“If There Is Opportunity, Money Doesn’t Really Mean”

Turk Telekom had revenue of over TL 10 billion at the end of 2008. The company is planning to continue to grow in 2009 and to increase its revenue by between 8 and 10 percent. Turk Telekom General Manager Paul Doany explains the growth plan: “We have US$1 billion for acquisitions. If more is needed then we can ask for more. This figure doesn’t really mean very much. We are thinking of buying Turkish companies which will complete and support our existing information technology companies.”

* What kind of future awaits Turk Telekom over the next five years? What are your targets for the near future?
In the next few years we shall own devices which are very intelligent, which people cannot even imagine at the moment and which will meet many needs. It seems clear that our revenue will come from carrying this traffic. In the future, we shall be the operator which carries this traffic.

If we consider that there are more than 60 million subscribers In the mobile telephone market, the number of intelligent telephones such as Blackberry and iPhone account for a relatively small share of the total market. Bu we expect this figure to multiply quickly. If the market for these intelligent telephones reaches even 5 percent of this market of 60 million then this makes a figure of 3 million. This is a really important market…

But what we are interested in, is not just this upper stratum of the market. There are a lot of people in the middle section of the market who cannot allocate a budget for intelligent telephones but will feel the need for the services they provide. This middle segment is an important market for us.

* So what kind of growth plans do you have for abroad?
The first point I will make on this subject is that we are approaching acquisitions very responsibly. An acquisition must most definitely be realized at a realistic, reasonable price. A company which has been bought for a high price can subsequently create significant losses. Yes, there are more acquisition opportunities as a result of the crisis. But we are not going to buy a company just because it is cheap compared with six months ago.

* But you are still interested in acquisitions in neighbouring countries, aren’t you?
Yes, we are very interested in neighbouring countries. We can cover all of the countries in the region from Turkey at a very reasonable cost, and most of them are extremely good in terms of return on investment. In principle, we are focusing on companies which have both mobile and fixed lines.

* If we ask more directly… Will you buy something this year? Will we also hear the news that you have made an acquisition?
I hope so…

* This year you will have a budget of US$1 billion just for acquisitions, won’t you?
Yes, in fact this US$1 billion is just what we have been authorized by the Board of Directors. If more is needed then we can ask for more, or maybe an opportunity will arise for a smaller investment and we can spend less. This figure doesn’t really mean very much.
As I said, what is important is that the investment will give us added value.

* Will you continue to buy companies in Turkey? In which areas will the acquisitions take place?
We are thinking of buying Turkish companies which will complete and support our existing information technology companies. These companies may be information technology companies which are involved in CRM, customer relations, and financial services. They may also be companies which provide software support services or those which specialize in testing software installations. We are talking with some of them.

* What new products will Turk Telekom introduce us to this year?
This year on the domestic market, which I noted was important for our future, we shall start to focus on convergent products. This product group offers an opportunity to provide services to all of the consumer segments which constitute our base. In the home, in the street, wherever you are, voice, data, fixed line, mobile telephones, whatever service you want to use, we at Turk Telekom shall reach you. Of course, different services are needed for these convergence products and they require a complex integration process. It will be a difficult process for us but will also offer us considerable possibilities.

This year, the different companies in our group will begin cross-sales. For example, TTNET will sell mobile services and the internet service providers will sell similar but different services. Then you will see more services on Wi-Fi. For example, we have started to provide WiRO services. This is a very interesting service. When you are abroad, instead of paying an international call rate or roaming charge, you can call a place in Turkey over your home telephone. We shall offer different new options in this area. We are signing a Wi-Fi roaming agreement, and this agreement will enable us to provide voice and data services. In the first stage, we are beginning with these products and are able to provide maximum value for our consumers.

In addition, this year you will see packet products in voice services. For example, we will start offering an unlimited calling service for domestic and long distance. In addition, as with Avea… after a certain number of minutes, Jetvell consumers will be have unlimited usage. First of all, WiPhones will appear. This product will be suitable for to Area, because mobile operators can also provide services. If you are in Wi-Fi coverage, you will be able to receive voice and data services.

In addition, you will see new products we have developed with Avea, the details of which I cannot disclose at the moment. During all of last year we produced 47 new products. As a result, the total number of our products exceeded 100.

There Is No Slowdown In Our Investments

We Have Accelerated As Costs Have Fallen
In 2008, we invested a total of TL 1.75 billion. We realized investments of approximately TL 1.3 billion in fixed networks and TL 450 million in mobile networks. We are continuing our investments this year. Because today we can make bigger investments at a low cost. The cost of cable investments has fallen by 70-75 percent compared with last year. We have 24 infrastructure agreements in Turkey as a whole. Now is the best time to establish a better, fast network.

We Shall Continue To Take On Personnel
We employed 2,640 new personnel during last year as a whole. Despite the crisis, we shall continue to take on new personnel this year as well. I cannot give a precise figure because the decision has not been taken yet. But I think I can say that it will be close to 1,000.

Elçin Cirik
[email protected]