Etisalat Renews TSF Agreement with PTCL

by Ahmed Rayyan

Etisalat has renewed its Technical Service Fee (TSF) agreement with Pakistan Telecommunication Company Limited (PTCL) recently for indefinite period.

According to the agreement, PTCL will pay 35 percent part of the overall revenues as TSF to its shareholding company every quarter in future.

The agreement has been scrapped in October 2011 since it was first signed in 2008 by the managements of the both telecom groups.

The TSF is a heavy operating cost for PTCL as it eats up its major earnings from different services including landline, LDI, wireless, broadband and cellular phone.

In the financial year 2010-11, PTCL has paid Rs 1.76 billion amount to Eitsalat as part of TSF.

Analysts said that the PTCL’s TSF agreement was unexpected with Etisalat because it is operating in challenging environment amid squeezing revenues every quarter.

On the other hand, the cost operation and stiff competition have made situation tougher for telecom giant to earn handsome revenues in the country,

PTCL is facing tough times in different sectors particularly fixedline, LDI and value added besides cellular and broadband services. The company is likely to face cut in revenues in next year.

It is expected that operating margins will start improving from 2013 onwards nevertheless because of favorable response to its bundled services, growing broadband segment and enhanced concentration on corporate solutions., analysts said