Turkcell blames Ramadan for drop
ISTANBUL – Leading Turkish GSM operator Turkcell thinks the boom years of mobile phone subscriber growth in Turkey are over and has cut capital spending to a minimum to ride out a crisis that forced it into a loss in 2001. Turkcell yesterday reported a loss of $186.8 million in 2001, when Turkey’s lira currency collapsed and the country crashed into economic crisis and recession. The company had reported a $227.9-million profit in 2000. Turkcell said subscribers rose to 12.2 million at the end of 2001 from 10.1 million at the end of 2000, but the proportion of lower-revenue prepaid clients had increased. «Turkcell believes that it has reached the end of the high-subscriber growth era, in comparison to previous years, and that it should focus mainly on profitability, while the market share of high-value customers became a priority,» the company said. It also reported fourth-quarter revenues of $383.4 million, lower than the $457.6 million in the third quarter and down from estimates of $433 million in a recent Deutsche Bank report. New Turkcell CEO Muzaffer Akpinar blamed seasonal factors and the annual Muslim holy month of Ramadan for the weak quarter. «We know that Ramadan comes 10 days earlier every year. This year it was most of December, so we see the effect of Ramadan slowing business life down. And the macroeconomic and crisis effect on consumer spending is still valid,» he told Reuters. The company said it was «unable to predict the extent, severity or duration of the current economic difficulties.» Blended average monthly revenue per customer per month fell 16 percent to $11 in Q4 from $13.1 in Q3, Akpinar said. Turkey’s lira currency has lost around half its value against the dollar since the crisis struck in February last year and Akpinar said the company, with debt and infrastructure expenses in foreign currency, was still trying to catch up. Turkcell has slashed capital expenditure to $197 million in 2001 from just under $1 billion the year before in a bid to hold down costs and manage end-2001 total debt of $1.64 billion. Akpinar said the planned expenditure was enough to run the network without any loss of quality. He said revenues for the start of 2002 appeared stronger. «In January and February, we see a slight improvement on the minutes of use and average revenues and we made a new price increase on February 12, which will affect our business on the positive side with the appreciation of the Turkish lira.» Akpinar also said he saw no progress on reaching a deal on allowing new market entrant Aria, owned by Is Bankasi and Telekom Mobile Italia, to use Turkcell infrastructure. Turkcell is appealing to international arbitration after rejecting a deal imposed by Turkey’s telecommunications board. Turkcell is 37.3-percent-owned by Finland’s Sonera and the two companies last week announced plans to increase their involvement in Eurasian mobile operator Fintur. Akpinar said he was confident the new structure had the experience in dealing with business in emerging markets, such as Azerbaijan, Moldova and Kazakhstan, where Fintur has operations. «These companies have local know-how with the existing management. We don’t think there’s going to be any major change with these companies’ local management teams which have been very successful so far,» he said. Another looming deadline is reinforcing the new unity. Both countries hope to be invited to join NATO in November and are at pains to stress how they are working together to stabilize a region still reeling from a decade of wars in former Yugoslavia and struggling to curb trafficking in drugs and people.
