Global Insight Perspective | |
Significance | Following the launch of a mobile number portability (MNP) system in November, Turkey has finally concluded its 3G licensing tender. |
Implications | With mobile penetration having exceeded 80%, the 3G licence award has come at the right time to stimulate the market, which could start to see slower organic growth. |
Outlook | The centre of competition will shift to 3G, offering operators the opportunities to offer enhanced mobile data services. With the availability of mobile number portability, Vodafone and Avea will be in a better position to compete with Turkcell. |
The Information Technologies and Communications Board in Turkey said in a statement it had approved the three bids it received for 3G licences shortly after a tender process on Friday (28 November). Turkcell, the largest mobile operator in Turkey, announced that it was granted the licence providing the widest frequency band, with a bid of 358 million euro (US$454 million). Vodafone secured the 3G licence on the second-widest frequency for 250 million euro. Avea, owned by fixed-line operator Turk Telekom, won the third-widest frequency with a bid of 214 million euro. A fourth 3G licence was cancelled due to lack of bids, but the lower frequency licence may still be auctioned off at a later date or distributed between the existing Turkish operators. The chairman of the Information Technologies and Communications Board, Tayfun Acarer, was quoted by Reuters as saying he expects 3G networks to be launched in summer 2009.
Outlook and Implications
- 3G Tender Concludes: A previous attempt by Turkey to award 3G licences failed last year as Turkcell was the only bidder to come forward (see Turkey: 19 September 2007: 3G Licence Award Cancelled in Turkey). Vodafone and Avea had chosen not to bid for the licences, stating that it was unfair that the regulator was issuing a 3G licence without imposing mobile number portability (MNP), which would have enabled customers of other operators to switch service providers with relative ease. In the light of this, the Turkish government in November this year launched the MNP system ahead of a new 3G licensing tender, despite strong opposition from Turkcell, which had taken court action to prevent the launch of MNP in the country (see Turkey: 10 November 2008: MNP Launched in Preparation for Turkish 3G Licence Awards).
- Competition Moves to 3G: There were approximately 65.4 million mobile subscribers in Turkey at the end of September, a penetration rate of around 85%. With a relatively high mobile penetration rate and intense competition, the three existing mobile operators in Turkey are all keen to offer advanced mobile data services in order to attract customers and generate additional revenues. The operators could primarily target business customers and the youth segment with their initial 3G offerings. Now with the availability of MNP, Vodafone and Avea should be in a better position to compete with Turkcell, which itself is also gearing up to fight off increasing competition. At end-September, Turkcell reported 36.3 million mobile subscribers, with the largest market share of 55.5%. Vodafone, with 17.4 million mobile subscribers at end-September, had a market share of 26.6%. This leaves Avea, which had 11.7 million mobile subscribers at end-September, with a market share of 17.9%.