As topic is too much subjective and time is too short. Thats why only the some important aspects will be discussed in this presentation. Introduction o PTCLPTCL is all set to redefine the established boundaries of the telecommunication market and is shifting the productivity frontier to new heights. PTCL want wants their customers for their better living standards with increased values in this ever-shrinking globe. The company is setting free the spirit of innovation. The largest telecommunication provider in Pakistan is PTCL. Code division multiple access (CDMA) is a channel access method used by various radio communication technologies. Also the largest CDMA operator of the country having more than 1 million V-fone customers. Code division multiple access (CDMA) is radio communication technologies. PTCL is on leading position in Pakistan as an infrastructure provider to other telecom operators and corporate customers of the country. 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.

Vision

To be the leading Information and Communication Technology Service Provider in the region by achieving customer satisfaction and maximizing shareholders' value'.

Mission 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 Teamwork Company Loyalty Corporate Information

1.

Landline

PTCL have the largest Copper infrastructure spread over every city, town and village of Pakistan with over million installed lines. Since the deregulation of the telecom sector, a large number

of foreign investors opted for licenses in LL, LDI and cellular operations, identifying Pakistan as an emerging market. Investors entered the market forcefully in the cellular segment, introducing heated competition for PTCL. In this situation PTCL's counter strategy for landline service, during the year 200708 was aimed

to increase ARPU, acquire new subscribers and contain churn.To increase operations, PTCL shifted from its conventional duration based charging system to value based options, like 'Pakistan Package' that offered 5,000 minutes for on-net nationwide calls at Rs. 199/month. PTCL also launched 'International Plus' package to facilitate cost effective international calls at unmatchable rates alongside offering Voice messaging and Phone n Net services, adding more value to the landline service. To increase customers' base, 'order on phone' was introduced, allowing customer to apply for a new connection by simply calling 0800-80800. To tackle the churn PTCL established an outbound call center to reach out to potential customers

with an objective to attain higher level of brand loyalty.

The network has over 6 million PSTN lines installed across Pakistan with more than 3 million working. Furthermore installed capacity of broadband is more than 0.6 million ports spread across the cities and towns of the country

2. 3.

EVO 3G Wireless Broadband Broadband2.6.5PTCL Broadband

The first major product initiative taken towards a changing PTCL during the year 2006-07, was the launch of PTCLs Broadband service under the theme of Broadband Pakistan by the Prime Minister of Pakistan. The service was launched on PTCLs new state of the art Broadband infrastructure that was added to our network during the last three quarters of 2007 with the initial capacity of over 100,000 subscribers. PTCL achieved unprecedented success as it added over 10,000 customers within the first 120 days of its launch while historically it had taken four years collectively for all the other operators to achieve 30,000 customers in Pakistan! The hallmark of PTCL service was the removal of the traditional barriers such as the upfront costs of installation and customer premises equipment and added bandwidth download. This high customer take up also reflected on the Companys trusted image in the eyes of the nation. The service is already available in the five largest cities of Pakistan and will be expanded into another dozen cities during the coming year. 4.

UfONE

5. (Pakistan Telecom Mobile Ltd) a wholly-owned subsidiary of PTCL commenced its operations 6. on 29th January 2001 as a GSM 900 service provider. Since the outset, it has expanded its 7. coverage and customer base at a rapid pace and established itself as one of the leading cellular 8. service providers in Pakistan. Ufone is now considered to be one of the most active, aggressive 9. and innovative players in the mobile sector of Pakistan. 10.The growth of the cellular industry is a direct result of the successful implementation of the

11.telecom deregulation and cellular mobile policy by the Ministry of IT and Telecommunications 12.(MOIT&T) and the support, guidance and timely enforcement of regulatory process by the 13.Pakistan Telecommunication Authority (PTA). 14.Ufone's operational performance has been very encouraging despite stiff competition in Pakistan 15.telecom market which has led to reduction of prices to bare minimum level. Ufone managed to 16.improve its revenue and operating profit by 35% and 47% respectively, as compared to the last 17.year through aggressive policies and exercising strict control over expenses. 18. Smart 19. Vfone

TV

PTCL V-Fone (WLL Service) was another major area of focus for PTCL during the year. A few prominent measures taken in this area during the year were launching of free home delivery service. No line rent package was launched in September 2007. In June 2008, 30 seconds billing was introduced contributing as an effective customer retention tool. PTCL has expanded the network to provide coverage in all large and small cities including over 10,000 villages in rural areas of Pakistan. As Vfone becomes the Wireless substitute to landline in un-served areas, it will be a robust line for voice, data and fax services for use at home and in the office. In business markets it will be positioned as the CDMA tellular extension to add trunk lines to the ever expanding business PABXs. Vfone will be spearheading the launch of the new postpay and pre-pay tariffs with no line-rent to meet the market demand. The tariff will include new post-pay unlimited local and nationwide calling packages to bring traffic back to PTCLs networks to stabilize the revenues. After the initial launch, the Company aims to retain the momentum by offering different bundled packages for voice to increase the subscriber base, including specifically targeting the rural areas where copper infrastructure does not exist. On Wireless broadband front, a major upgrade of PTCL WLL CDMA network is underway to provide Wireless broadband services in 17 major

cities by end 2007. Currently technical trial is in progress which will be followed by a pilot project on WiMax technology. This will enable PTCL to maintain its competitive edge.

2.6.4Paknet Limited

Paknet was incorporated in year 2000 for providing internet related services in the country is being wound up. However, PTCL has developed its own voice, data and video infrastructure and services. Paknet's operations have been closed and liquidator appointed for completing the formalities involving the company closure. All customers, assets, liabilities and capital stand transferred to PTCL in accordance with the special resolution passed in General Meetings.

2.6.6Smart Services

In March 2008, PTCL introduced a trial service that put PTCL on the path of a paradigm shift. Branded under 'PTCL Smart Line', the service included Interactive Television, Broadband and voice Telephony all at the same time on PTCL's telephone line. The 'Smart TV', for the first time offered TV viewers the power to control the TV channels interactively. This included the ability to rewind and pause live TV channels, block / unblock any TV channel for parental lock and search through video on demand content. The Commercial launch of the PTCL Smart Line services across the three largest cities in Pakistan was arranged on the 14th of August 2008 which will be expanded to the other cities during the course of the year.

Industrial Structure

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.

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.

Top PTCL Competitors China Mobile Orascom Telecom Telenor

Organizational Management Cycle

Retirement s

Vacancy Planning

Recruitment

Increment & Promotions

Transfer

Employee Training

Organization ManagementEmployee Master Data

Audit

Career Planning

Attendanc e

Qualification Updates

Performance

Payroll

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.

4.2.1 Profitability 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.

4.2.2Liquidity 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.

4.2.3Leverage 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.

4.2.4Activity 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.

4.2.5Dividends

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.

HR Aspects

The transformation from a legacy public sector organization into a responsive and competitive enterprise

in the deregulated era could not have been possible without implementing a forward looking Human Capital development and management strategy. One of the most important objectives of this new strategy was to optimize the workforce which was implemented by offering the voluntary option of separating from PTCL in exchange for financial compensation. Around 29,920 employees opted to pursue other career opportunities after accepting terms of voluntary separation from PTCL.

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. An MoU was also signed with Etisalat Academy to benefit from their experience in training programs. 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.

4.3.1Training 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.

BUSINESS STRATEGIESAs part of the Companys 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

PTCLs fixed line segment has witnessed decline in numbers in 2006-07 as against last year with a decrease of 452K lines during the past year. The market for the FLL segment has least amount of penetration primarily due to the major inclination towards cellular and wireless segments by users. PTCLs 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 countrys future economic growth.

Wireless Local Loop

PTCLs 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. WorldCall 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 WorldCall 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.

5.3 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. PTCLs 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 PTCLs 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.

6.1 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).

6.2 Free InternetPTCL 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.

6.3 One Stop Shop

Customer service is a series of activities designed to enhance the level of customer satisfaction that is, the feeling that a product or service has met the customer expectation. High standard customer service is an integral part of PTCLs customer value proposition. As part of strategy PTCL has invested huge some of money to improve the environment & efficiency of its service centers. With all together complete change in outlook, services to customers & facilities available, these centers are called One Stop Shop. They are aimed to provide better services to our valued customers for sales of products and after sales services.

These OSS are nine in number and are in Major cities of Pakistan. By the end of this year there will be 19 OSS operational in 11 cities of Pakistan. Customer

feedback about services standards at these OSS is very positive; these centers help us to provide better service to our customers.

7.1 Strengths Largest operational network and infrastructure within ICT (Information & Communication Technologies) segment. An integrated Monoply 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, Ufones 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

7.2 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 managment 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.

7.3 Opportunities

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.

7.4 Threats Increased competition in long distance continues to exert pressure. VOIP use is increasing despite ambiguous and discriminatory policies Exposure to market competition Migration to Cellular Networks Ability to Attract & Retain Quality Professionals Reduction in International Settlement Rates

8 FUTURE OF PTCLGoing forward PTCL is poised to align itself in to a more customer friendly and commercially oriented organization. This will be achieved through improved customer experience, offering better quality of service, and introducing new products and emerging services to satisfy specific market segment needs besides consolidating its leadership position in fixed line business. The customer interfaces will be fully empowered to achieve corporate objectives. Automation and simplification of internal process, optimization of operational expenditure, migration of services to Next Generation Networks, enhancement of national backbone infrastructure, expansion of robust and resilient IP infrastructure and

proliferation of broadband services are few of the milestones for the way forward.

8.1 Measures to achieve Set Targets

The management of PTCL has been adequately preparing itself to face the forthcoming challenges of deregulated environment. Appropriate structural changes have either been initiated or these are underway. To face the challenge, a new Marketing and Business Developing wing headed by a Member with appropriate organizational structure has been made functional with a view to expanding business and taking good care of the customers. Some other initiatives are as follows:

8.1.1New Technology

Prior to the start of the competition, PTCL should be well equipped with new technologies, billing, marketing & customer care infrastructure, skilled trained professionals with focus to win business and earn customer loyalty.

8.1.2Cross Subsidization

PTCL is providing range of services i.e. Fixed Line, Cellular Mobile and Internet etc. As the world experience shows, incumbent can engage in cross subsidization which means that price of one market may be increased above the cost and use the surplus revenue obtained from this market to subsidize the lower prices in other markets where more competition is faced. Analyzing PTCL position against this experience and seeing the prevailing competition environments of Pakistan, it can be safely concluded and seeing the prevailing competition environments of Pakistan, it can be safely concluded that cross subsidization is not possible in Cellular Mobile and ISP markets. However, in Fixed Line segment, there is a real possibility of cross subsidization. PTCL can lower rates of line rent, installation charges and local calls and correspondingly increase rates of NWD and International out bound traffic/maintain present level/ lower the prices but still remain on the higher profit margin side. Alternatively as part of overall business strategy, it can offer different packages i.e. residential and corporate customers, rural and urban and economy groups etc. within each package the prices can be cross subsidized. This practice can have adverse effects on the growth of other licenses particularly those not having vertical

integration. This abuse can be controlled through license conditions and accounting separation which will determine the existence of cross subsidization.

8.1.3Price Discrimination

In order to retain and even expand the market share, PTCL can resort to price discrimination. This can be between users of own network and other operators networks. For example PTCL may fix different rates for intra-network calls and inter-network calls. Lower rates of intranetwork calls will be strong temptation for customers to remain stuck with PTCL instead of switching over to other choice operators. This practice will be a restraint for other operators, hence will be considered anticompetitive.

8.1.4Vertical Price Squeeze

PTCL can increase the price of upstream input (local access). It monopolizes, and keep the downstream services (ISPs, DSL and Payphones etc.) price same. The effect would be reduction or elimination of the profit of downstream service providers because their margins would be squeezed. To increase the squeezing effects, PTCL can also reduce downstream price of its own services. To control price discrimination, the regulator can impose wholesale cost imputation requirements.

Resources o Companys website - www.ptcl.com.pk o Company Annual Reports o Magazine Business Economist o Google.com o Economic survey of Pakistan o Businessrecorder.com o Security and Exchange Commission of Pakistan o Kse.com o Yahoofinance.com o PTA Reports