Turkcell wins as rivals chicken out of Turkey 3G auction

7 Sep 2007

Turkcell, Turkey’s largest mobile operator by subscribers, this morning won a tender for the country’s first 3G licence, after offering EUR321 million (USD440 million) for the licence as the sole bidder in a live televised auction. The cellco initially bid EUR311 million, but raised the value after a request by the sector regulator, the Telecommunications Authority. ‘We want to spread this very important, very high speed technology to the whole of Turkey in the quickest way possible,’ said Turkcell CEO Sureyya Ciliv.

The auction of up to four UMTS licences had been threatened with the possibility of cancellation, after it emerged that Turkcell was the only bidder. The country’s second placed operator in terms of subscribers, Vodafone Turkey (Telsim), third placed player Avea, owned by Turk Telecom, and a potential new entrant, France Telecom’s Orange, were reportedly tentative about their chances of competing effectively in the Turkish 3G market. The trio all previously requested tender conditions, whilst Turkcell says it has earmarked USD80 million of its USD480 million annual investment budget for 3G. Turkcell yesterday placed bids for all four available UMTS licences, whilst neither Vodafone, Avea or Orange issued statements. 3G licence ‘A’ includes 45MHz of spectrum, with a minimum bid of EUR252 million (USD344 million); Licence ‘B’ also offers a 45MHz frequency allocation, with a minimum value of EUR224 million; starting prices were set at EUR196 million for concession ‘C’ (35 MHz), and EUR140 million for permit ‘D’ (25MHz).

The W-CDMA tender had originally been scheduled for May 2007, but the Telecommunications Authority postponed it with no clear explanation, although officials linked it to general elections in July. Last month, the Telecom Technical Staff Association (TETED), made up of sector employees, applied to an Ankara court to have the tender process cancelled on the grounds it would cause unfair competition and only benefit Turkcell if held before the introduction of mobile number portability (MNP). Avea and Vodafone have also argued that holding the tender before the introduction of MNP unfairly benefits the market leader.

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