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Macro-economic factors Essay

Macro-economic factors: There are a lot of macro environmental factors that affect Tell performance though emphasize has been given on the important factors. Economic factors like current and anticipated economic growth, interest rate, inflation, cost of labor, disposable income and distribution of income etc collectively comprise economic environment. Current and projected economic conditions: In recent years Pakistanis economic figures were indicating very impressive and promising consequences and infant hose all were proven to be wrong.

A number of reasons are behind this but the most important are the economic policies which were not integrated with political environment in an apt manner. Secondly, terrorism has stooped down our economy in a very negative manner. Therefore because of these reasons Pakistan current and anticipated economic conditions aren’t in Tell favor. Exchange Rate: Tell is directly affected by fluctuation of exchange rates as investment is being done in USED, all suppliers have to be paid in USED and being subsidiary of Pimple, Shareholder ululations are in USED while revenue is generated in local currency (PACK).

Due to depreciated PACK every year when revenue is calculated in USED it is minimized due to negative exchange rate effect. Fuel Prices: Tell is the one of the biggest

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customer of SO (Pakistan State Oil), due to energy crisis in Pakistan and being the largest on coverage for the services, more than 5000 cell sites have to be energize to keep the network running. Taxation: Gobo has applied additional 5% tax on the top up so bickerers get 5% less balance on recharge but as an impact it has been seen that subscribers have reduced the usage as recharge revenue has decreased and 5% reduction is from Tell revenue.

Inflation and interest rate: interest rate and inflation both are elevated in Pakistan. In most of countries it is very much natural that once economic conditions are bad central banks reduces interest rate in order to boost investment where as in Pakistan the case is otherwise. The interest rate is high because the government wants to cease central bank new notes issuing rate which is ore than 15% currently. Therefore collectively interest rate and inflation are presenting a bad picture for Tell.

Unemployment rate and cost of labor: Because of higher education bang there is a talented pool of candidates who are ready to be employed in big companies or organizations. But the fact is that the production of new Jobs is not competent with supply pool therefore unemployment rate is high. In addition as supply of potential workers is high, the cost of labor is low in Pakistan which is a positive signal for Tell. Level of disposable money and income distribution: It is really evident that if the economic conditions of a particular country are bad, the people living in, do not have high level income to be spent.

Moreover the fact is that national income distribution is very unfair and unequal in Pakistan because elite class dominates on key government posts. Non-economic macro Exposure: extent which are needed to be addressed. Political Factor: There is a democratic government now-a-days in Pakistan but due to previous government policies & resent government inability to manage issue wisely, it can be concluded clearly that government is not able to stabilize the situation as it was expected which is surely not good for the companies like Tell.

Rule of Law, Corruption and bureaucracy: Due to the amendments made in the constitution of Pakistan by ex-dictators and domination of rich people on the vital government posts, there is Just a minimal justice and rule of law in Pakistan. Regularity authorities: There are regularity bodies in Pakistan like PTA (Pakistan Telecommunication Authority) but it does not have enough grip on issues as it is expected from it due to the mandate given to it.

Security: Due to security situations, telecoms industry has suffered a lot as on events there is complete network shutdown to prevent terrorism. These shut down is a direct loss for complete industry. Moreover due to different measures taken by regularity to address security is to have Biometric scanning before issuance of SIMI so cost of sale has increased recently and all operators have to install machines to have scanning capability.

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