Among the noteworthy developments that left their mark on 2009, perhaps the introduction of 3G mobile services was the most important.
Turkish subscribers to the country’s three mobile operators, Turkcell, Avea and Vodafone, were introduced to the 3G mobile system on July 30. Including wide-area wireless voice telephone, video calls and wireless data all in the mobile environment, 3G services sparked cutthroat competition in the Turkish communications market. The 3G battle has become so attractive that even Türk Telekom, Turkey’s fixed line giant, entered the mobile market with a new product to take advantage of the rapidly growing demand for wireless data and voice services. Naked ADSL, which permits ADSL to be provided without any subscription to a fixed telephone line, can also be cited as another positive development in the sector during 2009.
Radical changes to sector
Mobile number portability, which started in November 2008, allowed GSM subscribers to keep their phone numbers when switching to different carriers and also escalated competition in the market. These new developments greatly benefited customers as well. Following a number of newly introduced promotions, subscribers now have the opportunity to make calls for cheaper than ever before. A law that made it possible for fixed line subscribers to switch between rival operators was also seen by many as a big step. According to Yusuf Ata Arıak, president of the Turkish Competitive Telco Operators Association (TELKODER), the competition between fixed line and mobile service providers will increase in 2010. He said local call services and portability for fixed line numbers were crucial for a healthy market.
Evaluating the developments in telecommunication sector in 2009 during an interview with Sunday’s Zaman, Information Technologies and Communications Authority (BTK) head Tayfun Acarer said the sector did not put the brakes on growth amid the global financial crisis. “The telecommunications industry in some countries suffered noticeable stagnation in 2009 due to the crisis; however, the sector continued its steady growth in Turkey.”
“Genuine progress” was how Acarer defined the changes in the Turkish telecom market, as he emphasized that certain regulations implemented by the Transportation Ministry played an important role to this end. “Thanks to a few regulations introduced at the right time, the Turkish telecom industry gained remarkable momentum in 2009.” Among the prominent achievements of 2009, according to Acarer, were the steps taken toward liberalizing the Turkish fixed line telecommunications market. “Local calls are now open to competition, and this is a big step.”
The BTK head said new technological developments and regulations benefited both investments and employment and he expects this trend to continue in 2010. He also recalled that the 3G tender earned the Treasury 1 billion euros.
There was a 24 percent increase in call traffic, while SMS services increased by 56 percent. “However, the costs did not increase at the same rate,” Acarer added. There was not a very high increase in fixed line Internet services; however, demand for mobile Internet services rose markedly. He said they expected growth in fixed line Internet services in 2010.
Acarer said he also expects research and development (R&D) investments to accelerate in 2010, noting that local companies will play a prominent role in this regard. According to a 3G contract signed between the BTK and operators, 50 percent of services must be provided by local providers. The government is determined to encourage more local service providers to this end. He also noted that Turkish operators have branched out into new markets in 2009, which will surely benefit the improvement of the domestic market. “We hear that many foreign investors are looking for partnerships and investments in the Turkish telecom market; this is encouraging.”
According to Acarer, the most important development in the telecom sector in 2009 was legislation that made the Transportation Ministry the sole authority regulating the market. This brought order to the market, Acarer argues, noting, however, that some drawbacks with regards to healthy competition might still remain. With regards to e-government services, he said they expected more consumers to start using e-state services in 2010 as an e-signature application becomes increasingly popular. The system makes things much easier for users, as documents that previously required a physical presence can be signed electronically. According to Erol Bilecik, CEO of Index Group, Turkey’s leading IT company, the government will continue investment in the e-government project and new services will attract more users. Can Orhun, general manager of E-Güven, Elektronik Bilgi Güvenligi A.Ş., the first electronic certification service provider in Turkey, said e-signature services will see a boost in 2010 as more public and private companies and banks are expected to switch to this system.
3G a breakthrough
Ayşegül Ceyda Yıldırım from Avea told Sunday’s Zaman that the Turkish GSM market saw breathtaking developments in 2009, with the introduction of 3G services being the most important event. “The GSM market has gone through a swift transformation. Hundreds of thousands of users were introduced to new technological products,” she said, noting that 2010 is poised to see further improvements and increased investment thanks to the achievements realized during 2009. With regard to the negative impact of the financial crisis on the GSM industry, she said there might have been a slight contraction in the market; however, this is not simply due to the crisis. “Other factors such as the number portability process, which led customers to stop maintaining SIM cards for various operators and choose only one single operator instead, were responsible for a decline in the number of new subscriptions,” Yıldırım said.
Once they switched to an operator, most customers cancelled subscriptions with their second or third company.
In line with anticipated economic recovery in 2010, she argued, the GSM industry will enjoy even better performance. Describing her company’s targets for 2010, she said Avea expected to focus on increasing its market share. With regard to sponsorship partnerships with sports clubs, she said the company planned to sign new contracts with several clubs in 2010. She hinted that the new contracts would also cover some companies in addition to sports clubs.
As for the anticipated developments in 2010 on the government side, a merger between the Radio and Television Supreme Council (RTÜK) and the BTK, the telecommunications sector’s two regulatory authorities, is likely to take place this year. The state also plans to offer its shares in Türk Telekom for sale to the public. Meanwhile the ban on Youtube, a public video-sharing site, is still in effect. Youtube has been banned since May 5, 2008 after it refused to delete videos that were ruled by a Turkish court to insult Mustafa Kemal Atatürk, the founder of the Republic of Turkey. The Transportation Ministry and the BTK recently met with Youtube officials to work toward a resolution, asking the provider once again to delete the offending videos.
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