MoITT to hire financial adviser for transaction advisory services

The Ministry of Information Technology and Telecommunication (MoITT) has decided to hire financial advisor (FA) to provide transaction advisory services (TAS) to solicit partnership through a suitable mode to utilize capability of Telephone Industries of Pakistan (TIP) for its revival.

"The TIP is a state-owned enterprise (SOE) currently running in losses of around Rs 500 million annually. The government has recently de-listed TIP from the privatization program in view of the MoITT's plan to revive it through a joint venture," a senior official of the ministry revealed to Business Recorder.

The ministry has decided to engage the services of FA to provide TAS to solicit partnership through a suitable mode to utilize capability of TIP and upgrade and enhance its present production facility to cope with the state-of-the-art manufacturing solution in the field of telecommunication, power sector, mechanical and electronic equipment.

The FA is expected to engage multidisciplinary expert firm(s) including technical firm having experience in the manufacturing sector, accounting and law firm(s) possessing TAS experience to conduct the transaction.

Sources said that the current challenges being faced by TIP included obsolescence of machinery, plants and skill base, intense competition in the telecom sector (especially vendor market), legacy of public sector culture of entire workforce, and above all heavy burden of salaries (up to Rs 500 million annually).

The TIP legally has 2,415 kanals of land but only 432 kanals are in its possession, while 611 kanals are currently with National Radio Telecommunication Corporation (NRTC) and the remaining land is controlled by PTCL. The government is mulling establishing mobile phone handsets plant in collaboration with private sector for its revival, said sources, adding that talks are underway with different Chinese companies for establishing mobile handset manufacturing plant. The move would help in reducing the country's import bill, creating jobs and saving huge foreign exchange reserves.

Federal Secretary Ministry of Information Technology and Telecommunication, Shoaib Ahmad Siddiqui told Business Recorder that every possible step will be taken for the revival of TIP through joint venture.

He said that the TIP is the historical factory and "it is our asset where we can run many businesses to generate revenue for country's benefit and development."

Siddiqui further said that every effort would be made to make TIP a best revenue generating body.

The TIP will be made an important element for the country's development, he said. He said that revival of TIP is vital to utilize it in better way especially catering needs of IT industry of Pakistan.

He further said that revival of TIP would not only result in good revenue generation, but will create many job opportunities for young people.