ISLAMABAD: PTCL Group, Pakistan’s largest telecom entity, is grappling with financial struggles despite increasing revenues. Much like other troubled state-owned companies, including Pakistan Steel Mills, PIA, and Pakistan Railways, PTCL is facing mounting losses. The latest financial results reveal a revenue increase of 15.3% to Rs160.6 billion for the first nine months of 2024 compared to the same period last year. However, despite this growth, PTCL reported a net loss of Rs15.3 billion.
Persistent Downward Trend Since 2006
In 2006, the Pakistan government handed over PTCL’s management control to the UAE-based Etisalat as part of a $2.6 billion deal, yet the company’s profits have continued to decline. While PTCL reported a profit of Rs28 billion that year, it has since experienced consistent financial losses. The government retains 62% ownership, with 12% held by banks, insurance sectors, and the public through the stock market.
Revenue Growth but Continued Losses
The PTCL Group, which includes PTCL, Ufone, and U Microfinance Bank, shows strength in consumer services, particularly broadband, mobile data, and wholesale solutions. Yet despite Ufone’s 25.6% revenue growth and U Microfinance Bank’s 76.5% increase in 2023, the Group posted a net loss of Rs14.1 billion that year. Analysts attribute this to high administrative and financial costs, ranging from 8% to 10% of revenue.
Concerns Over Operational Approach
Analysts urge PTCL to operate with a private-sector mindset rather than a typical state-owned approach. Nasheed Malik from Topline Securities warns that PTCL’s losses could worsen, particularly with its recent acquisition of Telenor Pakistan. The company’s management has not publicly responded to queries on the ongoing losses, though officials hinted at updates in the next quarterly briefing.
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