Turkcell wins fastest license

Bloomberg

Turkcell bid 358 million euros ($461 million) for a 20-year license to operate so-called third-generation services on a bandwidth of 40 megahertz, Orhan Öge, head of a committee in charge of the auction, told reporters in Ankara Friday.

"We will pay 422 million euros including the sales tax in full when the results are approved," Turkcell Chief Executive Officer Süreyya Ciliv told reporters after the auction.

Vodafone won a license for a bandwidth of 35 megahertz with a bid of 250 million euros after the commission drew lots between the company and Avea, which also bid the same amount. The fees do not include sales tax.

Avea won the license for a bandwidth of 30 megahertz after offering 214 million euros, Öge told reporters.

The three companies are competing for market share in the country of about 72 million, which increased competition by introducing number portability, allowing customers to keep their phone numbers when they change networks.

"Getting 3G licenses in Turkey is all about loyalty and customer retention," said Fulin Önder, an analyst at Global Securities in Istanbul. "We expect subscribers of between 14 years old and 25 years old to lead penetration in mobile data and keeping these customers will be very important for all the operators."

Vodafone bought Turkey’s second-biggest mobile-phone operator Telsim from the government in 2006 and is seeking to snatch market share from leader Turkcell and stave off competition from Avea, the third-biggest operator.

Third-generation, or 3G, services allow mobile-phone users to download videos, make video conference calls and surf the Internet at faster speeds than traditional GSM networks. The government sought to increase interest in the sale by announcing plans this week to lower the communications tax on Internet access via mobile devices to 5 percent from 25 percent. The change may be authorized by parliament next year.