privatization of ptcl: privatization and re-regulation of ptcl

Presented By: Umair Ahmed Roll No: 164 B.B.A (Hons.) 7th

EveningPresented To: Department of Management sciences University of Education Okara Campus

Impacts of Privatization on PTCL

Outline

Research Question Goals of Research What is Privatization? Etisalat Analysis And Findings Conclusion And Recommendations

Research Question

What is impact of privatization on PTCL?

Goals of Research

Impact on Performance

Impact on Competition

What is Privatization?

“It is the process of selling government assets to private buyers”.

Privatization is process of transferring ownership of a business, enterprise, agency or public service from the public sector (government) to the private sector (business). In a broader sense, privatization refers to transfer of any government function to the private sector including governmental functions like revenue collection and law enforcement.

Etisalat

The UAE based company that purchase 26% of shares with management rights.

It’s Vision: A world where people’s reach is not limited by

matter or distance.

It’s Mission: To extend people’s reach

Analysis And Findings

Privatization Process of PTCL Impacts of privatization on PTCL

Impact on PerformanceImpact on CompetitionImpact on Employment

Privatization Process of PTCL

1. In 1991 Govt decide privatize PTCL, by selling 26% shares with management rights.

2. In 1994 12% of its shares are divested.

3. In 1994 Govt issued 1 million exchangeable vouchers, equal to 100 million shares of Rs.10each for Rs.3 billion .

4. In September 1994 five million vouchers has been issued to 31 international investors for $ 900 million.

Privatization Process of PTCL

5. In 1997 notes of $150 million are issued to international investors which are convertible to “A” class ordinary shares, which are equal to 3.3% of total share capital.

6. In 1998 Govt hire M/s Goldman International to provide advisory services.

7. According to M/S Goldman Report, PTCL handed over to Etisalat, That purchase 26% shares with management rights.

Impacts of Privatization on PTCL

Impact on PerformanceImpact on Competition Impact on Employment

Impact on Performance

Liquidity

0

0.5

1

1.5

2

2.5

3

2004 2005 2006 2007 2008 2009

Current

Quick

Continued...

Leverage

-20

0

20

40

60

80

100

2004 2005 2006 2007 2008 2009

The Time Interest EarnedRstio

Continued...

Profitability

-10.00%

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

2004 2005 2006 2007 2008 2009

Operating Profit Margin

Net Margin

Return on Equity

Continued...

EPS

-1

0

1

2

3

4

5

6

7

2004 2005 2006 2007 2008 2009

EPS

Continued...

Continued...

Continued...

Dividend paid in five years

0

5000

10000

15000

20000

25000

30000

2004 2005 2006 2007 2008 2009

Dividend

Impact on Competition

With privatization of PTCL may competitors entered into the market and PTCL’s market share is day to day decreases, due to the following reasons: People switch toward cellular phones WLL users switch toward wateen, world

call and Tele Card because of better quality. Customer services are better then PTCL

Continued...

Continued...

However it is in favor of PTCL that it still has almost monopoly in landline subscribers

Impact on Employment

Before Privatization : PTCL has approx. 65000 employees before

privatization.

The main workforce of the PTCL is unqualified and unskilled. About 50% employees are under graduate.

Continued...

After privatization the following decisions have taken by management: Launch VSS (voluntary separation

scheme), under this scheme PTCL has to pay a lump sum amount to employee who is willing to leave.

Step forward to facilitate equal employment opportunities.

Continued...

Inducting fresh blood from the market

T & D department organized a comprehensive six months “Urgent Training Needs” program in technical and managerial fields to enhance soft skills.

Conclusion

Privatization of PTCL have both positive and negative impacts.

Some negative impacts are: The number of subscribers are decreases year to

year because of, poor quality of services, old technology and higher prices.

PTCL is in the process of layoff and provides a huge some for this purpose while competitors have skilled Personnel and offers attractive packages.

Continued

Besides these negative impacts PTCL also have some positive impacts:

PTCL introduced new technology in some areas.

Improve customer services

Recommendations

I Recommend PTCL to:

To Improve quality of servicesIntroduce new productsIntroduce new technologyImprove customer services