Turkcell AS

active

Turkcell was one of the two consortia selected by state-owned local incumbent Turk Telekom to build and operate GSM system under 15-year Build-Operate-Transfer agreement in May 1993. The other consortium was Telsim. Under the agreement, the private operators' revenues were constrained to a 25% commission of actual revenues collected. Those commissions were designed to reimburse the operators for their cost of running the cellular networks; while the state assumed ownership, determined tariffs, and was responsible for collecting customer revenues. The government changed those two BOT agreements to 25 year-licenses after each consortium committed to paid US$500 million in April 1998. In the new arrangement, operators are allowed to keep over 75% of their revenues, but they must continue to pay 15% of revenues to the government as licensing fees, and an additional 5%-10% to Turk Telecom for interconnection charges and international long distance fees. Turkcell was initially owned by Telecom Finland (34%), Ericsson (15%), Cukurova Holding (38%), MV Telekommunikasyon (7%) and Bilka (6%) by 1998. In July 2000, the company raised US$1.9 billion with an IPO. In 2008, Çukurova Holding A.S. sold 90,200,000 shares to JP Morgan Securities Ltd. for sale to foreign investors, bringing the percentage of Turkcell's equity that was publicly traded to 33.48%. The remaining major shareholders were TeliaSonera (37%) and Çukurova Holding A.S. (27%). The company, which launched its commercial services in 1994, invested around US$430 million in its network development between 1993 and 1997. The company also closed syndication of its US$575 million loan package to finance its US$500 million license fee in 1998. The debt was split between US$3-4 million three-year and three month term loans at 325 basic points over libor, a US$75 million three year and three month revolving credit at 325 basic points, and a US$195 million three year and three month term loan at US$212.5 basic points which carried a 95% political risk guarantee provided by the Finnish Guarantee Board. Turkcell dramatically increased its subscriber base from 2.3 million in December 1998 to 10 million in December 2000 (68% market share). Its service area covered 99 percent of Turkish geography. Turkcell competed with the privately owned Telsim AS (GSM 900 network) and IS-TIM (GSM 1800), along with state-owned Turkish PTT (NMT 450 network) by 2003. Turkcell also owned GSM licenses in two other countries: Azercell (Azerbaijan) and Geocell (Georgia). Turkcell provided comprehensive coverage of an area that, as of year-end 2002, included 100% of the population living in cities of 10,000 or more people and 99% of the population living in cities of 5,000 or more people. Turkcell was Turkey's market leader in mobile service with 24.3 million customers at end 2004. In an auction held on Nov. 28, 2008 for a type-A license to provide third generation (3G) services, Turkcell submitted a successful bid to the Information and Communication Technologies Authority (ICTA). Turkcell was expected to launch 3G services in mid-2009. On April 30, 2009, Turkcell signed a license agreement with the ICTA and paid €422.4 million (US$587.1 million), including VAT, to the Turkish Treasury. The investment in 2009 was US$1.24 billion including the license fee. 2014 turkcell annual report 2013 ibid 2012 capex and subscribers from GWI 2011 capex and subscribers http://www.turkcell.com.tr/site/tr/turkcellhakkinda/yatirimciiliskileri/Sayfalar/finansalveoperasyonelveriler/finansal-ve-operasyonel-veriler.aspx Corrected 2010 Capex according to 2011 annual report Capexp in 2006 total 604.8 including 202 million for operation in Ukraine, source: company annual report. This is consistent with Wireless Intelligence data