Fixed line incumbent Pakistan Telecommunication Company Ltd (PTCL), which operates in the mobile sector via its wholly owned subsidiary Pakistan Telecommunication Mobile Ltd (PTML/Ufone), has continued its downward trend, booking consolidated turnover of PKR30.18 billion (USD295.54 million) for the three months ended 31 March 2015, a fall of 9.6% year-on-year. The decline in revenue, combined with an increase in service and marketing costs – marginally offset by a dip in administrative expenses – led to a 70.4% y-o-y slide in operating profits to PKR1.75 billion. Net profit, meanwhile, dropped by 83.5% to PKR716.39 million from PKR4.35 billion twelve months previously. Much of the decline can be attributed to the operator’s mobile arm, Ufone, which has seen a steady drop in subscribers since mid-2014, with its customer base shrinking from 24.35 million as at 30 June 2014, to 21.72 million by the end of February 2015. Its user base is expected to fall further as a result of the recent SIM re-verification drive, which reportedly led Ufone to block 3.86 million SIMs. The cost of the re-verification programme has also impacted the cellco’s profitability, as the operator was obliged to hire additional staff and to bear the cost of the biometric thumbprint scanners required for the project.
Previously, PTCL reported a 1.0% decline in revenue in 2014 to PKR129.92 billion, but the impact of a voluntary separation scheme (VSS) and rising costs and expenses across the board saw net profit for the year fall from PKR23.79 billion in 2013 to PKR6.19 billion.