more

aware of our responsibilities towards putting our customer first.

Fixed Line Telephony

PTCL‟s fixed line segment has witnessed decline in numbers in 2007-08 as against last

year with a decrease of 452K lines during the past year. The market for the FLL segment

has least amount penetration primarily due to the major inclination towards cellular

and wireless segments by users. PTCL‟s fixed line potential is anticipated to remain

stable with its having the largest network, coverage and better quality service as

compared to WLL and cellular networks. The fixed line segment is anticipated to cater

the needs of the business community at large and as expected is to be driven by the

country‟s future economic growth.

Wireless Local Loop

PTCL‟s WLL segment has depicted immense amount of growth, nevertheless at a

slower pace than expected. It started its service from the northern regions slowly moving

towards the metro cities using its CDMA wireless technology. World Call and Telecard

were the other major operators that introduced the WLL services using CDMA2000 and

CDMA technology to cater the needs of its customers. Telecard started its operations

from Karachi, flowing into Baluchistan region while World Call initiated its operation in

Lahore in Jun 2005 with aim of rollout its network to update its capacity to 1.5 mn

subscribers in the years to come. PTCL has been facing stiff competition however with

vast presence and infrastructural facilities across Pakistan, has the potential to outrun its

competitors in the segment.

Broadband and Value Added Services

PTCL through diversification and assorted products and services could retain its

fundamental presence in the Telecom Sector. Introduction of DSL Broadband services

across major cities with plans to include more cities in times to come will enhance the

revenue base of PTCL. Stiff competition from other cable based broadband service

providers and local cable operators still persists. PTCL‟s broadband services were

introduced in Jun 2007 with free installation service with an initial capacity of 100,000

subscribers by providing services in the five largest cities and had a decent start by

adding over 10,000 subscribers within the first few months of its operations depicting

PTCL‟s brand recognition. Furthermore, with the introduction of WLL segment, Phone N

Net, IPTV, VMS and Carrier Services is expected to bring product leadership in the

sector.

ENTREPRENEURSHIP – INNOVATION & INCENTIVE PLANS

Quality Services

In order to have sustainable business performance in the highly competitive

environment of the Telecom industry, PTCL has to deliver highest quality services to its

customers. Quick provisioning of PTCL services brings lot of value to the customers

which not only guarantees more revenues but creates goodwill for the company.

In the backdrop of this situation, PTCL management is taking key initiatives in different

business areas. One important move aimed at improving the Sales and Customer

satisfaction is to boost the morale and motivation level of our employees.

An Incentive Plan has been worked out to present substantial cash rewards to the

employees performing beyond the specified benchmarks. This will be the start of an era

where the rewards shall be linked with the performance and achievement of targets.

While the first phase focuses on front end of the Supply chain, it would subsequently be

expanded to other segments of the organization like Fault management, WLL and IP TV

etc. Important features of this plan are:

Implementation would be highly transparent, with zero tolerance for abuse.

It would cover Installation/Provisioning of Telephone (wire-line) & Broadband

connections.

Rewards would be applicable to all the channels of request for installation/

provisioning of connections.

Rewards against Installation/Provisioning are subject to receipt of the amount of

first monthly bill through B&CC.

Rewards against Installation/Provisioning of telephone connections are strictly

subject to the fact that the whole process completes within a span of 03 days

(from service request registration to the final service activation).

Free Internet

PTCL proudly presents Free Internet facility for its landline valued customers. All

PTCL landline subscribers can now experience the best dial up speeds with unlimited

internet usage during night hours from 10:00pm to 07:00am. Furthermore subscribers can

also avail up to 100 hours of free dialup internet on monthly basis from 0:700 am to

10:00pm every day.

Offer/ Package Details:

Free unlimited dialup internet will be available from 10pm to 7am in the morning

every day.

For day time users (7am to 10pm) PTCL is offering up to 100 free hours on

monthly basis to entire subscriber base.

Customers exceeding 100 hours in a month (during day time from 7am to 10pm)

will be charged as per existing tariff of Rs. 6/Hour.

ORGANIZATIONAL STRUCTURE

Organizational Structure describes the organization‟s formal framework or system

of communication and authority.

In other words, the organization structure sets forth each principal, management position

and helps to define authority, responsibility and accountability.

An organization chart is essential to the development of a cost system and cost reports

which indicates the responsibilities of individuals for implementing management plans.

In PTCL President / CEO is the head of major functional areas. i,e State management,

Finance, Technical, Operations, HR & Admn and Corporate affairs. So Senior Executive

Vice President who are the head of these units generally reports directly to the President.

The main purpose of PTCL is allowing them to effectively and efficiently accomplish

organizational goals and objectives. Designing an appropriate structure means that

managers must decide how to coordinate work activities and efforts both vertically and

horizontally.

Organization structure of PTCL can be described as having three components like any

other organizations:

Complexity

Formalization

Centralization

COMPLEXITY

The term complexity refers to the amount of differentiation in an organization.

The more division of labor there is in an organization, the more vertical levels in the

hierarchy and more geographically dispersed the organization‟s units, the more difficult

(or complex) it is to coordinate people and their activities.

When we analysis the complexity of PTCL, there is big amount about 70,000 employees

and hierarchy is as under:

PRESIDENT SEVP EVP GM/CE DIRECTOR SE/MANAGER etc

ENGINEER/AE/SDO/AO ES/ASSISTANT T.TECH/CABLE JOINTER LM/UDC

NAIBQASID/FRASH etc.

This is a very large hierarchy, which creates problems for the organizational activities

and coordination‟s. The result is a slow correspondence between management and

officials at lower levels. The Etisalat (who control the charge of PTCL) is restructuring

the organization and the work is under process.

FORMALIZATIONS

The degree to which an organization relies as rules and procedures to direct the

behavior of employees is formalization. The PTCL organization structure operates with

standardized guidelines, rules and regulations. Each officer/official knows his/her

responsibilities of what he has to do. Due to these strict rules and regulations the PTCL

organization‟s structure is more formalized.

CENTRALIZATION

The term centralization describes where the decision making authority is.

In PTCL, organization decision making is highly centralized at upper levels of

management. Problems flow up to senior executives, who decides what, should be done.

In some cases, decentralized policy is used and decision making is delegated to lower

levels of management. Which is not correct and creates problems in the creation of long

term value aided strategies.

DEPARTMENTS OF PTCL

Engineering:

Engineering Department of PTCL is responsible for:

Maintenance department

Operations department

Research and Development

Marketing:

Marketing department is concerned to create the value for the customer

and capture value in return.

Finance

Finance department deals with

Accounts department

Revenue department

Taxation department

Human Resource Department

HR department is responsible for the management of human resources needed in

the organization efficiently and effectively. It includes;

Training and Development

REGIONAL G.

MANAGER

Managers

SENIOR EXECUTIVE

VICE PRESIDENT

PRESIDENT &

CEO

EXECUTIVE VICE

PRESIDENT

Director (SENIOR

MANAGER)

MANAGERS

Chain of Command

SENIOR

ENGINEER

ASSISTANT

MANAGER

REVENUE

OFFICER

S.D.O/ ASST.

ENGINEER

HR DEPARTMENT OF PTCL

Introduction

The Human Resource Department in PTCL was formally established in 1996 and

it was re-organized in 2005. PTCL human resource system is known as HRIS-PTCL and

it is working under SEVP & GM at regional centers.

HR manager plays a very important role in hierarchy, and also in between the higher

management and low level employees. He is one of the most important people to achieve

company‟s overall objective by properly managing the most useful company resources.

HR Importance

The main objective of HR department in PTCL is to meet company needs of the

human resources and the needs of the people hired by the company. The management of

PTCL considers that in order to stay competitive and to meet the needs of their

customers they should focus on their employees. They consider employees the main

assets of organization and focusing on providing them the better facilities

Vice President

of HR

Chief Executive

HR

President

Senior Executive

Vice President HR

G.M HR

Director

Senior Manager

Chain of Command of HR

Main Pillars of HR

1. Staffing

2. Training and Development

3. Motivation

4. Maintenance

Staffing

Activities in HRM are concerned with seeking and hiring qualified employees. Staffing

includes

Job Analysis

Recruitment

Selection

Job Analysis

Job Analysis provides the information about the jobs currently being done and the

knowledge, skills and abilities that individuals need to perform the job adequately.

Job analysis is concerned with:

Job Specification

Job Description

Job Evaluation

For the purpose of job analysis the company provides different tasks to check their

efficiency. The company also checks the grip of the employees on his job requirement

and observes his interaction with other employees. They mainly focus to check their

attitude because in service sector customers are directly involved with the employees.

The company matches whether employee is fulfilling his tasks properly or not, if

not the company try to find that reason. The company also checks number of

complaints against the employee and what the basis of that complaint is.

Recruitment

Company uses different sources to fulfill vacant vacancies. First of all it identifies

how many employees are required and for which posts. This job analysis is done by

PTCL HR governing body consisting of highly skilled persons. The company evaluates it

on the basis of different regulations given by the Pakistan government and Labors Law

enforced in Pakistan.

The main sources used in PTCL are:

Internal sources

External sources

Internal Sources

In the internal sources company promote its contract basis employees on

permanent basis and also promote the permanent employees according to their

performance and qualification. Recommendations are usually not preferred.

External Sources

Through external sources company attract fresh as well as experienced persons.

Print media and electronic media are utilized to achieve their goal of hiring best suited

employees. For technical staff candidates holding engineering degree are invited from all

over Pakistan and for management staff people with MBA are invited but the preference

is given to LUMS students because PTCL partner with LUMS.

Selection

Selection attempts to thin out the large set of applications that arrive during the

recruiting phase and to hire an applicant who will be successful on the job.

After conducting test and interviews potential candidates are selected and they are given

jobs on the following five categories.

Regular

It is the selection on the permanent basis.

NCPG {New contract pay grade)

First they will have to work for one month and then contract is given.

Daily wages

Usually security guards and peons are selected on daily wage basis.

NTC New Term & Conditions

Employees are given contract for 2 to 3 years.

Project based

People are selection and there time duration depends on the time of the project.

ROLE OF HUMAN RESOURCE

Voluntary Separation Scheme (VSS)

The VSS marked the single largest most successful exercise in the history of

Pakistan. In the highly challenging marketplace, PTCL HR wing stepped forward to

facilitate the emergence of new Corporate Culture by becoming Equal opportunity

employer, inducting fresh blood from the market, improving the way PTCL runs and

reducing the number of employees having outdated skill set. The Training &

Development wing of the HR Department also organized a comprehensive six months

“Urgent Training Needs” program in technical and managerial fields to enhance soft

skills.

Healthy improvements have been made in the area of Recruitment and Retention

as the whole recruitment process has been redefined to cope with the changing business

requirements. Detailed facilitation programs have been initiated for the orientation of

newly hired employees. PTCL employees have been provided excellent international

placement opportunities across various Etisalat International Business Operations.

Training and Development

The role of training and development in a service involved organization is many

times more in comparison with what it has in a manufacturing involved organization.

This role becomes more significant in a situation where the need to transform

organizational culture is identified as the most glaring problem and the most difficult

impediment on the way to organizational growth. PTCL employees are a great asset not

only for the company but also for the country. Their marvelous potential is yet to be

exploited. Their skills need to be developed, their expertise need to be updated for which

training and development department is at their disposal to cater to their training needs.

At PTCL, training and development team would never miss an opportunity to

contribute towards the betterment of the company. Training and Developments is playing

an essential role in changing PTCL from a government sector organization to corporate

sector company. PTCL consider every employee of the company as our customer and

firmly believe that meeting their expectation would help us achieve customer satisfaction.

We look forward to your input for making our endeavors more effective. The Training

and Development has a clear road map of activities and is committed to provide high

quality trainings for the development of every single employee.

REFERENCE OFFICERS

Mr. Abdul Qayyum

Revenue officer (PTCL Sargodha)

Mr. Zafar Nadeem

Senior Manager (PTCL Islamabad)

CONCLUSION

We have completed our project of management for about two weeks. During this

period we have gained a lot of knowledge and practical experience.

After a complete research work we will conclude that decision making power in

PTCL is fully centralized. All the powers lie in the hands of CEO of the company. Main

decisions are made by board of directors. And confirmation of their decision is given by

president of the company. We analyze the organizational structure of PTCL.

Organizational structure of PTCL is fully straight forward. For this purpose we got help

from Mr. Abdul Qayyum who is the revenue officer in PTCL Sargodha, and Mr. Zafar

Nadeem who is the senior manager in gateway Islamabad.

We can conclude that since the HR department of PTCL has been re-organized in

2005, there is still a long way to go for achieving the competitive advantage. Although

the strategies they are adopting are good but they still need further improvement for the

satisfaction of their employees and best utilization of human resources so in return they

would be able to increase their market share.