Presented By: Umair Ahmed Roll No: 164 B.B.A (Hons.) 7th
EveningPresented To: Department of Management sciences University of Education Okara Campus
Impacts of Privatization on PTCL
Outline
Research Question Goals of Research What is Privatization? Etisalat Analysis And Findings Conclusion And Recommendations
Research Question
What is impact of privatization on PTCL?
Goals of Research
Impact on Performance
Impact on Competition
What is Privatization?
“It is the process of selling government assets to private buyers”.
Privatization is process of transferring ownership of a business, enterprise, agency or public service from the public sector (government) to the private sector (business). In a broader sense, privatization refers to transfer of any government function to the private sector including governmental functions like revenue collection and law enforcement.
Etisalat
The UAE based company that purchase 26% of shares with management rights.
It’s Vision: A world where people’s reach is not limited by
matter or distance.
It’s Mission: To extend people’s reach
Analysis And Findings
Privatization Process of PTCL Impacts of privatization on PTCL
Impact on PerformanceImpact on CompetitionImpact on Employment
Privatization Process of PTCL
1. In 1991 Govt decide privatize PTCL, by selling 26% shares with management rights.
2. In 1994 12% of its shares are divested.
3. In 1994 Govt issued 1 million exchangeable vouchers, equal to 100 million shares of Rs.10each for Rs.3 billion .
4. In September 1994 five million vouchers has been issued to 31 international investors for $ 900 million.
Privatization Process of PTCL
5. In 1997 notes of $150 million are issued to international investors which are convertible to “A” class ordinary shares, which are equal to 3.3% of total share capital.
6. In 1998 Govt hire M/s Goldman International to provide advisory services.
7. According to M/S Goldman Report, PTCL handed over to Etisalat, That purchase 26% shares with management rights.
Impacts of Privatization on PTCL
Impact on PerformanceImpact on Competition Impact on Employment
Impact on Performance
Liquidity
0
0.5
1
1.5
2
2.5
3
2004 2005 2006 2007 2008 2009
Current
Quick
Continued...
Leverage
-20
0
20
40
60
80
100
2004 2005 2006 2007 2008 2009
The Time Interest EarnedRstio
Continued...
Profitability
-10.00%
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
2004 2005 2006 2007 2008 2009
Operating Profit Margin
Net Margin
Return on Equity
Continued...
EPS
-1
0
1
2
3
4
5
6
7
2004 2005 2006 2007 2008 2009
EPS
Continued...
Continued...
Continued...
Dividend paid in five years
0
5000
10000
15000
20000
25000
30000
2004 2005 2006 2007 2008 2009
Dividend
Impact on Competition
With privatization of PTCL may competitors entered into the market and PTCL’s market share is day to day decreases, due to the following reasons: People switch toward cellular phones WLL users switch toward wateen, world
call and Tele Card because of better quality. Customer services are better then PTCL
Continued...
Continued...
However it is in favor of PTCL that it still has almost monopoly in landline subscribers
Impact on Employment
Before Privatization : PTCL has approx. 65000 employees before
privatization.
The main workforce of the PTCL is unqualified and unskilled. About 50% employees are under graduate.
Continued...
After privatization the following decisions have taken by management: Launch VSS (voluntary separation
scheme), under this scheme PTCL has to pay a lump sum amount to employee who is willing to leave.
Step forward to facilitate equal employment opportunities.
Continued...
Inducting fresh blood from the market
T & D department organized a comprehensive six months “Urgent Training Needs” program in technical and managerial fields to enhance soft skills.
Conclusion
Privatization of PTCL have both positive and negative impacts.
Some negative impacts are: The number of subscribers are decreases year to
year because of, poor quality of services, old technology and higher prices.
PTCL is in the process of layoff and provides a huge some for this purpose while competitors have skilled Personnel and offers attractive packages.
Continued
Besides these negative impacts PTCL also have some positive impacts:
PTCL introduced new technology in some areas.
Improve customer services
Recommendations
I Recommend PTCL to:
To Improve quality of servicesIntroduce new productsIntroduce new technologyImprove customer services
