PACRA Maintains Entity Ratings of Trans World Enterprise Services (Pvt.) Limited

Trans World Enterprise Services (Private) Limited (“the Company” or “TES”) ratings reflect an emerging business profile and robust presence in the telecommunication industry. TES specializes in providing reliable internet connectivity through a scalable Fiber-to-the-home (FTTH) network. Additionally, the Company offers comprehensive Tru TV™ and Voice services, solidifying its reputation for reliability and innovation in the sector. TES is backed by its parent company, Trans World Associate Limited (TWA), Pakistan’s TIER-1 network operator. TWA possesses exclusive and consortium ownership of the submarine fiber optic cable network system and is the leading connectivity provider for Pakistan. The company has emerged as a dynamic player in the telecommunications sector, driven by a strategic vision and an unwavering commitment to customer satisfaction. In a technology-driven world, reliable connectivity and quality assurance are pivotal for customer retention. Over time, the company has established a solid reputation in its niche. Currently, the Company is expanding its presence in Lahore, Karachi, and Islamabad, where it enjoys unparalleled dominance in numerous areas. The ratings reflect confidence in the strategic initiatives implemented by management, aimed at achieving sustainable long-term growth. According to the latest data from the Pakistan Telecommunication Authority (PTA) regarding the FTTH segment, as of May 2024, TES holds the 5th position in terms of active subscribers, commanding a market share of 3.8%. The company maintains a robust presence in Lahore and is expanding into new surrounding areas including the new phases of DHA, Cantt, and Paragon City. Assigned ratings also take comfort from association with its parent company TWA. During CY23, the company’s topline clocked in at ~PKR 3,639mln, reflecting a growth of ~36.5% (CY22: ~PKR 2,665mln). The growth is primarily attributed to two factors (i) increase in customer base & (ii) increased prices of ~25.9%. The Company expects to sustain its growth trajectory in the (FTTH) by leveraging its enhanced area coverage for the acquisition of new customers. The Company manages 100% of its internet bandwidth requirement from TWA and bandwidth charges are directly pegged in USD which ultimately creates a gap in Sales and Cost of Sales as the selling price is PKR-denominated. The BOD of the holding company oversees the business and besides the quarterly board meetings, BOD members take monthly briefings on the financial performance and network expansion progress. A team of professionals and industry specialists augments the operations of the company. The company has implemented a robust internal control system across the organization, complemented by top-notch IT, business insight & intelligence, and financial reporting solutions. The financial risk profile of the Company is characterized by adequate coverages and cashflows. Capital structure is leveraged; encompassed by long-term borrowings and modest equity, however, during CY23, the parent company injected PKR 706mln in equity through a share deposit to shore up depleted equity levels resulting from accumulated losses.
The ratings are dependent upon improvements in revenue, profitability, and market share while retaining sufficient cashflows and coverages. However, adherence to maintaining its debt matrices at an adequate level is a precondition.

About the Entity
TES was incorporated as a private limited company in Pakistan on 28 February 2011 under the Companies Ordinance, 1984. TES is a wholly-owned subsidiary of TWA. The Board consists of two directors and both are executive directors. Mr. Saad Waraich is the new CEO of the company & elevated in place of Mr. Faisal Abbasi (former president).