Turkcell grows in second quarter

9 Aug 2007

Turkey’s largest cellco by subscribers, Turkcell, has announced its results for the second quarter ended 30 June 2007, including revenues that grew by 29% year-on-year to USD1.5 billion, and EBITDA that also rose by 29% on an annual basis to USD597 million. Net income of USD274 million was a 215% improvement over the same period last year, mainly due to rising sales as a result of a growing subscriber base, higher average minutes of use, and lower taxation compared to 2Q06, and despite foreign exchange losses due to appreciation of the Turkish lira against the US dollar in 2Q07. The company expects full-year 2007 revenue growth of at least 20% on the back of growth in subscribers, current usage trends and revised exchange rate expectations.

Turkcell’s domestic GSM subscriber base grew by 1.5 million quarter-on-quarter, or 13% year-on-year, to 33.8 million as of 30 June 2007, whilst 2Q monthly average revenue per user (ARPU) was up 13% at USD14.1. Astelit, Turkcell’s 55%-owned subsidiary in Ukraine, recorded a 178% year-on-year increase in revenues to USD54.8 million, whilst its subscriber base reached 6.3 million (4.0 million active over three months) at the end of June, up from 5.8 million (3.5 million active) at the end of March, and 3.9 million (2.0 million active) at the end of 2Q06. USD505 million of Turkcell’s USD703 million consolidated debt at mid-2007 was related to the Ukraine unit, and the restructuring of a USD390 million long-term syndicated loan obtained by Astelit in December 2005 was completed in June when Financell, a wholly owned subsidiary of Turkcell, assumed the entire commitment and Turkcell guaranteed the payment of the loan.

Turkcell holds a 41.45% stake in holding company Fintur, through which it has interests in GSM operations in Kazakhstan (4.5 million subscribers at the end of June 2007), Azerbaijan (2.6 million), Moldova (500,000), and Georgia (1.1 million). Revenues from Fintur operations in the second quarter totalled USD355 million. Kibris Telekom, Turkcell’s 100%-owned unit in the Turkish Republic of Northern Cyprus, reported 300,000 users at end-June, up from 200,000 a year before. Group-wide, Turkcell reported 42.5 million proportionate GSM subscribers at the end of the period under review.

On 7 August 2007 Turkcell decided to apply for the pre-qualification stage and conduct necessary studies to bid in the public auction of a 26% ownership stake in the new company that will be incorporated as the third mobile operator in Kuwait. Additionally, the company decided to conduct the necessary studies to participate in the tender of three 15-year national mobile licences in Iraq.

Turkey, Ukraine, Lifecell (Ukraine), Turkcell