MoITT plans to revive TIP through joint venture

The Ministry of Information Technology and Telecommunication (MoITT) has short-listed two companies to finalize one of them as 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 Rs500 million annually. The government has recently de-listed TIP from the privatization programme in view of the MoITT's plan to revive it through a joint venture," a senior official of the ministry said.

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, and mechanical and electronic equipment.

The FA is expected to engage multi-disciplinary expert firm(s) including technical firm having experience in the manufacturing sector, and accounting and law firm(s) possessing TAS experience to conduct the transaction. The ministry has short-listed two companies for the Financial Advisor (FA) included Ahmad Shahid & Co and Ijaz & Co. Both the companies have been asked to submit financial bids.

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 Rs500 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 to establish mobile phone handset plant in collaboration with private sector for TIP 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 a 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.

Replying to a question, he said that privatization of TIP is not on the cards as it is no more in the privatization list of the government. 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 a better way especially catering for the needs of IT industry of Pakistan. He further said that revival of TIP would not only result in good revenue generation, but will also create many job opportunities for young people.