PTCL has been struggling since quite some time with its revenue generating ability on account of highly aggressive competition from the competitors and low quality of its products especially the landline service, which is causing people to divert from PTCL and resulting in a significant drop in its number of fixed line subscribers.

PTCL has been struggling since quite some time with its revenue generating ability on
account of highly aggressive competition from the competitors and low quality of its
products especially the landline service, which is causing people to divert from PTCL and
resulting in a significant drop in its number of fixed line subscribers.
The recent FY11 result is the product of the above mentioned problems that resulted in a
3% decline in the revenue of the company. Increase in the number of WLAN subscribers
is the main factor that contributed towards PTCL’s earnings.
The cost handling by the company is also inefficient. The cost of services increased 9% Yo‐
Y. Taking the cost to sales ratio, the cost of services for FY11 was 75.6% as against 67%
in the prior year hence showing that the sales did not increase in line with the increasing
cost. Administration and marketing costs have increased 4% and 6% respectively on
account of high employment cost, high competition and growing inflation.
The only positive aspect of the final accounts is the operating income that increased by
53%. That too, is because of high dividends from Ufone and interest income on loans
given to its subsidiaries.
All margins of PTCL are weak eventually resulting in a decreased EPS yield of Rs1.46/sh
which is 20% reduced from the prior year.