ISLAMABAD, Nov 10: The federal government on Wednesday announced to privatize Pakistan Telecommunication Company Limited (PTCL) including Paknet and Ufone as one entity on "as-is-where-is basis" within six months.

The announcement was made at a news conference jointly by Minister for Privatization and Investment Dr Abdul Hafeez Shaikh and Minister for Telecom and Information Technology Awais Ahmad Khan Leghari.

Dr Shaikh said the decision was taken at a meeting presided over by President Pervez Musharraf and attended by the prime minister, ministers for privatization and telecom, chairman Pakistan Telecom Authority (PTA) and top management of the PTCL on Monday.

Asked as to why such a big decision was taken by a select group of people instead of a larger forum like the federal cabinet, Mr Shaikh said the cabinet had already approved the sale of PTCL as one entity in 2000.

He said the government has now decided to move forward on fast track privatization of 26 per cent shares of the company along with management transfer as an integrated utility and invite fresh expressions of interest for the purpose.

He said it was a very careful and well-considered decision based on the logic of economy of scale that a large entity would attract quality players to a sizable investment opportunity and take advantage of its strength and big size in converting the company into a major regional telecom player.

The privatization minister said this would also save money and time required in the restructuring and unbundling of the company and at the same it was felt that the risk to its monopoly has also receded. This would also signal to international investors that Pakistan offers big investment opportunities.

The other option that involved restructuring of the company into three or five companies by selling mobile firm Ufone, internet service provider Paknet, long distance operations and local land line telephony separately was not found beneficial.

He said the market share of PTCL in land line connections had reduced from 80 per cent to 55-60 per cent in the last one year that could have dropped further if it was unbundled.

He said the government has also learnt from the last two years competition that the government would have to be very aggressive on the regulatory side of the telecom sector.

Telecom and IT minister Owais Khan Leghari said the decision was guided by the President's directive of consumer-oriented policies where they had good options and affordability.

He said four to five companies each in 15 different sectors of telecommunication would be starting operations in the next three to four months to generate competition in all areas like the mobile telecom sector where roaming charges, connection charges and calling rates were already diminished or reduced significantly.

Responding to a question, Dr Abdul Hafeez Shaikh said the government as a big safeguard would continue to hold 62 per cent shares while another 12 per cent shares were already with the Pakistani investors which means the government would earn more in terms of increased profit, higher taxes and improved share prices, besides the telecom sector growth that would be beneficial to all the Pakistani people.

Answering another question as to why profit making companies were being privatized instead of loss-making, the minister said profit of companies like PTCL did not mean these were being run efficiently and there profits may increase much higher than the losses of loss-making companies.

He did not agree with a journalist who said the steering committee of the PTA on privatization of PTCL had opposed its sale as an integrated entity and said he had proposed both the options namely restructured privatization and one entity and had not given any specific recommendation to any option.

He quoted PTA chairman as saying "lay out the options and let the larger group to take a decision". He said the two other subsidiaries of PTCL - Telephone Industries of Pakistan (TIP) and Carrier Telephone Industries (CTI) -were already on their way to privatization separately and would not be included in this transaction.