The biggest news in Turkey’s telecoms market this quarter is the country’s 3G auction, which finallywent ahead in early September. However, in a surprise move, Vodafone and Avea decided not to bid, andthe auction failed to attract any new entrants, leaving mobile market leader Turkcell as the onlyapplicant. The operator was duly awarded the A Type licence, which has the largest frequency band, afterentering a bid of US$440mn. At the time of writing, neither Vodafone nor Avea had made any officialstatement on their reasons for abstaining from the auction, although it is thought that they were protestingagainst the lack of mobile number portability in Turkey. They had previously claimed that in the absenceof number portability, the 3G licence tender would only serve to increase Turkcell’s dominant position inthe mobile sector. The move was a disappointment for the Turkish government, which had been hoping toearn as much as US$2bn from the sale. However, in the week following the auction, it emerged that thenational regulator and the Council of State may nullify the outcome of the auction on competitiongrounds.
While the outcome of the 3G auction was a disappointment, we maintain our broadly positive outlook forTurkey’s business environment. The resounding victory of the ruling party, the AKP, in July’s generalelections should improve investor confidence, especially as the administration has vowed to continue onits path of economic reform. Vodafone’s acquisition of and ongoing investment in Telsim should help theoperator to compete more effectively with Turkcell. Meanwhile, a stake in Oger Telecom, the largestshareholder in Turk Telekom and Avea, is due to be sold to an international investor, with France’sVivendi the most likely candidate.
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