Reformed PTCL

An analysis on how PTCL evolved as an aggressive competitor after the change of its

Submitted to: Mr. Naveed Ilyas Prepared by: Muhammad Saad Huzefa Shabbir Hussain S.M. Shajeel Kamal Arshad Hussain Channa Noshad Latif

January 12, 2010

Mr. Naveed Ilyas Management Faculty Institute of Business Management Karachi

Dear Mr. Naveed: In keeping with our January 12 deadline, we are submitting the accompanying analytical report entitled Reformed PTCL. The purpose of this report is to provide an analysis of how PTCL evolved from a monopolistic organization into an aggressive competitor in Pakistans growing Telecom industry. We acknowledge and appreciate your guidance and support which helped us in successful completion of this report. We would also link to acknowledge and thank Mr. Sanaullah (Manager Broadband, PTCL) and Mr. Abdul Sattar (Ex-Employee of PTCL) in providing ample amount of valuable information which was critical for our report. I hope this report will prove to be satisfactory and up to the given requirement.

Sincerely, Muhammad Saad Huzefa Shabbir Hussain S.M. Shajeel Kamal Arshad Hussain Noshad Latif

Table of Contents
1. Introduction 2. PTCL...Before Merger: 2.1 Organizational Structure 2.2 Range of Products & Services 2.3 Customer services & Support 2.4 Brand Image 2.5 Competitors & Subsidiaries 3. SWOT analysis 3.1 Strengths 3.2 Weaknesses 3.3 Opportunities 3.4 Threats 4. PTCL RebornThe Change Begins: 4.1 The Takeover of Etisalat 4.2 New PTCLs Vision 4.3 New PTCLs Mission 4.4 Enhanced Brand Identity 4.5 New Strategies by a New Leadership 4.6 Structural Changes 4.7 Launch & Expansion of New products & services 4.8 Shifts in Marketing Strategies 4.9 Cultural Changes 4.10 Changes in HR, Recruitment & Compensation Practices 4.11 Improvement in Customer Service 5. Other Changes & Improvements 5.1 ERP implementation to bring in excellence 5.2 HCM & NLM implementation to bring in control 5.3 PTCL Carrier Services & Wholesale for better utilization of infrastructure 5.4 PTCL Call Centers and Service Centers to win back customer confidence 5.5 NOC development to increase customer reliability 5.6 Image building through socially responsible behavior

6. Resistance to Change 6.1 Factors that caused Employees resistance 6.2 How new management handled resistance 7. The Results 7.1 Financial Impact 7.2 Organization Structure 7.3 Customer Satisfaction 7.4 New Product & Services 7.5 Brand Power & Brand Image 7.6 Human Resource 8. Recommendations 9. References

1. Introduction
Pakistan Telecommunication Company Limited (PTCL) is the largest telecommunication company in Pakistan. It serves all telecommunications services from basic voice telephony to data, internet, video-conferencing and carrier services to consumers and businesses all over the country. In 2006, Government of Pakistan sold 26% shares and management control of the company, in exchange of $2.6 bn, to Etisalat which is the fourteenth largest telecom operator in the world according to the Financial Times 500 survey. This merger has changed PTCLs way of operation, the strategies, the brand image, the management and the organization structure. This report is made to analyze whether these changes improved PTCL. How PTCLs vision, mission and services have influenced their employees and customers. This report will compare before merger and after merger PTCL and will highlight the differences.

2. PTCL...Before Merger
Here we will focus on some characteristics of PTCL before the actual merger happens.

2.1 Organizational structure

The organizational structure if we see in the light of management concepts was as follows: 2.1.1 Centralization The operations of PTCL were highly centralized. Even if a customer wants an action on his complain, no lower management staff can fulfill his request without the proper approval of his senior manager. The senior manager usually is a toplevel manager. Thus, even a basic task is dependent for approvals. The decision making power was not for everyone. 2.1.2 Narrow Span of Control The span of control before the merger was narrow. The Managerial levels were large in number. To fulfill a single task, an approval had to travel through numerous levels.

2.1.3 Chain of command If an employee from a marketing department wanted to get a job done from IT department, he/she has to inform his manager first who then informed his manager and so on until the marketing head came to know the problem. Then the marketing head used to convey this problem to I.T head who then transferred orders to downward chain of management. Due to this long chain of command, a single task sometimes took days to complete.

2.1.4 Formalization Simple task like getting a new connection was tedious at that time. Filling out numerous forms, collecting demand notes , attestation from several grade officers were some of the basic requirements of every task. Formalization was rich in PTCL.

2.1.5 Heavily Mechanistic Structure Since PTCL was a government organization, the structure was highly mechanistic. The rules were rigid, there is a clear chain of command, highly centralized architecture, very narrow span of control and very high formalization can be seen.

2.2 Range of Products and Services

The range of services PTCL was offering before the merger was mostly related to voice and telephony. It does not have much focus on long haul data business corporate data segment. The services which were in focus were: Fixed Telephony 0800 Toll Free UAN UIN (ISP numbers e.g. 131-777-777) BRI / ISDN Dial up Calling cards Some ignored services were Co-Location DSL

Broad Band Wireless

2.3 Customer services & Support

The customer support was poor at that time. Complaints took days or even months to fire an action. People preferred to get a new connection rather than complaining about their existing one. The service quality of PTCL landline was also not very good.

2.4 Brand Image

PTCL did not have much power in its brand. It was only considered as a government organization. The logo of PTCL did not give an evident brand identity and it was merely and image without a brand power.

2.5 Competitors and Subsidiaries

Ufone was the most popular and biggest subsidiary of PTCL. Ufone held a good market share at that time also. The competitors of PTCL at that time were Mobilink GOCDMA Telenor WorldCall

3. SWOT Analysis of PTCL:

3.1 Strengths
Largest operational network and infrastructure within IT and Telecom A near-to monopolistic position in Pakistani Fixed line market Market leadership in Wireless local loop (WLL) and fixed telephony, Ufones aggressive approach is a market challenger in GSM segment. Most of the PTCLs competitors have a dependency on it either direct

sector

with more than 7.5 million subscribers.

or indirect (E.g. Domestic Private Leased Circuits, International Private Leased Circuits, Internet backbone) PTCL has achieved economies of scale in its Fixed Line segment, due Widest and strongest coverage of Fixed, WLL and Broadband services PTCL is one of only few competitors to provide Long-haul Fiber Solution Huge sources of Cash Flow and Re-investments. PTCL carriers a significant portfolio of businesses, with Fixed Telephony to a longer experience curve. throughout Pakistan. in Pakistan.

as a Cash Cow, WLL in the position of Question Mark, and Ufone GSM being a Star business.

3.2 Weakness
Less than average Customer Service and Support Lengthy procedure for installation of new fixed connections. Heavy bureaucratic red-tape Monopolistic organizational culture has fuelled lethargy and change resistance. V-PTCL, the Fixed Wireless Local Loop service is suffering due to poor quality and support

Over employment & low productivity Sluggish decision making including external interferences Corporate culture akin to government departments Poor focus on a high-potential Corporate Broadband market

3.3 Opportunities
A huge un-tapped market, due to low tele-density in Pakistan Vast infrastructure and real estate assets which can be leveraged further through aggressive penetration, esp. in rural areas Partnerships with new entrants in a deregulated environment The grace period due to economies of scale can be utilized to maximize the future benefit High Potential in corporate broadband market Introduction of IT education in rural areas of Pakistan, esp. Punjab & Sindh

3.4 Threats
Increasingly new entrants in Long-Haul Fiber network segment VOIP use is increasing despite ambiguous and discriminatory policies, which is affecting Long-Distance usage Exposure to aggressive market competition in GSM business and Longdistance business Increasingly changing preference of GSM/Wireless telephony over Fixed Local Loop Ability to Attract & Retain Quality Professionals by competitors such as, Mobilink and Telenor Entrance of competitors like Transworld in the IPLC and IP Bandwidth business, thus, breaking the monopoly of PTCL Aggressive competitors in Broadband (Consumer & Corporate) business Strong brand loyalty of Mobilinks post-paid customers

PTCL Subscribers Before and After Privatization

Year 2006 Recen Fixed Line 5,128,442 4,405,161 GSM (Ufone) 7,487,005 19,104,594 (Sept WLL 661,532 1,139,399 (Aug

(2008)

2009)

2008)

4. PTCL RebornThe Change Begins

4.1 The Takeover of Etisalat
The local telecom market has changed significantly since the creation of PTA as an independent regulatory agency; and had enjoyed sizeable success to open up the local market to competing operators. With the governments deregulation policies, Etisalat, the UAE based telecom player being the highest bidder emerged as the buyer of the 26% share in PTCL in April 2006. PTCL, despite being a giant, had to face many bottlenecks in its operations with such large network. During the earlier phase of acquisition, Etisalat-based management took certain urgent and critical decisions that were necessary to kick start the engine of a New PTCL. Some of which are, a. It started an initiative to right-size the organization by introduction of VSS for its employees where about 28,000 employees were accepted under the scheme. b. Introduction of various diversified products and services to sustain and build its market share. c. Implementation of ERP solutions to provide integration of various departments through acquisition of SAP software and state-of-the-art billing and customer service softwares. d. Revamped the Brand Identity and reinforced the vision of PTCL to inject vibrancy and strong consumer impact.

4.2 New PTCLs Vision

One of the most important changes that were brought to PTCL was actually to reinforce their own vision. The vision of PTCL is, To be the leading Information and Communication Technology Service Provider in the region by achieving customer satisfaction and maximizing shareholders' value This vision serves as the main driver of change in PTCL. It contains components that were part of PTCL, but they were not in implementation such as: Innovation, New products/services, Customer Satisfaction, and being a Total Communication provider (broadband and data business).

4.3 New PTCLs Mission

New PTCL formulated a realistic mission statement to achieve the new vision, An organizational environment that fosters professionalism, motivation and quality An environment that is cost effective and quality conscious Services that are based on the most optimum technology "Quality" and "Time" conscious customer service Sustained growth in earnings and profitability

4.4 Enhanced Brand Identity

Another important change given to PTCL was a new and revamped brand identity that complemented Etisalats brand identity and vision.

The new PTCL logo shown above on the right symbolizes energy, newness, nationalism, innovation, customer satisfaction, service quality & efficiency, Teamwork, Customer Loyalty, and a vision to take PTCL to rising levels of a total communications provider. The new brand identity does not only mean creating a new logo, but, Etisalat-based management is also turning the underlying symbols into reality. This is evident through their strive for, Innovation into new products & services such as IPTV Largely improved customer service Reduced new connection timelines Attractive offers and packages on various occasions Reduced complaint resolution time.

This change in brand identity is also reflected in PTCLs new tagline which is, PTCL Feel the Difference

4.5 New Strategies by a New Leadership

Any change cannot be materialized without formulation of strong strategies and action plans that supports the strategic vision. PTCLs new leadership also formulated new strategies to achieve their newly established vision and goals. The formulation of new strategies started from developing a Five year Strategic Master Plan which included some key components listed below, 1. Defining yearly targets on market shares for various Voice and Data services

2. Introduction of a corporate KPI based performance measurement system

3. Restructuring of the organization

4. Formulation of IPTV, Triple Play and converged services

5. Investment strategies such as Assets Management for risk diversification and improved Return on Investments.

6. Aggressive Penetration of DSL Broadband into existing and new cities, esp. in rural areas.

7. Enhanced focus on Corporate Data segment, with formulation of new teams and KPIs to drive high potential corporate data clients.

4.6 Structural Changes

PTCLs new leadership has over-hauled the structural design of PTCL to minimize the red tape and to improve customer service/support. The new PTCLs structure is discussed here with respect to the components of Organization Structure, 1. Decentralization: Although Government of Pakistan still holds a majority share in PTCL, but the new leadership has opted to decentralize the operations to a greater extent in comparison to the previous structure.

The new management decentralized certain decision to regional/exchange level, such as, DSL link approving authority of another ISP, Tower usage permission by other ISPs, approval of new connections, lesser documentation.

2. Wider Span of Control: Span of control has been widened for functions such as Field Installation, Customer support, Exchange Operations, etc. Instead of creating redundant managerial levels, a team leader approach is adopted where required. For e.g., PTCL has reduced number of GM positions by appointing only a single Regional GM in a region for a particular department. Rather than appointing numerous GMs for each sub-department in a region. Besides, this Regional Senior Engineers now look after the sud-department in various divisions and report to their common GM. 3. Less Departmentalization: With widening of the span of control, the departmentalization has also been reduced. 4. Less Formalization: The most important aspect of this re-structuring was lessening of formalization in PTCL. Unnecessary rules, procedures, documentations, verifications, and approvals were eliminated in order to cut the red tape and serve customers efficiently and effectively. 5. Mechanistic vs. Organic Structure: Overall, PTCL has shown a clear shift from a purely mechanistic organization to become more of an organic type. This is evident from flexibility brought in major areas such as complaint registration, new connection application, and complaint resolution. The new organizational structure (Organogram) of PTCL is accompanied with an individual departments structure. PTCLs NEW Organization-wide Structure shown below

Individual Department Structure

4.7 Launch & Expansion of New products & services

Besides structural changes, the Etisalat-based management also focused on launching of new products as well as expansion of high-potential existing products. Each product is discussed below, 1. Digital Subscriber Loop: With the growing need of High-speed data and internet in Pakistani market, the new management geared the launch of the largest network of DSL services throughout Pakistan. In a matter of few years, PTCL expanded its DSL coverage to 200+ exchanges and it currently holds a 0.3 to 0.4 million DSL strong customer base, thus becoming a market leader in the DSL segment. 2. IPTV or Smart TV: PTCL brought in the innovative concept of digital TV viewing in Pakistan coupled with value added features like Video-on-Demand and Time-shifted TV. Smart TV has gained quick popularity in the top niche of the consumer market. It is now available in 15 cities with 15,000 to 20,000 customers. 3. Expansion of Data business: PTCLs largest network of Long-Haul Fiber Optics, expanding upto 10,000+ kilometers, throughout Pakistan was primarily used for Voice services only. But, identifying the opportunity of a strong data business, the new management fuelled aggressive corporate sales efforts for selling the data service. Currently, PTCL has more than 200 corporate data clients in its portfolio. 4. Point-to-Point Leased Lines (DXX): With its expertise in copper-based infrastructure, PTCL digital cross connect (DXX) network provides the most dependable media for WAN connectivity with more than 200 nodes country wide. DXX service didnt receive much attention in the past, but considering its potential as a strong WAN connectivity medium, more focus is being given to this service in order to buildup a corporate clientele around this product. One of DXXs biggest features is that, it very cost effective as compared to other last-mile mediums. 5. V-PTCL: V-PTCL is a Wireless Local Loop service started by PTCL to serve customers who had difficulties in getting a fixed telephone connection, esp. for customers in Rural areas. V-PTCL currently holds 58%+ market share of WLL segment with a customer base of 2.5M+ customers. 6. EVO: EVO is a revolutionary 3G Broadband on-the-go service. With USB plug & play and nationwide wireless roaming features, this product is gaining quick popularity among masses.

7. Multiplayer Gaming: This new product is in the development phase and is being introduced in response to a growing sense of online and network gaming among the children and the youth. This service would be launched in a years time and is bound to revolutionize PTCLs broadband services.

4.8 Shifts in Marketing Strategies

A clear shift can be seen in the marketing strategy of PTCL after takeover of the new management. Before merger, PTCL had almost no marketing and competitive strategy, or they did not needed one. But with growing competition and rapid boost in Telecom sector, PTCLs new management designed a solid marketing strategy coupled with improvement in customer service in order to ensure its strong presence in Telecom sector. Some of the key changes in marketing strategy are, a. Aggressive Sales Efforts b. Renewed efforts for New Telephone Connections c. Frequent Promotional Offers d. Discount Offers e. Bundle Offers f. Revived and Energetic Advertisements

4.9 Cultural Change

The change in PTCLs culture after takeover is realized through the following parameters, 1. Responsibility: Employees from all job areas in PTCL are assuming more responsibility in order to serve customers better with faster services and support. This change is mainly due to the placement of proper monitoring systems and tools (such as SAP). 2. Behavior & Attitude: Unlike the past, PTCL has seen a marked difference in Behavior and attitude of its employees, esp. towards customers. Customers are greeted nicely, their problems are heard carefully, quick resolution is ensured and soft tone is maintained throughout their conversation. 3. Absenteeism: The absenteeism and tardiness of employees has declined to a greater extent mainly due to the proper monitoring and introduction of performance-based culture. According to approximate figures absenteeism rate has declined by 40% to 50% as compared to earlier true figures. 4. Employee Satisfaction: A negative change in satisfaction can be seen which is mostly among those employees who avoided work previously, but they now have to perform in order to sustain their position.

5. New Ideas: With the broad vision of new management, employees contribute in the new thinking by contributing to new and innovative ideas through various formal and informal channels.

4.10 Changes in HR, Recruitment & Compensation Practices

The following changes are brought in overall HR, recruitment and compensation policies and practices, More planned processes and procedures Shift to Web-based HR system Almost Zero Paperwork Implementation of HR module of SAP ERP system Lesser focus on Old Qualification Processes More inclination towards Internal References and On-campus Recruitment Activities Abolishment of Quota System New Terms Conditions salary contract (on test basis); higher compensation in exchange of government grade. Replacement of Vehicle Policy with Car Maintenance Allowance Market competitive salary to new hires.

4.11 Improvement in Customer Service

Drastic improvement in PTCLs customer service and support can be gauged with the help of the following hard core facts, Reduced time for New Telephone Connection Almost Zero Documentation Zero Security Deposit Fewer approvals Average Timeline: 5 to 14 days Previous Timeline: 1 month to several months Reduced approval time for.. Tower usage : 1-3 weeks 3rd Party DSL : 1 day Average Complain Resolution Time

Before: 1-4 weeks or more Current: 2-5 days

Percentage of New Complains resolved within a week Before: Less than 50% Current: More than 80%

5. Other Changes & Improvements

Other than strategic changes, Etisalat out of its global experience quickly envisioned potential areas of change in PTCL. These were related to technology as well as over all approach towards business, customer satisfaction, image building and social responsibilities.

5.1 ERP implementation to bring in excellence

The implementation of Enterprise Resource Planning (ERP) has been an instrumental tool for driving PTCL towards excellence. With the implementation of ERP, PTCL aims to revolutionize its business processes backed by an efficient, fool proof and integrated system resulting in a broader and much more satisfied customer base. The implementation of ERP system includes all major functions of Human Resource, Finance, Procurement, Project Systems and Maintenance & Operations departments and Fixed Assets Management. ERP System is also providing internal information in the organization, connecting employees, suppliers and vendors to real time business processes. With the implementation of new modules, the system seeks to bring enhanced efficiency and effectiveness in day to day functions of business processes. This innovative system is continuously being promoted through trainings and promotional emails on regular basis.

5.2 HCM & NLM implementation to bring in control

PTCL seems fully committed towards bringing PTCL to a higher platform with enhanced efficiency, more transparency and better control. The vision to bring that transformation is on its way. Human Capital Management (HCM), a module in ERP is a clear example. HCM is a critical tool for development of job and employees profiles. It also provides profile matchup which help in identifying training needs. The module also offers complete functionalities for training activities and best possible utilization of training events. Altogether, HCM is enabling more control by providing better visibility and transparency. Network maintenance was pointed out as another major area of improvement. Although, procedures were in place but proper monitoring and pro-active approach

was lacking. To improve in this area Network Life Cycle Management-Plant Maintenance (NLM-PM) ERP module was implemented. The NLM-PM system captures data and details of PTCL core network equipment and sites at which they are installed to execute maintenance activities. The system also provides the Executive Management with cost visibility to allocate resources accordingly. The system is linked with network equipment inventory and spare equipment stock issuance / utilization. Some of the major available reporting information includes fault ratio report, equipment down time report, equipment maintenance cost reports, equipment inventory status report, and stock movement/ stock consumption report. With all these functionalities, the system enables the executive management to undertake cost effective measures e.g. comparison of cost incurred on specific equipment.

5.3 PTCL Carrier Services & Wholesale for better utilization of infrastructure
Dynamics of the carrier market have become very challenging with the emergence of the competition. The focus, thus, is on understanding carriers needs and requirements and extending PTCLs product portfolio to meet carrier customers needs in a timely manner. Though PTCL has a large infrastructure but its market position does not reflect it. PTCL carrier services and wholesale (CS&W) is the one window facility to interface and address carrier and wholesale customers infrastructure and service requirements. For the inter-operator segment, aim is to improve customer satisfaction by faster fulfillment and implementation of the services, thus, enabling the retention and acquisition of new business. PTCLs major focus is at providing the advanced satellite communication solutions to enable backhaul of GSM traffic from sites in rural and remote areas to PTCL hub station near Islamabad. PTCL has recently undergone an agreement with Telenor Pakistan for this service. PTCL is further exploring the option of providing backhauling service to cellular base stations to base switching centers.

5.4 PTCL Call Centers and Service Centers to win back customer confidence
PTCL customers had always complained about delays in service restoration in case of failures. Lack of well-defined customer interfaces and tedious documentation had always frustrated PTCL customers. There were complaint centers that used to issue a unique token to customer for complaint. This complain along with the token number was then forwarded to staff in that area for rectification. There was no complaint tracking system in place for customers. New management realized the importance of customers and dedicated 2009 as a year of customer care. Aggressive measures were taken to win back customer confidence. PTCL call centers and service centers are one step towards that. PTCL Call Centers were established in February 2007. It now has 5 customer call centers located in Karachi,

Lahore and Islamabad, with plans to expand in other parts of the country. These centers are one-point contact facility, designed to give customers maximum convenience with personalized and prompt service. These centers will facilitate customers in; New service provisioning Maintenance support End-to-end communication solutions provisioning at corporate customers

These facilities are designed to provide better customer care through swift processing of customer requests at one window for all telecom services, convenient registration procedures with minimum documentation for hassle-free registration. No doubt, the new management has created much improved customer interfaces but there are issues from various other ends that keep frustrating the customer. As an example, suppose there is a problem at customer fixed line. Customer would raise a complaint. The problem may be at either of switching core end or external copper network end. The external network faults are difficult to trace and keep occurring due to various infrastructure developments in the area. To avoid the hard work required in tracing the external faults, nominated staff connects a telephone set at subscriber line interface at central office (CO) and complete the procedure of fault removal acknowledgment. These steps should ideally be taken by customer in order to acknowledge the fault rectification. Customer keeps suffering whereas the concerned authorities assume that the fault has been rectified. In February 2008, Jamil Khawaja, EVP Business Zone North originated the idea of customer facilitation camps. The main purpose of holding such camps was to impart PTCL staff with firsthand knowledge of issues & problems faced by customers. Additionally these camps are also being used to educate customers regarding current and upcoming services of PTCL. The first camp was organized on 23rd February 2008 Saddar, Rawalpindi and witnessed approximately 1000 visitors.

5.5 NOC development to increase customer reliability

PTCL was facing serious operational challenges due to absence of centralized network management. Fault resolution was ad hoc and inefficient, service restoration took long time and a lack of mechanism for root cause analysis. To overcome these problems, PTCL has recently completely development of a Network Operations Center (NOC). This development would help PTCL win confidence of corporate customers. The purpose of NOC is: 1. To control, monitor and manage the entire PTCL Network 2. To enhance and optimize Network Management through a transparent and centralized platform 3. To create a highly available, adaptable and fault resilient network that can meet the market demand and provide customer satisfaction.

5.6 Image building through socially responsible behavior

PTCL has always responded to ongoing country wide issues in a socially responsible manner. Since the takeover of the new management it was believed that PTCL would only be interested in profits. But the new PTCL management proved these allegations wrong by continuing its participation in furthering worthy causes that contribute to the lives of individuals and help better the standards of society as a whole. As an example, PTCL donated a sum of Rs.2.5 million to the SOS Villages. SOS is an organization that looks after the well-being and education of orphans and the destitute. Another initiative taken by PTCL was announced at the World Telecommunication Day held on May 17, 2008. This year the worldwide theme for the Day was Connecting Persons with Disabilities. To raise awareness of this theme and support initiates focusing on less privileged persons, PTCL chose to become the lead sponsor of the World Telecom Day event in Islamabad contributing PKR 6.8 Million. During address at the event, PTCLs President, Mr. Walid Irshaid announced five academic scholarships per year for persons with disabilities so that they could pursue their career of choice by obtaining higher education at any university with Pakistan. PTCL would bear the full tuition costs and living expenses of those awarded these scholarships. PKR 1.5 million was announced focusing on the education of the special people. Donation of Rs.10 million by President PTCL for the reconstruction and rehabilitation of earthquake victims in Baluchistan is another example of social responsible behavior. Another example of a more socially responsible PTCL is the development of Elearning portal. Its a comprehensive easy-learning program that delivers more than 1500 affordable, certification-level IT, desktop and professional development courses through the internet allowing learning anytime, anywhere for a fraction of the cost of class-based training. These courses not only provide skills that improve prospects in life, but also give free access to hundreds of work opportunities posted by businesses worldwide on their free website. To promote and introduce this valuable service, PTCL teams conducted free distribution of Easy Learning Cards to Educational Institutes, to corporate clients, Broadband and Vfone customers.

6. Resistance to Change
Even before the actual privatization of PTCL took place, the media and other national thinkers looked at it as a big financial scam. Etisalat acquired a 26% strategic stake along with management control in 2006 after months of deals and bargaining on the actual value of the deal. Scandal reported in the papers claims that PTCL was worth a lot more. PTCL no doubt is one of the strongest corporate enterprises not only in Pakistan but also in the continent known as Asia. Therefore, if the news story had become true, it could have a devastating effect on the Pakistans Telecom market, Economy and Pakistans political stability.

Leading newspapers in Pakistan had highlighted news over privatization of PTCL, as the secret contract. An ex-Senior Vice President also claimed the privatization as Pakistans Biggest Financial Scandal. Generally, it was believed that pricing decisions were made through old records instead of determining current market value. Furthermore, in days of PTCL privatization, Supreme Court of Pakistan had given decision against the privatization of Pakistan State Oil and Pakistan Steel and if PTCLs privatization had been challenged it could have brought horrifying results. People believed that being state owned enterprise; it was Governments critical responsibility to measure the scope and feasibility of privatization. PTCL was considered as one of the oldest and strongest corporate enterprises and revenue contributor in Pakistan. It was generally believed that marketing, corporate level, business level strategies and new product launch could also had been carried on without risking a profitable business. All PTCL needed was good corporate governance through accountable and economically feasible process with holistic approach towards growth, transparency and control. Together, these measures could have put PTCL in a better position. Above mentioned prevalent situation built an anti-privatization atmosphere within organization and added fuel to much stronger resistance from employees.

6.1 Factors that caused Employees resistance

PTCL employees were enjoying government offices with government packages and flexibilities related to timings as well as performance. Employees lacked technical expertise. Most of the services were managed through third parties and PTCL employees only acted as facilitators. This dependency was causing huge annual operation and maintenance cost. Due to lack of proper monitoring, corruption was also at its peak. Generally, the employees had either political affiliations or were part of different unions and were focused at serving their personal interest only. Privatization of PTCL posed a serious threat to this culture. New entrants at the same time with better vision and expertise were continuously capturing market share. PTCL employees at the same time were not well aware of increasing threats posed to it because of new trends and practices in industry from the technology point of view. Employees generally believed that PTCL is incurring

huge profits and would continue to do so. New management had a realization that PTCL could only sustain its position if it adapts to latest technical practices. Employees at the same time lacked the required qualification and motivation towards learning, thus looking at new practices as a threat to their jobs. PTCL organizational setup was designed with a vision of increasing employment. There was huge redundancy in job roles having long chains of command. New management believed in optimal human resources with well-defined job roles and strict monitoring. Huge job cuts were also announced as part of privatization agreement. This created an environment of uncertainty among employees which prevails in PTCL to date. General public perception of private sector jobs also acted as a biggest hindrance. People like public sector jobs because they do not really want to work. Privatization meant an end to all the luxuries. Private organizations are usually too demanding and often expect working beyond normal working hours. Furthermore, private organizations require professional attitudes in which only fittest people can survive. PTCL employees generally believed that they will not be able to adapt themselves to expected levels.

6.2 How new management handled resistance

Biggest resistance prevailed in PTCL because of job uncertainty, motivation towards learning and cultural shift. PTCL addressed each of these by introducing revolutionary and intensive measures. Employees political affiliation and influence of unions turned out to be major hurdles in implementation of these measures. Job cut was part of privatization agreement. However, due to threats from employees to jam the total network straight forward termination was not possible. Mechanism was devised to implement the job cuts through Voluntary Service Separation (VSS), a very friendly package. The scheme was projected to cost rupees 34.858 billion, assuming that 60 percent of the employees would avail this package. Many employees readily availed this as an opportunity and separated from service. Two phases of this scheme had been completed. This scheme proved to be very beneficial for new PTCL management and weakened employee unions. Having got rid of huge chunk of employees, the new management wanted to bring in more control over employees which was lacking because of employees permanent government job agreements. So, the new management announced revision of job contracts that allowed management more control over employees and decorated it with very attractive pay scales. As an example, an employee who was getting 35 thousand rupees monthly could now easily earn around 80 thousand rupees monthly. The scheme was known as Unified Pay Scale (UPS) and was optional for all the employees. New management explained that this package is for the benefit of workers and those opposing it are misleading the entire work force without being fully aware of its salient features and benefits. Many employees opted for this new scheme, thus creating further division in PTCL employees and weakening their unity. New organization structure was designed. Various interdepartmental transfers were done to fill in the slots. Further to this fresh graduates were also hired with newly defined job roles and designations. This created another division among PTCL employees. By this time the new management was in much better position and had enough control over the employees. Currently, there are three major divisions of PTCL employees from pay scale point of view. 1. Government employees having government pay scales 2. UPS employees voluntarily transferred from government pay scale to new pay scale 3. Fresh hired employees with pay scales equivalent to UPS but strict employment clauses

New management plans to bring all the employees at same pay scales but is not in hurry to get it done. Regardless of the pay scales, the employees are currently having same workloads, thus encouraging more and more employees to opt for UPS. PTCL is no more a luxury package. Targets are aggressive which are supported by incentives that are motivating. Amidst all the resistance, new management kept highlighting the factors that were affecting the PTCL profitability. Major focus was on the quality of infrastructure deployment and customer relations. To make this possible, new management created a new department called Quality Assurance. Role of this department was to ensure the quality standards at all the new PTCL deployments and its participation was made mandatory. The year 2007 and 2008 was declared as quality year. To reinforce this, various banners and pictorial demonstrations were placed at all the PTCL offices and exchanges. The new management believed that greater customer satisfaction can be achieved if their lower staff like, line man and CPE installers are given the required training and tools. They started treating them as a basic customer interface. Various trainings and incentive plans were arranged for them. Basic trainings included the tool handling and basic troubleshooting skills specially in case of broadband provisioning. The trainings served the purpose of improving the employees technical level and incentives increased the motivation level. Table 1-3 show examples of incentives offered to staff.
Table 1: Incentive Plan for new telephone connections per month Table 2: Incentive Plan for Broadband Installation/Provisioning for the 41 to 80 connections per month

Sr. No 1 2 3 4 5

Designation Lineman Technician Engineer/Super visor AE/ADE/SDO Senior Engineer

Amount in Rupees 100 20 20 20 15

Sr. No 1 2 3 4 5 6

Designation CPE Installer Lineman MDF Technician DSL Officer Manager Provisioning SM MM&BB

Amount in Rupees 150 75 45 15 10 05

Table 3: Incentive Plan for Broadband Installation/Provisioning for more than 80 connections per month

Sr. No 1

Designation CPE Installer

Amount in Rupees 250

2 3 4 5 6

Lineman MDF Technician DSL Officer Manager Provisioning SM MM&BB

125 75 25 15 10

Resistance was massive but handling was very cautious and gradual. It will not be wrong to say that until now the new PTCL management has only gotten rid of the resistance towards its own existence. The transformation in PTCL has yet to be seen. More than 0.2 million broadband subscribers, development of state of the art Network Operation Centre (NOC) as discussed in earlier section and revamping of the training centers are only a few glimpses of their overall vision.

7. The Results
7.1 Financial Impact
Profit after tax(Rupees in billion) Revenues (Rupees in billion)

80 70 60 50 40 30 20 10 0
2003 2004 2005 2006 2007 2008 2009

The above graph shows the financial impact of the Etisalat takeover. Etisalat took over PTCL on April 2006. Due to this the impact of the change can be seen from the 2007 figures. If we analyze the impact prior to the takeover then we observe that revenue stream of PTCL was increasing but profit was not increasing accordingly. In fact, profit was going down as we move forward from 2004. After Etisalat took over, same pattern continued for couple of years. In fiscal year of 2009, profit started to take the upward turn. In 2008, profits took the steepest drop although revenues drop were consistent. This happened due to the introduction of VSS. VSS incurred huge cost during first year of its implementation. After that in 2009 cost of VSS also reduced resulting in the increase in profits.

7.2 Organization Structure

PTCLs new leadership has changed the structural design of PTCL to minimize the red tape and to improve customer services. Some of the changes have started to give positive results. Decentralized decision making and less departmentalization has improved customer satisfaction, widen span of control has allowed to reduce cost. As PTCL moves from mechanic to organic structure, more positive results will be visible in the future.

7.3 Customer Satisfaction

PTCL is enthusiastically striving to face the challenges of the dynamic telecom industry in Pakistan. In addition to their recently launched nationwide and local call promotions, the introduction of free voice mail in major cities is a big step forward in the right direction. In the vigorous telecommunication industry, customer satisfaction is a key component in the success of a telecom provider in Pakistan. With mobile providers coming up with new promotions day in and day out, PTCL needed to step up. By providing the free voice mail service they have given their customers the ability to stay in touch anytime, anywhere. Improvement in land line services is now visible as well. New connection processing time has reduced significantly. PTCL has introduced the concept of PTCL call centers where one window for all services is provided to customers. Network operations centers are established and used to control, monitor and manage network. Though PTCL is making huge strides in the right direction, the telecom industry is also moving faster than ever and the need to keep pace has never been greater.

7.4 New Product & Services

With the change in the leadership, PTCL is now not afraid to launch any new product or services. Before takeover, initiative of launching new services and products were lacking. Centralized decision making was also a main block when it comes to introducing new products or services. The introduction of DSL, IPTV / Smart TV, DXX and Multiplayer gaming are major steps taken by the new leadership.

7.5 Brand Power & Brand Image

Undoubtedly the brand power of PTCL has a big impact in the market. The new brand identity does not only mean creating a new logo, but, Etisalat-based management is also turning the underlying symbols into reality

7.6 Human Resource

Human resource management is among those areas where Etisalat leadership has put great emphasize. Introduction of VSS was the major initiative that Etisalat leadership took as soon as they got the control of PTCL to reduce human resource cost. Planned human resource system is introduced to control the human resource. It also provides the insight to individual on their respective performance and provides facilities to employees. Professional reference for hiring is fast becoming the part of the culture of the organization. Employees benefits have been reduced to reduce cost and competitive human resource is being hired. An Incentive Plan has been worked out to present substantial cash rewards to the employees performing beyond the specified benchmarks. This will be the start of an era where the rewards shall be linked with the performance and achievement of targets.

8. Recommendations
Overall PTCL still behaves as a monopoly it has to change its attitude. At a minimum, avoiding billing errors and providing competent and courteous service to its customers is essential if PTCL wants to show that it is transforming itself to a competitive company which cares for its customers.

Although PTCL culture is changed and it is behaving like a organic organization, employees of PTCL have not changed significantly. Soft skills training should be provided to employees so that their pre-takeover attitude is changed.

 After the takeover, PTCL has started hiring new employees with market competitive compensation. Old employees compensation should also be review with respect of the their performance so that all the employees are treated in the same way.

Broad band should be expanded to rural parts of the country. PTCL already has an established infrastructure on many such areas. This advantage should be used to expand Broad band in rural areas.

PTCL has showed great improvement in the customer support. Introduction of PTCL call centers has played a major part in this improvement. Now PTCL should expand its customer and should establish dedicated customer support for the corporate customers.

Copper infrastructure is still the Achilles heel of PTCL. Hugh amount of human resource and costs is being spent due to the worn out state of the copper infrastructure. PTCLs land line revenues are also limited by this problem. Improvements in the infrastructure should be considered the top priority.

9. References:
http://telecompk.net/2007/10/01/mobile-market-2007-mobilink-at-top/ http://propakistani.pk/2008/10/06/wll-industry-outperforming-fixed-line-inpakistan/ http://propakistani.pk/2008/12/16/ptcl-customer-loss-still-not-late/ http://propakistani.pk/2009/11/17/cellular-subscriber-stats-august-september2009/ http://www.ptcl.com.pk http://ptcl.com.pk/aboutus.php http://www.pta.gov.pk