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Turkey Broadband Overview

Turkey’s telecommunication sector was liberalised on 1 January 2004. Since then, new price control regulations coupled with the entry of new players has increased competition leading to a reduction in tariffs. Turkey’s preparation to join the European Union is an important incentive to make its telecommunications sector more competitive and dynamic. This has encouraged changes in the telecommunications regulatory regime following the guidelines set out in the EU 'acquis’ for candidate countries. However, significant progress still needs to be achieved, particularly in relation to the regulation of the former state-owned incumbent operator Turk Telekom (TT) and the cable companies.

TT provides landline, mobile and Internet services. It launched ADSL services in 2003, and currently offers Internet services in selected regions through its subsidiary TTnet. In 2005, in a drive for privatisation, the government sold a 55 per cent stake of TT to the Saudi-owned Oger Group. One of the key benefits of TT’s privatisation is the fact that it has lost the special status of a state-owned company and as a result is obliged to follow the same regulations as any other Turkish telecoms operator without having any special influence on the government. This is expected to lead to a more open competitive market, helping to accelerate the deployment of new technology and services. Nevertheless, TT is likely to remain aggressive within the telecoms marketplace and in the regulatory process as it tries to maintain its leading position.

At the end of H108, Turkey had 62.2 million mobile subscribers (up by 18 per cent compared to 2006). The mobile penetration stood at 88.8 per cent at the end of 2007 and is forecasted to reach 100 per cent by 2009. Three mobile operators, Turkcell, Vodafone (previously known as Telsim) and Avea, dominate the mobile telephony market.

Turkcell reported 35.4 million subscribers (57 per cent market share) at the end of Q208. It is owned by TeliaSonera (37 per cent), Turkish conglomerate the Çukurova Group (27 per cent), Russian-based Alfa Group (13 per cent) and other investors. Telsim, owned by Vodafone Group since 2006, is the second biggest provider with a subscriber base of 15.8 million (25 per cent market share) followed by Avea, which is 81 per cent owned by Turk Telekom, with 11 million subscriptions (18 per cent market share).

The three mobile operators are trying to find new sources of revenue in anticipation of the difficulties of increasing subscriber numbers in this saturating market. Both Turkcell and Telsim showed interest in the 3G license but only Turkcell entered the auction in September 2007. Turkcell was granted a 3G license which was soon cancelled by the Turkish Telecommunications Authority due to lack of competition. Meanwhile, in July 2008 Avea announced it had already completed the deployment of its 3G infrastructure and was ready to launch 3G services.