Amjad Mehmood
Islamabad— UAE’s telecom giant, Etisalat continues to earn huge profits from the Pakistani market despite an outstanding payment of $800 million to Pakistan after taking charge of 26% stake in Pakistan Telecommunication Company Limited (PTCL) for $2.6 billion in 2005. Etisalat owes money as part of its investment in Pakistan’s telecom sector but has withheld payment due to transferring ownership of the properties to PTCL from the government.
PTCL Group has achieved double-digit revenue growth of 10.2% during the financial year 2022. The company announced its annual financial results for the year 2022 at its Board of Directors’ meeting held in Islamabad. PTCL posted 8.6% growth in its revenues, owing to its upward growth in retail and business segments, whereas Ufone achieved 7.1% growth in its revenues. The Group’s subsidiary, U-Microfinance Bank, also posted 35.4% revenue growth in 2022. The Group’s revenue has increased by 10.2% from year to year claiming a jump to Rs. 151.6 billion, mainly driven by a stronghold in the consumer segment led by fixed mobile data, broadband, and wholesale & business solutions, and other microfinance services. PTCL’s revenue soars to Rs. 83.4 billion for the year 2022, highest ever in its history, and 8.6% higher than last year. The company in its report shared the news of earning an operating profit of Rs. 4.9 billion, which is 17% higher compared to 2021, and a net profit of Rs. 9 billion, highest since 2013 and 31.7% higher compared to last year.
Despite these economic miracles, the company has failed even after passing 18 years to clear its outstanding payment and tried to clear the dispute by offering even lower than half of the outstanding amount to different governments in Pakistan. Facing the loss of a huge amount, no Pakistani government has ever tried to take the matter to the international court of arbitration. Etisalat paid an initial $1.80 billion amount according to deal terms, which also included transferring ownership of the properties to PTCL from the government. An amount of $800 million was pending to be paid in six twice-yearly installments. Etisalat claims that money has been withheld due to non-transferring of remaining 33 properties in the name of PTCL, which the Pakistani government had committed in 2005. Whereas Pakistan has already transferred over 3,000 properties but Etisalat did not bother to pay any amount out of the remaining $800 million. Recently, in December 2022 the company offered to pay $263 million to settle the issue which however, Pakistani government has turned down the offer considering it even lower than the amount Etisalat was willing to pay in 2016.
While on the other hand, the services being provided by Etisalat-owned PTCL to customers are highly compromised. The quality, connectivity, post-connection services, complaint system, and dealing with customers’ queries are the common issues thousands of consumers face every day. The company has failed to install its facility within the vicinity of Islamabad including the area of Barakah, just 15 kilometers away from Parliament House.
The scope of high profits also indicates that governments should carefully asses the demerits of privatization of profitable organizations. The huge profit of Rs. 9 billion earned by Etisalat is simply a drain of money from Pakistan and this amount would never be invested in Pakistan. The country passing through an economic emergency situation is providing a lucrative market to foreign investors who fail to re-invest the money in the local market.
The newspaper approached the CFO of the company to share his views on earning huge profits from Pakistan and non-settlement of dispute of outstanding money however, he preferred not to reply. The platform would remain available for the company to share its views at convenience and Daily Spokesman would also publish their version.