After many months of intense complains from consumers about automatic activation of Pakistan Package by PTCL, there is some decisive action coming from PTA (Link to the offiical statement in pdf). Better late than never!
Pakistan Telecommunication Authority (PTA) has directed PTCL to refrain in future from announcing any pre-activated package without customers’ consent and without prior approval of the Authority.
These directions came in the wake of PTCL announcement of “Pakistan Package” on December 1, 2007 wherein the package was activated on all PTCL numbers and they were to be charged at Rs. 199 per month.
Taking cognizance of the consumer complaints, PTA has directed PTCL not to charge Rs. 199 from those subscribers who are unable to opt out of the package and have NWD bill of less than Rs. 200 per month in the corresponding months.
It has also directed PTCL to reduce the time period of subject package to 60 days with no extension. As announced by PTCL it was a limited time offer which was extendable and now it would be available for only 2 months. This decision is taken to ensure healthy competition and to safeguard consumers’ interest.
The Authority has further said that PTCL is directed to refrain from launching/announcing any promotion or tariff package without prior approval of the Authority by submitting complete details of such package(s) to the Authority at least ten (10) days in advance and also to refrain from pre-activating such packages without customers’ prior consent.
‘For your convenience ptcl Pakistan Package has already been activated on your ptcl landline phone’. The default activation of the package by PTCL is unfair, unethical and inconvenient. First the voice mail and then this … what a brazen way to rip off customers! Just force these packages down the throat of consumers, many of whom will not realize or may not have time or knowledge to deactivate it. I have read and heard stories about how difficult it has become to call 1236 and get rid of this package.
Note that I am not criticizing the package, I am against the way it has been forced on each and every landline. If this package is so good people will make their own choice and get it. With this move PTCL has lost whatever goodwill it had.
Is there any limit to which PTCL will not go to make quick money on the expense of consumers? How can you justify this blatant use of monopoly? Will PTA let them get away with it?
Published by Atif Tahir on December 6, 2007
under Business, PTCL
PTCL has consistently been facing market criticism with respect to its strategic management, policy, procedures, quality assurance, product flavors and orientation towards customer services. Our readers who have read the post on Balanced Score Card Technique (PTCL: Future Prospects & Challenges) on this blog can now see the practical implementation of BSC effectively being done by PTCL at present. If PTCL continues on the same path with focus on product, market & corporate leadership, they have all the means to differentiate for clear competitive advantage.
The Balanced Scorecard is a management tool that helps an enterprise to focus on holistic development across the organization rather than just focusing on a single area or on a specific objective, for instance, revenues & finance. Today, many large corporate entities across the world have adopted the BSC technique to exceed the overall growth objectives. The key areas of PTCL’s focus are:
The initiatives taken by the PTCL may not be enough for an abrupt change, however, if the strategic focus and strategy remains correct and effective as stated above, the list of initiatives will keep on increasing and shall lead PTCL towards Leadership in all the segments it serves.
Details of Voluntary Separation Scheme (VSS) at PTCL have emerged with information also provided at PTCL site which puts it like this in Urdu: Aap Ki Hidmat Ka Etraf (We recognise your services).
Total cost is about Rs 35 billion, out of which 50 per cent amount will be paid by the good old Government of Pakistan. The intended / eligible target of VSS are PTCL employees who are not over 58 years of age – probably management does not consider them relevant to the latest technology and strategy. According to insiders, this scheme works well for those who are relatively new at PTCL. As I have written before, if PTCL management handles this well, then this could be good for both the company and its employees in the long run. Business Recorder provides more information.
The government has imposed ban on re-employment of those employees of Pakistan Telecommunication Company Limited (PTCL) who will opt for Voluntary Separation Scheme (VSS), informed sources told Business Recorder.
“The Ministry of Information Technology will ensure that optees who are granted voluntary separation will not be re-employed by PTCL,” the sources quoted Cabinet Committee on Privatisation (CCoP) as giving directions to the Privatisation Commission.
As posted by Tee Emm on TGP. For calls to certain phone numbers, which are over a threshold of monthy charges, there may be a charge when the line is busy. Callers will get a recorded voice response telling you that the number can not be reached at this time and the caller will pay for the call. Just another way PTCL helps you serve and pays its bills! According to this news clip, PTA has asked PTCL to remove this “facility” as it is unfair.
PTCL is another step closer to its previously announced plans to let go of employees as it has permission for the Rs 17 billion transaction. These are not layoffs in the strict sense. These are voluntary separations. There is more reported in DAWN but the package details are still not known.
I have seen many such schemes during my work life and I think they are not necessarily a negative thing. For one thing this is the reality of our age - more and more companies are going this route and lifetime jobs are becoming a thing of past. For the employees it can be a handsome package that allows them to try out something new. PTCL can afford to provide a good deal in return for a smooth transition to a “new” organization. This can be a particularly good option for those PTCL employees who have marketable skills and are able to find some other job. For PTCL itself this can mean a number of things - lesser employees, lower overhead, ability to bring in younger, fresh blood and the chance to make its investors happy. However if PTCL fails to capitalize on this and its leadership cannot make a positive change these advantages will be short-lived.
Further analysis will follow when the package deal details are announced.
We have been talking about PTCL profits, layoffs and management. In this entry let’s focus on its customer service, which has never been a forte for PTCL. For instance the incomplete page for customer service centers at PTCL site does not give a good impression. I have selected two recent stories from consumer’s point of view - one from the traditional media and one from the new media (a blog) to illustrate the issues which PTCL customers are facing.
First, the report from Nation which is about disconnection of phone service due to “non-payment” of dues. There seem to be many procedural gaps and the whole process is a burden on the customers.
The subscribers complain that temporary disconnection is inevitable even if bill has been duly paid on the last date or after the due date. In some cases even timely payment of dues does not prevent disconnection. In such situation, subscribers have to take a day off in order to visit their respective exchange or customer service centre and submit a photocopy of their paid bill for getting their connections restored.
A subscriber of North Lahore Telephone Exchange complained about the same recurring problem. He said it was highly unfair that subscribers have to wait in long queues at banks to pay their bills and after a few days once again the process is repeated at the telephone exchange in order to prove that they had duly paid their dues. He said it was not the responsibility of the subscribers to intimate the exchanges about the payment of dues and it should be an internal process of the telephone department. Another resident said that on a number of occasions, the customer service staff of Township exchange had not been present at the counters.
The second service issue was raised at the Pakistan Spectator blog. Mehar Khan talks about the substandard service provided by PTCL in Karachi.
One such example is the Khayaban-e-Tariq and surrounding area in Phases VI and VII of the DHA in Karachi. Although we were one of the first areas to have a completely new fibre optic network installed, this network has failed to operate successfully since it installation. To compound a bad situation, the telephone services have not been working at all since May.
This current fault apparently arose due to NLA workmen digging up roads to lay the basic infrastructure in the area and, as a consequence, cut through one of the cables. Despite tens of personal visits to the local PTCL, offices and numerous sit-ins, where we refused to leave their offices until we were dealt with, the fault damaged line. How long does it take for a company of such size to obtain spare parts?
Why do we continue to receive threatening demands for payment when no service has been provided for over five months now?
Could Etisalat get away with such behavior either in the UAE or any other country they operate in? The answer is a resounding “no”.
Why are they allowed to get away with it in Pakistan?
I will ask the same question - how come there is not better focus on customer service in PTCL?
Related to the previous thread about PTCL Rebranding, here’s a clip of an ad which focuses on their new identity and new logo. Nice effort but after a month or so of this “New Beginning”, more serious challenges have surfaced for PTCL than rebranding. The next year is crucial and will make or break PTCL. Lets hope for the best.
Media is abuzz with news about reduction in force and restructuring at PTCL, which has 65000 employees. We have provided various views and news about PTCL at this blog before. Going through the time lines since last year, one can see that PTCL is at a critical junction. Depending on who you ask, PTCL is a management fiasco or a great opportunity. The stakeholders in this story include staff and workers (who have a union), Etisalat which manages PTCL with its 26% stake (and would like to get additional 25%) and the Pakistan government. The PTCL union leaders have announced their opposition to cut jobs. The state has not responded yet.
Significant questions have been raised by concerned public in media, blogs and online discusion forums about strategy and operations of PTCL. There are those who question the whole privatisation deal and whether it was good for Pakistan. Others point out to the hefty price paid by Etisalat and feel that this was the best possible option. Anyway, there is no going back to the days of state-owned monopolies in the telecom market of Pakistan. It is clear that Etisalat is trying to turn around a big ship and it will face considerable difficulties on the way. Even though job cuts are hard, in the long term there is no way around them. I want PTCL to get its act together and thrive in a fair and just manner.
As Etisalat moves to increase its stake in PTCL, it will inevitably be left with few options other than to work towards a robust plan for reforming the company with the ultimate objective of tackling its falling profits. Unless PTCL’s profits are not just lifted but turned into significant gains, the company’s long term outlook is likely to suffer.
While PTCL has been privatised for some time now, the Pakistani public is yet to witness the fruit of the change of management from public sector to private sector. Pakistani consumers may have seen the benefit of this change in ways such as much easier access to new telephone connections that once took several years to be provided.
But the quality of service by PTCL’s staff in areas such as dealing with complaints from subscribers still remains of simply pathetic quality. Stories such as subscribers waiting for several days before the PTCL staff were able to deal with out-of-order phone lines in rain drenched neighbourhoods still make the rounds across Pakistan.
Pakistan Telecommunication Co Ltd (PTCL) on Friday reported a 24.7 percent fall in net profit for 2006-07 financial year, as rising competition led to a decline in revenues from call traffic. Sources: Reuters and other news sources.
The full results are not available on the investor section of PTCL site as of this writing but I hope that the details will be posted there soon. It will be interesting to watch the stock performance after these results and the recent announcement by Etisalat about acquiring controlling stakes. The analysts comments below are worth reading.
Highlights of PTCL financial results 2006-07:
PTCL earned net profit of 15.64 billion rupees ($258 million) for the year ended on June 30, down 25% from previous year. Earnings per share fell to 3.07 rupees from 4.07 rupees. This was in line with the market expectations of 15.41 billion rupees to 17.69 billion rupees range.
The company said its revenue for the year fell to PKR65.28 billion, from PKR69.08 billion a year earlier.
Operating costs increased to PKR46.56 billion, compared with PKR41.69 billion a year earlier.
PTCL announced a cash dividend of 2.0 rupees per share, its first payout for 2006-07.
Analysts Are Optimistic
As reported by Reuters, Analysts said the fall in profits was a result of lower revenue from international and domestic call traffic and increased competition from new market players.
“Since the implementation of deregulation policies in the domestic telecom sector, the company is facing immense competition from new players, especially in the long-distance and international calls segment,” said Abrar Hussain, an analyst at First Capital Equities Limited.
But analysts said PTCL’s profitability is expected to rise in coming years as it expands network and attracts more customers.
“We anticipate an 11 percent annual growth in net profit of the company during the next three years,” said Abrar Hussain, an analyst at First Capital Equities. PTCL’s profitability growth is to result from the cumulative impact of expanded fixed line network, including profit of 20.78 billion rupees last year.
“The company has potential to grow in the longer run if the management succeeds in implementing steps for network expansion, service customization, cost-cuttingand the introduction of new services and efficiency measures,” said Hifza Zia, an analyst at Atlas Capital Market.
Pakistan’s telecommunication industry - mobile communication in particular - has made impressive strides in the last few years after deregulation. However broadband growth in the country has been very disappointing - there are less than 100,000 broadband users in Pakistan. The open competition observed in mobile industry has not been replicated to broadband. Reasons include high prices, control of PTCL over bandwidth resources, policy issues, lack of infrastructure and legal disputes.
Enter WiMAX. Simply stated, it’s a relatively new standards-based wireless technology which is intended for large coverage areas on the order of several kilometers (instead of a few hundred meters, as is the case with Wi-Fi).
With base stations transmitting signals and some equipment at customer location, it promises fast bandwidth for both fixed locations and mobile users. In this backdrop, Pakistan made headlines in 2006 when Wateen announced plans to work with Motorola to rollout Mobile WiMAX, the largest network of its kind in the world.
Is WiMAX (Worldwide Interoperability for Microwave Access) the right technology for developing countries? In other words, will this new technology deliver the promise of broadband at affordable prices?
WiMAX comes with many theoretical advantages but its potential is yet unproven. Without getting too technical, it is purpose-built for Internet (IP) communication and is based on standards (as opposed to other proprietary solutions) endorsed by a respected world standards body, theInstitute of Electrical & Electronic Engineers (IEEE)*.
Daily Times has reported this interesting statement. As we have been discussing, Etisalat’s last transaction (26% shares and management control) is under scrutiny these days in Pakistan. Now Etisalat is thinking about taking its stake to 51% to get full control. How will the market react to this? And how much will this lift up the PTCL stock?
The news item adds:
The state-owned United Arab Emirates company is now considering whether to increase that to 51 percent by buying more stock from the government, Etisalat Chairman Mohammed Hassan Omran said in a telephone interview with Reuters in Dubai.
“We are evaluating that option and once we’ve arrived at the decision that this is positive, we will talk to the government,” Omran said, declining to give further details.
Pakistan, the world’s third-fastest growing market for mobile phone users, has a moratorium on the sale of new mobile licences. The only way for international companies to enter the world’s sixth-most populous nation is by buying into existing operators.
“We are already in Pakistan, so if we have an additional share this will add to our array of operations,” Omran said. Etisalat has no immediate plans to spend on PTCL’s infrastructure, Omran added.
With base stations transmitting signals and some equipment at customer location, it promises fast bandwidth for both fixed locations and mobile users. In this backdrop, Pakistan made headlines in 2006 when Wateen announced plans to work with Motorola to rollout Mobile WiMAX, the largest network of its kind in the world.
Created by Babar Bhatti, TelecomPk.Net is a leading source of information and analysis about Pakistan Telecom industry.
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