Turkey: Turkey Communication Profile 2012

Turkey Communication Profile 2012

1. Broadband, Internet & Digital Media Market
2. Regulatory & Fixed Line Telecoms
3. Mobile Market

Turkey’s telecommunication sector was liberalised on 1 January 2004. Since then, new price control regulations coupled with entry of new players into the market have intensified competition leading to 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 made, particularly in relation to the regulation of the former state-owned incumbent operator Turk Telekom (TT) and the cable companies.

Along with the increase in mobile phone use, a downward trend in fixed line penetration can be observed. By the end of 2011, Turkey had about 15.21 million fixed line subscribers, down from 16.2 million a year ago. Fixed line penetration fell further to 20.6 per cent from 22.3 per cent in Q4 2010. The fixed telephony market is still dominated by the incumbent. In Q411, 91 per cent of revenue from telephony services provided in the country was earned by Turk Telekom, with only 9 per cent shared by alternative operators. Turk Telekom’s share has increased from 89 per cent in Q410, though it did fluctuate during the year.

As in other countries, rural broadband coverage remains a challenge in Turkey. To this end, in summer 2011, Turk Telekom received from the European Investment Bank EUR 250 million finance package for developing the Internet infrastructure in rural areas as well as modernisation of the existing infrastructure. The first tranche of the credit, worth EUR 100 million, has already been transferred to Turk Telekom.
 

The Information and communication technologies (ITCT) sector has become an essential part of the economy and social life particularly, since it is directly or indirectly affecting the ever-changing business world.

Turkey is aware of the fact that this sector will have a much more influential role in the future than its current state. Searches for solutions brought about by this development and growth, that are appropriate for the requirements of today, and the efforts to enable today’s economic and social life achieve these most current and fast solutions as soon as possible, form the basis of information and communication technology, since these solution searches basically require the utmost efficient utilization of both time and physical resources.

In this regard, Turkey has increased its interest in the ICT sector further and started the necessary studies so as to have a voice in the sector in the future.
The greatest indicators of these efforts are the new initiatives and R&D Law issued for the investors.

In Turkey, within the last ten years, ICT equipment has grown by 130%, software by 500%, services sector approximately by 500%, consumer materials approximately by 200%, information technologies by 225%, telecommunication equipment approximately by 75%, bearer services approximately by 275% and communication technologies approximately by 225%.

Broadband, Internet & Digital Media Market

Turkey Internet and broadband market, which has witnessed considerable growth in the number of broadband subscribers. ADSL is the predominant broadband access technology although cable holds great potential given the reach of the cable networks. Fixed-line incumbent Turk Telekom is focusing on broadband to generate new revenue streams to offset falling fixed line voice revenue. The country's sizeable Internet user population, despite low Internet penetration, has fostered an emerging Internet economy, encompassing e-commerce, e-government and e-education services. The country's broadcasting sector is comprised of a large number of free-to-air operators and a number of satellite and cable-based pay TV operators. Digital TV offerings are available and convergence offerings look likely to appear in the near future, given the liberalised telecoms market and growing broadband penetration.

Regulatory & Fixed Line Telecoms

Turkey s communications market holds much potential given the size of its population and its growing economy. The telecoms market has been liberalised with a number of licences awarded to alternative operators and a majority stake in incumbent fixed-line operator Turk Telekom privatised. The telecoms regulatory framework has been amended to conform to the EU's regulatory framework for communications. Despite these regulatory developments the incumbent still dominates the market.

Mobile Market

The Turkish mobile market is one of the largest in the region due to the country's large population. Three GSM operators share the market and competition is fierce although Turkcell has a dominant position in the market. Foreign players Vodafone and TeliaSonera hold significant ownership stakes in mobile operators, attracted by the market's growth potential. 3G licences were awarded to all three operators in 2008 and services launched in July 2009.