PTCL Q1 profit down 6.9pc

Posted on 10.31.06 by StockPK Team @ 3:00 pm    

Pakistan Telecommunication Co Ltd (PTCL) posted a 6.9 per cent fall in quarterly profit on Monday, a drop analysts said came as competition ate into international call revenue and outweighed subscriber growth.

PTCL - the country’s fourth-largest listed company with a market value of around $2.9 billion - said net profit in its first quarter to end-September fell to Rs5.15 billion ($85million) from Rs5.53 billion a year earlier.

PTCL’s control of Pakistan’s land-line sector has been eroded since the government opened up the market in 2002, but it still dominates the sector, and also operates mobile phone and Internet services.

Pakistan’s mobile phone penetration rate topped 25 per cent at the end of August, up from 8 per cent in mid-2005, according to figures from the Pakistan Telecommunication Authority. Earlier this year, Dubai-based Emirates Telecommunications Corp (Etisalat) took over management control of PTCL from the Government of Pakistan, buying a 26 per cent stake.

PTCL shares were trading little changed at about Rs43.80 on Monday, in line with the broader market. The stock has fallen more than 30 per cent in 2006 so far, while the market rose more than 20 per cent.

After deregulation of the telecommunication sector that enabled private companies to set up telephone services, PTCL has had to contend with tariff reductions, settlement rate cuts, and reduction in revenues due to government levies, analysts said.

Also since then, dozens of rivals, including domestic wireless players such as Worldcall and Telecard, have eaten into PTCL’s call traffic and forced it to slash charges. But with over five million fixed telephone lines countrywide and few significant domestic competitors, analysts expect PTCL to be the main winner in years ahead as the market expands.

Source: The News