PTCL expects Rs. 16 billion after-tax profit in new fiscal
ISLAMABAD: Pakistan Telecommunication Company Limited is expecting total after-tax profit of Rs. 16 billion during 1999-2000, same as that of last year despite recent “tariff rationalisation measures.”
A PTCL spokesman said on Monday that for the first time, the organisation will have to pay Rs. 3.5 billion on account of corporate tax and advance income tax on July 1,1999 otherwise the profit would have been at Rs. l9.5 billion. It however avoids to give the overall revenue increase due to these very measures.
For the purpose of explanation, PTCL, on Tuesday notified old and new rates along with percentage. According to PTCL calculations, line rent per month has increased by 30.6 per cent from Rs. 18O to Rs. 235 per month while local call charges rose by 20 per cent from Rs. 1.75 per five-minute call to Rs. 2.10. Similarly, installation charges increased by 9.7 per cent from Rs. 4,000 to 4,390 while NWD call charges declined by 26.7 per cent for Karachi from Rs. 28.56 to Rs. 21 per minute.
However, in contrast increase in line rent and local call charges come to about 41.6 per cent and 30 per cent respectively, when 40 per cent reduction in central excise duty is also included. But PTCL conspicuously did not mention the impact of CED reduction.
In case of line rent, PTCL calculates increase from Rs. 18O to Rs. 235 including CED. In fact, the old line rent of Rs. 18O also contains 25 per cent CED, otherwise, the net line rent was Rs. 144. With drop in CED from 25 per cent to 15 per cent, the total line rent would have dropped to Rs. 165.6 per month (from Rs. 180) if new increase in rate was not announced.
Similarly, in case of local call charges, old five-minute call at 1.75 also contains 25 per cent CED. It would have reduced to Rs. 1.61 per call in the absence of new tariff increase when calculated at 15 per cent CED.
It is to be clarified by Pakistan Telecom Authority (PTA), the regulatory authority responsible to safeguard the interests of the consumer and investor, whether the tariff increase has been approved based on same assumptions.
PTCL says that while preparing the new tariffs, due consideration was given to the ground realities like corporate tax, and external factors, like devaluation, inflation, increase in tariffs for other utilities.
It said that local call charges in Pakistan remained unchanged for many years unlike other countries despite devaluation and inflation and that local call charges in the country are still lower than that of neighbours like India, Sri Lanka and Bangladesh. At the same time, PTCL has halved (50 per cent reduction) the long distance calls from Rs. 42 to Rs.21 in two years for Lahore, Karachi and Islamabad, which is 67 per cent lower in real term.
PTCL pleads that increase in line rent and local call charges are barely sufficient to compensate for the impact of NWD reduction, decreasing international accounting rates and concessions on leased lines to promote information technology in the country. Besides, overseas call price has not been changed for the last several years in spite of heavy devaluation. Hence, there has been a real decrease in the overseas charges.
PTCL has carried a legacy of distorted tariff structure that needed gradual rationalisation. It is necessary to remove cross subsidies and to bring the prices of various services closer to their costs, it added.
Source: The News
Date:6/30/1999
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