Winner of this year’s World Finance award for corporate governance in Turkey, it is no surprise to Turkcell’s stakeholders that the telecoms giant would receive such acclaim. After all, Turkcell is the only Turkish company to attain listing on the NYSE (TKC), which occurred in 2000, the same year as it joined the Istanbul Stock Exchange. Since its formation in 1994, Turkcell has been the leading communications and technology company in Turkey and a major international operator.
Turkcell is the market leader in five of the eight countries in which it operates (Azerbaijan, Belarus, Georgia, Kazakhstan, Moldova, Northern Cyprus and Ukraine.) In Turkey alone, Turkcell has 36 million subscribers (as of September 2009), making it the second largest European mobile operator.
In 2008, Turkcell’s revenues reached $7bn (with a 37 percent EBITDA margin) yielding a net income of $1.8bn. In the first nine months of 2009, Turkcell recorded a gross revenue of $4.3bn (with a 34 percent EBITDA margin) and a net income of $922.9m.
Corporate governance
Being the only Turkish company to be listed on the New York Stock Exchange, it stands that the company’s corporate governance standards are exceptional and adhere to the requirements that come with NYSE membership. The company discloses information on a regular basis to conform with the regulatory requirements of Turkey’s Capital Markets Board (‘CMB’), the Istanbul Stock Exchange, the Securities and Exchange Commission and NYSE Euronext.
The company’s disclosure policy ensures active and transparent communication which is complete, fair, correct, timely, clear and cost-effective and equally accessible for all stakeholders. Turkcell’s interim and annual financial statements are prepared in accordance with the regulations of the CMB and IFRS published by the International Accounting Standards Board. Turkcell management host global teleconferences with analysts and investors following the release of its financial results and engage with the media both in Turkey and internationally.
Growing operations
Overall, Turkcell serves a population of 160 million customers in eight countries. Turkcell’s international presence dates from 1999 when it formed KKTCell in Northern Cyprus. Since 2000, Turkcell has been operating in Azerbaijan, Kazakhstan, Georgia, and Moldova through its 41.45 percent stake in Fintur. Turkcell has also had operations in Ukraine since 2004 and in Belarus since 2008.
Turkcell and has made $8.2bn US worth of investments since its foundation − excluding license fees – and remains opportunistic about M&A. In 2010 and beyond, Turkcell’s growth strategy will continue to be focused on organic growth, whilst selectively seeking and evaluating new investment opportunities in international markets and adjacent and new business opportunities.
Innovations in technology
Turkcell’s strong infrastructure, innovative products and commitment to provide high quality services are the reasons behind the company’s success and market leadership.
The huge customer interest in Turkcell’s 3G offering exceeded expectations and the company has been able to offer increasingly innovative mobile services to its consumer and corporate customers. Turkcell’s high quality network enables it to further build its wide portfolio of products and services. Innovative services Turkcell has launched include videocall, mobile TV, video surveillance, video chat and video messaging. Turkcell distinguishes itself from its competitors through its massive distribution network: a full 87,000 sales points. The company’s distribution channel acts as a sales force, equipped with all the latest technology.
A good example of Turkcell’s technological leadership is a recent initiative in collaboration with Turkey’s Directorate General of Coastal Safety. Together, they pioneered the “Remote Management of Lighthouses’’ project to bring the latest technology to lighthouses and reinforce existing infrastructures.
Turkcell’s technological leadership has also been recognised internationally. At the GSMA World Congress in Barcelona in 2009, Turkcell won the award for Best Mobile Advertising Service, honoring outstanding achievement in an industry renowned for its innovation. Turkcell also received an award for the “Best Mobile Content Development” for its ‘Turkcell NTV VIDEO News’ service at the prestigious Mobile Excellence Awards programme.
Turkcell has always led the way in bringing new technology to Turkey. The company is passionate about encouraging innovation and values external sources to generate ideas for new products and services. Turkcell promotes platforms to encourage innovation, making Turkcell a product and services “idea-sharing” hub. The company has established internal teams of employees from different areas to evaluate ideas. Periodically, it runs evaluation meetings to select the best ideas and to decide how to develop them into competitive offerings.
Turkcell’s recently launched partner portal (turkcellpartner.com) serves its existing partners, as well as potential new partners, with content reflecting its technical and business know-how, partnership mechanisms and procedures, and technical capabilities. Turkcell Technology, founded in 2007, aims to provide world class technology through a local work force. Turkcell Technology’s success is reflected in the fact that, on average, it has filed for a different patent every month of its existence. The trail blazing continues and Turkcell doesn’t disappoint.
3G Revolution in Turkey
While 3G mobile may be “old hat” in Europe since its launch early in the new millennium, and had a lacklustre launch in those times, the launch in Turkey in July, 2009 further cemented Turkcell’s hold against its competitors, Vodafone and Avea. With more than 19,200 base stations, Turkcell has the best mobile coverage (99 percent of the population) and highest quality network in Turkey. Today, with 36 million subscribers, Turkcell provides 3G services to a whopping 65 percent of the Turkish population.
Turkcell’s VAS revenues comprised 15 percent of its consolidated revenue in the third quarter of 2009, compared to 14 percent one year earlier. Going forward in this new 3G era, Turkcell’s 3G business model is forecasted to drive growth in its VAS revenues through increased use of mobile broadband and services.
