Turkcell returns to profit and predicts modest gains for 2003

Turkey’s leading mobile operator Turkcell has said improvements in the domestic economy helped it return to profitability and meet its financial targets in 2002. The company, which is owned by Fintur Holdings in which TeliaSonera has a 58.55% stake, reported total revenues of USD1.97 billion, up 16% from USD1.7 billion in 2001, as subscriber numbers jumped from 12.2 million to 15.7 million; 90% of the new additions were pre-paid subscribers, which now constitute 70% of all customers. EBITDA rose 18% to USD724 million, while net income stood at USD102 million, compared with a loss of USD187 million in 2001. Monthly minutes of usage declined by 12% to 56 minutes and blended average revenue per user (ARPU) fell by 7% to USD11.7 per month. Acquisition costs per subscriber (SAC) decreased by 35% to USD26 during 2002, whilst capital expenditure stood at just USD68 million, down from USD188 million in 2001; the company has budgeted to spend USD150 million on its network upgrades in 2003.

During 2002 Turkcell reduced its outstanding debt by USD475 million to USD1.3 billion, in addition to paying USD225 million in vendor financing to Ericsson. It had USD395 million in cash reserves at the end of the year and plans to reduce its debt burden by a further USD615 million during 2003. The company said that it expected subscriber growth to be only ‘modest’ in 2003, but that its financial returns should improve again in line with the government’s new budgetary proposals, currently before parliament, which are geared towards bringing Turkey closer to finalising an agreement with the International Monetary Fund (IMF) for fiscal aid.