Macro-economic factors Essay Example for Free

Macro-economic factors Essay on that point are a lot of big environmental factors that affect Telfin performance though emphasize has been addicted on the important factors. Economic factors like current and anticipated economic growth, by-line deem, inflation, constitute of labor, disposable income and dispersion of income etc collectively comprise economic environment.Current and projected economic conditions In recent days Pakistans economic figures were indicating actually impressive and promising consequences and infact these all were proven to be wrong. A calculate of reasons are behind this but the most(prenominal) important are the economic policies which were non integrated with governmental 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 arent in Telfin favor. Exchange Rate Telfin is instantaneously affected by fluctuation of exchange rates as investment is being done in USD, all suppliers suck to be paid in USD and being subsidiary of Vimplecom, Shareholder calculations are in USD while revenue is generated in local currency (PKR). collect to depreciated PKR every year when revenue is reason in USD it is minimized cod to negative exchange rate effect. Fuel Prices Telfin is the one of the biggest customer of PSO (Pakistan rural area Oil), due to energy crisis in Pakistan and being the largest on coverage for the services, more than 5000 cell sites discombobulate to be energized to keep the internet running.Taxtation Govt has applied additional 5% tax on the top up so subscribers 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 Telfin revenue. Inflation and interest rate interest rate and inflation both are elevated in Pakistan. In most of countries it is very much natu ral 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 gamey because the government wants to cease central bank new notes issuing rate which is more than 15% currently. Therefore collectively interest rate and inflation are presenting a bad picture for Telfin.Unemployment rate and cost of labor Because of higher education bang thereis a talented pool of candidates who are organize 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 potency workers is high, the cost of labor is low in Pakistan which is a positive signal for Telfin. Level of disposable cash and income distribution It is really evident that if the economic conditions of a particular country are bad, the people animateness in, do not have high level income to b e 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 ExposureTelfin like every other organization is also affected by the political apparatus to a greater 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 present government unfitness to manage issue wisely, it can be concluded clearly that government is not able to energize the situation as it was expected which is surely not good for the companies like Telfin. Rule of Law, Corruption and bureaucratism Due to the amendments made in the constitution of Pakistan by ex-dictators and domination of rich people on the resilient government posts, there is just a minimal justice and rule of law in Pakistan. geometrical regularity authorities There are regularity bodies in Pakistan like PTA (Pakistan Telecommunica tion 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, telecom 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 see before consequence of SIM so cost of sale has increased recently and all operators have to install machines to have scanning capability.