Turkcell CEO eyes Iranian deals as sanctions lifted

ISTANBUL – Reuters

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Turkcell is looking for acquisition opportunities to expand regionally and Iran could be a target market as sanctions against Tehran are lifted, the chief executive of Turkey’s largest mobile operator said on Jan. 18.

“Iran is a huge market and in our focus,” Kaan Terzioğlu said in an interview with Reuters. “We are closely watching the Iranian market and in touch with all of its fixed line and mobile operators.”

Turkcell has had a longstanding interest in Iran. In 2004 it led a consortium that won a mobile license in Iran that was later given to a rival group headed by South Africa’s MTN Group . It later tried to sue MTN in a U.S. court but eventually dropped that suit.

Like many mobile operators, Turkcell is looking to reposition itself as a telecom services firm by increasing revenues from data, television and music services. Through acquisitions, it is hoping to source as much 40 percent of its revenue from overseas, from around 9 percent now.

Although looking to expand its regional reach, it has not ruled out selling its nearly 42 percent stake in mobile firm Fintur, Terzioğlu said.

Fintur has operations in Kazakhstan, Azerbaijan, Georgia and Moldova and is majority owned by Sweden’s TeliaSonera, which is looking to sell its own stake in the Eurasian firm.

Turkcell said in November it would make a non-binding indicative offer for the TeliaSonera stake. However, it could instead consider selling out if the right offer came along, Terzioglu said.

“If we are convinced that the price is high enough, we may consider selling our stake in Fintur,” he said.

Terzioglu said the company would proceed with plans to pay a dividend again this year after its feuding shareholders called a rare truce last year, allowing the company to pay out a dividend for the first time since 2010.

Turkcell has a policy of giving away 50 percent of its annual distributable profit as dividend, although that has been hampered by a dispute between major shareholders TeliaSonera, Russian billionaire Mikhail Fridman and Mehmet Emin Karamehmet, one of Turkey’s richest men.

Turkcell’s net profit fell 16.5 percent to 631 million lira ($208 million) in the third quarter of last year mostly due to rising financial costs and devaluations in Ukraine and Belarus, where the company has operations.

The company has around 34 million customers in Turkey and has a second biggest market share with 36 percent in the whole telecom industry, following its rival Turk Telekom.