Different Measures for Improving Finance of Teletalk

Brief Description of Teletalk Bangladesh Ltd:

Tele density of Bangladesh is still the lowest in South Asia. The Bangladeshi telecommunication industry has been now facing global competition as different multi-national telecommunication companies have been trying to penetrating into this market. Hence, the existing phone companies have been loosing their competitiveness and market-shares. To retain market-share, existing local companies have been pursuing to fulfill the need gap of phone services in different regions of Bangladesh. Mission & Vision:

To innovate and constantly find new ways to enhance our services to our customer’s current needs and desires for the future. Our vision is to know our customers and meet their needs better than any one else.

Objectives:

 To provide mobile telephone service to the people from the public sector

 To ensure fair competition between public and private sectors and thereby to   safeguard public interest

 To meet a portion of unmitigated high demand of mobile telephone.

 To create a new source of revenue for the government.

Privatization & Regulatory structure of Telecommunication Services:

The Telecom sector of the country has been liberalized for private investment. Bangladesh T&T Board provides all types of telecommunication services in urban and rural areas while the mobile, paging and radio trunking services are offered by private operators. Private operators were also given license to install and operate digital exchanges in rural areas and they would install telephone exchanges in phases. Table-1 shows the list of the private operators.

Table 1 – Private Telecom Operators in Bangladesh

SL

Name of the Operators

1

Pacific Bangladesh Telecom. Limited (PBTL)

2

Bangladesh Telecom (Pvt) Limited (BTL)

3

Bangladesh Rural Telecom Authority (BRTA)

4

Seba Telecom (Pvt.) Ltd. (Recently acquired by Orascom)

5

Telecom Malaysia International (BD) Ltd. (TMIB)

6

Grameen Phone (GP)

7

Orascom Telecommunication

8

Teletalk Bangladesh Ltd. (TBL)

9

Warid Telecom

 Scope to be explored:

m-Governance is derived from e-governance refers to government’s use of information and communication technology to exchange information and services with citizens, businesses, and other arms of government. Teletalk is ready to provide with the help of third party software, mobile interactivity for the citizens of Bangladesh with m-Governance. This may includes, but not limited to

 Mobile based Live Citizen Reporting Solution

 Mobile User Info bank (Database of Mobile Users of Bangladesh)

 Agriculture information services for the farmers and also for the end users, like product price in different parts of the country.

 Product ID for all consumer products/ Organization.

 Interactivity between Government and the Citizens.

Reasons behind Using Pre-paid Phones:

Most of the mobile users have been found subscribers of pre-paid connections. The reasons behind using pre-paid mobile connections. ‘No hassle of bill payment’ has been found to be the most mentioned reason by the pre-paid mobile users (84%). ‘Availability of cards everywhere’ has been found the next mentioned reason by the prepaid mobile users (12%). The scenario is quite similar in all four regions of Bangladesh.

Reasons behind Using Post -paid Phones: 

Post paid mobile users have also mentioned reasons behind their preference. The major reasons behind using post paid mobile connections. ‘Low call rate’ has been found to be the most mentioned reason by the post-paid mobile users (74%). The scenario is almost similar in all the four regions of Bangladesh.

Number of Calls per Day: 

Nearly two-fifths of the respondents have mentioned that on an average they receive less than 5 calls per day (39%). Almost the same number of respondents receives 5-7 calls per day.

Regarding the outgoing calls, it should be mentioned that 59% of the respondents make less than 5 calls, while 31% make less than 5-7 calls per day.

Duration of per call:

Majority of the respondents (34%)

have reported that the duration of most of their calls is less than 5 minutes

Reasons behind Using Mobile Phone Service:

Most of the users opined that they use phone service for personal reasons (52%). However, about half of the respondents use for both personal and official/business related reasons (44%).

  Likes and Dislikes of Different Phones:

Two-thirds of Grameen phone users have responded that they like the network availability. One-fifth of the users of Grameen phone have expressed that they like My Time, My Easy Time, My Jones, etc; whereas 46% of them dislike higher call rate of Grameen. Pulse facilities given by Robi (Aktel) liked by 31% of Robi (Aktel) users while the and lower call rate is liked by 24% of them. Lesser availability of the network (29%) and high call rate (22%) are the key disliking factors to the Robi users.

T&T phone user take T&T phone as a cheaper option than mobile phones. That the phone can be used by all the members of the family is an important reason for preferring T&T phone to mobile phone

Major Achievements of Teletalk:

a. First mobile operator to give ‘Free incoming’ to all subscribers.

b. First mobile operator to give ‘BTTB Connectivity’ to all subscribers.

c. First mobile operator to give ‘ISD & EISD Facility’ to all subscribers.

d. First mobile operator to introduce ‘single-Zone country wide Network.

e. First public sector enterprise to introduce e-governance.

 Financial Analysis

 Future Outlook :

The Company started its commercial operation on 31st March, 2005. While the Company is structuring and training a will focused technical term to ensure high standard of mobile service performance, it is at the same time developing and training its sales, logistics and marketing term to ensure sale of the entire service. This Company is putting in place a professional organization with all the required systems and tools to run the business efficiently and profitably

 Provision for doutful debts

A net amount of Tk.3,506007 representing receivable from PCO clients and post paid subscribers appears doubtful of recvery The board of Directors therefore recommends making a provision for the same amount in the financial statements under review. However, the management has taken due care to recover the doubtful debts within shortest possible time.

Fairness of the financial Statement and accounting policies

Its is the responsibility of the Directors as per the  of the Companies Act,1994,to prepar financial statements for each year. The  financial statements and other financial information included in this report fairly present all material aspects,The financial conditions,results of operations, cash flow statement and the charges in equity  of the company for the year under review.

The Company has used appropriate accounting policies in preparation of these financial statements supported by reasonable and prudent judgment and estimates as necssary international Accounting Standards (IAS), as applicable in Bangladesh has beenfollowed in preparation o these financial statements in compliance to the relevant accounting principles..

 Financial results:

During the year ended on 30th June, 2010, the company has registered gross revenue of more than Tk. 2328.52 million from its operating activities (2008-09, Tk. 1961.19 million) A brief results is shown hereunder

(Figures are in million Taka)

 30 June, 2010

 30 June, 2009

Difference

Taka (m)

%

Network revenue

 2,207.50

 1,839.23

 368.27

 20.02

Hardware revenue

 76.51

 60.78

 15.73

 25.88

Interest on bank account

 42.00

 58.49

 (16.49)

 (28.19)

Other revenue

 2.51

 2.69

 (0.18)

 (6.69)

Total revenue

(A)

 2,328.52

 

 1,961.19

 

 367.33

 

 18.73

Direct operating expense

 857.98

 1,001.76

 (143.78)

 14.35

Network operating expense

 164.91

 149.18

 15.73

 (10.54)

General&administrative expense

 192.48

 193.63

 (1.15)

 0.59

Selling &distributing expense

 200.07

 202.99

 (2.92)

 1.43

Provision for doubtful debts

 3.51

 0.74

 2.77

 (374.32)

Total expense

(B)

 1,418.95

 

 1,548.30

 

 (129.35)

 

 8.35

EBITDA

(A-B)

 909.57

 

 412.89

 

 496.68

 

 120.29

Depreciation and amortization

 1,539.39

 1,715.47

 (176.08)

 10.26

Net profit/ net loss(before tax)

 (629.82)

 

 (1,302.58)

 

 672.76

 

 51.65

Tax adjustment

 340.90

 202.98

 137.92

 67.95

Net Loss after tax adjustment

 (288.92)

 

 (1,099.60)

 

 810.68

 

 73.72

Major items of expenses include Direct Operating Costs and Depreciation on assets which were Tk.856.98 million and Tk.1539.39 million respectively. General,Selling and network operating expenses remained in proportion to the normal business trend of the Company.Depreciation expenses, however increased in proportionate to the installation of new capital machineries. However,the EBITDA (Earning before interest depreciation and amortization) of the year was Tk. 909.57 million which reveals improvement of the overall operational activities in comparision to the previous years

Balance Sheet of teletalk Ltd 2009 &2010

Teletalk Bangladesh Limited

Balance Sheet

As on 30 June 2010

Notes

2010

2009

Source of fund

Taka

Taka

Shareholders equity:
 Share capital

5

 6,438,661,000 6,438,661,000
 Accumlated loss

6

 (4,188,879,617) (3,899,935,020)
 2,249,781,383 2,538,725,980
Long term liabilities:
Deposit from subscribers,dealers and agents

7

 112,433,309 113,114,225
 Deferred tax liability

8

 104,615,119 445,510,848
 217,048,428 558,625,073
 2,466,829,811   3,097,351,053
Application of fund
Property, plant and equipment cost

9

 8,407,909,757 8,126,332,501
less:Accumlated depreciation 5,818,699,896 4,504,103,434
 2,589,209,861  3,622,229,067
Capital work-in-progress

10

 1,406,678,974 638,542,354
Intangible assets

11

 46,399,592 171,370,087
Deferred expenses

12

 61,330,100 159,333,374
Current assets and advances
Inventories

13

 35,732,976 30,159,901
Service handsets for staff 5,623,316 9,754,188
Sundry debtors

14

 792,271,866 750,764,263
Advances,deposit and prepayments

15

 83,653,739 30,018,141
Advance income tax

16

 37,511,186 32,573,142
Accrued interest against fixed deposit recepit 11,734,389 17,425,363
Cash and cash equivalents

17

 714,507,230 583,146,792
 1,681,034,702  1,453,841,790
Current liabilities and provisions
Payable to BTRC

18

 205,517,109 45,826,982
Provision for income tax 11,703,514 11,698,514
Security deposits from suppliers 36,996,752 41,329,843
Unearned revenue

19

 99,649,885 126,070,115
Sundry creditors

20

 2,963,956,157 2,723,040,166
 3,317,823,417  2,947,965,620
Net current assets (1,636,788,715) (1,494,123,830)
 2,466,829,811  3,097,351,053

 

Profit & Loss account of Telatalk Ltd (2009-2010)

Teletalk Bangladesh Limited

Profit and Loss Account

For the year ended 30 june 2010

Notes

2010

2009

 Taka

 Taka

Revenue
Network revenue

21

 2,207,497,027 1,839,227,516
Hardware revenue

22

 74,036,065 59,138,061
Brckbone revenue 2,475,142 1,641,999
 2,284,008,234   1,900,007,576
Operating expense

23

Direct cost of network revenue

24

 619,901,263 680,316,219
Direct cost of hardware revenue 238,085,311 321,442,269
 857,986,574   1,001,758,488
 1,426,021,660  898,249,088
Gross profit
Less; Other operating expense:
Netwark operating and maintenance exp

25

 164,905,804 149,186,123
General and administrative expense

26

 192,484,181 193,628,474
Selling and distribution expense

27

 200,073,094 202,991,614
Provision for bed & doubtfut debts 3,506,007 739,493
Depreciation and amortization

28

 1,539,394,534 1,715,469,416
 2,100,363,620   2,262,015,120
Operationg loss (674,341,960) (1,363,766,032)
Non-operating income

29

 41,999,077 58,487,865
Other income

30

 2,507,556 2,695,915
 44,506,633 61,183,780
 (629,835,327) (1,302,582,252)
Net loss before tax
less: income tax (expense )/income

31

  
Current tax 5,000 –
Deferred tax income 340,895,729 202,975,591
 340,890,729 202,975,591
Net loss after tax trensferred to accumulated loss (288,944,597) (1,099,606,661)

 Chart Sales & Loss Combination with Graf:

Chart of Sales & loss Combination

Sl no

Year

Sales

Loss

 1 2010 2284008234 288944597
 2 2009 19000075576 1099606661
 3 2008 1519080932 1626534312
 4 2007 1001597841 610939350

 Statement of Cash Flow Statement

Teletalk Bangladesh Limited

CASH Flow Statement

For the year ended 30 june 2010

2010

2009

Taka

Taka

A. Cash flows operating activities:
Net loss before tax (629,835,326) (1,302,582,252)
Add: Items not involving in movement of cash:
Depreciation on property,plant and equipment 1,314,596,462 1,424,555,742
Amortizaion of intangible assets 125,467,070 149,539,750
Amortizaion of deferred expenses 99,331,002 141,373,924
Provision for bed&doubtful debts 3,506,007 739,493
 1,542,900,541 1,716,208,909
 913,065,215 413,626,657
Cash renerated from operation
(Increase)/decrease of inventories (5,573,075) 15,454,369
Decrease of service handsets for staff 4,130,872 3,330,697
Increase of sundry debtors (45,013,612) (87,940,015)
(Increase)/decrease of advance, deposits and prepayments (53,635,598) 22,133,843
Decrease of deposits from subscribers, dealers and agents (680,916) (1,607,163)
Increase/decrease of payable toBTRC 159,690,127 11,668,806
Increase/decrease of security deposits from suppliers (4,333,091) 13,119,732
increase/decrease of unearned revenue (26,420,230) 40,106,806
Increase of sundry creditors 240,915,991 509,991,770
 269,080,468 526,258,845
Income tax paid & deducted at source (4,938,043) (5,830,743)
Net cash generated from operating activities 1,177,207,640 934,054,759
B. Cash flow from investing activities:
Increase of property, plant and equipment (33,232,399) (8,579,980)
Increase of capital work-in-progress (809,810,552) (665,952,617)
Increase of intangible assets (496,575) (138,498,632)
Increase of deferred expenses (1,327,728) (490,496,786)
Decrease/ increase of accrued interest against fixed deposits 5,690,974 (326,742)
Net cash used in investing activities (1,045,847,204) (862,404,757)
C.Cash flow from Financing Activities:
Net cash inflow from financing activities
D. Net cash flow (A+B+C) 131,360,437   71,650,002
E. Operating cash and cash equivalents 583,146,792   511,496,790
F. Closing cash and cash equivalents 714,507,230   583,146,792

Statement of Changing Equity:

Teletalk Bangladesh Limited

Statement of Changes in Equity

For the year ended 30 june 2010

Paritculars

Share capital

Accumulated loss

Total

Opening balance as at jult 2007

22000

 (1,173,794,047)

 (1,173,772,047)

Net loss for the year

 (1,626,534,312)

 (1,626,534,312)

issuance of share capital

6438639000

 6,438,639,000

Closing balance as at june 2008

6438661000

 (2,800,328,359)

 3,638,332,641

Net loss for the year

 (1,099,606,661)

 (1,099,606,661)

Closing balance as at june 2009

6438661000

 (3,899,935,020)

 2,538,725,980

Net loss for the year

 (288,944,597)

 (288,944,597)

Closing balance as at june 2010

6438661000

 (4,188,879,617)

 2,249,781,383

Teletalk