Turkcell sticks with Europe operations despite waning profits by 33 percent

02.03.2012

Despite a 33 percent decline in net profits, mostly due to problems in Belarus last year, Turkey’s largest GSM operator Turkcell is committed to expanding its presence in European markets, CEO Süreyya Ciliv told Today’s Zaman in İstanbul on Thursday.

Içerigi Paylas |

Currently operating in nine different countries, Turkcell serves European customers with its partner operator “Life:)” in Ukraine and Belarus and entered the German market in 2010. Ciliv met with reporters in İstanbul on Thursday to evaluate the company’s 2011 results and expectations for this year. Turkcell saw its revenues grow by 4 percent to TL 9.37 billion ($5.32 billion) in 2011 over the preceding year. Increasing revenues, however, did not mean a profit boom for the company as it suffered a 33 percent loss in net profit in the same period. This indicates that the operator is now expected to intensify its focus on services with relatively higher value-added.

“Underlying the contraction in net profits was a depreciating local currency in Belarus. … We had previously received $370 million in loans in Belarus and a devaluation in local currency against the US dollar cost us TL 735 million,” he explained. Turkcell’s Scandinavian partner TeliaSonera criticized the company’s board for its allegedly bad governing of European operations, particularly in Ukraine. “We have no intentions to leave any market that we exist in in Europe. … On the contrary we are expecting 15 percent growth in Ukraine this year over 2011,” Ciliv asserted. Turkcell’s revenue in Ukraine in the fourth quarter increased by 20 percent to $98 million in the final quarter of 2011 over the same months of 2010. The company reached 7 million subscribers in the country. Providing further details about the company’s performance, Ciliv said the number of their subscribers increased by 1.1 million to 34.5 million last year in Turkey. One of the driving forces behind higher revenues in 2011 was the swelling mobile Internet services business. Turkcell earned TL 1.94 billion from mobile services last year while the number of subscribers benefiting from these services increased by 3.7 million over 2010. Ciliv said the cost per megabyte of mobile Internet usage dropped drastically by 81 percent between 2009 and 2011, a development he described as a “win-win for subscribers and operators.”
2,000 new employees, TL 1.7 bln investment

The company expects to add 2,000 new people to 12,700 currently working this year and the majority of the new staff will be recruited in call centers. Ciliv said the company expected to boost revenues by at least 6 percent this year over 2011. “We could reach between TL 9.9 and 10.1 billion in 2012 revenues.” In addition to revenue growth, Turkcell also has plans to invest TL 1.7 billion in business this year. “We see our growth speeding up and competition is getting tougher in the markets as people adapt to the latest devices really fast,” Ciliv said, adding that they worked to meet customer demand with innovative products.

Also noting that they expected to get a larger share in the Turkish fiber optic services market, Ciliv said current interconnection tariffs were relatively higher when compared to Europe. “There have been some comments that the interconnection tariffs be reduced. … Current prices are too low and this has a negative impact on our business. We would like to see it increased,” he explained. Ciliv said Turkcell contributed to making Turkey a leading country in global GSM markets as he recalled that a recent survey conducted by INSEAD Turkey boasted the largest mobile network coverage among 138 countries. “Turkey is also among five countries to have provided households with as high as 1 gigabyte fiber optic Internet service. All of these successes were achieved thanks to the players’ commitment to upgrading the country’s communication infrastructure,” he explained.

Source : todayszaman.com
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