|
|
Competitive Pressures Are Mounting on Turkcell
Published on: 15th May 2008
Turkcell has reported a very encouraging set of results, despite the fact that for the first time ever, its domestic subscriber base fell quarter on quarter. Turkcell's position in its home market was verging on total dominance throughout the late 90s and early years of this century. It still enjoys a strong position today, but the competition is hotting up and the era of effortless growth is over.
That this would happen was inevitable, that it is happening now is largely due to the fact that Vodafone acquired Telsim back in 2005 and has done much to improve coverage and erode the advantage Turkcell enjoyed with respect to network quality. Quite how much damage Vodafone has done in this latest quarter remains to be seen, but, for its part, Turkcell is suggesting that the small drop in customers can be attributed to the aggressive subscriber acquisition policies of both of its competitors at a time when natural demand is declining.
The decline in customers is minimal - just 0.22k - to leave the base at 35.1m, but the effect of competition isn't seen most clearly in this metric. More telling is the 7.7% drop in blended ARPU, despite a 17% improvement in usage (to 73.6 minutes) and the 210bp rise in churn (to 7.2%). Those figures are in local currency but as Turkcell reports in US dollars, the P&L hasn't been shot to pieces - overall revenues in US$ are up 21.6% and EBITDA, up 12.4%. By way of comparison, were one to re-translate this back into Lire, the changes would be plus 2.6% and minus 5.1% respectively.
There is more to the company that just Turkey, of course and Turkcell now has a presence in six countries. Four of these are held through the Fintur joint venture with TeliaSonera; the other, Astelit in the Ukraine, is a 55% owned subsidiary. This produced a very strong performance, with 66% subscriber growth and 111% revenue growth to $90m. That in turn, was sufficient to allow the company to record a positive EBITDA of $2.1m, against a loss of nearly $17m in Q1 07.
Tags: [arpu] [teliasonera] [turkcell] [telsim] [churn] [era] [Turkey]
| |
|
| |
|
| |
|
| |