PESTLE ANALYSIS OF PTCL

1. POLITICAL: Despite privatization of PTCL, still 68% of the shares are with Government
of Pakistan. PTCL is working under Ministry of IT & Telecom and Secretary IT M/O IT &
Telecom use to be the Chairman of PTCL Board. So Political involvement always remains
in decision making of the policies in PTCL. Lot of investments have to be made in the
areas on Political pressure where otherwise it is not feasible economically. Even during
hiring of higher officials in the Company, Political involvement do occurs.

2. ECONOMICAL: Global and National economical situation do affects the working of

PTCL as well. Due to high inflation rate, buying power of the customers is getting low and
low. Among all other utilities PTCL lines have the lowest priority among the customers.
Customers will surely prefer to retain and pay bills of Electricity as first priority, Water
and Gas as next priority, thus PTCL line have the least priority among financial
constraints of the customers. This has affected PTCL as well. During 2006 PTCL use to
have 5.4(Millions) customers, which have now been reduced to 3.1(Millions) due to high
inflation rate, affordability and competition from the mobiles.

3. SOCIAL: PTCL being a Government entity plays a vital role among all telecom operators
socially and have more social responsibilities than any other company in Pakistan. In lot
of the areas, where telecom facility is very difficult to be provided and financially not
viable, still PTCL invests for the social betterment of the people of Pakistan. Presence of
Broadband in over 1000 cities and towns is a proof of it. In hundreds of the towns,
where even most of the people cannot afford to have Broadband services, still PTCL
provides the services at very cheap rate. Like small cities of Central Punjab and Interior
Sindh, remote areas of Baluchistan and KPP, PTCL has made huge investments with very
little pay back as social responsibilities and to enhance education facilities by providing
Broadband services. Another aspect of social impact is the use of the mobile has
become a symbol of social status, which also affects PTCL.

4. TECHNOLOGICAL: Technological shift affects and have affected PTCL a lot. Due to
rapid changes in technology, PTCL has to make huge investments to provide latest
technology services but at the same time company has to make huge investments. For
example shift of traditional TDM switches into IP Switches require billions of Rupees,

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 which is under way and by the end of December 2011, 70% of the exchange switches
will be converted into NGN switches.

5. LEGAL: PTCL being member of ITR has to follow ITU (International Telecommunication Union)
rules, PTA regulations and Government of Pakistan rules and laws. Similarly Labour laws also
apply on the regular employees of the PTCL. Regular Government employees of PTCL are around
90% of the total employees and have legal protection of services. This protection affects
implementation of performance based culture in the company. Reward and punishment cannot
be properly imposed due to this legal protection.

6. ENVIRONMENTAL: Now a day in Pakistan’s environment mobile sector is progressing

with a nice pace and is affecting PTCL. Erection of towers and specially during laying of
underground network or its maintenance, one has to dig the streets and roads, thus
affects even the community. PTCL has to pay huge amounts to the municipalities’ for
digging of the streets and road crossings. It affects PTCL financially as well very time
consuming. PTCL has to follow international environment accord as well Ministry of
Environment rules in this regards.

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