BMI's Executive Summary

[TOP]

Little progress appears to have been made by Turkey's telecoms regulator regarding the licensing of 3G services, following the annulment of the country's original 3G tender in September 2007. Two of the country's three mobile operators – Vodafone and Avea – boycotted the tender in protest at delays in the implementation of mobile number portability in Turkey. That left mobile market leader Turkcell as the only bidder and the regulator argued that the licences must be awarded in a competitive tender process. However, in doing so, the regulator has effectively handed Vodafone and Avea a veto over the 3G licensing process, meaning that a new tender is unlikely to take place until the operators' concerns over number portability have been addressed. Not that this is necessarily a bad thing; BMI has previously bemoaned the slow progress of number portability, which we believe is inhibiting competition in the mobile market and helping Turkcell to maintain its dominant position. With mobile penetration expected to exceed 80% by the end of 2007, we believe that now is the time to liberalise the market further and allow operators to compete more effectively, not just for first-time mobile users, but also for existing customers from other networks.

While the mobile market is maturing, Turkey's broadband sector is still in its infancy but is growing rapidly. Incumbent operator Turk Telekom reported 3.4mn subscribers at the end of June 2007 and we believe that the operator is likely to have hit its target of 5mn broadband customers by the end of 2007. Given the rapid rate of Turkey's economic expansion and the lack of mobile broadband services due to the absence of 3G, we anticipate strong ongoing demand for high-speed internet services. We forecast broadband penetration to exceed 10% in 2008, hitting 20% in 2010.

This quarter sees the inclusion of BMI's new business environment rankings for the Middle East. Based on a revised methodology, the rankings present a more refined analysis of the opportunities and risks of investing in the region's telecoms markets. As in our previous ranking system, Turkey scores near the bottom of our regional table, behind Gulf states such as Saudi Arabia and Bahrain. However, we still maintain that Turkey's demographic profile and strong economic growth present interesting opportunities for telecoms investors, while as the mobile and broadband markets mature, customer spending levels are likely to rise from their current low levels. The most immediate improvements in the business environment could be made in the regulatory sphere; as outlined above, we have some concerns about the slow pace of liberalisation, particularly in the mobile market.

Contents

[TOP]

Chapter 1 - Executive Summary

Chapter 2 - Business Environment Rankings

Middle East & Africa

Turkey

Chapter 3 - SWOT Analysis

Turkey Telecoms Industry SWOT

Chapter 4 - Industry Forecast Scenario

Fixed-Line

Table - Turkey Telecoms Sector – Fixed-line - Historical Data & Forecasts

Internet

Table: Turkey Telecoms Sector – Internet - Historical Data & Forecasts

Mobile

Table: Turkey Telecoms Sector – Mobile – Historical Data & Forecasts

Chapter 5 - Macroeconomic Climate

Slowing Growth – Rising Risks

Table: Economic Indicators

More Risks Ahead

Chapter 6 - Country Snapshot: Turkey Demographic Data

Section 1: Population:

Table: Demographic Indicators (2005)

Table: Rural/Urban Breakdown

Section 2: Education & Healthcare

Table: Education

Table: Healthcare: Vital Statistics

Table: Healthcare: Expenditure

Section 3: Labour Market And Spending Power

Table: Employment Indicators

Table: Consumption and Stratification

Chapter 7 - Competitive Landscape

Competitor Analysis

Table - Key Players: Turkish Telecoms Sector

Table – Selected Operators Financial Indicators

Key Players

Fixed-Line

Table: Regional Fixed-Line Penetration Overview

Internet

Table: Regional Broadband Penetration Overview

Mobile

Table: Regional Mobile Penetration Overview

Market Data Analysis

Fixed-Line

Mobile

Table: Turkish Wireless Market, Q306

Table: Turkish Wireless Market, Net Additions Q306

Table - Turkey Wireless Market, Net Additions, Q106 and FY05

Table: Turkcell ARPU (US$)

Chapter 8 - Industry Developments

Company Monitor

Regional Case Study – Huawei Technologies

Huawei Technologies – Contract Sales (US$bn)

Major Contract Wins For Huawei Technologies in MEA

Operators

Türk Telekom

Turkcell

Telsim (Vodafone)

Chapter 9 - BMI Forecast Modelling

How we generate our industry forecasts

Telecommunications Industry

Chapter 10 - Appendix: Regional Demographic Data

The Long View: Data Over The Economic Cycle (2000-2007)

Population

Household Spending Per Capita, US$

Private Consumption Per Capita, US$ PPP

Market Size, GDP, US$bn

Competitive Landscape for Middle East & Africa Telecommunications Reports: Sample of Companies Ranked

[TOP]

Commentary on key operators highlighting ownership structures, latest available revenue figures, market share analysis and ARPU counts. BMI forecasts for all headline macroeconomic indicators, including real GDP growth, inflation, fiscal balance, trade balance, current account and external debt. Company SWOTS Covering all leading telecommunications operators and manufacturers operating in each market, including competitive intelligence on geographic presence and competitive positioning against local companies; local market share; leading products, services and technologies; foreign direct investments, projects, merger and acquisition strategies.

Network of Middle Eastern and African Telecommunications Sources

[TOP]

BMI's Middle Eastern and African Telecommunications Reports are based on an extensive network of multilateral organisations, government departments, telecommunications industry associations, chambers of commerce and company reports. Information sources include: