New spectrum allocations and a fourth mobile licence offering are expected to provide a fillip for Turkey’s telecoms sector, which has benefitted in recent years from rising mobile and internet penetration, driven by its young, tech-savvy population.
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In March, the transport and communications minister, L?tfi Elvan, announced a tender for 4G mobile data services, which is scheduled to be completed before the end of May. Bids will be sought in the 800-, 900-, 1800-, 2100- and 2600-MHz bandwidths, with an initial rollout of services planned before the end of the year. The government aims to extend 4G services to at least 90% of the population within six years, Elvan said.

Boost for economy

Turkey will also be opening the door to a fourth operator, which will be able to bid for the 2600-MHz bandwidth. Despite strong demand for services and the rapid development of 3G over recent years, a new operator will face tough competition. The three existing operators, Turkcell, Vodafone and Avea, have their infrastructure backbones in place, and the two larger players ? Turkcell and Vodafone ? have already carried out 4G tests. The existing players are looking to advanced networks to provide next-generation mobile internet services, in a bid to boost revenues in an what remains a fiercely competitive market.

Service providers will also need deep pockets to fund the rollout. The government has set a minimum price for the spectrum allocations of $2.44bn, well above previous market expectations of around $1.6bn.

In addition to the direct revenue to be raised from the spectrum auction, the government expects 4G services to provide a significant boost for the economy. The Ministry of Transportation, Maritime Affairs and Communication has estimated that the 4G rollout ? based on the assumption of a 10% increase in bandwidth ? may add 1% to Turkey?s GDP growth.

To further boost sector growth, the government is implementing measures as part of the Ministry of Development?s 2015-18 Information Society Strategy and Action Plan. Under the scheme, which was announced in March, families will receive free internet access, with a particular focus on families with students. Another measure will make it compulsory for new buildings to have adequate infrastructure for internet services.

Strong demand for broadband

Though the telecoms sector is hindered by high taxes, an increasing number of young Turks are embracing new technologies and mobile broadband services. These developments are in line with the government?s Vision 2023 plan, which seeks exponential growth in the telecoms sector over the next decade.

The total number of mobile phone subscribers in Turkey stood at 71.9m at the end of 2014, corresponding to a 92.5% penetration rate, according to the Information and Communication Technologies Authority.

Mobile phone and internet penetration is high in Turkey and rates are still climbing. In its most recent survey of household ICT usage ? published in August ? state statistics agency Turkstat found that internet access in homes spiked last year, with nearly two-thirds of households able to access internet at home as of April 2014, compared to almost half a year earlier. In the first quarter of 2014, 44.9% of individuals aged 16-74 used the internet regularly ? meaning at least once a week. The figure stood at 39.5% a year earlier.

There was also a strong increase in the number of subscribers using mobile or portable platforms. Mobile or smartphones accounted for 58% of all internet connections in the first quarter of 2014, while portable computers contributed a further 28.5%, compared to 41.1% and 17.1%, respectively, one year earlier.

The take-up of ICT by businesses was also strong, with 89.9% of companies employing at least 10 staff connected to the internet in 2014, while among firms with a minimum of 250 employees the figure rose to 98.7%, according to a separate report by Turkstat. Though this is close to saturation, the need for faster, more capable ICT services will help drive sales of technology and subscriptions for 4G in the business community.

The Turkstat report, released in late November, also found that while most companies had access to broadband, more than half only subscribed to the slowest service available, with download speeds of below 10 Mbit/s, and just 15.2% of enterprises had download speeds of 100 Mbit/s or more. It is likely that greater access to high-speed data services will spur existing business users to upgrade and previously unconnected firms to get online, increasing revenues for service providers.

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