Pakistan Telecommunication Company Limited (PTCL) is the largest telecommunication company in Pakistan. The company provides telephony services nation-wide and is the backbone for country's telecommunication infrastructure despite arrival of a dozen other telecommunication companies, including giants like Telenor and China Mobile. The company operates around 2000 telephone exchanges across the country, providing the largest fixed line network. Data and backbone services such as GSM, CDMA, Broadband Internet, and IPTV, wholesale are an increasing part of its business.
1. The Nature of Change Undertaken by PTCL
Privatization of PTCL
In July 2006, the process of privatization took place in Pakistan’s largest telecommunication company PTCL. The company still is the largest but the growth that this company has shown is by far larger then in some years before. PTCL has partially been privatized, 26% of PTCL shares are now with a Dubai based company Etisalat. Etisalat though not has a significant shares yet it is controlling the management of PTCL. Under its management the PTCL is going efficient and well enough to remain at top. PTCL has been on the verge of privatization since 1991 and there has been many efforts undertaken for its privatization, but it was made official in July 2006. There is still the government as the major shareholder but the management vests with Etisalat. The privatization has been beneficial to the company as the whole, but the individuals involved are still shaky about their jobs. The company some period before and after the privatization has been the aim of constant resistance. From the employees to the people indirectly associated with the company; all were some what against it being privatized. The government was strongly criticized for it. The protests were at all time high when the proposed time of privatization was near; although it was delayed due to the protest but never laid down.
Four Main Causes of Strategic Change:
Due to a lack of competition, local telephone call rates were high and international call rates were even higher. During the 1990s, a call to United States cost $5 per minute (300PkRs per minute), which was not affordable for most of the population. In addition customer service was poor; fixing a problem might take 10 to 15 days. Despite this, consumers had to stick with PTCL, as they had no other options. This prompted the government to take a series of actions to improve the service by opening the telecommunications market. The PTCL was loosing her customers because of having a huge competition like Warid and Zong etc which were providing better services comparatively to PTCL. So, there was a serious need of such management in PTCL who could re-maintain PTCL’s image and value. b. Business Relationships
In July 2003 the government introduced a Deregulation Policy for the Telecommunication Sector, which allowed and encouraged foreign companies to invest in the Pakistani telecommunications market. The centerpiece of the deregulation was the establishment of two categories of basic services licenses: Local loop (LL), for fixed line telecommunication within the 14 PTCL regions, and Long-distance and International (LDI), for connectivity between regions.” Two sets of criteria set by the regulatory authorities must be met before an operator is allowed to start operation: one for the issuance of a license and another for the maintenance of service quality. In 2006, Etisalat International Pakistan, a wholly owned subsidiary of Emirates Telecommunications Corporation, purchased a 26% stake in PTCL and assumed management control of the company. c. Technology
By the passage of time the need of new technology increased because there were many opportunities for customers to shift from PTCL to cellular companies. Because these companies were continuously growing by increasing their...