Turkcell to double user count in 3 years
Leading Turkish mobile phone operator Turkcell believes its user count and data consumption could double within three years as it looks to maintain above inflation sales growth, its chief executive Kaan Terzioglu told Reuters. The company, currently working on a new three-year strategy, aims to achieve such growth by focusing on extending digital services and e-commerce, Terzioglu said. “I see user count and consumption potential doubling in the next 2-3 years,” he said, pointing to the increasing use of its exclusive digital services including messaging, music and video streaming applications. He added that while almost 80% of Turkcell’s 37 million customers have higher bandwidth LTE service-compatible data lines, only half have the smart phones required to use higher data consuming data services, such as video and music, efficiently.
Turkcell has been hampered in recent years by a feud between three major shareholders: Cukurova, owned by Turkcell founder Mehmet Emin Karamehmet, Russian billionaire Mikhail Fridman’s Alfa Telecom and Sweden’s Telia Company. Two weeks ago, two sources close to the matter told Reuters that Alfa Telecom was interested in increasing its stake in Turkcell by buying out Turkish firm Cukurova, which missed a recent debt repayment and could consider offers.
Despite the dispute, Turkcell aims a 21-23% rise in sales this year, having achieved an increase of 29% to TRY 13 billion in the first nine months of the year. Sales in 2016 had grown by only 10%. When the company forecast annual growth above 10-14% two years ago, “they didn’t believe it and our shares fell,” Terzioglu said.
“Now I can say the same thing. The telecom sector has to maintain growth above inflation,” he said. Turkcell has introduced subscription based products such as Bip for online messaging, Fizy for music, and TV+ for video streaming in an attempt to boost growth and its market share. Turkcell’s churn rate, showing how many customers abandon its services, is 4.25.6% since 3Q 2016, when it began marketing digital services aggressively, he said. Previously the rate was some 6.9-8%. Turkcell’s average revenue per user was up to TRY 32.8 at the end of the third quarter, maintaining growth of around 1117% each quarter this year.