FINANCIA

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REPORTI
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9
 Acknowledgments

All the praises for Allah Almighty, the

most merciful and the most beneficial, for

blessing us perseverance,

patience, intelligence and commitment, all of which is required for

successful completion of a project. It is with the grace of Allah that we

have been able to take and accomplish this research work. We pay honor

to the Prophet Hazrat Muhammad (PBUH) who is forever a torch of

guidance and light of knowledge for mankind and teaches us high ideas of

life.

We feel great bliss of deepest gratitude to Mr. Abrar Jameel for his

supervision, valuable suggestions, and cooperation throughout our

research work. We are grateful for his cordial attitude towards us.

We would also like to thank Mr. Faisal Siddiqui, Manager Customer

Services of WorlCall for providing us with all the information and his

cooperation. I would also like

SUBMITTED TO:to acknowledge
Mr. ABRAB Mr. JAMEEL
Mujahid Rasool for his

up to date SUBMITTED
knowledge about statistics methodology.
BY: All these teachers
Hafiz M. Hassan
Qureshi
have been extremely cooperative to help up us in our research project
Ali
and we whole heartedly thank them forRaza
that. Bashir
M. Haris
We also express our deep sense of gratitude and thanks to friends

for their cooperation, support and caring behavior towards us throughout

the course of completing this project.

 Last but not the least we would like to thank our group members for
being so cooperative, helpful, motivate and for maintaining good group
dynamics.

Executive Summary:

Worldcall Telecom is a service provider company and is dealing in

telecommunication services, cable providers, internet service provider,
and payphone services. They are operating in Pakistan since 1996. They
are improving their business tactics and planning as the time passes and
become number one in private telecom services. Salman Taseer is the
chairman of the company. The major decision making lies in the hands of
executives. For internal communication they are using LAN. Managing
directors are responsible for the projects management and also for the
operations of the business. At operational level, Worldcall needs to have
information about its daily operation like daily sales transactions, No. of
orders placed by the franchises, no of complaints from their customer.
Company should be aimed to check the SWOT analysis to increase the
efficiency of company. External environment has a great effect on the
company. The major impact is of technology, because infrastructure and
the efficiency of the company depend on the use of technology. The
threat of entrance is high, there are many suppliers, bargaining power of
the buyer is high, but there is no threat of substitutes of the company. The
major competitors of the company are PTCL, WATEEN, CYBERNET, GSM
operators. The main opportunity available to the company is to install
fiber cables in company, they can also tale advantage of internet
explosion. The major threat of company is from instability of economy.
Other threats are from the newly launched companies providing the same
services with lower prices. The major strength of company is the size of
their network. They also have some licenses (WLL /LDI /NGN). Less
emphasize on the marketing is another weakness of the company.
Company is normally operating in the turnaround area. As it is a service
based company, the major focus in the value chain analysis is on sales
and marketing, and after sale services.

The tactical plans of the company are to train employee, implement

system with in a year, etc…etc. Operational plans includes necessary
information about current data base, preparing of a vendor list, evaluate
the cost and services offered by the outsource company. As for as the
change management is concerned, we supposed that change should be in
parts, firstly data base should be implemented and then trained people
should be hired in order to increase the efficiency of the business.

They are heavily investing in plant and equipment (New Technology) and
experiencing high speed expansion. That is the very reason they are
facing losses at present. But the company’s operating costs are not
increasing with respect to their expansion which shows that they are
working efficiently and paying much interest to control there costs. But
the expansion costs like investing in hardware is not controllable because
of the market demand. If they don’t expand, they will not survive.

2.1. A general review of the performance of the company, its

various activities and products during the period under review.

A BRIEF INTRODUCTION ABOUT WORLDCALL:

Worldcall Telecom Limited (WTL), an Oman Telecommunications Company

(Omantel), is the most reliable and unique telecom and multimedia
service provider in Pakistan.
Worldcall launched its business in June 1996 with payphone operations,
then with shifts in technology and industry, innovation and dedication led
us to growth in diversified businesses with a range of services designed to
serve the needs of the local market. Worldcall Telecom Ltd. became an
associate company of Omantel after acquisition of major share holding by
Omantel in 2008. Today, Worldcall Telecom has become synonymous with
innovation, dedication, and reliability in Pakistan.

VISION: We at worldcall are committed to achieving dynamic growth and

serve excellence by being at the cutting edge of the technological
innovation. We strive to Consistently meet and surpass customers’,
employees’ and stakeholders expectations by offering state-of-the-art
telecom solutions with national and international footprints. We feel pride
in making efforts to position Worldcall and Pakistan in the forefront of
International arena.

MISSION STATEMENT: In the telecom market of Pakistan, Worldcall to

have an over-whelming impact on the basis of following benchmarks:
 • Create new standards of product offering in basic and value added
telephony by being more cost effective, easily accessible and
dependable. Thus ensuring real value for money to all segments of
market.
• Be a leader within indigenous operators in terms of market share,
gross revenues and ARPU within five years and maintain the same
positioning thereafter.
• Achieve utmost customer satisfaction by setting up high standards
of technical quality and service delivery.
Ensuring the most profitable and sustainable patterns of ROI (Return on
Investment) for the stake-holders.

PERFORMANCE REVIEW OF THE COMPANY:

The company is focusing on its aim to become the number one national
telecoms provider and a leading multi service operator in the region.
Initially the business was started with payphone operations. Then with the
passage of time worldcall grew and diversified its business from Cable
Broadband to Wireless Broadband, from Cable TV to Video on Demand,
from Long Distance and International (LDI) services and fiber optic
network to wireless local loop telephony, WTL has crossed a number of
milestones by shifting Hello calling card traffic into LDI network. At the
same time a NGN (Next Generation Network) powered plate form
installation is also complete, which help the company to handle call traffic
even more economically. WorldCall has also launched Wireless Local Loop
(WLL) payphone under the name “Free Phone”. (Figure1) shows that
public response to it is encouraging. WorldCall Management is also
conscious of the fact that their will be a pressure on prices, so they are
frequently focusing on the quality services, and better customer care
which would result in achieving the company’s aim to maximize their
customer base.

Figure 1

MULTI SERVICE OPERATOR:

Wordcall Telecom Limited is now positioned as the only Multi Service

Operator (“MSO”) in Pakistan capable of offering such a variety of telecom
services.

SALES PERFORMANCE DURING THE PERIOD UNDER REVIEW:

STRUCTURAL ANALYSIS:

Worldcall telecom is a service based industry. Currently the company is

operating in telecommunication, internet services, and cable services.
Salman Taseer is the chairman of the company and the decision of the
company is centralized. The major decision making of the company lies in
the hand of the board of directors which include Kamil Aziz, Naveed Tariq,
Effan ibne Riaz, and Farooq Ahmed. The major purpose of the business is
to find the potential buyers and also they are focusing on the best
services to the users.

For the internal communication (within department) they are currently

using Local Area Networking, and for the communication with other heads
of departments they are using simple internet.

The managing director of the finance department is responsible for the

forecasting of new projects and also for the costing of the current
departments. They are maintaining the database for every department
which is being updated on the daily basis.

The director of information technology is Shahid Mahmood which is

responsible for the use of technology in the organization by departments
and between other departments.

Under these there are chief operating officers, whose duty is to check and
run day to day operating activities of the business.

Company has more than 59000 franchises, so it is a great task for the
business managers to collect data from all the places and than put it into
a single data base.

SWOT ANALYSIS:
 SWOT ANALYSIS OF WORLDCALL

2.2 Outline of the contribution of the company to the national

exchequer and the economy of the country.

The Telecommunication sector is the most important sector of Pakistan. It

plays an important role in the economy of the country. Its contribution in
the national income and GDP is comparatively high. World Call is the key
company of telecommunication sector its contribution in country’s
economy is valuable. In the Economy of Pakistan, World call has a
splendid impact on the basis of following benchmarks:
INVESTMENTS

The Pakistani market is one of the largest and fastest growing telecom
markets in the region Foreign Direct Investment in Pakistan in the year
2007-2008 was US$ 5.2 billion of which 32% pertains to communication
sector. Which had a major impact on the economy of Pakistan? The sector
is also currently contributing 2 per cent out of the 7 per cent of GDP and
in 2006-07; more than $1,824 million were invested in Pakistan into the
telecom industry through FDI, making it a major driver of economic
growth.

ATTRACTING FOREIGN INVESTMENTS

The foreign investment being attracted by the world call and during 2006-
07 US$ 0.8 billion FDI came into the World call which was 15.6 percent of
the total FDI.

Omantel acquired 488.8 million shares in WorldCall Telecom from majority

stakeholders and other related parties. The majority state-owned Omantel
is also planning to buy another five per cent stake in Worldcall from
Pakistani bourse. The transaction includes 70.65 per cent interest in
Worldcall Telecom's subsidiary in Sri Lanka.

CONTRIBUTION IN GDP AND ECONOMY

Pakistan's economy is showing increasing signs of stress by the end of

fiscal year 2007-2008, real GDP growth for FY-08 has dropped below 6%
level for the first time in last 5 years, annual inflation has reached
12%.The total World call revenue for the year ended June 30, 2008 rose
by 4.5% to Rs. 4,508 million compared to Rs. 4,313 million for the last
year.

CREATING JOB OPPORTUNITIES

Currently only worldcall telecom sector employed 5000 workers and the
amount of worker employed every day is increasing. Worldcall web. There
are many announcement on the web about job.

CONTRIBUTION IN NATIONAL TREASURY

2005 2006 2007 2008

PTA charges 2,353,771 28,534 28534 26,537

 Taxes paid 234,610 82,905
(Rupees in
‘000)

This represents charges payable to PTA in respect of contribution to the

Research and Development Fund established by the Federal Government.
These include license fees and many other types of licenses.

INVESTING IN FOREIGN MARKET

Worldcall has 70.65% shareholding in Worldcall Telecommunications

Lanka (Private) Limited which operates payphone operations in Sri Lanka.
During the period, the number of customers subscribed to Worldcall Lanka
service decreased by 372 (from 1,238 to 866). The gross revenue for the
year ended 30 June 2008 is Rs. 11.2 Million compared to the
corresponding period of previous year's revenue of Rs.16.2 Million.

Employment and Foreign Direct Investment Potential of

Telecom Sector

Service Direct Indirect Employment Foreign

Employment Investments

Mobile 5,000 Vendors, Franchises and US $ 2-3

distributors billions

Fixed Line 15,000 Pay phone (PCOs) Vendors, US $ 3-5

Telephony Customer Service Centers, billions
LL (5,000), WLL
Call Centers and
(8,000), LDI Distributors
(2,000)

Total 20, 000 350,000 US $ 5-8

Billions

Next 3 to 5 years

2.3. Information on how the company contributed to its

responsibilities towards the development of Human Resources

CUSTOMER RELATIONS
Worldcall has its own 59000 franchises or point of sale in the country, so
they are doing very well in providing after sales services. They have their
separate customer relation management department whose unique
function is to check where the customer is having problems and after
identifying the problem they resolve the problem as quickly as possible.
They also have a separate customer care department, whose function is
to record the customer problem and inform the technical department to
fix it.

OBSERVED AT GULBERG CENTRE

The salesperson's attitude of showing restlessness while waiting for the

customer to make up his mind. The sales person was impatiently looking
and forcing the customer to do it quickly and making him more nervous.

Two or more sales clerks visiting each other rather than offering to assist
customers.

HR AND TECHNOLOGY

Currently they used manual system for information about the sale of new
connections and after receiving all the slips from their representatives
they put this information into their system. It happens that the repetitive
came with the new connections information after weeks. Updating period
is long for new sales connection and customer information. This create
problem for operational decision. Currently they have their database
system for their customers but as mentioned above it is not updated on
the daily bases. Because of that they get some problem at operational
level. When a customer apply for the connection Worldcall staff check the
availability of free connection and come to know that there is a free
connection available in that area. After giving an OK report to customer
they come to know that the connection has been already sold to a
customer but it was not updated. At that time they feel embarrassment.
But after the installation of EDI the records will be updated even after a
single connection sale and will provide management a way to make
efficient decision.

LIVING STANDARD SCALE

Company Size 5,000 employees

Salaries, wages, benefits expense / number of employees =
Earning per year

= (19363000 +492551000+31300)/5000

=512227000/5000
Earning per year =102445.4

Earning per month =102445.4/ 12

=8537 RS

Every laborer will got 8537 Rs a month which is not bad. This result
indicates that they are treating and motivating them by giving them
higher incentive and improving their standard of living

PUSH AND PULL STRATEGY

Worldcall Multimedia is working both on push and pull strategies. Because
push Strategy means a promotion strategy that calls for using the sales
force and trade promotion to push the production through channels.
And Pull Strategy means a promotion strategy that calls for spending a lot
on advertisement and consumer promotion to build up consumer demand.
If the strategy is successful, consumer will pull the product the product
through channels.
So if we observe the promotional strategies of Worldcall we find that it is
working on the both. As
• Free installation (on special occasions)
• Free modem (on special occasions)
• Discounts (on special occasions)
• Discounts in case, if customers submit advance payment for two, three
or six months.
• Discounts if a customer is using more than one internet cable.
• Customer retention as by organizing concerts. For the purpose they
advertise that a concert is being organized and Entry Tickets will be
issued to only those, who will submit six months payments for the internet
services.
• Ads are also given in the newspapers, magazines etc.

LOANS AND ADVANCES TO EMPLOYEES

These loans and advances are unsecured and interest free and include
advances given to workers of Rs. 2.46 million (2006: Rs. 0.365 million) in
2008 Rs. 5.20 million (2007: Rs. 2.46 million

CUSTOMER DATABASE

Oracle 9i being developed which contain all the information about the
customer. Customer ID should be assigned so that company knows that
which kind of facility their customer is using (wireless facility, TV cable,
internet Cable). The address and other important information about the
customer will be mention in the data base. They should buy a decision
support system like Decision Edge system. It will help them to divide the
customers on the geographical bases. They will able to know that which
area of the cities having more connection so company should increase the
capacity of the connection by having more BTS station.

• It will help them to deal customer in speedy manner because they

have all the information at their disposal.
• It will help the workers to make decision.
.
MOTIVATING THROUGH REWARDS AND BENEFITS

DEFINED BENEFIT PLAN

The group companies operate un-funded gratuity plans for their eligible
staff under which benefits are paid on cessation of employment subject to
a minimum qualifying period of service. One year. Except for WTL, the
liability under the plans is determined on the basis of actuarial valuations
carried out by using the Projected Unit Credit Method and is charged to
income.

2.7. Social corporate responsibilities, environmental issues and

how these have been met

Approaching your business aims responsibly, with an awareness of your

surrounding social and environmental needs, in order to fulfill stakeholder
demands, achieve a profit and remain competitive. There are several
areas that construction companies should be addressing in order to
become more socially responsible. Many of the issues that are being
grouped under the heading of CSR are already part of the daily work of
construction professionals. These include
• Ethics,
• Human Rights,
• Environment and
• Employee

ENVIRONMENT ISSUES
REDUCING VISIBLE CABLING NETWORK
Service without a wire new cellity worldcall service: Cellity worldcall is an
innovative software solution for your mobile phone, that works on a
principle similar to making calls. The worldcall application works on most
mobile phones including Nokia, iPhone, Samsung, Sony Ericsson, Motorola
and others. All you have to do is launch our software then dial. The
software then contacts the cellity server* and a few seconds later you'll be
called and connected to whoever it is you want to talk to. The calling costs
are paid through your own prepaid cellity account, which you can top up
with your credit card or PayPal giving you full control of your costs.
BURIED FIBER OPTIC CABLES
100% buried fiber and exclusive owned Right of Ways for Fiber Ducts. The
most advanced quality Poly / Ethylene pipes/duct. Which help to stop ware
and tear of the cable in ground. Worldcall has deployed Hybrid Fiber
Coaxial (HFC) network in Karachi and Lahore. Worldcall provides
customers with the ability to lease dark fiber for high-speed, dedicated
fiber optic networks or offers availability of cable ducts for businesses to
have their own network. Fiber optic networks are pathways installed in
conduits underground
INFORMATION SHARING PLATFORM
Worldcall environmental issues forum hosted by worldcall internet
solutions (information regarding different issues) on this form you can get
information regarding different environmental issues like Global warming
and discuss it with other registered customers
http://www.worldcall.net.pk/advertisement_websites.php
WORKPLACE ENVIRONMENT
Observed at Gulberg Centre: Working environment is good. There was
air conditioning facility available, Proper sitting arrangement, Clean
drinking water for employees and customers. All in all it was a better
place for employment.

Ethics
Not displaying the true picture, charging more from the customer and
providing lower quality at some occasions . There have been a lot of bad
things about there VAS (Value Added Services) ever since the started e.g.
up time, contents, update frequency etc. No one knew what were they up
to when they couldn’t update their website for the past few years after
importing it as it is from there Karachi’s portal originally. However in
recent past they updated there portal with lot of pirated stuff. Even
though that is debatable but its not today’s topic

EMPLOYEE WELFARE
Loans and Benefits
The Company operates unfunded defined benefit gratuity plan for all
permanent employees, having aservice period of more than one year.
Provisions are made in the financial statements to cover obligations onthe
basis of actuarial valuations carried out annually under the projected unit
credit method
Employee Compensation
These loans and advances are unsecured and interest free and include
advances given to workers of Rs. 2.46 million (2006 : Rs. 0.365 million) in
2008 Rs. 5.20 million (2007 : Rs. 2.46 million
Donations for the Poor’s

2005 2006 2007 2008

571000
Donation in 512900 95000 313000
Rupees

Most of the money was sent to earth quake victims. None of the Directors
of the Group or any of their spouses have any interest in or otherwise
associated with any of the recipients of donations made by the Group
during the year.

2.8 Market share & competitor information preferably from an

independent source

PTCL

Introduction
Pakistan Telecommunication Company Limited (PTCL) is the largest
telecommunication company in Pakistan. This company provides
telephony services to the nation and still holds the status of backbone for
country's telecommunication infrastructure despite arrival of a dozen
other telcos including telecom giants like Telenor and China Mobile . The
company consists of around 2000 telephone exchanges across country
providing largest fixed line network. GSM, CDMA and Internet are other
resources of PTCL, making it a gigantic organization. The Government of
Pakistan sold 26% shares and control of the company to Etisalat in 2006.
The Government of Pakistan retained 62% of the shares while the
remaining 12% are held by the general public.

Services
PTCL is also part of the consortium of three major Submarine
communication cable networks: SEA-ME-WE 3, SEA-ME-WE 4 and I-ME-WE.
In addition to wire line operations, PTCL also provides fixed line service
through its countrywide CDMA based WLL (Wireless Local Loop) network,
under the Vfone brand name. In the cellular segment, the second largest
cellular provider in Pakistan, Ufone, is also a wholly owned subsidiary of
PTCL.
Monopolist
From the beginnings of Posts & Telegraph Department in 1947 and
establishment of Pakistan Telephone & Telegraph Department in 1962,
PTCL has been a major player in telecommunication in Pakistan. Despite
having established a network of enormous size, PTCL workings and
policies have attracted regular criticism from other smaller operators and
the civil society of Pakistan.
Pakistan Telecommunication Corporation (PTC) took over operations and
functions from Pakistan Telephone and Telegraph Department under
Pakistan Telecommunication Corporation Act 1991. This coincided with
the Government's competitive policy, encouraging private sector
participation and resulting in award of licenses for cellular, card-operated
pay-phones, paging and, lately, data communication services.
Pursuing a progressive policy, the Government in 1991, announced its
plans to privatize PTCL, and in 1994 issued six million vouchers
exchangeable into 600 million shares of the would-be PTCL in two
separate placements. Each had a par value of Rs. 10 per share. These
vouchers were converted into PTCL shares in mid-1996.
In 1995, Pakistan Telecommunication (Reorganization) Ordinance formed
the basis for PTCL monopoly over basic telephony in the country. The
provisions of the Ordinance were lent permanence in October 1996
through Pakistan Telecommunication (Reorganization) Act. The same
year, Pakistan Telecommunication Company Limited was formed and
listed on all stock exchanges of Pakistan

Mobile Data Services

PTCL launched its mobile and data services subsidiaries in 2001 by the
name of Ufone and PakNet respectively. None of the brands made it to the
top slots in the respective competitions. Lately, however, Ufone had
increased its market share in the cellular sector. The PakNet brand has
effectively dissolved over the period of time. Recent DSL services
launched by PTCL reflect this by the introduction of a new brand name
and operation of the service being directly supervised by PTCL.
As telecommunication monopolies head towards an imminent end,
services and infrastructure providers are set to face even bigger
challenges. The post-monopoly era came with Pakistan’s Liberalization in
Telecommunication in January 2003. On the Government level, a
comprehensive liberalization policy for telecom sector is in the offering.
Privatization
Last Year, in middle of 2005 Government of Pakistan had decided to sell
at least 26 percent of this company to some private agency. There were
three participants in the bet for privatization of PTCL. Etisalat, a Dubai
based company was able to get the shares with a large margin in the bet.
Last year when Government was going to privatize the company there
was country wide protest and strike by PTCL workers. They even disrupted
Phone lines of some big Government institutions like Punjab University
Lahore and many lines of public sector were also blocked. Military had to
take over the management of all the Exchanges in the country. They
arrested many workers and put them behind bars. The contention
between Government and employees ended with a 30% increase in the
salaries of workers.
There have been various changes in the company due to privatization.
Such examples include the VSS (Voluntary Separation Scheme for its
employees), ERP (SAP based), restructuring, B& CC (Billing and Customer
Care Software) etc. Another seemingly minor change was change of brand
identity (logo) that will present PTCL's new face after privatization, with
greater focus on customer satisfaction and bringing about of new
advancements in telecom for Pakistani consumers.
Historical Events
 1947 Posts & Telegraph Dept established
 1961 Pakistan Telegraph & Telephone Deptt.
 1995 About 5% of PTC assets transferred to PTA, FAB & NTC.
 1996 PTCL Formed listed on all Stock Exchanges of Pakistan.
 1998 Mobile (Ufone)& Internet (PakNet) subsidiaries established.
 2000 Telecom Policy Finalized

Wateen Telecom
Introduction
Wateen Telecom is the Abu Dhabi Group’s latest communication
investment in Pakistan, after the successful launch of Warid Telecom
which provides mobile GSM services to over 10 million customers in 145
cities across Pakistan. Wateen Telecom is set up to become the leading
"Carrier's Carrier" providing services based on quality, reliability and
affordability in the communication and media sector. Wateen is
committed to bringing next generation services to your doorstep...today.
Wateen Telecom is a Pakistani telecommunication company based
in Lahore, Pakistan and is a sister concern of Warid Telecom. Wateen
Telecom is the Abu Dhabi Group's latest communication investment in
Pakistan. With the collaboration of Motorola, they plan on deploying a
WiMax country-wide network across Pakistan. The commercial launch of
Wateen's mobile WiMAX services began with 22 major cities.
Wateen uses MOTOwi4 WiMAX by Motorola. Other partners include Cisco,
and Intel. Wateen is giving CPEi 600 & CPEi 300 to its indoor usage while
CPEo400 for outdoor usage to its customers.
Product Information
The availability of our WiMAX network is a major milestone for Wateen
Telecom and for the telecommunications potential of developing
economies. Our network puts Wateen at the global forefront of the WiMAX
telecoms industry. Motorola’s capabilities to effectively deliver WiMAX
802.16e solutions and CPEs ahead of the industry and our early adoption
of this technology has given us the opportunity to be the first to offer
WiMAX 802.16e-based broadband voice and data services in Pakistan.
With Pakistan’s impressive growing economy and rising user demand for
data access, Wateen Telecom-Pakistan anticipates a rapid demand for
residential connections for its Motorola-based WiMAX broadband services
during its first year of operation.
Wi-Tribe
Introduction
Formed in April 2007, Wi-Tribe is the product of a joint venture between
Qatar Telecom (Qtel) and A.A. Turki Corporate Trading and Contracting
(ATCO), together with a proactive partnership with Clearwire (USA). Wi-
Tribe is planning WiMAX based wireless broadband launch in Pakistan.
Recently Wi-Tribe Pakistan announced that it is deploying its Internet
Protocol (IP) backhaul network using Dragon Wave’s Horizon Compact
radio system.
Product and its Features
Dragon Wave’s advantages include high speed data links, true IP
architecture, minimum power consumption, and zero heat foot print, Wi-
Tribe Pakistan. The Horizon Compact is a small, 9-inch-square, all outdoor
radio, integrating traditional indoor and outdoor backhaul functionality. It
is used to deliver connectivity across mixed topology networks including
ring or mesh architectures. Wi-Tribe can easily and remotely expand the
capacity of individual links up to 400Mbps as traffic needs dictate.
The Horizon Compact will underpin their deployment in Pakistan, and we
look forward to helping them grow their network quickly and efficiently.
Horizon Compact continues to reinforce its credentials as the IP backhaul
solution of choice for next-generation service providers throughout
Europe, the Middle East and Africa. Advanced Ethernet transport features
and radio performance have been uniquely combined to help service
providers optimize costs and substantially de-risk the business case for
mobile and fixed-line IP networks. Dragon Wave products operate in both
licensed and unlicensed radio frequencies between 6and 38 GHz. An
uncompromised product design delivers pure “packet” microwave
performance with software scalable, ultra-low latency transport of up to
1.6 Gbps per link. Extremely easy to deploy and manage, Dragon Wave
products deliver carrier-grade (99.999%) interference-free performance in
next-generation IP networks.

Market share

Growing rate of Wireless Local Loop (WLL) subscribers in Pakistan is

snatching market share from fixed line market. Recent stats from Pakistan
Telecommunication Authority show that fixed-line teledensity has seen a
fall while WLL subscribers have marginally grown when compared to
previous months. This addition in WLL subscribers is shared by all five
major WLL companies operating in the country.

The WLL subscribers of Pakistan Telecommunication Company Limited

(PTCL) have increased from 1,126,585 in July 2008 to 1,139,399 in August
2008, followed by Telecracd from 523,773 to 534,809, WorldCall from
500,159 to 509,606, Great Bear from 47,214 to 43,847 and Buraq from

388 to 400.

Wireless Local Loop subscribers-Graphical

Representation

The total number of WLL subscribers has increased from 2,224,128 in July
2008 to 2,251947 in August 2008.

PTA’s most recent fixed line stats showed a declining trend in fixed line
subscribers with going down from 4,086,206 subscribers in 2007 to
4,546,443 in the first two months of 2008. The PTCL fixed-line subscribers
have declined from 5,128,442 in 2006 to 4,405,161 in August 2008.
However, the subscribers of other fixed-line operators WorldCall, NTC,
Brain Limited and Union Communication have increased during the
current fiscal.

Fixed Line Subscriber-Graphical Representation

Monopoly

There is a monopoly in the market in fixed line subscriber section.

Because PTCL is serving for many year and have control over the market.
PTCL is a price maker. If any other company wanted to survive in the
market it has to take the price witch PTCL coats. As a business giant he
can offer any sevices at less price. But other companies cannot compete
in this department because of many reasons.

The fixed-line subscribers of NTC have increased from 99,665 in 2007 to

103,059 during the period under review of ongoing fiscal. The subscribers
of Brian Limited have gone up from 6,089 in 2007 to 7,376 in the first two
months of 2008. The subscribers of World Call and Union Communication
have increased from 10,748 and 2500 in 2007 to 11,347 and 3,500
respectively in August 2008.
PROFIT AND LOSS ANALYSIS

2005 values 2006 values 2007 values 2008 values

in in in in
percentages percentages percentages percentages

Net revenue 100 100 100 100

Direct cost (89.67) (62.58) (60.95) (63.33)

Gross profit 10.33 37.42 39.05 36.67

Operating (13.60) (23.74) (24.53) (26.84)

cost

Operating (3.27) 13.69 14.52 9.83

profit

Finance cost (3.65) (4.11) (7.26) (10.23)

Result 9.56 7.26 (.4)

Gain on 3.18 6.47 .085

revaluation
----------
investment

Gain on --------- .48 .36 .89

revaluation
property

Gain on long 2.21 10.40

term
liabilities

Other ------- 3.63 3.2 2.07

operating
income

Other ---------- (.11) (.91) (.66)

expenses

Profit before (4.80) 27.14 16.38 1.2

taxes

Taxation 1.87* (5.39) (1.92) .5

Profit after (2.93) 21.75 14.45 1.7

taxation

Table explanation

The first line of this income statement percentage table is always

100% because the net sales figure is divided by itself. The second
line of this table of common-size income statement, cost of products sold
divided by net sales, is referred to as the cost of goods sold percentage.
For a firm that is a merchandiser, one that simply buys and resells goods
without changing their shape or form, this percentage reflects the
relationship between the price the firm pays for the goods and the price it
charges customers. For a manufacturer, a firm that buys raw materials
and component parts and reshapes them into a finished product, the cost
of goods sold percentage can also indicate the efficiency of the
manufacturing process. Similarly all the other percentages are being take
by dividing the respected amount by the net sales and multiplied by
hundered
TURNOVER COMPARISON

The sales comparison is given in comparison with the prior year. Like year
2006 is beig compared with 2005. The nil values of 2005 indicates that we
are not considering year 2004

2008 values in 2007 values in 2006 values in 2005 values in

percentages percentages percentages percentages
Telecom services (6) (18) 84 ----
Broad band 21 29 New product ----
launch

Less ----
Sales tax (28) (18) ---- ----
Discount & 1.3 (65) ---- -----
commission

Net sales 4.5 (1.0) 84.4 % 0%

Comments

• Telecom portion revenues decreasing 18% in 2007 and 6% more in

the next year.
• The broad band service sales increase 29% in year 2007 and 21%
more in the next year are relatively high
• Commission is very high in 2007

Worldcall telecom generates its revenues through services provided to the

customer and through advertisement etc. Worldcall telecom generates its
revenues through services provide to the customer and through
advertisement etc. Revenue recognition Revenue is recognized on
rendering of services. Revenue from originating minutes is recognized on
the occurrence of call both for prepaid and postpaid subscribers, however,
bills to postpaid subscribers are dispatched on monthly basis. Line rent is
recognized from prepaid and post paid customers on daily basis.

1) The decrease in sales of telephone wireless services are numerous

external factors influencing demand, such as competition,
population taste like many people switch towards mobile phone
connections. And the most important factor is the price sensitive
customers. There is a fears competition on price between worldcall
and PTCL. PTCL is a giant of the market and cutting its prices on
 regular basis. It can do that because he had 65% of the market
share by simply lowering their margin. On the other hand worldcall
have to lover their quality in order to sustain in the market.
2) The broad band service is relatively new in the market. So customer
show great interest in the it. But, worldcall is increasing his sales
because of the coverage. There are places where PTCL was unable
to reach and world call capture that part because of early
introduction of the technology with grater force.
3) Market skimming strategy was used by Worldcall to attract more
customer. They gave them discount to customer because our
market is higly price sensitive. To make people to buy some thing
you have to give higher discounts. Sales commission is higher in
2007 is to promote the new brand more quickly and more
efficiently. As we all know money is always going to be the greats
motivator.

G.P ANALYSIS

2008 values 2007 values 2006 values 2005 values

in in in in
percentages percentages percentages percentages

Interconnect, 27.3 31 40 75.5

settlement
and other
charges

Bandwidth 5.9 6.1 6 8.9

and other
PTCL charges

Depreciation 17.79 15.4 10 3.7

Amortization 1.9 1.4 1

of intangible
assets

Power 4.2 2.9 2 .3

consumption
and pole rent
Securities & 1.4 1.45 .75 .3
PTA charges

Cable .43 .8 .23

License fee

Salaries and .4 .31 .2

other
benefits

Inventory .4 .72 .5
consumed

Stores and .5 .22 .2

spares
consumed

Annual .7 .31 .37 .04

Spectrum

Content cost .67 .56 .5

Network 1.35 .23 .7 .04

maintenance
& insurance

Cable & .13

accessories

Others .23 .1 .05 .66

Direct cost (63.33) (60.95) (62.58) (89.67)

Gross profit 36.67 39.05 37.42 10.33

Comments

Interconnection and settlement charges are decreasing gradually.

Bandwidth and other charges are also decreasing but in slow rate

Depreciation expense is increasing more rapidly with comparison to the

sales 3.7 -> 10. -> 15.4 -> 17.79 with respect to sales and eating up
sales margin.

Power consumption also increasing but with very little margin

 1) The company purchased and installed much equipment in prior
years so the expenses incurred installing the equipment is higher as
compare to the years coming after that. Worldcall Telecom Ltd. won
frequencies in all 14 regions, but in Karachi it received the
frequencies only in 450 MHz, in 10 regions only in 479 MHz, in 10
other regions only in 1900 MHz, and in 9 regions only in 3.5 GHz. It
was also thought that some of the companies just wanted to get a
license for future trading purpose and not with genuine intentions of
using it. That is the very reason the expense in 2005 is higher with
respect in other years.
2) According to PTA’s recent reduction in cost of Domestic Private
Leased circuit (DPLC) by 35% International Leased circuit by 39%
and international bandwidth cost by 40%. These steps help worldcall
to lower the bandwidth expense.
3) Depreciation increasing rapidly because the the company is
investing more in fixed asset. They changed the accounting
standard use previously to reduce the expense but the rate of
purchase is greater than disposal.

Previously full year depreciation was being charged in the year of

purchase and no depreciation is being charged in the year of
disposal. During the years 2006 onwards the company changed its
accounting estimates for charging depreciation. Full month
depreciation is charged in the month in which the asset is put into
use while no depreciation is charged

4) The energy consumption is increased but the expenses are

increasing more because of the per unit price increase in every
year. If we compare every year the worldcall workers are using
energy efficiently.

OPERATING COST ANALYSIS

2008 values 2007 values 2006 values 2005 values

in in in in
percentages percentages percentages percentages

Salaries & 10.926 10.928 8.74 4.8

benefits

Marketing, 3.7931 3.4653 2.29 4.7

selling expenses

Rent, rates and 1.4137 1.2163 0.98 .593

taxes

Communications 0.7064 0.7029 0.76 .179

 Transportation 0.5874 0.4269 0.46 0

Legal and 0.5646 0.264 0.46 .78

professional

Insurance 0.8102 0.5348 0.34 .386

Utilities 0.5611 0.5734 0.57 .169

Printing and 0.4544 0.4171 0.49 .125

stationery

Entertainment 0.4421 0.4417 0.38 .146

Travel and 1.3859 0.9562 0.32 .382

conveyance

Repairs and 0.4779 0.4342 0.28 .094

maintenance

Provision for 1.707 1.7071 1.77 0

doubtful debts

Bad debts 0 0 .23 0

written off

Donations 0.0069 0.0132 .12 .014

Consultancy - 0 0 o

Auditor's 0.0955 0.0914 .08 .103

remuneration

Depreciation 1.9852 1.4725 1.07 .583

Amortization of 0.065 0.058 3.57 .756

intangible assets

Amortization of 0.1049 0.1237 .37 0

deferred cost

Miscellaneous , . . .24 / . .343

Newspapers and 36/.018/.15/ 27/.0149/.2 06 /.09/.06
periodicals , Fees .23 223
and subscriptions
/.19
Postage and
Courier
 Exchange loss .05

Comments

1. To attract more competitive and hardworking employees you have

to pay more. Worldcall higher many IT professional according to
(Fasial Siddique, Ex Sales Manager Gulberg Branch). Most of them
have foreign high quality education experience. The are well
informed about the new technology being used in worldcall. There
are no short courses held by worldcall HR department to educate
their old workers. For this very reason they have to higher workers
on a very high salaries.
2. Marketing expenses are increasing because of new product
promotion and competition. The major competitor PTCL is investing
heavily in advertisement and promotions of their product. To match
the competition and making people to remember their product they
have to do the same.
3. The company bought oracle 9i server for better internal and
external communication

Profit Before and after Tax

The main factor which are eating up profit before taxation is financial
expenses

2005 2006 2007 2008

Finance cost (3.65) (4.11) (7.26) (10.23)

The Company obtained a long term loan of Rs 1,800 million from below
mentioned syndicate for the purposes of acquiring 20 years license from
PTA to operate WLL network and import of equipment under various
letters of credit. Some of the big lenders are

Habib Bank Limited 750,000,000 254,142,000

National Bank of Pakistan 750,000,000 254,142,000
Muslim Commercial Bank Limited 150,000,000 50,802,000
Askari Commercial Bank Limited 150,000,000 50,802,000 etc
 • In case of default in payment of any installment the Company will be
liable to pay additional 1.5%.

• Mark-up is being charged at a rate of six months (ASK KIBOR 1%

interest rate) prevailing two working days prior to beginning of each
installment period plus 4% with no floor or cap. The mark-up is
payable on quarterly basis.

• The loan will be paid in 14 equal quarterly installments starting from

November 2006 with a grace period of 18 months

Step taken to reduce these expenses

Expensive Debt Retirement

Worldcall has raised new finances under TFC arrangement at lower mark-
up rate (KIPOR plus 1.6%) and retired most of the expensive loans (KIBOR
plus 4%) saving a considerable financial cost. The Company is in the
process of obtaining approval from SECP for public offer of Rs. 1 Billion out
of a total TFC issue of Rs. 4 Billion.

Advances and loans to suppliers associated company

For example: This loan and advance include unsecured advance given to
Media Times Limited carrying markup at the rate of 14% to 16% per
annum (starting 2006: 14% to 16% per annum). This help the company to
earn some money and to pay up the interest mention above. The
company itself pay less interest on its loans and charges higher interest to
its lenders.

(Rupees in ‘000)

2005 2006 2007 2008

Net income (19,217,652) 947,610 623,536 76,218

ADD interest 24,743,728 312,939 179,092 460,569

Add Taxes 234,610 (82,905)

Add 25,261,309 454,401 662,837 802,272

depreciation & 3,953,280 42,943 58,273 86,535
amortization
5,124,979 3570 63,503 89,497

46,741 2500 2932

Total EBITDA 39865644 2042814 1372646 1518023

EBITDA tell the true picture of the earning. EBITDA allows for looking
at the profitability of the business before factoring in these two items. One
needs to be aware that this can be a highly misleading indicator based on
the depreciation and amortization characteristics of the business and
adjustments to EBITDA are almost always necessary to get a true picture
of the earnings. Through these result we can say that worldcall is not
operating under loss but got a great potential.

This shows that if we exclude taxes interest etc, then company will
undergo in huge profit which shows that Worldcall is a company to invest
in.

Conclusion & Solutions to the Problems

As a hole worldcall is performing well. Although they are not making any
profits at present. But they have all the tool to become a giant in the
coming future. Worldcall is the only company which can give competition
to the giant of this sector PTCL. There are some seggession which can
help to make the company better.
• Firstly they need to utilize the technology advancement to its full
potential.
• They needed to improve the after sales complain section.
• Searching for more advance technology
• Website improvement
• Sustainable growth

Although the Worldcall has a website but it needs a lot of modifications.

Firstly all the services of Worldcall should be merged on one site. Secondly
online payment option. Thirdly FAQ should be there on the site. Fourth the
website should be updated on regular intervals. It should be more detailed
having information about all the packages, future plans and details about
the franchises and telephone numbers of CRM and other customer related
departments. The addresses of the head office and also about regional
offices. Online payment options could be provided by obtaining a secure
SSL encryption connection. So customer can pay their bills of both the
telephone and cable through net. This would facilitate customers to pay
online while at home. Payment options is another area where IT/IS can be
used for competitive advantage.
Prepaid Bills cards should be used for the payment of the bills. An online
system will be their. Customer has to put customer ID and than option for
the billing means for which services they want to pay. And after paying
bills they can confirm their bills payments and reaming balances in the
prepaid cards.

They can use ERP in their organization. As they have three main sectors in
their
organization which made the Worldcall a very complex type of
organization. The ERP will help them to combine their entire sectors and
further more all the departments will be connected with each other. It will
help to a have a true financial picture of all the sectors and also all the
departments. Employee in different department can see the information
by using single software and can update it accordingly. ERP especially
help Worldcall in standardize HR information. It will help Worldcall in
managing and tracking employees’ time and communicating with them
about benefits and services. It will also help in managing inventory of the
company
They are lending a lot of money from outside, if the growth is sustainable
they can expand with the help of their own resources.

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