LAHORE - The broadband segment of the telecom sector has witnessed a tremendous growth over the years, with subscribers growing by threee-year Compound Annual Growth Rate (CAGR) of 85 percent. According to telecom industry experts, though the growth could be attributed to a low base effect; nonetheless low broadband density of only 0.8 percent compared to countrys total teledensity of 69 percent leaves ample room for further growth. Latest data reveals that in 1QFY12 PTCLs DSL, customer base increased by 9 percent with a steady market share of 95 percent. Therefore, with available growth room, it is believed the broadband would also shoulder the declining fixed line business. Experts estimate that the broadband will contribute approximately 8 percent to the topline of the company in FY12. They said that the segment growth prospects also stems from being the major beneficiary of companys CAPEX program. In the last thee years, PTCL capital expenditure stood at Rs24b with major expansionary projects like expansion of optical fibre network in Balochistan to acquiring of VDSL2 bonding technology for high speed data transfer and many more all coming under the broadband segment. The largest telecom operator has underperformed the broader KSE index by 33 percent during 2011YTD, on concerns of its ailing fixed line business segment. However, Muhammad Milwala, a telecom sector expert, believed that fixed line is only one-half of the PTCL coin and investors have overlooked the growth story in PTML (Ufone), PTCLs 100 percent owned cellular firm. Therefore, in order to capture the complete essence of Ufones story, he advises investors to look at companys consolidated earnings rather than stand-alone which is usually announced at the Karachi bourse after the PTCL board meeting. This investment case is also driven from growth prospects of its broadband business (subscribers witnessed CAGR of 85 percent in last 3 years) that has a potential to cushion the decline of fixed line. Overall, it is expected company to post double-digit increase in consolidated profitability of 20pc. Investors must only look at consolidated statistics as Ufone is becoming a large part of PTCL. Due to the changing dynamics of telecommunication industry (fixed line to wireless technology), Ufone has become the spearhead of PTCLs earnings growth. As per estimates, the segment contributed approximately 47 percent to companys topline while, approximately 50 percent of PTCL 1QFY12 is attributed to Ufone. During FY12, it is expected the pendulum would further swing towards Ufone, with estimate Ufones revenue to surpass that of its parent company and segment contribution to consolidated bottomline is estimated to stand around 68 percent. In addition to Ufone, broadband would also be the potential savior for PTCL. SALMAN ABDUHU