Optimism: PTCL sees room for growth in fixed-line internet users

Faces challenges as mobile broadband sidelines fixed-line services

KARACHI: Pakistan Telecommunication Company Limited (PTCL) is the oldest telecom company in Pakistan that has enjoyed monopoly for decades before mobile phones got popular and became a household name with a marked reduction in the cost of handsets and wireless services.

Once a top traded company at the Pakistan Stock Exchange, PTCL has now been reduced to a mid-cap stock. However, the company says it has added value by offering new and better services to clients and bringing down the number of complaints by almost one-fourth in some areas.



“We have upgraded and transformed 30 exchanges in different parts of Pakistan, [therefore] customer complaints in areas covered by these upgraded exchanges have gone down by over 25%,” said Dr Daniel Ritz, President and CEO of PTCL, in an email response to queries from The Express Tribune.

As the company is huge, more than one-third of the complaints registered with the Pakistan Telecommunication Authority (PTA) are against PTCL.PTA - the telecom industry’s regulator - received 34,723 complaints from consumers in financial year 2016-17 against mobile operators, PTCL, internet service providers and wireless local loop (WLL) operators. Of the total, 12,019 or 35% complaints were against PTCL, according to the PTA’s annual report.

The number was higher in previous years. In the three-year period ended June 30, 2016, the PTA received a total of 115,278 complaints, of which 44,115 or 38% were against PTCL. This shows the telecom giant has succeeded somewhat in reducing the number of complaints by improving its infrastructure.

Major challenges for the company include a massive but decaying infrastructure with a huge workforce that needs training to keep pace with emerging technologies. These challenges stand in the way of quality services, prompting complaints from the consumers.

Over the past three decades, most of the innovation and invention has taken place in the technology sector. New technologies are making the previous technologies redundant and PTCL has faced the consequences as well.

Fixed-line telecom services could not compete with mobile broadband which spread at a rapid pace following the auction of 3G and 4G licences in April 2014 in Pakistan, the PTA suggested in its report.

Since the launch of 3G services, the five cellular mobile operators (CMOs) in the country added millions of broadband subscribers, which jumped from 3.8 million on June 30, 2014 to 52 million at the end of January 2018.

The new technology broadly sidelined fixed-line internet services, which once dominated the broadband market.

PTCL lost over half a million subscribers and its customer base shrank to 7.6% of total broadband users compared to 80% three years ago. PTCL, in which the government of Pakistan has more than 60% shareholding, was a favourite stock of investors in 2013 and recorded a hefty increase in its share price. However, since 2014, its share price has dropped 45% and its earnings contracted 88%.

“We are indeed a 70-year-old company, but we are young at heart,” said the PTCL CEO. “PTCL is hopeful about the fixed-line internet customer base; there is a lot more room for growth as today less than 10% of households in Pakistan has fixed-line internet connection - one of the lowest penetration rates in the world,” said Ritz, the 51-year-old Swiss national.



Despite all these challenges, PTCL is still the biggest player in the telecom industry due to its gigantic infrastructure and heavy cash flow.

It has more than 16,000 employees, 400 telephone exchanges, 700,000 distribution points and a network of fibre optic cables spread over 38,000 km across the country.

“PTCL has by far the largest fibre footprint amongst all operators in the country and is well positioned as the carrier of carriers,” said Ritz.

In the year ended December 2017, the company booked a consolidated profit of Rs4.34 billion, up 171% from Rs1.6 billion in the previous year.

Published in The Express Tribune, March 28^th, 2018.

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