Turkcell plans overseas expansion to beat slowing sales in Turkey

Economy Materials 4 July 2016 11:43 (UTC +04:00)
Turkey’s biggest mobile phone operator, Turkcell, wants to make up 40 percent of its profit through foreign markets

Baku, Azerbaijan, July 4

By Azad Hasanli – Trend:

Turkey’s biggest mobile phone operator, Turkcell, wants to make up 40 percent of its profit through foreign markets, among which are those in the Balkans, Iraq, Iran, Azerbaijan, the company’s Chief Executive Kaan Terzioglu said in an interview with the Wall Street Journal.

The Istanbul-based company, formally known as Turkcell Iletisim Hizmetleri AS, aims to boost revenues by expanding along an arc encompassing North Africa, Eastern Europe, the Middle East and Central Asia, he said.

Turkcell now gets 91 percent of its revenue from its domestic market. But while Terzioglu projects 10 percent annual growth in Turkey in the next three years, he said acquisitions abroad would shrink domestic contribution to total revenue to 60 percent.

“Our first priority markets are the Balkans and the Middle East, particularly …Iraq, Iran and, in the future, Syria, though I don’t know when,” Terzioglu said in an interview. “Africa is also an important market.”

“Turkey is a very big market,” he said, but no longer enough. “We must position ourselves as a regional player in mobile, and a global player in digital services.”

Turkcell and other mobile operators face slowing growth in Turkey after two robust decades, according to the Wall Street Journal. There are now has 74 million subscribers in a country of 79 million people.

Turkcell’s new investments would build on its operations in Ukraine, Belarus, Germany, Azerbaijan, Kazakhstan, Moldova and Georgia.

In Iran, Turkcell’s mobile messaging app BiP has reached 33,958 downloads, the CEO said. With the lifting of international sanctions on that country, he wants to reach 300,000 downloads as soon as possible.

“We may popularize BiP by signing a virtual operator agreement with one of the operators in Iran,” he said.

The biggest part of the planned expansion is an overture to Sweden’s Telia Company AB, which owns 38 percent of Turkcell. The Turkish operator offered in September 2015 to acquire controlling stakes in two of Telia’s Eurasian operations.

One Telia asset Turkcell wants is the Netherlands-based Fintur Holdings B.V. Acquiring it would turn the Turkish mobile operator from a minority shareholder to outright owner, giving it full control over Fintur’s operations in Azerbaijan, Moldova and Georgia.