Presented By:

Umair Ahmed
Roll No: 164
B.B.A (Hons.) 7th
Evening
Impacts of Privatization Presented To:
Department of
on PTCL Management sciences
University of Education
Okara Campus
 Outline
Research Question
Goals of Research
What is Privatization?
Etisalat
Analysis And Findings
Conclusion And Recommendations
 Research Question

What is impact of privatization on PTCL?

Goals of Research

Impact on Performance

Impact on Competition
 What is Privatization?
“It is the process of selling government assets to
private buyers”.
Privatization is process of transferring ownership of
a business, enterprise, agency or public service from
the public sector (government) to the private sector
(business). In a broader sense, privatization refers to
transfer of any government function to the private
sector including governmental functions like
revenue collection and law enforcement.
 Etisalat

The UAE based company that purchase 26% of

shares with management rights.
It’s Vision:
A world where people’s reach is not limited by
matter or distance.
It’s Mission:
To extend people’s reach
 Analysis And Findings
Privatization Process of PTCL
Impacts of privatization on PTCL
Impact on Performance
Impact on Competition
Impact on Employment
Privatization Process of PTCL
1. In 1991 Govt decide privatize PTCL, by
selling 26% shares with management rights.
2. In 1994 12% of its shares are divested.
3. In 1994 Govt issued 1 million exchangeable
vouchers, equal to 100 million shares of
Rs.10each for Rs.3 billion .
4. In September 1994 five million vouchers
has been issued to 31 international investors
for $ 900 million.
Privatization Process of PTCL
5. In 1997 notes of $150 million are issued to
international investors which are
convertible to “A” class ordinary shares,
which are equal to 3.3% of total share
capital.
6. In 1998 Govt hire M/s Goldman
International to provide advisory services.
7. According to M/S Goldman Report, PTCL
handed over to Etisalat, That purchase 26%
shares with management rights.
Impacts of Privatization on PTCL

Impact on Performance
Impact on Competition
Impact on Employment
 Impact on Performance
Liquidity

2.5

1.5 Current
Quick
1

0.5

0
2004 2005 2006 2007 2008 2009
 Continued...
Leverage

100

80

60
40 The Time Interest Earned
Rstio
20

0
-20
2004 2005 2006 2007 2008 2009
 Continued...
Profitability
60.00%
50.00%
40.00%
30.00% Operating Profit Margin
20.00% Net Margin
10.00% Return on Equity

0.00%
-10.00%
2004 2005 2006 2007 2008 2009
 Continued...
EPS
7
6
5
4
3 EPS
2
1
0
-1 2004 2005 2006 2007 2008 2009
Continued...
Continued...
 Continued...
Dividend paid in five years

30000

25000

20000

15000 Dividend
10000

5000

0
2004 2005 2006 2007 2008 2009
 Impact on Competition
With privatization of PTCL may competitors
entered into the market and PTCL’s market
share is day to day decreases, due to the
following reasons:
People switch toward cellular phones
WLL users switch toward wateen, world
call and Tele Card because of better
quality.
Customer services are better then PTCL
Continued...
 Continued...
However it is in favor of PTCL that it still
has almost monopoly in landline subscribers
 Impact on Employment
Before Privatization :
PTCL has approx. 65000 employees before
privatization.
The main workforce of the PTCL is
unqualified and unskilled. About 50%
employees are under graduate.
 Continued...
After privatization the following decisions
have taken by management:
Launch VSS (voluntary separation
scheme), under this scheme PTCL has to
pay a lump sum amount to employee who
is willing to leave.
Step forward to facilitate equal
employment opportunities.
 Continued...

Inducting fresh blood from the

market
T & D department organized a
comprehensive six months
“Urgent Training Needs”
program in technical and
managerial fields to enhance soft
skills.
 Conclusion
Privatization of PTCL have both positive and
negative impacts.
Some negative impacts are:
The number of subscribers are decreases year to
year because of, poor quality of services, old
technology and higher prices.
PTCL is in the process of layoff and provides a
huge some for this purpose while competitors
have skilled Personnel and offers attractive
packages.
 Continued
Besides these negative impacts PTCL also have
some positive impacts:
PTCL introduced new technology in some
areas.
Improve customer services
 Recommendations
I Recommend PTCL to:
To Improve quality of services
Introduce new products
Introduce new technology
Improve customer services