Margaret Thatcher, when advocated for privatization to create a nation of shareholders skipped the possibility that someday, investment organizations owned by wealthy individuals, instead of “people” will start buying the national organizations, fire the people out and will maximize their profits by decreasing the human resource instead of offering innovation and value to their product line.
She was unaware of the future prospects even, that 4000 miles away, the Pakistani government will follow her footsteps in an opposite way by selling the most profitable national institutions like PTCL to investment organizations like Etisalat, who would fire 20,000 employees in a bid to maximize their profit, that too without bringing innovation to iron-plastic telephone wires and the most disconnected and unstable landline telephone network.
Pakistan Telecommunication Company Limited (PTCL) for the fourth time has announced Voluntary Separation Scheme (VSS) for its current employees. The company through three such schemes or otherwise has already “got-rid-of” 17000 employees. But once again it is hoping that 50% of its 18000 remaining “human resource” will avail the opportunity at a total cost of Rs. 10 billion.
Employees of PTCL and New Compensation Pay Group (NCPG) are now being motivated to avail the fourth Voluntary Separation Scheme (VSS). The eligibility criterion to avail the service is as follows;
- Employees in Basic Pay Scale (BPS) 1-20 are eligible to apply.
- The age of NCPG employees willing to avail such service shall be below 58 years.
- Age of pension has been reduced to 18 years from 20 and pensionable employees will get a 2 years additional service years benefit if they opt to leave.
- All opting NCPG employees will get 4 times additional gratuity.
- Regular employees will get 6 and NCPG will get 15 months additional bonuses if they want to leave the company.
- 2 lac rupees early bird allowance will be added to the leaving sum of those employees who opt to leave in first 20 days of the scheme announcement.
- The PTCL region from which 30pc or more of its employees opt to leave will get additional 150,000 rupees on every application.
- EOBI pension for every outgoing employee.
- House Building/Car/Bike loan taken by any VSS opting employee will be waived off by the PTCL.
- 180 days leave encashment for all those who will avail this offer.
- Free vocational training courses for all those who are willing to learn techniques/skills to start a personal business after leaving the company.
- The employees can opt to take the VSS amount at once or in the form of pension in monthly installments.
- PTCL will take responsibility to help its leaving employees in investing their amount at different national saving schemes, the stock market or banks.
- Third party briefing on starting a different kind of businesses after leaving the company.
All these lucrative offers to “got-rid” employees of the PTCL are regardless of the fact that three successive governments, including the present one, have failed to recover $800 million outstanding payment from the buyer of the Pakistan Telecommunication Company Limited (PTCL) since April 2006. 26 pc of the PTCL shares were sold to the UAE telecom giant Etisalat, for $2.59 billion with management rights. $1.799bn of it was paid and remaining $799.3.4 million were withheld because the buyer demanded the transfer of all 3,248 properties in its name out of which 43 are still pending.
Time has proved that the amount, profitable PTCL was sold out was much less than the asset value of the company. Musharraf regime, responsible for “disposing of” this national wealth on a pauper’s price played safe by a Share Purchase Agreement (SPA) which now makes it impossible to probe that why the company was sold on a price ¼th of its original value when it was already a profit making national asset. It was then told that the company after privatization will bring revolution to the analog system. But the PTCL landline customers in Pakistan, after 10 years of such promises are still dwelled into the same iron-plastic wires that disconnectedly connect them to nothing exemplary.
One after another, its products have badly failed to live by the customers’ expectations. Its Vfone and Char-Gs are not in demand and CMOs have ruined its landline edge too conforming to the popular saying that “Customers will never love a company until its employees love it first”. In Pakistan, privatization has helped to revive the performance of banks but mixed results came in many other sectors -especially with failure where half-hearted attempts were made such as energy, steel, airline and manufacturing.
Chief Human Resource Officer (CHRO) of PTCL, Mr. Syed Mazhar Hussain while talking to MORE accepted that since privatization, his company is continuously failing to compete in the market. “We are not competing with other mobile phone companies, another reason that we launched this 4th Voluntary Separation Scheme”. Saying that the PTCL values the human resource at the most he added, “Our business venues and profit has been decreased drastically”. Mazhar thinks that this is because of the declining trend in the profit of telecom sector. “Subscribers are growing, revenue isn’t, sector’s ARPUs are lowest in the region and mobile apps are hurting voice” Mazhar mentioned.
But he forgot that Zong, the Pakistani subsidiary of China Mobile, surpassed Ufone, a PTCL subsidiary’s overall subscribers in 2014. Zong now accounts for 19% of the country’s telecom subscriptions – five percentage point above Ufone that slipped to number 4 with a market share of 14% or 18.97 million subscribers. In October 2016, Zong announced its highest-ever monthly revenue of PKR 5 billion. The company registered a 23.2% (MoM) increase in revenues for the month of October 2016, a 26.5% growth in recharge as compared to October 15.
A source in top management on Ufone on the condition of anonymity told MORE that PTCL and Ufone’s joint mismanagement and decline to invest in the future of telecommunications at the right time in the right way has brought the companies to this level. Claiming that his job in the company is secure and that the Ufone is different than PTCL as there is no chaos about job security there, he shared inside story of Ufone’s failure to compete in the market.
“Mobilink, Telenor and Zong bought 3G 10MHz frequency but we were contented on 5 MHz thinking that our mother organization PTCL owns 10 which will lend their system to us in the time of need. We launched a super card offer which brought so many customers to this scheme that our network was choked. Our services were drowned and we lost the only edge we had, a better service.”
“We had to discontinue our most popular super card scheme and re-launched it with the offers that are in no way motivating and useful. We are not in a position to buy the 4G spectrum now. It is either too late or not financially feasible and now everyone here is terrified, our merger with PTCL is becoming a need. The only way we can pump a 4G power to our system as the Mobilink did in the case of Mobilink-Warid Merger. Arabians are in a trend of selling, they merged Warid with Mobilink, they will merge Ufone with PTCL”.
The experts are seeing this year change of PTCL and Ufone CEOs connected to this merger. “We are planning to launch PTCL’s 4G power at Ufone on 20 test sites, negotiations on tower sharing, lease line, backend share and core share are in process. A merger is inevitable, the source said”.
But the Zong CEO, Liu Dianfeng thinks that it will not be a merger but his company will buy one of the Pakistan’s CMO. Although he never named Ufone, but after Mobilink-Warid merger, none other than Ufone is left as his company’s purchase target. “It is difficult to make profits in Pakistan’s market and the return on investments comes in different outlines. Maybe, in the future, we can think of buying an operator,” he told media a few months ago.
Etisalat, although rejected all these rumors in an official statement but everyone here is asking;
Will the PTCL rise again?
