The Turkish telecommunications market holds up well relative to its regional peers and a surprise uptick in fixed voice connections complemented further steady growth in fixed and mobile broadband connections, as well as pay-TV accounts, in Q213. The mobile voice market is somewhat troublesome, however, as IP voice and messaging substitution begins to take hold. The largest operators -Turk Telekom and Turkcell - are responding with an increased emphasis on fixed-mobile service bundles, with TV central to those offerings. This could put Vodafone at a disadvantage, as it has yet to develop its own pay-TV service for its fledgling fixed broadband business. Broadband video aside, the main catalysts for change in the Turkish market continues to be the arrival of MVNOs and roll-out of mobile number portability.
- Monthly blended ARPU grew appreciably in Q213, countering the effects of negative growth in Q113. Increased voice usage - possibly linked to civil unrest in the country during the quarter - and the deactivation of large numbers of inactive non revenue-generating subscriptions could be behind this growth. Falling income from voice services, the rise of non operator-billed third party messaging applications and termination rate reductions, coupled with the elimination of inactive subscriptions are still expected to force ARPUs downward in the years ahead, however.
- Smartphone ownership continued to grow as Turkcell and Vodafone reported that 25% of their respective subscription bases were smartphone users at the end of June 2013, while Avea claims smartphone penetration of 28%.
Key Trends And Developments
In early September 2013, Dogan Holding said it had tabled at US$742mn offer for 53% of pay-TV operator, Digiturk, beating Turk Telekom's offer of US$530mn. Dogan's offer values Digiturk at US $1.4bn. Dogan already owns D-Smart, Turkey's second-largest pay-TV operator; the telecoms sector regulator and anti-trust bodies will need to consider the offer carefully as the deal potentially puts the bulk of Turkey's pay-TV sector under the control of a single player. Turk Telekom's response is not known; the incumbent wants to expand its presence in the pay-TV market despite growing interest in its Tivibu IPTV offering.