Etisalat plans Pakistan retirement scheme

Operator considering a voluntary retirement scheme to reduce staff at Pakistan affiliate.

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By  Reuters Published  September 18, 2007

Emirates Telecommunications Corp (Etisalat) said on Tuesday it is planning a voluntary retirement scheme at affiliate Pakistan Telecommunication Co Ltd (PTCL) to boost "efficiencies".

Etisalat Chief Executive for International Investments Jamal al-Jarwan told Reuters on Monday the operator, which manages PTCL and has a 26 percent stake in it, planned to reduce staff numbers at Pakistan's largest telecoms provider.

"Etisalat plans to remove the extra fat," said Jitesh Gopi, head of research at Bahrain-based SICO investment bank.

"When you are facing increased competition it becomes increasingly difficult for some state-controlled companies to fight effectively in the market."

The South Asian firm, which Etisalat bought into in 2005, reported a 25% drop in profit in the year to June 30 as competition rose in the world's sixth most-populous nation.

State-controlled PTCL employs 65,000 people and has 5.7 million customers, according to its Web site.

"In its effort to build further efficiencies in the operations, PTCL is in the planning stage to offer a voluntary retirement scheme to PTCL employees," Etisalat said in a statement.

The scheme "provides them financial settlement and end-of-service benefits," Etisalat added, without giving details.

Shares of PTCL rose as much as 2% on Tuesday before closing up 0.6%. The stock is still down 17.7 since hitting a more than five-month high on July 31.

Etisalat is the third-biggest Gulf Arab telecom firm by market value. Chairman Mohammed Omran told Reuters this month that Etisalat was interested in raising its stake in Pakistan Telecom to 51%.
Competition is heightening in Pakistan, the world's third-fastest growing market for mobile-phone users, where the number of subscribers more than tripled to 58.4 million in the 19 months to April 2006, according to the Web site of the Pakistan Telecommunication Authority.

Etisalat wants to "grow market share with good returns on investments", the firm said on Monday.

Other telecom operators in the world's biggest oil-exporting region have targeted Pakistan as part of expansion plans.

Qatar Telecommunications Co took over Pakistan's Burraq Telecom this year with a Saudi partner.

State-controlled Oman Telecommunications Co said last month it expected to conclude a deal to buy 65% of Pakistan's Worldcall by the end of the month.

Warid Telecom, Pakistan's third-largest mobile operator with about 10 million customers, is owned by the private Abu Dhabi Group.

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