Ptcl Audit Report

Pakistan Telecommunication Company Lt.

Submitted to: Prof. Rida Iftikhar 4/2/2014

INTRODUCTION

Pakistan Telecommunication Company Limited (PTCL) is a mega corporation and a leading telecommunication authority in Pakistan. The corporation provides telephonic and internet services nation-wide and is the backbone for country's telecommunication infrastructure despite arrival of a dozen other telecommunication corporations. The corporation manages and operates around ~2000 telephone exchanges across the country, providing the largest fixed line network. Data and backbone services such as GSM, CDMA, Broadband Internet, IPTV , wholesale are an increasing part of its business. PTCL is the largest telecommunications provider in Pakistan. PTCL also continues to be the largest CDMA operator in the country with 0.8 million V-fone customers. The company maintains a leading position in Pakistan as an infrastructure provider to other telecom operators and corporate customers of the country. It has the potential to be an instrumental agent in Pakistan‟s economic growth. PTCL has laid Optical Fibre Access Network in the major metropolitan centres of Pakistan and local loop services have started to be modernized and upgraded from copper to an optical network. On the Long Distance and International infrastructure side, the capacity of two SEA-ME-WE submarine cable is being expanded to meet the increasing demand of International traffic Originally one of the state-owned corporations (SOEs), the share holding of the PTCL has been reduced to ~62%, when 26% of shares and control was sold to Etisalat Telecommunications and the remaining 12% to the general public in 2006 under an intensified privatization programme of Prime minister Shaukat Aziz. However, the 62% shares are still remains under the management of government-ownership of state-owned corporations (SOEs) of Pakistan

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HISTORY

From the of beginning Posts & Telegraph Department in 1947 and establishment of Pakistan Telephone & Telegraph Department in 1962, PTCL has been a major player in Telecommunication in Pakistan. Despite having established a network of enormous size, PTCL workings and policies have attracted regular criticism from other smaller operators and the civil society of Pakistan. Pakistan Telecommunication Corporation (PTC) took over operations and functions from Pakistan Telephone and Telegraph Department under Pakistan Telecommunication Corporation Act 1991. This coincided with the Government's competitive policy, encouraging private sector participation and resulting in award of licenses for cellular, cardoperated pay-phones, paging and, lately, data communication services. Pursuing a progressive policy, the Government in 1991, announced its plans to privatize PTCL, and in 1994 issued six million vouchers exchangeable into 600 million shares of the would-be PTCL in two separate placements. Each had a par value of Rs. 10 per share. These vouchers were converted into PTCL shares in mid-1996. In 1995, Pakistan Telecommunication (Reorganization) Ordinance formed the basis for PTCL monopoly over basic telephony in the country. The provisions of the Ordinance were lent permanence in October 1996 through Pakistan Telecommunication (Reorganization) Act. The same year, Pakistan Telecommunication Company Limited was formed and listed on all stock exchanges of Pakistan PTCL launched its mobile and data services subsidiaries in 2001 by the name of Ufone and PakNet respectively. None of the brands made it to the top slots in the respective competitions. Lately, however, Ufone had increased its market share in the cellular sector. The PakNet brand has effectively dissolved over the period of time. Recent DSL services launched by PTCL reflect this by the introduction of a new brand name and operation of the service being directly supervised by PTCL.

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As telecommunication monopolies head towards an imminent end, services and infrastructure providers are set to face even bigger challenges. The post-monopoly era came with Pakistan‟s Liberalization in Telecommunication in January 2003. On the Government level, a comprehensive liberalization policy for telecoms sector is in the offering.

In 2005, Government of Pakistan decided to sell 26 percent of this company to some private corporation. There were three participants in the bet for privatization of PTCL. Etisalat, an Abu Dhabi based company was able to get the shares with a large margin in the bet. Government's plans of privatizing the corporation were not welcomed in all circles; countrywide protests and strikes were held by PTCL workers. They disrupted phone lines of institutions like Punjab University Lahore along with public sector institutions were also blocked. Military had to take over the management of all the exchanges in the country. They arrested many workers and put them behind bars. The contention between Government and employees ended with a 30% increase in the salaries of workers.

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PRODUCTS & SERVICES

The range of services and products introduced by PTCL for its wireline and wireless services provided the impetus to establish the Company as the foremost Information Communication Technology (ICT) service provider of the country. PTCL is facilitating both enterprise and household consumers by offering them multiple solutions for their ICT needs. Our focus continues, to enhance customer experience through innovative and futuristic suite of products and services as we take the lead in driving the digital revolution in the country. An overview of the main products and services offered by PTCL are as follow



Business Services



Carrier Services & Wholesale



Home and Personal Services

1) Business Services

a. Business Connectivity: PTCL‟s business connectivity offers secure, reliable and integrated end to end domestic and global connectivity solutions to cater for the demands of corporate and enterprise users.

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b. Business Communication: PTCL‟s communication product portfolio is tailored to help business enterprises gain productivity advantages by offering a suite of powerful convergence and presenceenabled applications. 

Audio Conferencing



Personal Collaborator



Video Conferencing

c. PTCL Cloud: PTCL offers Public / Private Server‟s (Virtual / Physical) on Cloud along with Managed Solutions for Messaging & Collaboration, Disaster Recovery, File Store in „Pay as you Use‟ fashion.

d. Business Security: Video surveillance cameras are essential of business security. Before to begin a surveillance project several technical and policy matters must be considered; PTCL Corporate Services take care of all these issues in light of its vast experience in this field of Video Surveillance.

e. Managed Services: PTCL‟s Managed Network Services is a comprehensive solution for those corporate customers which are aimed at satisfying the essential needs of telephony/voice, data and security needs. 

Business-in-Box



Managed WAN

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2) Carrier Services & Wholesale

a. Wholesale Service: PTCL customers can now provide services to their clients without undertaking large scale investment in infrastructure or developing expertise in running their own networks. 

Calling Cards & LDI



Payphones



Network Capacity Services



Broadband

b. Telecom Operators:

3)



Leased Circuits (IPLC / DPLC)



International IP Services



PTCL Metro Fiber Network



Interconnection Services



Wavelength Services

Home and Personal Services:

a. Broadband: PTCL Broadband is the largest and the fastest growing Broadband service in Pakistan 

Broadband Static IP



FREE Broadband Wi-Fi Modem



PTCL Video Con



Broadband Pakistan (DSL)

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b. EVO 3G Wireless Broadband EVO 3G Wireless broadband is the pioneer of 3G Wireless Broadband service in Pakistan. Launched in June 2009 - Evo has started the revolution of the internet evolution in Pakistan. 

3G EVO Wi-Fi Hotspot



EVO Easy Paisa Recharge



EVO Wi-Fi CLOUD



Public Cash Payment Machine



EVO Widest Wireless Coverage



Smart TV Application for EVO Wireless Broadband

c. Smart TV: Employing the IPTV (Internet Protocol TV) technology, PTCL brought Pakistan in the list of a few countries across the globe that offers this state of the art interactive TV service to its subscribers.

d. EVO Wingle 9.3Mbps Pakistan‟s first 3G USB modem with built-in Wi-Fi hotspot; EVO Wingle is all out & about! The most talked about futuristic Wi-Fi tool that lets you effortlessly connect multiple Wi-Fi gadgets simultaneously at Hyper Speeds of up to 9.3 Mbps.

e. Landline: Maintaining the tradition of introducing affordable and simple packages, PTCL revised its international call packages offering more value to subscribers. Special packages designed for high volume traffic international destinations at fixed monthly rate helped increase the revenue. 'Freedom Package' with unlimited on-net calls at fixed monthly rate with no line rent further stabilized on-net calls revenue stream. Also, a synergy initiative offering reduced rates for mobile calls to all Ufone subscribers was undertaken resulting in increased PTCL Group revenue.

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f. 3G EVO Tab PTCL has introduced Pakistan‟s First 3G Enabled Android Tablet which is in-built 3G EVO wireless broadband technology with the ability to create personal Wi-Fi hotspot anywhere anytime, a 5MegaPixel autofocus camera; an enhanced IPS screen with a 180 degrees viewing angle for a richer multimedia and gaming experience, an in-built 4GB Flash memory that lets you freely download and use Apps without worrying about space limitations.

g. V-fone Various win-back and customer retention initiatives at regional and country level were introduced. These included A-ME-WE3 and Double Balance Promotion, Islamic Portal VAS Services, Eid offer, Hello Ufone Offer, V-fone Family package, air time incentives on purchase of V-fixed wireless phones and various regional packages. These initiatives helped in customer retention and consequent revenue stabilization

h. EVO 3G Nitro 9.3 PTCL has introduced Evo 3G Nitro in Pakistan; “The World‟s first & most cutting edge EVDO Rev.B commercial network”. PTCL is the first operator in the world to commercially launch EV-DO Rev.B products which offer blazing fast speeds of up to 9.3 MBPS.

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INTERNAL CONTROL SYSTEM OF PTCL

Management acknowledges its responsibility for establishing and maintaining a system of internal control directly related to and designed to provide reasonable assurance to achieve the following objectives:



Efficiency and effectiveness of operations



Compliance with applicable laws and regulations



Reliability of financial reporting

The PTCL is continuously adding to its internal control systems by enhancing the quality of processes, staff and IT infrastructure and will continue to do so to strengthen internal controls as it grows its business volumes and activities.

PTCL is committed to sustaining the utmost level of integrity in business through compliance with the highest standards of ethical conduct which is critical to maintain the trust and credibility with customers, partners, suppliers, and employees. This document outlines these fundamental principles applicable throughout the Company and affirms the commitment of every member of the Company towards upholding of these valued beliefs through their genuine enactment in daily roles and responsibilities.

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The company is pleased to make the following disclosures on the components of internal control system:

Treating Customer and Employees with Respect & Preventing Harassment: All customers and employees will be treated with dignity and respect. There won‟t be any interference for prejudicial reasons. All employees will be entitled to freedom of thought, conscience, religion, and expression as long as these do not interfere with the rights of others. No employee will be discriminated against or harassed by means of any action that creates an intimidating, hostile or offensive environment including disparaging remarks based on gender, religious, race, age, disability, political opinion or ethnicity.

Compliance to Merit, Transparency Values, Legal and Regulatory Laws: PTCL, being a commercial entity, is working in a competitive, challenging, and liberalized telecom environment where success comes from hard work, competence, and fairness. The employees will, therefore, ensure adherence to the values based on merit, performance, and transparency and refrain from seeking any political support for gaining undue advantages. They will also abide by all legal and regulatory laws applicable.

Confidential and Proprietary Information: PTCL employees will take every appropriate action to preserve and enhance the Company‟s Intellectual Property including respecting and maintaining privacy of customer‟s information, while respecting the Intellectual Property rights of others. The proprietary and commercial information, under no circumstances, shall be disclosed, either during or after employment, without Company authorization to do so.

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Physical Assets: Equipment, materials and other physical assets of the company will be handled with care and not be misused under any condition. PTCL employees will take all possible steps to ensure the safety and security of these assets under all conditions. They will be utilized for PTCL‟s business purposes with due authorization.

Conflicts of Interest: PTCL employees will always be expected to act in the Company‟s best interest by basing their decisions and actions purely on the professional business requirements. Personal relationships or benefits will not impact employees‟ judgment or lead to any activity resulting in a conflict of interest.

Prohibition of Corrupt Practices: PTCL employees will not demand or accept any kind of bribery, kickback, payoffs or any other illegal or unethical benefits, and will never be involved in any corrupt business practices. The use of Company funds for political contributions to any organization or to any candidate for public office will be strictly prohibited

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PTCL AUDIT FIRMS

Auditor of Firm:



A.F. Ferguson & Co., Chartered Accountants



Ernst & Young Ford Rhodes Sidat Hyder, Chartered Accountants

A. F. Ferguson & Co.

A. F. Ferguson & Co. (a member firm of PricewaterhouseCoopers network) is the largest firm of professional accountants in Pakistan, operating in three metropolitan cities viz Karachi, Lahore and Islamabad. The firm also has an office in Kabul, Afghanistan. The firm operates under international membership of PricewaterhouseCoopers and is also known internationally as PricewaterhouseCoopers Pakistan (PwC Pakistan). Broadly,

the

firm

offers

professional

of Accounting, Audit and Assurance, Taxation,

services

Transaction

in

Advisory,

the Risk

fields Advisory

Services, SPA and HR Consultancy. Internally, the firm is organized along two separate service lines- Assurance and Business Advisory Services (ABAS), Tax and Legal Services (TLS) which are equally split into 8 'sections.' Each service line has its own leader (partner) The firm currently employs nearly 1600 people: partners, senior managers, managers, assistant managers, and professional trainees. Firm's clientele includes leading groups/ companies of Financial and Non-Financial sectors. The head office of the firm is situated in Karachi, Pakistan.

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Ernst & Young Ford Rhodes Sidat Hyder & Co Ford Rhodes Sidat Hyder & Company, Chartered Accountants is one of the largest professional services firm in Pakistan and has been in existence for over eighty years. They provide a host of professional services to the clients which include Audits, Accounting, Taxation, IT audits, Transaction Advisory, Human Capital etc. to organizations all over Pakistan. Ford Rhodes Sidat Hyder & Company is a member of Ernst & Young Global, which is one of the top four professional services firms of the world. Ernst & Young has offices in over 140 countries around the world

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PTCL AUDIT REPORT

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