Trans World Enterprise Services Maintains Emerging Profile Despite Financial Challenges**

Islamabad: Trans World Enterprise Services (Private) Limited (TES) maintains a developing business profile in Pakistan’s telecom sector, specializing in Fiber-to-the-home (FTTH), Tru TV, and Voice offerings, according to the Pakistan Credit Rating Agency Limited (PACRA). The company benefits from its link with parent company Trans World Associate Limited (TWA), a major network operator.

TES is expanding its reach in Lahore, Karachi, and Islamabad, boasting approximately 20% penetration of fiber-ready homes in its service areas. As of December 2024, TES held the sixth-largest market share (3.6%) in active FTTH subscribers, per Pakistan Telecommunication Authority (PTA) data.

The firm’s revenue reached PKR 4,428 million in 2024, a 21.7% increase from the previous year (PKR 3,639 million in 2023). This rise is attributed to subscriber growth and price adjustments. However, gross margins decreased to 30% from 39% in 2023 due to rising expenses not fully transferred to consumers. Despite this, operating margin held steady at 7% due to cost-cutting initiatives. TES reported a net loss of PKR 7 million, an improvement from the PKR 80 million loss in 2023.

TES plans to continue its growth trajectory by expanding coverage and attracting new subscribers. Sourcing 100% of its bandwidth from TWA, the company faces a currency risk as bandwidth costs are linked to the US dollar while sales are in Pakistani Rupees.

Governance is overseen by the holding company’s board, with monthly performance reviews. A skilled team manages daily operations, supported by robust internal controls and advanced IT systems. Financially, TES exhibits modest coverages and cash flows, with a leveraged capital structure partially offset by a PKR 1,206 million equity injection from the parent firm.

PACRA’s maintained ratings depend on TES improving revenue, profitability, and market share while maintaining adequate cash flow and coverages. Adhering to debt targets and projected financial performance is also crucial.