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Etisalat and PTCL’s Privatisation – Daily Business Recorder Report

Etisalat and PTCL’s Privatisation – Daily Business Recorder Report

Karachi (April 15, 2012) – Chief Executive Officer (CEO) & President of Pakistan Telecommunication Company Limited (PTCL) Walid Irshaid stated in a recent interview that “we are very close to finalising” the deal that would enable Etisalat, the 26 percent stakeholder in PTCL, to release the 800 million dollars that it owes to the Pakistan government.
This amount, out of a total of a 2.6 billion dollar deal, was pending due to the non-transference of 300 units of real estate within the federal as well as the provincial territory to PTCL as agreed in 2006.
 Federal Government, Punjab and the Sindh governments have released the properties to PTCL, accounting for the majority of the land value that was to be transferred to PTCL, and the government of Pakistan is now arguing that Etisalat must release the amount due on these lands which, as per estimates, is in excess of 650 million dollars.
However the government has offered to allow Etisalat to keep 150 million dollars in lieu of land that has yet to be released by the smaller provinces – an amount considered to be double the value of the remaining land.
What no doubt has complicated matters somewhat is the fact that PTCL’s market capitalisation, defined as share price multiplied by the number of shares in issue providing the total value for the company’s shares outstanding, has declined to 522 million dollars making Etisalat’s stake worth no more than 120 million dollars.
Net profit of PTCL plummeted from 27.3 billion rupees in June 2005 during its monopoly days to 8.4 billion rupees six years later.
The reason for the decline in profits was unavoidable Irshaid stated as PTCL struggled to reduce reliance on plunging call revenues, “you cannot compare what we were doing in the monopoly days and the market now.
We would have been wiped out if we hadn’t started diversification.”
Greater competition in the telecommunication sector has benefited Pakistani consumers accounting for the fact that this is perhaps one of the very few sectors in the Pakistan economy that continue to show profits.
Be that as it may, Etisalat will pay the money that it owes Pakistan irrespective of its financial fortunes.
There is no doubt that the Ministry of Finance has continued to actively pursue Etisalat to pay the amount due as per agreement.
The PTCL story does indicate the benefits of privatisation.
Analysts argue with a great deal of credibility that had the PTCL remained in government control it would have become a loss-making venture by now joining the growing ranks of other state-owned entities (such as Pakistan Steel Mills, Pakistan International Airlines and NICL) registering ever-rising losses.
Thus PTCL, too, would have required massive annual budgetary injections that the country’s treasury would have been unable to support.
They also point out that had our other loss-making entities been privatised, not only would the pressure on the budget have been significantly reduced in terms of annual bailout packages but the government would also have been able to free considerable resources to meet social sector requirements.
And charges of nepotism and corruption would no longer have been levelled against the government to boot.

(Published in Daily Business Recorder)

About Tahir Iqbal

PTCL Worker at Switching EWSD Multan Qualification = DAE (electrical) + BS(CS)

4 comments


  1. very good well done Mr.Walid Irshad for demanding of valuable properties in such a way, which is enough for the opening of eyes of these blind authorities, who dealt and sold those properties for which the young and old employees have worked day and night in all seasons just like the services of their mothers. but now, it is handing over the stakeholders with only 26%, whose are going to built huge building and plazas for monetary gain and the poor poor pensioners are crying for their rights. on the other hand government is demanding the remaining amount and you are claiming for properties, while you are not ready for compliance of the agreement to act on all the sections including giving the rights of pensioners. By the way. Mr.Irshad, from whom you are demanding? from the government of Pakistan! whose directives and orders are ignored by you and you are living in such country, where you do not obey the orders of honourable courts. but so much astonishing that you have been given the rights to snatch the claims and suck the blood of the poor employees and old age pensioners and their families. But be remember the day of JUDGMENT.


  2. I am ready to buy PTCL on the same term and condition wtf is that GOvt of Pakistan is blind or they don’t have any interest of Pakistan property they are interested on their commission only. they can sell their wives and daughters even now wonder its just matter of commission.


  3. what a joke handing over all assets to the stakeholder, with 26%. The PTCL high ups are sucking the blood of their employees and pensioners and are leading luxurious life. By the way what commission your paper took from the PTCL for publishing this type of story? You should be feel ashamed of yourself.


  4. Unjustice for( ptcl )telegraph and telephone deptt employees . Non-gazzated staff waiting from long time 23 years for departmental promotion still ignored from corrupt deap and dump stage . where the pay and facilites of company. surf units officer duno hatho say ptcl ku kah rahey hain 10 15 salo say aik hi jhga per hutey retey hain

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