Rupee rapid slide blow to economy but not for PTCL
(Nation (Pakistan) Via Acquire Media NewsEdge) The rapid slide of rupee against dollar, which has plunged by 8 per cent annually, has been a blow for the economy but not for the PTCL, as the company’s LDI incoming revenues are denominated in dollars and thus any above than expected depreciation of rupee against US Dollar will bode positive for the company. Telecom industry experts said that since the ratio between incoming revenues to cost is around 65:35, the impact of rupee depreciation is nominally positive on the company’s bottom line.
After much consideration and efforts, the LDI operators along with the government, have finally launched a monitoring system costing $27 million at the Pakistan Telecommunication Authority to stop the menace of grey trafficking that is eating up almost 40 per cent of the total industry traffic. The system has completed its trial run and has now been made fully operational in order to block all unlawful IPs involved in bringing illegitimate traffic.
Telecom industry experts said that the international incoming minutes declined from an average 1 billion mins/month (12b mins annually) to 600 million mins/month as higher call charges greatly incentivized the grey trafficking mania. Experts believe that any such proposition would eventually result in a pick up in international minutes but the impact would be visible after some time.
As per company sources, every LDI player has contributed its share of cost for the establishment of this monitoring system. However, the cost will be amortized over a period of time thus having an insignificant downside impact on the company’s financials. Thus, with cost aside what needs to be quantified now is the benefit of the established setup. The implications of the setup would be positive for all and sundry but due consideration should be given to TELE and other small players
According to a notice issued by PTCL, the company has submitted a takeover bid for rival mobile operator Warid Telecom. PTCL made the offer to acquire 100 per cent of Warid on September 30. This deal may prove beneficial for Ufone on three accounts, including additional subscribers in a saturated market where growth is limited, integration of Warid’s high?ARPU users with existing Ufone customers to improve margins and extra subscribers to help Ufone capitalize upon the introduction of 3G network in Pakistan.
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