CHAPTER 1 INTRODUCTION TO THE REPORT

INTRODUCTION TO THE REPORT At Qurtuba University D.I.Khan this is essential degree requirement for the students of MBA to complete internship program of eight week in well-reputed organization. Internship writing follows the report, which is the integral part in the fulfillment of the requirements for the degree of MBA. The report encompasses the knowledge of the internee that he obtains during his course of study in the organization, his learning and analysis his experience that he has during internship in the light of which recommendation are made. These recommendations may benefit the organization concerned for further improvements in its performance. The supervisor assigned to the internee guides the whole process of report writing. After its completion the report is submitted to the Qurtuba University D.I.Khan. The report is properly analyzed by the Qurtuba University on its descriptions will as on the analytical capabilities of its writer, and proper grades assign to the writer. This internship report has been written on PTCL Northern Telecommunication Region-I1 D.I.Khan BACKGROUND OF THE STUDY The Telecommunication sector around the world is going through a process of rapid change in information technology and convergence with focus on mobile Internet and value added services. In line with global trend and for meeting emerging demand, major initiatives have been taken by PTCL to up grade it network. And also to introduce a range of new value added services; develop a portfolio of information technology, Internet bandwidth related services and should revise it organization structure to make it more conducive to deal with the change and commercialization process to enhance the revenue potential of the company.

The socio economic growth of a developing country depends mainly on the Telecommunication sector and its involvement in information technology; Tele marketing and E-commerce make it an integral organ of the overall development of the country. PURPOSE OF THE STUDY To fulfill the requirements for the degree of MBA in Qurtuba University D.I.Khan. To do practical work in the relevant field and apply the knowledge gain during the course of studies in real world. To understand how various operations are carried out in the organization of real world? To perform financial and other analysis of organization. To make possible recommendations in the light of analysis to improve long report writing skills. SCOPE OF THE STUDY Students are required to specialize in only one department or to cover the complete organization in case of small organization. As for as I am concerned I have worked in Finance department of Pakistan Telecommunication Company at TR-II (Northern Telecommunication Region-I1) Telephone house D.I.Khan. In Finance department I have particularly study the directorate of operation and maintenance, directorate of receipts and revenue and directorate of budget and payment. It was not possible for me to go through each and every aspect of the company due to the restriction, which was officially proclaimed for eight weeks, however I have tried my best to cover some of the basic and important aspects of the study. METHODOLOGY OF STUDY The data collected for the analysis and review includes both primary and secondary data. The methods used for collecting primary and secondary data are as follow:

Primary data: Data collected for the first time is called primary data. The method used to collect such data includes: Personal observations Discussions Interviews Secondary data: The data collected earlier by some one else and which has gone through mathematical and statistical techniques after its collection, is called secondary data. Methods used to collect secondary data include: PTCL Annual Reports PTCL Brochures PTCL Manuals Circular and Newsletters Internship Reports on PTCL Journals and Newspapers Internet LIMITATIONS OF THE STUDY None of the human made things can be considered perfect. Only things created by divine are perfect and error free. No matter how carefully a study or research is carried out it will not be perfect and complete in all respects. This study was conducted in conformity with the objectives of study; however the study is subject to following limitations. The study does not include broad explanation of facts and figure due to the following factors: The nature of the study. The Telecommunication company official were not willing to explain all the things regarding their organization and its operations, making it

difficult to gather information about and understand different technical operations. All the facts regarding company cannot be presented due to the problems of secrecy. All the required data was not available because the documents and files area kept confidential. Through financial analysis was not possible due the limitation of information in the company annual reports. Data required for carrying out through HR and SWOT Analysis was not available. The internees are not provided with opportunities of doing things themselves during internship, making it difficult for them to understand technical things. This also affects the quality of the study resulting report. Limited financial and technical resources also affected the analysis. Limited duration of internship makes the analysis restricted because all the technical operation of the company cannot be understood and analyzed in only two months.

Appendix A

BOARD OF DIRECTORS OF PTCL

MR. NAGUIBULLAH MALIK Chairman PTCL Board Secretary IT & Telecom Division, Ministry of Information Technology Government of Pakistan, Islamabad MR. ABDULRAHIM ABDULLA ABDULRAHIM AL NOORYANI Chairman & Chief Executive Officer, Etisalat International Pakistan L.L.C Executive Vice President Contracts & Administration Etisalat, UAE. MR. SALMAN SIDDIQUE Secretary (Finance), Ministry of Finance Government of Pakistan, Islamabad MR. ABDULAZIZ AHMED SALEH AHMED AL SAWALEH Chief Human Resources Officer Etisalat, UAE MR. MUSHTAQ AHMAD BHATTI Member Telecom Government of Pakistan, Islamabad MR. FADHIL MOHAMED ERHAMA AL ANSARI Executive Vice President Engineering Etisalat, UAE MR. KHURSHEED AHMED JUNEJO Ambassador, Embassy of Pakistan Abu Dhabi, UAE MR. ABDULAZIZ HAMAD OMRAN TARYAM General Manager, Northern Emirates Etisalat, UAE

DR. AHMED AL JARWAN General Manager Real Estate Etisalat, UAE

MS. FARAH QAMAR Company Secretary PTCL PTCL Headquarters, Islamabad

Appendix B

DETAIL OF EMPLOYEES IN PTCL

S.NO 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 GRADE M-I M-II M-III B-21 B-20 B-19 B-18 B-17 B-16 B-15 B-14 B-13 B-12 B-11 B-10 B-09 B-08 B-07 B-06 B-05 B-04 B-03 B-02 B-01 JOB DESCRIPTIONS President Senior Executive Vice President Company Secretary Executive Vice President General Managers, Chief Engineers Directors, Dy. Chief Engineers DEs,Sr. Lecturers, SAOs ADEs, Aos, DAOs, A.D. Aes Ess Selection Grade Data Asstt:, Assistant, SAC, Stenographer Steno typist Selection grade Khateeb Steno typist SAC Technician Selection grade UDCs Selection grade Telecom. Technicians UDCs,ACs, Tos Drivers Selection grade LDCs,JACs Linemans, Drivers. Wiremans. N/Q.L.C,Chowkidars,etc. N/Q, Chowkidars, sweepers, malietc. NOs OF EMPLOYEES 01 05 01 15 70 348 1835 2697 404 598 282 221 369 285 514 446 7854 13414 337 2416 13058 2218 637 5620

Appendix C

ACCOUNTING CODE RANGE

MAIN CODE CODE RANGE DESCRIPTION

10000 11000-11999 13000-13999 14000-14999 15000-15999 20000 21000-21999 23000-23999 24000-24999 25000-25999 40000 41000-41999 42000-42999 43000-43999 48000-48999 49000-49999 50000 51000-51999 52000-52999 53000-53999 54000-54999 55000-55999 56000-56999 57000-57999 58000-58999

EQUITY & LIABILITIES Capital & Reserves Long Term & Deferred Liabilities Short term Liabilities Current Liabilities ASSETS Tangible Fixed Assets Long Term Investments Long Term Loans & Advances Current Assets REVENUE Telephone Traffic Revenue Telegraph Traffic Revenue Telex Traffic Revenue Miscellaneous Revenue Other Income EXPENSES Staff Salaries & Allowances Staff Expenses Maintenance & Petty. Works Office Contingencies Other operating Expenses General Overheads Depreciation Financial & Other Charges

CHAPTER 2 REIVIEW OF THE ORGANIZATION

HISTORY OF PTCL Introduction It is considered appropriated now that the history of Pakistan Telecommunication is compiled, from the pre-independence period starting from 1853 up 2003. It should end up the very brief overview of particular interest the 58-year period of Pakistan Telecommunication from 1947 to 2003. From the humble beginnings of Posts and Telegraph Department in 1947 and establishment of Pakistan Telephone and Telegraph Department in 1962, to this very day, ours is a story of commitment and vision. Pakistan Telecommunication Corporation (PTC) set sails for its voyage of glory in December 1990, taking over operations and functions from Pakistan Telephone and Telegraph Department under Pakistan Telecommunication Corporation Act 1991. This coincided with the Government's competitive policy, encouraging private sector participation and resulting in award of licenses for cellular, card-operated payphones, paging and, lately, data communication services. Pursuing a progressive policy, the Government in 1991, announced its plans to privatize PTC, and in 1994 issued six million vouchers exchangeable into 600 million shares of the would-be PTCL in two separate placements. Each had a par value of Rs.10 per share. These vouchers were converted into PTCL shares in mid-1996. In 1995, Pakistan Telecommunication (Reorganization) Ordinance formed the basis for PTCL monopoly over basic telephony in the country. It also paved the way for the establishment of an independent regulatory regime. The provisions of the Ordinance were lent permanence in October 1996 through Pakistan Telecommunication (Reorganization) Act. The same year, Pakistan Telecommunication Company Limited was formed and listed on all stock exchanges of Pakistan. Since then, PTCL has been 8

working vigorously to meet the dual challenge of Telecom development and socioeconomic uplift of the country. This is characterized by a clearer appreciation of ongoing telecom scenario wherein convergence of technologies continuously changes the shape of the sector. A measure of this understanding is progressive measures such as establishment of the company's mobile and Internet subsidiaries in 1998. As telecommunication monopolies head towards an imminent end, services and infrastructure providers are set to face even bigger challenges. Pakistan also entered postmonopoly era with deregulation of the sector in January 2003. On the Government level, a comprehensive liberalization policy for telecom sector is in the offing. PTCL is in full awareness of the same, and future policies feature a strong conviction of healthy competition. The Company is in process of enhancing organizational and business proficiency through vertical integration and horizontal diversification. At the same time, cross-national ownerships, operations and partnerships are being evaluated with a view to developing and diversifying the business. In this overview, it is proposed to highlight mainly the growth technology, sector structure, organization, the lessons learnt and future trends. Phases of development:The compilation of the history has followed a very logical plan and divisions and chronology and major organizational changes in Telecommunication entity. It also covers the period of Government of Pakistan (GOP) five years plan including, the major pats of the middle and the eight (1993 up to 1998) plan progressively. In addition it also covers a period of an evolving restructuring of the telecommunication sector structure and organization, starting from a combine Post and Telegraph (P and T) department at independence to a Telegraph and Telephone (T and T) in 1962 and a Pakistan Telecommunication Corporation (PTC) in 1990. Telecommunication Act 1996 brought the major reorganization, separating policy, regulation and operation in the ministry of communication, Pakistan Telephone Authority (PTA) and Pakistan Telecommunication Company Limited (PTCL) respectively.

It also let to the area of liberalization and increasing the participation of the private sector in telecommunication especially since 1990 with the cellular, phones, data and paging services. The period also covers great advances in technology leading to the digital revolution and open wire to coaxial to optical fiber transaction. The international services develop in this period from the unrealizable short- view radio to the high quality service by sub marine cable and satellite radio. In this half century, the Pakistan Telecommunication sector faced many challenges to set up a viable operational entity, production units and support systems leading to the establishment of an adequate national infrastructure on which the knowledge and the informational super structure can be built. The Telecommunication Sector 1947-2009 At independence 1947, the Pakistan Telecommunication Sector was organized as a combined P and T (Post and Telegraph) Department as it was in India before partition. In September 1965, the minister of railways and communication decided that a detail examination be made of the working of the Pakistan Post and Telegraph department for bringing about improvement in the efficiency of both the branches, the Postal and Telegraph Services. There was a realization that the nature and needs of both the services would best be served by bifurcation, which was supported by the Organization and Management (O and M) wing of the presidents secretariat. The cabinet approved this division and a major step was taken in 1962 to create the Pakistan Telephone and Telegraph (T and T) department. However the status of an attached department continued and did not provide the administrative and fiscal autonomy require for it to function efficiently. The World Bank felt reorganization necessarily in 1968 while considering a request for an in 1977 and for that purpose appointed consultants for a study. This was also followed in 1969 by a review and a report to the Chief Martial Law Administrator in 1973, the cabinet approved the setting up a board of administrate and control the Telephone and Telegraph (T and T). After prolonged discussion between the government and World Bank 1973 to 1979, a presidential order was issued on 30th may 1979 (without 10 card pay

changing the nature of the Telephone and Telegraph (T and T) as an attached department) which give the Director General Telephone and Telegraph (DG T and T) enhanced administrative and fiscal powers and appointed a full time financial advisor. The new agreement came into force on 1st July 1979. Although there are some improvements, but with the greater demands on Telephone and Telegraph (T and T) for telephone and improvements in services, it was felt that Telecommunication sector was not meeting the needs of the economy. The World Bank also held this view. As a result in after reviews, the government decided to convert the Telephone and Telegraph (T and T) and into in autonomous corporation that was created as Pakistan Telecommunication Corporation (PTC) by an ordinance on 15th December 1990. The establishment of the corporation was in intermediate step in governments strategy, which was to restructure the sector-facilitating private sector participating to meet the phenomenal growth, which could not be supported in finance by government itself. For this purpose, government obtained the services of a consortium led by Bears Streams United States of America (USA) for the study and recommendation, which result in the promulgation of the Telecommunication ordinance of July 1995 separating the policy, regulations and operations in the sector. While policy was reserved for the government, the regulation of the sector was entrusted to the Pakistan Telecommunication Authority (PTA). A frequency Allocation Board (FAB) was created for the management of the Radio frequency spectrum and for governments Telecommunication services, National Telecommunication Corporation (NTC) was created. The Pakistan Telecommunication (PTC) was converted to the Pakistan Telecommunication Company limited (PTCL) on december31, 1995. In October 1996, national assembly enactive the Telecommunication

reorganization act replacing the ordinances. Although not perfect, the Telecommunication Act 1996 provides a reasonable framework for the sector structure and organization. It was only after the conversion of Telephone and Telegraph (T and T) department into a corporation in December 1990 when serious were made to wipe out the pending demands and to provide the Telephones to applicant in reasonable time. In collaboration with the private sector through Build Lease Transfer (BLT) scheme, 355,981 lines in 1993 and

11

429,023 in 1994 increase the capacity of the telephone exchanges in 2004. The capacity had exceeded 4.5 million lines, in increase of over 3.5 million since 1991. For long distance telephone services, capacity of circuits was increased in 1950s by reconstruction of open wire lines and installation of a large number of 3 and 12 channel carrier systems. Carrier channel mileage increased from 8500 in 1948 to 206,873 in 1962. To further increase circuit capacity, coaxial cable systems were installed in 1960s and in early 1970s radio relay systems supplemented these in 1970 and 1980, on both main and subsidiary roots these systems enabled introduction of point -to-point subscriber trunk dialing (STD) in 1962 and Nation wide dialing (NWD) in 1976. By 1981, the telephone subscriber of fifty cities had been provided with NWD facility. In 1990 the NWD stations had increased to 168 and NWD channels to 10,487. In 2006 the NWD stations has increased to 2,252. Network Expansion and Service Improvement PTCL maintained steady growth during the year in its network capacity and customer base. Access Line Installed (ALI) and Access Lines in Service (ALIS) stand at 8.33 million and 5.84 million respectively. This includes 0.51 million customers served through the WLL network. Expansion of switching and transmission networks across the country made it possible to connect 189 new towns on NWD. Enhancement of the Internet Service was achieved by the addition of 180 new stations to the nearest Point of Presence (POP) thus enabling customers to avail internet service via a local call. Introduction of two Next Generation Network (NGN) Soft switches at Islamabad and Karachi along with 20 Media Gateways in other cities speaks of PTCLs commitment to serve its customers with leading edge technology. As Telex and Telegraph services became obsolete following the adoption of fax, e-mail and internet technologies, they were ceased during the year.

12

To augment network reliability, the Company has invested in Preventive Maintenance programs relation to Outside Plant (OSP) of identified cabinet areas and Multi-storey buildings. Company Board approved a wide array of new projects during the year including the expansion of 2.5GB DWDM system by 4 lambdas and expansion of 10GB DWDM system. In addition 50 Fiber Optic Links were upgraded to STM-4 and STM-16. 3,200 KM Fiber Optic Cable was laid on subsidiary rotes during the year and 200 more cities shall be connected on Fiber Optic Cable during 2006-07. PTCL also launched an Optical Fiber Access Network (OFAN) project which provides 542,000 lines in 13 major cities for which 2,340 KM Fiber Optic Cable was laid in the Access/Junction network. This project also provides 100, 00 ADSL ports for Broadband Services to Corporate Customers. The transport additional traffic on trunk routes for interconnection with Mobile, Long Distance International (LDI) and Local Loop Operators, capacities of 8 HCTEs were increased and 5 Universal Media Gateways were commissioned. Existing digital switch interfaces were expanded by 6,129 EIs and 266,000 new digital lines added to the network at 560 sites during the year. Services to remote areas were improved with the commissioning of 303 Digital Radio Systems, The capacity of the fixed Intelligent Network (IN) platform was also enhanced to cater for 21 million prepaid cards. Aggressive rollout of the WLL network is underway and 1,134 base stations were commissioned to cover 720 new cities, towns and numerous villages. Following the installation of 2.03 million lines during the year PTCL now has the largest WLL network in the country. In addition to several value added services like Intelligent Payphone, SMS, Call Transfer/Forwarding/waiting, Fax, Conference call etc, the WLL network can also provide high speed internet services. The Pakistan Internet Exchange (PIE) network has undergone a major expansion during the last year with an increase in the number of PoPs from 9 to 34 and the introduction of disaster recovery nodes. PIE is now more resilient and is able to offer enhanced Quality of Service to its customers. International bandwidth sold on PIE has

13

increased from230 MB in August 2004 to over 2,100 MB in August 2006. In addition PIE also offers transport for VoIP migration strategy. BACKGROUND OF PTCL Five years into a new century, the telecom sector of the world finds itself at cross roads, after changing it self almost beyond recognition over the last twenty year. Privatization and competition is the order of the day, with the majority of countries having adopted these policies to advance their telecom sector. The results have been impressive; the industry has grown at in unprecedented pace. Although there has been phenomenal growth in Pakistan, especially in cellular mobile communication and in the Internet. Yet the tele-density remains always stagnant. The telecom sector of Pakistan has also entered into a new era. The monopoly of PTCL is now over and the sector is now moving towards liberalization. While liberalization and competition synonymous, the future scenario also poses some challenges to the market dominance of PTCL. The Company is ready; to face this challenge and maintain its dominating position, while guarding its revenue streams in the face of forth coming competition. Although the sector will embrace full liberalization in the near future, PTCL has already experience healthy competition, even before the announcement of the deregulation policy; the mobile telecom operators, data network operators, internet service providers, card payphones operation etc have been operating for quite some time now and PTCL has been in competition for a long time. For the new challenges that is to say an international, national and local fixed line communication. PTCL has already geared up as in the process of appropriate corporate restructuring, tariff, re-balancing and developing cost effective solutions. In addition, it has also been continuously upgrading infrastructure, taking more responsive customer care approaches and taking initiatives to wards, Introduction of new services and technologies, like Wireless Local Loop (WLL), New Generation Network (NGN) and Optical Fiber Access Network (OFAN). We 14

understand the need to prepare our selves for the forth coming competition and realize the importance of marketing and customer care. Retention of customers, especially the corporate customers, will remain the focus of our attention. While the retaining the present customers, we have to compete for the new customers as well, in order to broaden PTCLs customers base. The company is therefore viewing the forth-coming competition as an opportunity rather than a threat. We believe that the competition would also bring along with it, greater level of efficiency in our system and procedure. This will come forth with our dedication, commitment and all out efforts to wining customer confidence and altimetry enhancing the shareholders value. Historical Background 1947 1962 1990-91 Post and Telegraph (P and T) department was established. Pakistan Telegraph and Telephone department was established. Pakistan Telecom Corporation (PTC) was established. Access Line in Service (ALIS): 850,000, Waiting list: 900,000 Expansion Program of 900,000 lines initiated (500,000 lines by private sector of Pakistan 400,000 lines PTC/GOP Own resources). 1995 About 5 % of Pakistan Telecommunication Corporation (PTC) assets transferred to Pakistan Telecommunication (PTA), Frequency Allocation Board (FAB) and National Telecommunication Corporation (NTC). 1996 1998 2000 2003 PTCL Formed listed on all Stock Exchanges of Pakistan Mobile and Internet subsidiaries established Telecom Policy Finalized Telecom De-regulation Policy Announced

PRIVATIZATION OF PTCL Pakistan Telecommunication Corporation was established in December 1990 to take over the functions of the Pakistan Telephone and Telegraph department. Its operation was govern by the Pakistan Telecommunication Corporation (PTC) Act 1991 in 1991 Government of Pakistan (GOP) announced its intent to privatize PTC and 15

appointed a financial advisory team led by Bear Streams and Coopers and Lybrand based on whose advice the Government of Pakistan (GOP) decided to sell the 265 stake share capital, with management rights of PTC by converting into a limited company under the provisions of company ordinance 1984. Later on, Government of Pakistan (GOP) decided to sell 11.8% of its share, in the shape vouchers, on Stock Market through domestic and international offering. The sale of 26% stake to strategic investor remains on the agenda. In August 1994 Government of Pakistan (GOP) issued 1,000,000 (one million) PTC vouchers exchangeable into 100 million PTCL shares (with a nominal value of Rs.10/share) in a further 5,000,000 (five million) similar vouchers was issued in September 1994 to international investors. PTC vouchers contributed to the exchequer about US$ 900 million (UK placement) and Rs.3 million domestic issues. The price of the vouchers were listed and traded on the stock exchanges. The price of the vouchers in the first and the second issue was Rs.3000 and Rs. 5500 respectively. Government of Pakistan (GOP) also issued exchangeable notes worth US$ 150 million to international investors in February 1997 through Numura international, UBS and global securities. These notes are exchangeable into fully paid An ordinary shares of PTCL about 3.3% of total issued share capital. If the notes are converted into shares it will amount to total 15.06% of Government of Pakistan (GOP) equity divestiture. In August 1997 a deal of securitization of PTCL foreign receivable has been successfully done which fetched US$ 250 million to Government of Pakistan (GOP) and equivalent rupees to PTCL. The concept of securitization of PTCL future receivables from major operations has been opportunity of cheapest possible loan to PTCL. In 1995, Government of Pakistan (GOP) Privatization Commission appointed a new financial advisor to implement the strategic sale. Morgan Green Fell (UK), Cooper and Lybrand, Denton Hall, Muslim Commercial Bank, Deutsche Bank AG, Abacus Consulting and Rizvi, Isa led the team as member. This new advisory team instantiated work in September 1995 and step taken on their recommendation are summarized in annex-1 the new government dispensed the services of the Deutche Morgen Green Fell and in (1998) appointed Goldman Sachs International (GSI) one of the most reputed financial advisors to render advisory services of PTCL

16

M/S Goldman Sachs financial advisor for privatization of PTCL have started the work of due diligence. The company established a data room at PTCL where complete information pertaining to PTCL is available to headquarter due facilitate

diligence the proposed policy statement from Ministry of Science and Technology (MOS and T). This is ready and can be issued once approved by the government on legal and regulatory matter major initiatives have been taken, (PTML) and also accepted the Goldman Sachs Pakistan Telecommunication International (GSI) proposed Authority (PTA) has granted mobile license to Pakistan Telecom Mobile Limited regulations both on incensing and tariff. Final details on price control are to be agreed. Tariff rationalization will be completed in four years as agreed. Goldman Sachs International (GSI) is currently working on staff restructuring policy and information memorandum. Once policy related issues are settled, subjects to Government of Pakistan (GOP) approval, road shows, could be start. The present government has initiated the de-regulation policy and wants to divest its 26% share with the management control. Tell now 14 big international reputed telecom companies have showed expression of interest in PTCL. PRIVATIZATION COMMISSION Transaction profile:Pakistan Telecommunication Company Ltd. (PTCL) is majority owned by the Government of Pakistan (GOP) controlling 88% shareholding in the company with the remaining 12% shares listed on the stock exchanges. The Government of Pakistan GOP) is offering up to 26% of the issued share capital of the company to strategic investors. A teaser document for prospective investors is provided on the website. Regularity Regime:Policy, regulation and operation functions stand totally separated for the telecommunication industry in Pakistan. Policy formulation rests with the Ministry of Science and Technology (MOS and T). The PTA, established in 1996 as an independent and autonomous body, regulates the telecommunications sector. Its functions include policy advice, sector monitoring, licensing and tariff regulation, arbitration of interconnection and other disputes, and consumer complaints handling. 17

Sales Process:The Privatization Commission has appointed a financial advisory consortium coled by Goldman Sachs International and JPMorgan for pr privatization of PTCL. Nine (9) pre-qualified parties are conducting due diligence. Decision:The Cabinet Committee on Privatization (CCoP) has accepted the Etisalat's bid of $2.6 billion for 26 per cent stakes in the Pakistan Telecommunication Company Limited (PTCL). Emirates Telecommunications Corporation (Etisalat) offered $1.96per share for PTCL, even better than the combine offer of the other two bidders. Singapore Telecommunications Limited (Sing Tel) offered just $0.88 per share (Rs 52.54/share) and China Mobile submitted $1.0633 per share (Rs 63.48/share) for the Company, which earned Rs 29.2 billion net profit in 2004. The reserve price of the company approved by the CCoP was just Rs 62 per share. PRODUCTS LINES AND SERVICES OF PTCL A product line is a group of products that are closely related because they satisfy a class of needs are used together are sold to the same customer group are distributed through the same type of outlets or fall within a given price range. PTCL has major product lines containing various Telecommunication services. Within each product line is the product item, a specific product as noted by a unique brand, size or price. The third way to look a product is by the product Mix or the number of product lines offered by a company. PTCL however has many lines consisting of following items and services. New Telephone Connection (NTC): New Telephone Connection provides you a link with PTCL network for making local, national, and international calls. ISDN BRI/PRI: (Integrated services digital network, Basic service

Interface/Primary rate Interface) It is a broad band service suitable for house holds and small/medium sized organizations, offering faster, cleaner voice, fax, data communication and internet on a single phone line. ISDN BRI provides two 64kbps user channels plus one16kbps signaling channel. For larger applications and PABXs, PTCL also provides ISDN primary rate interface (PRIs), which give thirty 64kbps user channels and one 18

64kbps signaling channel. The service also carries a cost advantage, is installation charges and monthly line rent are equivalent to twenty PSTN lines. Mobile Phone service: PTCL provides also mobile services. PTML provides the U Fone network in this field. U fone is the example of PTCL, mobile service which provided to the customers, and going very well in this field. Pre-Paid Calling card: The launch of pre-paid calling card service in October 2000 resulted an overwhelming customers response, yielding sales revenues of (Rs. 7.4 billion up till June 2008.).This necessitate the expansion of existing IN (Intelligent Network) system, and the installation of a second IN plate form facility with edit futures, such as home country direct in telephone bill payment. The system is expected to be commissioned in October 2003.This calling card for Rs. 100/-, Rs. 250/-, Rs.500/-, Rs.1000/- and Rs. 2000/-easily available through out the country and easy to use from any PTCL Digital phone and fast and easy nation wide and International excess without any line rent and no phone bill. Toll Free Service (0800): Toll Free Service is another specific solution for corporate customers, running call centers for greater customers convenience. Businesses and entrepreneurs are benefiting from this service with three different discount packages and the services have generated Rs. 70.29 million in the year 2007-2008. UAN:-Universal Access Number: UAN is a popular solution for corporate entities, providing one-number access to customers in different cities. UAN has generated an overwhelming response over the years giving the satisfaction an of better customer care. UIN:-Universal Internet Number: It is an ISP specific dial up access number accessibility by dialing 131. It connects Internet users and is charged as a local call, irrespective of duration and distance. Premium Rate Service (0900): It allows a service provider to provide useful information to the callers. Nine private operators have made agreements with PTCL, generating revenue of Rs. 159 million in the year 2007-2008. 19

VPN:- (Virtual Private Number): It is best suited to corporations and businesses with multi-location offices/branches, because it allows them to have private network using PTCL lines, without having to install dedicated network resources. It features 25% tariff discount along with facilities, such as abbreviated dialing, private numbering plan origin/time dependent routing etc. Domestic Leased Lines: A 206-code digital cross connect (DXX) network having a data speed range of 64 kbps to 2mbpsi now available in all major cities of the country. PTCL offers leased lines connectivity for point to point inter-office connectivity with the same city or between two offices in different cities. A monthly (DXX) charge depends on data rates while media charges are distance based. International Leased Circuits: PTCL: offers a range of options to meet the international connectivity requirements of its customers on satellite and submarine cable. The product range includes: Clear half circuit International private leased circuit (IPLC) via Clear half circuit International private leased circuit (IPLC) via sub Full circuit premium Internet backbone connectivity via sub marine satellite. marine cable. cable. Tariffs are dependent upon the customers category and media used. Co-Location: PTCL providing co-location facilities in its exchanges/premises to

licensed service providers and O and M partners. Three co-location centers have been established at Islamabad, Lahore and Karachi in the first phase. These purpose built facilities offer Telco grade space with uninterrupted power supply (UPS), airconditioning, fire protection and 24 hours manned security. Customers can either colocated in cabins or in open space available at these locations. Access to back end infrastructure is ready available. Local Call Offers: PTCL for greater customer facility has doubled the duration of local calls from five minutes to ten minutes between the hour 2230 to 2400 and 0600 to 0700

20

hours. Besides that local calls made from midnight till 0600 hours have also been made free. Future Services: PTCL is planning to launch the following IN based services in the near future: Home Country Direct (HCD) Pre Payment Telephony (PPT) Telephone Bill Payment (TBP) Universal Personal Number (UPN) Universal Personal Telephony (UPT) PARTNERSHIP AND COLLABORATION OF PTCL In order to diversify its service, expand its business and encourage private sector participation, PTCL is continuing to expand collaborative business agreements with other companies/service providers/operators. These initiatives include prepaid calling cards (PPCC), card payphone, Volp project Asymmetric Digital subscriber line (ADSL), Wireless payphone service (WPS), global mobile personal communication system (GMPCS), premium rate service (PRS), Pakistan Education Research Network ((PERN) and the outsourcing of PTCL customer service centers. PTCL has also outsourced 63 customers service centers to the private sector, which has led to an increase in its revenue. During the past one year, the total value of PTCL private sector partnership has gone up by more than 200% from just under Rs. 6 billion to over Rs. 18 billion. This indicates the rapid expansion in the telecom sector in the country post-deregulation. PTCLs SUBSIDIARIES Pak Telecom Mobile Limited (PMTL):- PTCL took a strategic decision to enter into the cellular business in a big way with the launching of its fully owned subsidiary PTML (U fone). PTML is wholly owned subsidiary of PTCL established to operate cellular telephony under the brand name of U fone. Ufone successfully maintains its market share of21% by increasing its subs to 18.1 billion. During the year, Ufone successfully completed the launching of sites under Phase V in existing as well as new cities and towns by investing more than US$ 525 million. This has increased the asset base of Ufone rupees 33.5 billion to 55.9 billion. To further enhance the subscriber base and 21

strategically position the company in the growing telecom market, Ufone has finalized a network expansion for Phase VI contact amounting to about US$ 126 million. Ufone currently, has network coverage in more than 3756 locations throughout the country. Ufone operational performance has been very encouraging despite stiff competition in Pakistan telecom market which has led to reduction of prices to bare minimum level. Ufone managed to improve its revenue and operating profit by 35% and 47% respectively, as compared to the last year through aggressive policies and exercising strict control over expenses. PakNet Limited: PakNet was incorporate 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, Paknets 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 the General Meetings. The accounts of Paknet have been audited and a final report is required to be submitted to the share holder (PTCL) in the AGM (to be held in October 2008) and on wards to SECP. The company will formally windup after filling the report with SECP. Telecom Industries of Pakistan (Pvt) Ltd. (TIP): Telephone Industries of Pakistan is primarily manufacturing units involved in the manufacturing of exchanges, telephone instruments and other Telecom equipment. It is a joint venture of the PTCL and M/S. Semens having shares of 70% and 30% respectively. There are several other products are manufactured like energy meters, fire alarms, cross connect cabinets, containers, drop wires etc. The company continued to perform poorly during the period up to April 12, 2006 when PTCL withdraw its investment from the company. During the period from July 01, 2005 to April 12, 2006, the company suffered a loss of Rs 114 million on revenues of Rs 1,142 million. PTCL management on its part has completed all formalities pertaining to disinvestment of TIP and transfer of shares to Ministry of IT and T, GOVERNMENT OF PAKISTAN. 22

23

Carrier Telephone Industries (Pvt) Ltd. (CTI): Carrier Telephone Industries primarily a manufacturer of Telecom Transmission Equipment. The company was privatized in November 2005 as part of the PTCL privatization commitment. PTCLs equity investment of Rs 8 million was sold for Rs 500 million to Siemens AG. The privatization commitment has not yet released the proceeds of this sale to PTCL. The following major equipment was produced by the CTI. SRAL Digital microwave radios. SDH Systems. Computer with peripherals. RDBX System. In order to meet the emerging requirements of IT and telecommunication the products like access network and WLL would form part of business plan of the PTCL. PTCL Customer Segmentation. PTCL customers are segmented in two Major categories as under. I. Business Customers. I. II. III. IV. II. I. II. III. Multinational corporations. Public Sector corporations. Private sector companies. Small and medium enterprises. PCOs users. High Income class. Middle and Lower Middle Income class.

Residential Customers.

CORPORATE SOCIAL RESPONSIBILITY PTCL continued to contribute to the social development of the community. PTCL supports a variety of caused primarily focused in the area of sports, environment and cultural activities in the country. In the aftermath of last years earthquake, PTCL contributed handsomely to the Government of Pakistan and the affected people.

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Future Prospects The new management Etisalat International Pakistan (EIP) is reviewing options to re-structure the organization, improve customer care, increase revenue, enhance cost control and bring about a paradigm shift in the mind set of the mind set of the employees to deliver on expectations of all the stakeholders. The new management is also planning urgent measures towards revenue assurance, timely collection of overdue receivables and the effective utilization of PTCL assets and strengths. A new Enterprise Resource Planning System along with a new Billing and Customer Care System is also being implemented. Your Board fully supports all the initiatives to improve the productivity and profitability of the Company. Pakistan Telecommunication company Network PTCL network consists of 99 percent digital switching system exchanges, Optical Fiber Cable Backhoe, subsidiaries routes, long distance media, digital radio systems, satellite communications and alternate arrangements. It has international Gateway exchanges at Karachi and Islamabad. The PTCL is provider of infrastructure for connectivity for Internet services Providers (ISPs), data network operators, software exporters, educational institutions, universities, corporate customers and other users. Its tariffs were reduced by 25 percent on international calls during 2001-02 and are expected to be reduced further in 2002-03. Tariff has also been reduced by 60 percent on international IP bandwidth, 10 to 68 percent on lower than one MB, and 70 percent on domestic lease circuits. For promotion of Information Technology, 1,350 cities/towns/ villages have been provided with Internet facility, up to March 2003, compared to 850 cities/towns/villages in June 2002 showing an increase of 58.8 percent. Promotional traffic has been introduced for ISPs, Software exporters and educational institutions/universities working in the country. During 200001, the PTCL has launched its domestic and International Pre-Paid Calling Card Service (Intelligent Network) in the country. Since its commissioning, the intelligent network system at Islamabad, Lahore and Karachi has met with tremendous success. So far 9.73 million cards have been floated in the market. Pakistan Telecommunication network is expanding each year, thus providing telephone access to rural and urban communities in record time. Total telephone lines installed by March 2003 were 4.6 million as against 3.6 million up to June 2002 last year, showing an increase of one million telephone connections or 27.8 percent. 25

A system with a capacity of 110,000 Mail Boxes has been installed at 10 major cities like Faisalabad, Gujranwala, Hyderabad, Islamabad, Karachi, Lahore, Multan, Peshawar, Quetta and Sialkot. The Mobile Phone Service (Ufone) has been launched in 60 cities/ towns and highways. Its customer base is 425,978, which is expected to increase further in future. Paknet, an Internet Service provider (ISP), is a subsidiary of the PTCL. The PTCL has installed Internet Exchanges (PIE) at Rawalpindi, Lahore and Karachi, comprising of high-end routers, multi-services switches, firewalls and proxy services etc. PTCL Directors Report 2008 The directors of PTCL are pleased to present the Annual report and the audited financial statement of the company for the year ended June 30, 2008. The financial year 2 007-08 was a challenging year for PTCL the largest integrated telecom service provider in Pakistan. However, during the year major initiatives have been undertaken to accelerate transformation of PTCL from legacy public sector organization to a customer focused, corporate enterprise competing in the de-regulated era. Along with the basic voice service, PTCL expand its Broadband internet offering to 14 cities across the country, made the dial up internet available across the entire country and commenced soft launch of delivering over 100 Television channels using internet protocol providing digital quality phone, broadband internet and IPTV services to its customers in Lahore, Karachi and Islamabad, thereby taking PTCL from a basic telephone company to a voice, data and video provisioning enterprise. Yet another landmark achievement during the year was the successful implementation and rightsizing through voluntary separation scheme (VSS). Financial Performance To thrive in the highly competitive telecom market and to meet the growing challenges, PTCL has taken certain essential steps for organizational transformation like introduction & implementation of Voluntary Separation Scheme (VSS), Enterprise Resource Planning Packages as well as penetrating new innovated services. However, the profitability of the Company for the year ended June 30, 2008 suffered due to absorption of a massive VSS cost amounting to Rs 23.94 billion. 26

Due to this company sustained a loss Rs. 2.8 2 billion (LPS Rs. 0.55) against pervious years net profit of Rs. 15.64 billion (EPS Rs. 3.07). Total revenue for the financial year 2007-08 stood at Rs. 61.09 billion. However, revenue streams from overseas calls, value added services and domestic long distance calls revealed improvement. Intense penetration by mobile business and stiff market competition affected subscriber base as well as traffic volumes which ultimately posed negative impact on other revenue steams during the year under review. Due to enhanced operational controls, the Company managed to minimize its operating costs to Rs.44.7 billion as compared to Rs. 46.6 billion last year. The huge outflow of financial reserves in the shape of VSS expense also affected the Companys non-operational income but at the same time it helped the Company to realize certain savings in the last quarter against salaries & allowances. As compared to pr-tax loss of Rs.14.4 billion during the first half, the Company earned a pre-tax profit of Rs.9.9 billion in the second half, thus reducing the pre-tax loss to Rs. 4.5 billion for the year. Despite the severe competition in the Telecom market to be forecasted, the Company management is confident that after successful execution of new initiative and implementation of improved strategies, the Company will witness customer confidence on PTCL quality and low cost services due to improvement in the operational efficiency and eventually significant increase in revenue and shareholders value in the years to come.

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PAKISTAN TELECOMMUNICATION COMPANY LIMITIED

Comparative Balance Sheet 2006-07-08 June 30, June 30, 2007 June 30, 2008 2006 (Rupees in thousand) EQUITY AND LIABILITIES SHARE CAPITAL AND RESERVES Authorized share Capital 11,100,000,000 "A" Class ordinary shares of Rs. 10 each 3,9000,000,000 "B" Class ordinary shares of Rs. 10 each 111,000,00 0 3,900,000 150,000,00 0 Issued, subscribed and paid up capital Insurance Reserve Inappropriate Profit 150,000,00 0 1,749,047 30,500,000 22,483,050 105,475,46 4 NON CURRENT LIABILITIES Long Term Loans and other borrowing - secured Liabilities against assets subject o finance lease Payable to PTA against license fee Deferred Taxation Employee retirement benefits and other obligations Deferred Government grant 170,873 1,937,322 11,624,935 111,000,0 00 3,900,0 00 150,000,0 00 150,000,0 00 1,683,0 74 30,500,0 00 18,797,3 45 101,980,4 19 9,100,9 49 1,910,8 58 4,469,8 52 14,307,4 32 95,00 0 111,000,00 0 3,900,00 0 150,000,00 0 150,000,00 0 1,749,04 7 30,500,00 0 30,966,13 2 114,215,17 9 10,348,25 0 2,23 1 1,768,68 1 5,234,57 9 12,378,63 6 -

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Long Term Security Deposit from customers - non interest bearing Other long term liabilities 2,755,896 16,489,026 CURRENT LIABILITIES Current portio of Long term loans and other borrowing - secured Liabilities against assets subjects to finance lease Payable to PTA against license fee Employee retirement benefits and other obligations Short term borrowings Trade and other payables Interest and markup accrued Taxation 3,763,303 17,557,092 12,323 2,725,984 30,275,532 CONTINGENCIES AND COMMITMENTS 152,240,02 2 NON CURRENT ASSESTS Property, Plant and equipment Capital Work-in-Progress Assets Subject to finance lease Intangible assets Long Term Investments Long term Loans 75,937,780 13,104,320 4,048,876 7,118,002 1,862,867 102,071,84 5

1,468,5 92 25,518,9 42 56,871,6 25

1,587,80 5 4,138,06 3 35,458,24 5

1,268,4 49 2,23 1 25,44 0

2,536,7 10 27,951,2 71 238,5 98 182,2 92 32,204,9 91

1,440,03 0 3,63 5 26,96 6 12,77 4 3,674,63 0 24,460,64 4 21,49 0 2,709,15 7 32,349,32 6

191,057,0 35 97,817,9 22 18,603,5 81 4,98 3 3,898,2 49 3,917,3 83 1,174,1 40 125,416,3 25

182,022,75 0 122,932,92 7 11,716,91 3 98 8 3,754,65 7 3,737,63 4 394,94 3 142,538,06 2 29

CURRENT ASSEST Stores and spares Stock in Trade Trade Debts Loans, Advances, Deposits, Prepayments and other receivables Receivable from Government of Pakistan for Voluntary Separation Scheme (VSS) Cash and bank Balances 3,435,679 17,862,049 5,771,664 22,598,785 50168177 152,240,02 2 879,2 06 270,4 64 11,543,4 94 5,654,8 73 35,258,3 85 56606422 182,022,7 50 4,954,08 5 190,88 3 12,610,26 1 7,358,26 1 2,164,07 2 21,240,74 5 48851973 191,057,03 5

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PAKISTAN TELECOMMUNICATION COMPANY LIMITIED

Profit and Loss Account 2006-07-08 June 30, 2006 June 30, 2007 June 30, 2008 (Rupees in Thousand) Revenue Operating Cost Operating Profit Voluntary Separation Scheme Non-Operating income Finance Cost Share of (loss) / Profit of Associate (Loss) / Profit before tax Provision for taxation Group Associate (Loss) / Profit after taxation (Loss) / Earnings per share (Rupees) 21,439,584 (13,335,309) 8,104,275 1,070,094 (421,650) 9,596,019 81,406,709 (59,283,989) 22,122,720 5,478,688 (1,880,029) 25,721,379 846 8,752,719 8,752,719 3,290,091 1.14 25,722,225 8,921,264 223 8,921,487 16,800,738 3.29 80,835,886 (60,455,243) 20,380,643 (23,937,584) 3,720,092 2,661,347 2,498,466 4,300 2,502,766 468,210 204 468,006 2,034,760 0.40

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32

Global connectivity The company commissioned SMW-4, the latest in submarine cable systems, to enhance reliability and availability of international connectivity. This complements the existing SMW-3submarine cable and has increased network capacity by 647,422MIU Km. in addition to carrying the majority of international IP and Voice traffic, SMW-4 provides restoration and diversity for SMW-3. This increased the equipped capacity of SMW-3 from 4.66 million MIU Km to 5.38 million MIU Km to meet the demand of Other Licensed Operators (OLO) and other customers for bandwidth. This capacity enhancement puts the company in a better position to carry more voice and data traffic. A global customer base and the entry of Other Licensed Operators (OLO) have resulted in an increase in traffic to and from Pakistan. To meet this new demand more than 2,500 international circuits were added to PTCLs network during the year. Human Resource Development 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 Scheme (VSS) from PTCL in exchange for financial compensation. Around 29, 290 employees opted to pursue other opportunities after accepting terms of Voluntary separation from PTCL. The VSS marked the single largest most successful exercise in the history of Pakistan. The company has implemented changes in organization structure to make it more responsive to commercial imperatives and to increase internal efficiencies. Real Estate PTCL owns a large number of real estates assets throughout the country. Out a of total 3,276 properties titles of 2,588 have been transferred in the name of PTCL from the now defunct Telephone and Telegraph (T and T) department. The transfer of 219 properties is under process. The prime minister of Pakistan has recently constituted a committee to facilitate PTCL in the transfer of titles of the remaining properties to PTCL. 33

Corporate and Regulatory Affairs The regulatory environment throughout the year remained very intense following the many Policy Initiative of the Pakistan Telecommunication Authority (PTA). The company continuous to evaluate all such changes in the regulatory framework to ensure a level playing field and also challenged some of the directives issued by the PTA during the year. They have strengthened its regulatory department to better manage regulatory affairs, license obligations and interconnections functions. In addition to the interconnect agreement with fixed sector licensees, agreement with six Cellular Mobile Operators (CMO) were also signed during the year following the PTAs approval of the Reference Interconnect Offer (RIO). The PTA issued determinations on carrier pre-selection on payphones and on bandwidth tariffs which were set aside by the Lahore High Court after these were challenged by PTCL. PTCL signed settlement agreements with National telecommunication corporation (NTC) and the special communication organization (SCO) to resolve long outstanding issues. The company has applied to PEMRA for IPTV license, after obtaining special exemption from the restriction of non-eligibility of companies with foreign management. Financial Reporting Framework The company has compiled with all the material requirements of the code of corporate Governance and the Directors are pleased to confirm the following: The financial statements, prepared by the management of the company present fairly its state of affairs, the result of its operations, its cash flows and its changes in equity. Proper books of accounts of the company have been maintained. Appropriate accounting policies have been consistently applied in the preparation of financial statements and accounting estimates are based on reasonable and prudent judgment.

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 International accounting standards, as applicable in Pakistan, have been followed in the preparation of financial statements and any departure there from has been adequately disclosed. The system of internal controls in sound in design and has been effectively implemented and monitored. There are no significant doubts about the companys ability to continue as a going concern. There has been no material departure from the best practices of corporate governance, as detailed in the listed regulations. The Audit and Finance committee has recommended the appointment of M/s A.F. Ferguson& Co and M/S Ford Rhodes Sidat Haider & Co. (Ernest & Young), Charted Accountants as joint auditors of the company for the financial year ending June 30, 208. Information regarding outstanding taxes and levies is given in notes to the accounts of the financial statements. The audited value of Pension Assets as per audited accounts amounted to Rs. 48.4 billion at June 30, 2008.

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CHAPTER 3 OVERVIEW OF ORGANIZATIONAL

STRUTURE OF PTCL Organizational structure of PTCL The term organization structure describes the organizations formal framework or system of communication and authority. The PTCL converted from Government sector to Public Sector w.e.f. 15-12-1990. Thus the organization structure prior to 15-12-1990 was centralized and decision making is highly centralized in upper levels of Management. The Director General was act being Chief Executive of the Department and having few Regions just one in each province where act General Manager or Director as Regional In charge of the Department. The human resource was also kept in minimum level comparatively now a days. Each Region had some field divisions scattered in far flung Areas. The Divisional Engineers were performing their duties as Divisional In charge with some Sub. Divisional Officers and Supervisory staff. The unity of command was very simple and it was highly cleared where is the types and amount of authority and responsibility that organizational members hold. The Accountant General PT&T Audit Lahore was the Principal Audit and Accounts office of the department. The Telegraph and Telephone department restructured and renamed Pakistan Telecommunication Corporation w.e.f. 15-12-1990. The Post of Director General was redesigned as Chairman PTC. Now the complexity interred in the organization structure resultantly more division of labor the more vertical levels and more geographically dispersed the organizations units, the more hierarchy, the more difficult it is to coordinate people and their activities. However since 1990 or becoming corporation the Telecommunication is playing an increasingly significant role as the most important infrastructure of modern economic and societies. The government of Pakistan now holds more then 62% stake in the company and nominates four (04) directors on the Board of Directors of the Company, while the 36

Etisalat International Pakistan (EIP) has 26% holding in the Company and nominates five (05) Directors on the Board of Directors. All the directors are non-executive directors. The Organizational chart of PTCL Headquarter is shown in Fig 3.1. The Organizational Structure of PTCL shows that President of PTCL is the head of all the Organization and there is only one Secretary of the Organization. The Etisalat Company has 26% of Shares therefore they can nominate five (05) directors of the Board of Directors. Top Management of the Company includes Senior Executive Vice President and Executive Vice President of the Departments. Board of Directors of PTCL After the privatization of PTCL the new management holds the charge of the Company and has formed a Board of Directors consisting upon ten members including a Chairman and Chief Executive Officer. The PTCL is to comply with the code of corporate Governance (code) contained in the listing regulations of the Karachi, Lahore and Islamabad stock exchanges for the purpose of establishing a framework of good governance, whereby a listed company is managed in compliance with the best practices of the corporate governance. The Company has applied the principles contained in the code in the following manner. Pursuant to privatization of the Company, the government of Pakistan now holds more then 62% stake in the company and nominates four (04) directors on the Board of Directors of the Company, while the Etisalat International Pakistan (EIP) has 26% holding in the Company and nominates five (05) Directors on the Board of Directors. All the directors are non-executive directors. The name of members of the Board of Directors as on 30th June 2006 is given in Appendix A The directors of the company have confirmed that none of them is serving as a Director in more then ten listed companies, including this Company. All the resident Directors of the Company are registered as taxpayers and none of them has defaulted in payment of any loan to a Company, being a

37

member of a stock exchange, has been declared as a defaulter by that stock exchange. All the vacancies occurring in the Board were filled up by the Directors within 30 days thereof. The Company has prepared a Statement of Ethics and Business Practices, which has been approved by the Directors of the Company and is in the process of being signed off by the Directors and designated employees. Details of Employees in PTCL Headquarter Organizational restructuring of PTCL is being carried out for making the company more responsive, competitive and capable of facing emerging global and domestic challenges. In areas of focus would be marketing and customer care, Human resource management and development, emerging technologies etc. Appropriate changes have also been brought about in Human Resource Management such as completion of census and establishment of Human Resource Management information system. Recruitment process and system has been adequately revamped by adopting appropriate Human Resource practice. Decision support system, thus established, will help generate desired management reports. Professional development of employees, especially the middle management is being ensured. Training sources for employees have been redesigned. A special emphasis is being paid on the inculcation of sense of responsibility and politeness in the minds of PTCL employees, especially the low Management and staff. Total number of employees as categorized below is 61840 as on 30-5-2008. The Details of Employees charts of PTCL are give in Appendix B Departmentation of PTCL PTCL is big organizations which have several departments. These departments are given below. All these departments have a Senior Executive Vice President which controls these departments. Now the scope of these departmental units and the complexity of the enterprise give rise of additional organizational units. These types results mainly from such things as the nature and amount of work to be done, the degree of specialization or division of labor practiced, and the people and the workplace available for the work.

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This is specialization or division of labor, which give birth to Departmentation, which again five births to span of control. PTCLs organizational chart is a full picture of the division of labor. As we can see that the whole organization is departmentalized into seven major activities. These are: I. II. III. IV. V. VI. VII. Corporate Affairs Operation Finance Estate Management Human Resource and Administration Special Projects Information Technology

Although specialization is criticized very much but I must say that for a large organization like PTCL, specialization is a pre-requisite. PTCLs organizational chart shows a vertical expansion in the positions of the organization. And thats the reason that in PTCL job requirements and manager (in-case of PTCL and SEVP) specifications are developed and matched to assign personnel. Every manager or SEVP in-case of PTCL has his or her own SEVP administration department, who is one of the assisting sub heads to the company, Secretary, GM internal Audit and General Manager Solutions, who again assist the president. The administration SEVP in PTCL is obliged to take care of so many things, for example: He / she have to handle all the issues related to human resource and planning. Has to take care of co-ordination among different departments. Will handle issues related to transport and telecommunication. And so many other activities like public relations, HR telecommunications etc. For all these activities, he / she are then supported by eleven more managers who again are the experts in their own fields.

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Operative Departments of PTCL The operative functions of the PTCL can be divided into the following operative departments. I. II. Policy Formation and Directions. President, Secretary and Board of PTCL Administration. General Administration, Rules, Regulation and Recruitment, Transport, Security, Welfare Branches. III. IV. IV. V. VI. Training Organizations. TSC, NPGIT, Regional Schools. Finance and Accounts. Internal Audit, Pension Cell, Accounts Offices. Stores and Workshops. General Store Depot, Purchase Branch, Telegraph W/shop. Customer Services and Sale Promotion. Customer Services, Printing & Publications. Planning and Development. Development Administration, Planning Branch and Regional Development offices. VIII. Maintenance and Operation. Regional Offices, Telephone, Telegraphs, Radio, Wireless Divisions.

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Fig 3.1

PTCL Organizational Chart and Departmentation

President & C.E.O Company Secretary

Board of Directors Chief Engineers General Managers

Top Management Senior Executive Vice President Executive Vice President Business Development Administration (Operations) South, Karachi Procurement Development (Operations) Central, Lahore (Operations) Central, Islamabad Accounts Finance Marketing Human Resource IT Customer Care Quality Assurance

Administration Maintenance & Operation Development Business Development Business Planning & Strategy International Communication Information Technology

SEVP Corporate Affairs SEVP Operations SEVP Finance SEVP Estate Management SEVP HR & Administration SEVP Special Projects SEVP IT

41

Comments on the Organizational Structure of PTCL The PTCL is a large organization and its offices are situated all over the country. It has more division of labor, more vertical levels in the hierarchy and the more geographically dispersed the PTCL units, the more difficult or complex it is to coordinate people and their activities. However the decision making authority is also divided among the top management and Regional Executives according to their responsibilities. Therefore we can say that decision making is highly centralized in upper level of Management in PTCL. As I analysis that Human Resource wing has been established in PTCL explicitly to implement Human Resource strategies and to adopt modern, innovative and best proven policies to make PTCL a responsive and competitive service organization. To strengthen the Human Resource Wing the position of Director General (Administration) has been filled and recruitment for other senior position is in process. In new and changed scenario when the new players in Telecom Sector have started building their core organizations and likely to cause attrition in PTCL human resources. The PTCL has given new dimensions to human resource activities. PTCL efforts are being made to development of a competitive workforce through rigorous training and with programs to improve the retention of these employees. To deal with the situation PTCL has transformed its human resource department to focus on modern management practices. With responsibility for creation and diffusion of the new human resource culture. More emphasis is being given to the formulation of clear policies the areas of training, recruitment, transfer /postings compensation etc. The on going salient human resource activities are includes, completion of human resource information systems, formation of new service rules, new job description rightsizing, compensation management, performance appraisal system, performance standards training and development, organizational development. It is obvious that PTCL is being given special attention to building human assets.

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CHAPTER 4 PRACTICAL OF PTCL NTR-II, D.I.KHAN

ORGANIZATIONAL CHART OF PTCL NTR-2, D.I.Khan There are two regional offices in KPK which provides telecommunication services to the peoples of KPK. One is the Northern Telecommunication Region-I (NTR-I) and the other is Northern Telecommunication Region-II (NTR-II). NTR-II controls the areas D.I.Khan to Khyber Agency and D.I.Khan to Northern Areas. NTR-II controls the areas D. I. Khan to Peshawar and D. I. Khan to North and South Waziristan Tribals. Both the regions have their own General Manager which is the head of the regions. The Organizational Chart of PTCL NTR-II, D.I.Khan is shown in Fig 4.1. The chart shows that General Manager NTR-I1, D.I.Khan is the head of all the departments which are under control of NTR-I1, D.I.Khan. There are some other departments which are given in the chart of NTR-I1, D.I.Khan, like Digital Zone, Phone I D.I.Khan, Phone II D.I.Khan, Telegraph D.I.Khan, Telegraph Malakand, Revenue and Account, etc. Each of the department has their own Director and every Director have their own subordinates which works under the Director. Each Director responsible to the General Manager NTR-I1, D.I.Khan. Now we explain the Finance department of NTR-I1, D.I.Khan which worked under the control of Budget and Payment department of NTR-I1, D.I.Khan.

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Fig 4.1

Organizational Chart OF PTCL NTR-II D.I.Khan

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DEPARTMENTATION OF PTCL NTR-II, D.I.Khan Departmentation of the PTCL NTR-II, D.I.Khan is the Sub-Department of Budget and AGM (Finance) is the head of Finance Department and working under the control of Director (Budget and Payment) of PTCL NTR-II. There are two departments which controlled the financial activities of PTCL NTR-I1, D.I.Khan 1. (I) 2. (I) Budget and Payment of PTCL NTR-II, D.I.Khan (Finance Department) Revenue and Accounts of PTCL NTR-II, D.I.Khan (Accounting System)

Director NTR-II is the head of each Department and all these departments are controlled by the Director NTR-II and Director NTR-II is working under the administrative control of General Manager NTR-II D.I.Khan. Budget and Payment Department of PTCL NTR-II D.I.Khan The Budget and Payment department of PTCL managed the budget which provided by the PTCL Headquarter. At the end of Every Financial year Budget are provided by the Headquarter to every Region. After issuing the Budget to the NTR-II, the director Budget and Payment divided the budget into different departments of the NTR-II, D.I.Khan. The whole budget process are done by the main headquarter. In regions only the Budget are divided into the departments. Function of the Budget and Payment Department of NTR-II Function of the Budget and Payment department are explained the following. All Divisional Offices prepared budget and submit to their respective regions for compilation and further sending to budget branch of PTCL Headquarters for allocation of budget in relevant head of accounts. The budget must be prepared during February of each year in which funds demanded for the coming financial year. After receiving the funds from PTCL Headquarter the Regional Office further allocate the funds to their relevant units according to Director payment and budget for the purpose of drawing and disbursement has been posted by the PTCL in each Regional Headquarter. All Divisional units executing the works of capital, Maintenance of Line 45

and wire, A & P and buildings through contractors or quotation basis after obtaining the Financial approval of competent authorities. The contractors and firms who have completed the targeted work submitted their claim invoices to Divisional Heads for onward submission to DDO after necessary verification for payment. The DDO apply bank ceiling from ceiling branch of PTCL NTR-II according to available sanctions. Bills and invoices received from Divisional units. On receipt of adequate amount of ceiling from PTCL NTR-II in relevant bank account the drawing and disbursing Officer issued cheque in favor of contractor or supplier through concerned Divisional unit. For this purpose each Drawing and Disbursing Office have opened a joint bank account in National Bank of Pakistan main branches in the city where their headquarter is exist. The Director Payment and budget must sign on the cheque in addition to one signature of senior accounts Officer or Divisional Accounts Officer accordingly. All units must remain in budgetary limit and observed financial rules and regulation as well as instructions issued by the Regional and Headquarters authorities time to time in this regard. Regional General Managers have no power to divert the funds from one head to another head without formal approval of the senior Executive Vice President (Finance) PTCL Headquarter. Finance Department of PTCL NTR-II, D.I.Khan Finance department of PTCL NTR-II, D.I.Khan consisting upon. I. II. Budget branch. Fund distribution branch

III. Bank ceiling branch Finance department of PTCL is headed by the AGM (Finance) under General Manager NTR-II, D.I.Khan and coordinating the activities of budget, ceiling and revenue sections. All Divisional Engineers and Directors send their operating and capital budget estimates to Director Budget and treasuries of PTCL NTR-I1, D.I.Khan. The budget and software branch compiled report on budget from provided data and put up in board meeting for approval. The funds allocated to Regional heads are to be further allocated to Divisional units working under their control. The DDOs send ceiling demand according to monthly requirement as per requirement of each field unit attached with the concerned DDO. 46

In response to the DDOs demand the ceiling branch issued drawing limits to Zero balance accounts in NBP Branches. The branches make payments to DDO concerned against their cheques or the party the cheque issued in his favour by the DDO. These branches furnish cheques drawn by the DDOs to main branch of NBP main branch D.I.Khan. NBP main branch D.I.Khan debits the all amounts to cheques. To main account of PTCL and credit the concerned bank branch. Total DDOs in the PTCL all over the country are 45 and have direct access to main server in PTCL Headquarter Islamabad through DDO ONLINE SYSTEM. All entries of payment and receipts made by the DDOs directly. This software recently installed and starts its functions. Software has the capabilities to record the all entry according to the financial accounts requirements. Now we discuss the Function of Finance Department of PTCL NTR-II. Functions of the Finance Department of PTCL NTR-II, D.I.Khan The Major function of PTCL Finance Department includes obtaining resources from owners and providing them a return on their investment and obtaining resources from creditors and repaying those borrowings. Common examples of cash inflows from financing activities include the issuance of notes, bonds, mortgages and other short or long term borrowings and the issuance of common and preferred stock. Common example of cash outflow of Finance Department of PTCL from financing activities include repayment of these borrowings, the payment of cash dividends and the purchase of treasury stock. Finance system Finance department of PTCL NTR-II, D.I.Khan is headed by the Director Budget and Payment and coordinating the activities of budget, ceiling and revenue sections. All the Divisional Directors send their operating and capital budget estimates to Director Budget and Payment of PTCL NTR-II, D.I.Khan. The budget and software branch compiled report on budget from provided data and put up in board meeting for approval.

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The funds allocated to Regional heads are to be further allocated to Divisional units working under their control. The DDOs send ceiling demand according to monthly requirement as per requirement of each field unit attached with the concerned DDO. In response to the DDOs demand the ceiling branch issued drawing limits to Zero balance accounts in NBP Branches. The branches make payments to DDO concerned against their cheques or the party the cheque issued in his favour by the DDO. These branches furnish cheques drawn by the DDOs to main branch of NBP civic center Islamabad. NBP main branches D.I.Khan debit the all amounts to cheques. To main account of PTCL NTR-II, D.I.Khan and credit the concerned bank branch. Total DDOs in the PTCL all over the country are 45 and have direct access to main server in PTCL Headquarter Islamabad through DDO ONLINE SYSTEM. All entries of payment and receipts made by the DDOs directly. This software recently installed and starts its functions. Software has the capabilities to record the all entry according to the financial accounts requirements. In compliance with the code of corporate Government the PTCL give the following statements. Financial statements, prepared by the management of company present fairly its state of affairs, the result of its operations, cash flows and changes in equity. Proper books of the company have been maintained. Appropriate accounting policies have been consistently applied in preparation of financial statements and accounting estimates are based on reasonable and prudent judgment. International Accounting Standards as applicable in Pakistan have been followed in preparation of financial statements and any departure there adequately disclosed. LOAN AND BORROWING The Loans and borrowings are recorded at the proceeds received. Finance charges are accounted for or an accrual basis and are either added to the carrying amount of the instrument or included in creditors, accrued and other liabilities to the extend to the amount remaining unpaid. Exchange gains and losses arising in respect of loans or borrowing in foreign currency are added to the carrying amount of the instrument. from has been

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INVESTMENTS Investments of PTCL NTR-II, D.I.Khan are initially measured at cost. At subsequent reporting dates, the company reviews the carrying amount of the investment to assess whether any indication that such investments have suffered an important loss is. If any such indication exists the recoverable amount is estimated in order to determine the extent of the impairment loss if any impairment losses are recognized as expense. Where an impairment loss subsequently reverses, the carrying amount of the investment is increased to the revised recoverable amount but limited to the extent of the initial cost of the investment. A reversal of the impairment loss is recognized as income. Accounts and Revenue Department of PTCL NTR-II, D.I.Khan Both directors of Finance and Revenue are working under the control of General Manager NTR-II, D.I.Khan. Director Revenue is responsible for smooth creation and collection of Revenue. PTCL Headquarters controls all operations through Regional General Managers. In each Region the Director Revenue and Accounts and Senior Revenue Officers has been entrusted the responsibilities of revenue collection against services offered to the customers. All Directors working in each Division submitted revenue statements along with supporting documents in Billing and Revenue branch. Accrual Accounts on monthly basis are prepared and submitted to billing and revenue branch in PTCL NTR-II, D.I.Khan. Revenue collections managers in various head of accounts. The Revenue Department performed the main function to realize the billed amount and keeping in proper head of accounts. The billing collection functions performed by the different banks in different accounts named System Billing Collection computerized bills are received in system collection accounts by the concerned banks and PTCL customers service centers and amount collected transferred in Main system account. The amount collected on account of demand for installation of new telephone connection or for any other services and recovery from defaulters subscribers in non system account and all banks transferred their collection in Main non system account Islamabad.

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All Regions send Revenue statements along with source documents provided by the banks to Billing and Revenue branch of PTCL Headquarters Islamabad. Billing and Revenue branch compiled the reports containing different head of accounts and prepared basis for revenue collection for profit and loss accounts. Revenue Department of NTR-II basic function is to collect bills from the customers. After collecting these bills the amount are transferred to the PTCL Headquarter Main Branch. Accounting System of PTCL NTR-II, D.I.Khan Up to June 1991 the Accounts of PTC were prepared on a cash single entry basis but the June 1992 accounts have been prepared under the International Accounting Standard (IAS) double entry accrual bases. All decision making in an organization has an impact on its financial viability. The management decisions are also greatly influenced by the financial information that the accounting process generates. Since becoming PTCL significant progress has been made to over haul the accounting system of PTCL. The Accounting systems of PTCL are prepared by the Director Revenue and Senior Account Officer of Revenue Department. PTCL has not only introduced the mercantile system of double entry based on recognition of accruals but have also computerized the accounting system. It is also heartening to note that has been achieved by relying totally on in house expertise. The PTCL allocated accounts code to each assets, revenue and expenses head. The account codes have been classified into the account heads for balance sheet and profit and loss accounts. All expenditure capital and revenue are coded according to its relevant DDO and function codes. ACCOUNTING CODE RANGE PTCL NTR-I1, D.I.Khan has also allocated codes to all regions and the DDOs. These codes are being used for all transactions whether in cash, through bank or accounting for receipts from store. These codes are given in Appendix C

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PAYMENT VOUCHER PTCL NTR-I1, D.I.Khan has designed a payment voucher which based on double entry system. It is also the source document for entering the transaction into the accounting software on computers. The step instructions are to be followed by all DDOs for recording the transaction are consists on the following items. I. II. III. IV. V. VI. VII. VIII. IX. X. XI. XII. XIII. Payment voucher No. Date Cheque No. Name of payee. Bank Code No. Amount in Figures/words, Purpose. Project code. DDO Code. Function code. Account No. Debit and Credit.

Cash/Cheque

XIV. Payee No. RECEIPT VOUCHER. The PTCL NTR-I1, D.I.Khan has been used a receipt voucher which is prenumbered and contains three pages. The first two pages of the voucher are perforated page -1 is meant to be handed over to the depositor whereas page-2 is use in PTCL NTRI1, D.I.Khan Account. Page three is to be retained by the Cashier making payments. It may be noted that voucher is to be used for actual receipts and not for deduction from payments being made refund of a temporary advance by an employee is to be routed through receipt voucher but in case temporary advance is recovered from salary of the employee the transaction need not be through the receipt voucher. The filled in receipt voucher shall from the basis for data entry into computer consists on the following items. I. II. III. Book No. Receipt voucher no. Date, Cash, Cheque, Amount etc. 51

IV. V. VI. VII.

Received from. DDO code no. Function code and account no. Debit and Credit.

JOURNAL VOUCHER Journal voucher are used for accounting transactions that do not involve cash payment or receipt i.e. adjusting entries. The journal voucher is also to be used for transfer of funds from the collection accounts to PTCL NTR-I1, D.I.Khan as this transaction does not change the balance of cash in hand or at bank of the DDO. The main steps are as under:I. II. III. IV. V. VI. VII. SCHEDULES After all the vouchers have been prepared for the month, the preparation of the schedules for each head of account starts. The accounting software for commercial accounting automatically prepares all the accounts schedule after all the vouchers have been fed into the computer and posting completed at the end of month. ACE-40 A summary are to be prepared by each DDO while prepared the accounts schedule, the net debit or credit balance appearing against each head of account in the account schedules is posted to on the debit or credit column of the ACE-40 against the relevant code. The DDOs are submitting the ACE-40 along with the accounts schedules and the supporting vouchers to PTCL Accounts Directorate Lahore so as to reach there on the 6th of the ensuing month for further process. Journal voucher no. Date. Account Code, Function code. Amount of Debit. Amount of Credit. Brief narration. Signature of concerned Officer.

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CHAPTER 5 SWOT ANALYSIS OF PTCL NTR-II

The term SWOT, in management literature stands for strengths, weaknesses opportunities and threats, SWOT analysis refers to analyzing the organizations internal strength and weaknesses as will as external opportunities and threats in order to identify niche that the organizations can exploit. The purpose of such analysis to identify and develop the companys strength in order to capitalize on the opportunities in the company environments and to identify correct companys weaknesses and formulate strategies to avoid threats confronting the company in its environment. SWOT analysis is based on the assumption that if manager carefully review and analyze the strengths, weaknesses, opportunities and threats pertaining to their organizations they can develop useful strategies for curtailing failures and insuring organizational success. SWOT analysis typically includes analysis an organization from different aspects such as management, marketing, fianc, production, human resource, research and development. Strengths and weaknesses relate to the internal environment of an organization, where as opportunities and threats are brought about by the external environment of the organization. In the following section both internal and external analysis are outlined: In the words of peter and Drunker, any business, manufacturing or any other, is a business owned by it customers. Because any thing you produce or any service you provide his to be produced or provided viewing the customers choice and taste. Therefore it is concluded that the customer is the ultimate boss of any business. This standing of a business in a customer mind is known is the image of that very business. Image of any business is one of the most important things for any type of business. Whether you want to produce some thing, want to capture a market, penetrate a market, go globally or want to diversify the product line. Each sand every decision and strategy is taken and formulated keeping in view, how does the business stand in the customers eyes? Or what it is ranking in customer mind? A good quality product of a bad image company or a company with new existence would not sell it all or would not meet the standards or objectives and goals but a poor quality product or produced of fair or 53

Medium would sale like product of super quality just because of its image. But customers image of a product or product of a company is not the whole facts. Ruther a companys own management view about its own company or business is also very important. The management of accompany, obvious of the facts, where its company or business stands in customers eye could never make its company pauperized in customers and could not develop its companys or business good or sound image. Only when the management would know its standing would they strive for the development of sound image and the business or company would get customer acceptance. How would the management know about its companys or business standing? So many methods are adopted for that purpose. One such tool is called SWOT Actually SWOT stand for: S-----------------Strengths W---------------Weaknesses O----------------Opportunities T----------------Threats SWOT is a tool, used by the management of a company initially know where does its business stands. INTERNAL ANALYSIS An internal analysis of an organization is the analysis of its strengths and weaknesses. Unless a firm has internal strengths and controls its weaknesses, it cant take advantage of opportunities and avoid threats, which the external environment confronting the organization presents. Following are the main strengths and weaknesses of PTCL NTR-II D.I.Khan:STRENGTHS Strengths are positive internal characteristics that the organization can exploit to achieve its strategic performance goal. These are the strengths which are given below.

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Monopoly of PTCL Due to this factor there is no any organization and company who provide the facility of fixed lines in D.I.Khan city. PTCL is the company who is trusted by the subscribers/users. It has wide range and can easily access to wide and distant local areas in D.I.Khan. Dependence of Telecommunication Companies on PTCL All the Telecommunication companies are dependant on PTCL. All the mobile companies have to take permission from PTCL. All the local PCO`s (Public Call Offices) and ISP`s (Internet Service Providers) in the D.I.Khan city are Dependant on PTCL. They cannot start and expand their business without the permission of PTCL NTR-II, D.I.Khan. Low Turnover Rate PTCL NTR-II, D.I.Khan provides too many facilities to its employees and workers such as good salaries, medical and home facilities. They also enjoy the facility of free local calls too. So therefore the entire worker doesnt want to leave the organization. There is low turnover rate and in this way company maintain its value and standard. Employees are satisfied in the beginning of this Organization. WLL (Wireless Local Loop) PTCL NTR-II, D.I.Khan has strong financial position; therefore, PTCL can start new Technology of wireless phone in order to reach those areas, where it is difficult to place the network Telephone lines. So by introducing and launching this technology, PTCL can access to the hilly and wide areas of KPK. This helps in generating of more revenue. STRONG FINANCIAL POSITION PTCL NTR-II, D.I.Khan has also a strong financial position and it has too many financial resources in order to invest it in new technologies to compete and maintain its position in market. There are a good network of PTCL NTR-II, D.I.Khan in KPK and Northern areas therefore the collection of revenue are very well.

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WEAKNESSES Weaknesses are the internal characteristics that may inhabit or restrict the organizations. Or a weakness can be defined, as an area in organization where the organization is not is good doing sometime as its competitors are. A weakness is something that is lacking in organization thus putting the organization at competitive disadvantages. With the above Strengths PTCL NTR-II, D.I.Khan have also Weaknesses. PTCL NTR-II, D.I.Khan has the following weaknesses. Change of Management Although PTCL NTR-II, D.I.Khan is a good Regional office of PTCL but there are some weaknesses which have effected the whole department. Some of the officers are acting as dictator. No bodies of the upper management will cooperation with their employees. Employees dissatisfaction Employees are not satisfied from the upper management and the upper management has also dissatisfaction from the top management. The other point of dissatisfaction is that there are no promotions of qualified staff. During the internship there are so many qualified people which were working on lower position. If the upper management promote these employees to their seats than that will be effected the organization to positive side. Change of new Management effected the Management and the Employees. Lack of Qualified Staff In effective communication between the higher and lower staff, this is due to less qualified lower staff. If there will be well qualified staff then no chance of system failure. The staff of PTCL NTR-II, D.I.Khan is not highly qualified and many of them also do not aware about their responsibilities and jobs. Most of the work is done by the irrelevant persons, like the work of clerk is done by the technician and wireman.

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More Telephone lines faults PTCL NTR-II, D.I.Khan faces too many Telephone line faults as there is no standard in D.I.Khan city, for building roads and sewerage system and building houses. Therefore telephone lines that are placed underground are always affected by the water and due to the constructions. Lack of Commitment The staff members are not committed to their jobs and most of the officers show negligence to customers complaints and often delay in solving the customers problems and needs. EXTERNAL ANALYSIS The management of every organization has to monitor the environment confronting the organization constantly to identify the factors that may require change. This is necessary to keep up with new developments and changes in the environment. A change in the external environment may be either an opportunity or threat. In either case, the organization to properly employ it strength to capitalize opportunity and avoid minimize a negative effects of threat. Following are the main opportunities and threat of PTCL NTR-II, D.I.Khan:OPPORTUNITIES Opportunities are the characteristics of the external environment that have the potential to help the organization to achieve and exceed its strategic goals These are the opportunities which are given below. Mobile Technology As in this new world of mass communication there is a trend shift from fixed line telephone system to the mobile networks as PTCL has strong back bone in fixed line sector it can easily attract this potential market

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Cable Network PTCL as an open opportunity to grape the internet user on commercial basis by introducing the cable net work system. As it has gain popularity due to its high speed and 24 hours connectivity. Following are the some other opportunities. The revenue can further be generated through better marketing strategies. PTCL NTR-II should take measure to ensure that the entire complaint and customer care center, which will able to serve customers in a better way. PTCL NTR-II still can expand their market by venturing into small cites, which are still unexplored. Private mobile companies are getting license from PTA, which are source of revenue as well. PTCL has also launched its own mobile services. Due to pressure of various governments PTCL NTR-II, D.I.Khan has not been able to collect sufficient amount of its money from its defaulter but present government is very strict to collect the arrears with the help of NAB, PTCL can cover its million of rupees. THREATS Threats are characteristics of the external environment that may prevent the organization from achieving its strategic goals. There are some threats given below. Strategy of New Management With the change of the management, most of the employees are working under pressure. They are disturbed due to fear and tension created by the new management. As the new management has its first step to remove the unnecessary and unskilled employees from the organization. So in this perspective the performance and efficiency of the employees is affected. Mobile Companies Many mobile companies such as Mobilink, Warid Telecom, and Telenor are threats for PTCL NTR-II, D.I.Khan. People are increasingly using mobiles and ignoring PTCL NTR-II, D.I.Khan connections, that is why there is a decline in the use of fixed 58

connections of PTCL NTR-II, D.I.Khan. This decrease the revenue of PTCL NTR-II, D.I.Khan. There are some others threats for PTCL NTR-II, D.I.Khan given the following. In case PTCL is privatized, there will be a lot of shutting of employee and the work force will be reduced. So there is a threat to may employee of there job being lost and it will effect the Employees of NTR-II, D.I.Khan. PTCL had the monopoly in telecommunication services till 2003, which is not off. Now all the companies are allowed to enter in the telecom business in the Pakistan. The new competitions are very challenging for PTCL NTR-II, D.I.Khan. The unstable economic condition of Pakistan is a great threat to PTCL. In strong economic condition, the growth of business is very frequent. The poor economic condition increases the inflation rate, which is very threatening for PTCL NTR-II, D.I.Khan. The management of PTCL should prepare a training plan for the staff of each regional centre because these trainings play an important role in the output of employees. The training should be two types local training program and foreign training program. CONCLUSION PTCL NTR-II, D.I.Khan is one of the good Regional offices in KPK and performing well but still there is always a room to improve. NTR-II, D.I.Khan should develop the strategies to encounter the future challenges through its opportunities for those areas where NTR-II, D.I.Khan have no Access. To remain the leader in the telecom sector in Pakistan PTCL has to give importance to customers by offering low charges. PTCL should avails its opportunities and reduce the weaknesses and threats by taking concrete steps.

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CHAPTER 6 FINDINGS AND PROBLEMS

Adoption of New Emerging Technologies Finding PTCL is not adopting New Emerging Technologies. This will create problem to cope with the challenges of the modern world and new developments in telecommunication sector. Suggestion In order to meet the new world challenges, it is very important for PTCL NTR-II, D.I.Khan to bring some new changes in the existing system. With the implementation of the state of the art technology PTCL NTR-II, D.I.Khan would be able to compete and face the challenges of the new world. Provision of Training of employees Finding There is no provision for training of employees. This will affect the development of the employees and the organization as well. Suggestion It is the main responsibility of the PTCL NTR-II, D.I.Khan upper management to give proper training to its employees because it will help the employees in the implementation of new technologies. The training should be both local and foreign to handle technical operations. Training should also be given in different managerial areas. The need for training each and every employee may be identified and training programs can be designed.

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To adopt Communication among Management Finding There is lack of Communication among Management and employees. Suggestions PTCL NTR-II, D.I.Khan should communicate changes to its key people (top management and down wards). By sharing information and ensuring its acceptance, there are some other suggestions which should adopted by the management to improve the efficiency. There should be strong communication between Top management and Lower management. When top management provides confidence to lower staff then the relationship will be strong. Lower management will be able to communicate their new ideas and their involvement in work will increase. There should also good relationship between middle management and clerical staff. If the middle management and clerical staff cooperate with each other than the strong relationship is possible. There should be a good working environment in the offices. This is important as productivity is dependent on healthy working conditions. This includes both physical and intangible working environment. No Hot line facility Finding No Hot line facility. This can create problem such as for line fault removal. Suggestion The PTCL NTR-II should introduce Hot line facility for line fault removal in each and every city of KPK.

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BIBLIOGRAPHY
1. DOWNLING, WILLIAM, F.Leonard R. Sayles (1987). How managers Motivate the imperatives of Supervision; New York Columbia University McGraw-hill company 2. A.ALLEN, LOUIS, (1985 MANAGEMENT AND ORGANIZAION; Tokyo, McGraw-hill Company). 3. LUTHANS, FRED, (1985), Organizational behavior, New York, McGraw-hill 4. KOONTZ HAROLD DONNEL SYSILO, and WEINRICH, HEINZ. (1984) Management; New York McGraw-Hill book co.2004. 5. DATA BOOK, 1998-1990, Northern Telecommunication Corporation Limited, Peshawar 6. Khan Jahanzeb, (2001, November), Human Resource Management- PTCl. Dissertation report submitted at IMS, University of Peshawar. 7. Luthans Fred, 1985, Organizational behavior, New York McGraw Hill 8. PTCL Annual Report 2008 9. (Online) Available http://www.ptcl.com.

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