Türk Telekom sticks to investment plans

Bloomberg

Turkey’s biggest fixed-line phone company told investors in November about its growth outlook and that it planned to spend 1.25 billion liras to 1.45 billion liras in the fixed-line unit in 2009. The company may even accelerate its plans to expand and rewire its lines after copper prices declined, Doany said in an interview in Istanbul late last week.

"We’d rather build as much as we can before the prices begin recovering," Doany said. Copper, which is used for phone cables, fell 54 percent last year, the most since at least 1987. The investment figure doesn’t include expenses or the license fee for its mobile-phone unit’s high-speed wireless network.

3G payment
Türk Telekom will this year need to make a payment of 252 million euros ($336 million), including taxes, to the Turkish government after its unit Avea won a license to operate a so-called third-generation, or 3G, network in a Nov. 28 auction. Doany didnots say how much Avea would need to spend on its 3G network.

The company targets as much as 25 percent growth in mobile-phone sales this year. Avea will continue to aim for revenue growth and protecting its growing profit margins, Doany said. Türk Telekom has gained 18 percent this year in Istanbul trading. Doany also forecasts 20 percent growth in the high-speed Internet market this year, spurred by the government’s decision to cut the Internet communications tax to 5 percent from 15percent this year and competition that increases overall demand.

Türk Telekom offers Internet services using asymmetric digital subscriber lines, or ADSL, which allow high-speed connections via traditional copper phone wires. Türk Telekom, which has about 95 percent of the country’s high-speed Internet retail market, will charge other Internet service providers less than its own unit to use its infrastructure. That policy of "positive discrimination" will continue until Turk Telekom’s market share falls to 80 percent or less, Doany said.

Last month, Türk Telekom submitted a non-binding bid to buy Macedonia’s Cosmofon Mobile Telecommuni-cations Services AD Skopje. Cosmofon, which has 640,000 clients in the country of 2 million, is being sold after Deutsche Telekom, which also has a phone business in the former Yugoslav republic, bought a stake in Hellenic Telecommunications Organization SA, the owner of Cosmofon. Six companies are conducting due diligence and will submit binding bids in the second week of February, Michael Tsamaz, deputy chief executive officer of Cosmote Mobile Telecommunications, a unit of Hellenic Telecom, said Jan. 14.