KARACHI, April 26: Pakistan Telecommunication Company Limited (PTCL) posted profit before tax at Rs23.7 billion and after tax at Rs15.3 billion for the nine months ended March 31, 2006. These represented drop of 26.6 and 28.3 per cent over the same period last year.

The results were announced at the stock exchanges following the meeting of the board on Wednesday. A press release issued by PTCL on Wednesday noted that the board meeting was the first after the takeover of management control by Etisalat.

Muzzamil Mussani, Research Analyst at JS Capital Markets observed that earnings of the company at Rs3 per share was slightly lower than their expectations of Rs3.10. According to the analyst, the major reason behind the decline in earnings was 11 per cent decrease in net revenue to Rs51.16bn from Rs57.53bn in July-March FY05. Due to major drop in calling rates coupled with increasing operating cost, margins of PTCL were lowered by 12 per cent and stood at 41 per cent versus 53 per cent during the same period of last year.

In its press release, the company observed that domestic revenue for the period under review had continued to show growth, mainly due to an expansion in domestic leased lines, interconnect and value added services. The international incoming revenue had, however declined due to aggressive competition from newly licensed Long Distance and International (LDI) operators, carving out a share of the market.

The PTCL statement further noted that during the nine months period, Pakistan Telecommunication Authority (PTA) had twice reduced settlement rates by a total of 21 per cent. During the nine months, PTCL was stated to have expanded its capacity by adding 1,182,000 lines including 811,000 lines on Wireless Local Loop (WLL).