Pakistan Telecom to Sustain Sales Growth on Broadband

Pakistan Telecommunication Co., the country’s biggest fixed-line phone-service provider, said second-half sales growth will at least match the pace of the previous six months as broadband demand increases.

“We will be doing equally well, if not better” in the second half as the broadband business grows, Chief Executive Officer Walid Irshaid said in an interview yesterday. Net income rose 15 percent to 7.86 billion rupees ($76 million) in the six months ended June, while sales climbed 17 percent to 65.6 billion rupees, according to calculations based on data compiled by Bloomberg.

Pakistan Telecommunication, part-owned by Emirates Telecommunications Corp., seeks to tap the increasing demand for broadband connectivity, which contributes about 25 percent to its total revenue. The carrier, which has about 1.8 million broadband users and says it has almost 95 percent of the market share, expects the double-digit annual pace of subscriber additions to continue, Irshaid said.

“PTCL is on a growth path and our revenue is driven basically, primarily from the broadband growth,” Irshaid said at his office in Islamabad.

The carrier, which owns mobile service provider Ufone, is conducting a due diligence of smaller competitor Warid Telecom Ltd., Irshaid said, declining to elaborate. Warid Telecom is controlled by the Abu Dhabi Group.

Pakistan Telecommunication had 40.8 billion rupees in cash and short-term investments as of March 31, the data shows.

Acquisition Benefits

Ufone also competes with Pakistan Mobile Communications Ltd.’s Mobilink, Telenor ASA’s local subsidiary and the unit of China Mobile Ltd.

“I foresee consolidation as a natural phenomenon,” said Irshaid. “A natural thing to happen to improve and sustain the existing operations.”

Shares of Pakistan Telecommunication fell 2.5 percent to 25.64 rupees in Karachi yesterday. They have surged 48 percent this year, compared with the 36 percent advance in the benchmark Karachi Stock Exchange 100 Index.

Pakistan Telecommunication plans to bid for licenses for the third-generation mobile-phone network when the government seeks offers in an auction, Irshaid said. He expects the government to seek bids as early as end of this year.

Prime Minister Nawaz Sharif, who won an election in May, has increased tax levies on the telecommunications industry and agreed on a loan with the International Monetary Fund as its reserves plunged and the nation’s currency fell to a record low. Sharif is aiming for 4.4 percent economic expansion in the fiscal year that started July 1, up from an estimated 3.6 percent in the 12 months ended June 30.

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