Global Insight Perspective | |
Significance | Now that mobile number portability (MNP) will be implemented before the auction, operators will have a level playing field to encourage bidding. |
Implications | 3G services will stabilise ARPU levels which have dropped considerably over the past few years. |
Outlook | 3G services will greatly benefit the business customer but provide a range of applications for the country's youth. |
Although the auction time frame is set, it is not the first time the regulator has delayed the licence process (see Turkey: 23 May 2007: Telecoms Regulator in Turkey Delays 3G Licence to September). When Turkey first announced a 3G licence award in May 2007 it was won by the country's largest operator by market share, Turkcell, which paid 321 million euro (US$448 million) in order to obtain it; however, both Vodafone and Avea boycotted the auction because MNP was not implemented. As Turkcell wanted to maintain its market leading position, it tried to block the decision to implement MNP in the country, since then actions have been taken to implement it and it will be in place in November this year (see Turkey: 29 April 2008: Mobile Number Portability to Start in Turkey).
Mobile penetration in Turkey is currently around 70%, with Turkcell taking the largest market share of 65%, leaving Vodafone and Avea with 21.5% and 13.5% respectively. 3G services in the country will be necessary for business users and will be taken advantage of by the high youth population in the country. Operators will be able to deploy a wider range of services which will boost revenues. Although the country has demonstrated significant growth in the telecoms mobile sector, Turkey suffers from falling ARPU figures which are typical of an emerging-market country. 3G services will provide stability in the trend for lowering ARPU figures. Vodafone already operates in markets where it has implemented 3G services such as in Egypt, where it launched "Bubble Motion Service", which is an alternative to the traditional "type and read" SMS service which works by a short voice message (SVM) being recorded in the sending handset and sent to the user who calls a number to retrieve the message. The service also works with email capability, where the recipient can send an audio file attachment to the email (see Egypt: 31 May 2007: Vodafone Egypt Sees Bubble Motion Service Increase ARPU by 1.5%).
Outlook and Implications
- Future Value Added Services: The 3G licence will allow the operators to implement a range of 3G services, Vodafone, and Turkcell have already launched a range of 3G services, and has a strong reputation in deploying revenue generating services (see Turkey: 18 July 2008: Turkcell Launches Windows Messenger in Turkey). The high proportion of youth in the country will want to take advantage of the interactive capabilities of the service, music, and video downloads are already popular in countries where where 3G services are available among the young.
- Business Users: 3G in Turkey will enable business users to use email and other internet-based services such as video conferencing. Business enhanced handsets such as the BlackBerry have been launched in the country and proved popular amongst business users (see Turkey: 28 March 2008: Turkcell Launches New BlackBerry Pearl 8120 in Turkey).
- Impact of MNP: MNP will allow customers to keep their same number while switching between operators (see Turkey: 29 April 2008: Mobile Number Portability to Start in Turkey). All operators will have to offer greater incentives to keep customer loyalty. Turkcell will be affected in particular as it is the market leader with 56%; when 3G licences are made available, all operators will be able to compete heavily on product. Turkcell's main competitor, Vodafone, has a strong track record in providing value-added services internationally and in emerging markets, such as Egypt, which hace proved to be good revenue sources.