Always Forward in The International Arena

As Turkcell Group, we continue our operations in Ukraine, Belarus and the Turkish Republic of Northern Cyprus through our subsidiaries and in Kazakhstan, Azerbaijan, Georgia and Moldova through our stake in Fintur. We also operate in Germany under a marketing partnership agreement.

TURKCELL INTERNATIONAL* REVENUE BREAKDOWN - 2015

* In 1Q15, Turkcell has divided its main operations into two groups: “Turkcell Turkey” and “Turkcell International” within the framework of the strategy of providing converged communications and technology service, and so as to enable economic integrity. The operations of Turkcell International contain the operations of the following companies: Cyprus Telekom, Eastasia, Euroasia, lifecell, Beltur, Beltel, Belarusian Telecom, UkrTower, Global Ukraine, Turkcell Europe, Lifetech and Fintur.

UKRAINE: lifecell

We became the sole owner of lifecell having acquired the 44.96% stake of SCM Holdings Limited on June 26, 2015 for USD 100 million. Thus, we aim to manage lifecell more efficiently so as to strengthen its position in the market, and to increase its contribution to Turkcell Group.

Established in February 2005 to provide mobile service in Ukraine, lifecell covers 99% of Ukraine’s population and 95% of its land area. As of the end of 2015, the number of registered customers of lifecell was 13.5 million, while its 3-month active customers had reached 10.6 million.

Burak Ersoy who served as Senior Vice President of Retail and Distribution at Turkcell was appointed the lifecell CEO as of October 1, 2015.

lifecell acquired the most advantageous frequency to provide outstanding customer experience in 3G services.

lifecell was awarded the 3G Lot 1 package by placing the highest bid (UAH 3.36 billion) at the national tender organized by the Ukrainian Regulatory Government Committee in February 2015. lifecell’s 15-year 3G spectrum license for the Lot 1 package is the most advantageous and investment promising lot providing the rights to use the 1920-1935 and 2110-2125 MHz band frequency.

lifecell, the first operator in the market to provide 3G services in June 2015, uses the most advanced three carrier aggregation technology enabling speeds of up to 63.3 Mbps. Providing 3G service in 7 city centers and over 180 residential areas as at the end of 2015, lifecell plans to provide 3G service in all regional centers in Ukraine within 18 months, and in residential areas having over 10 thousand inhabitants within 6 years.

As at the end of 2015, lifecell had 2 million 3G data users active for 3 months and a 46% smartphone penetration.

We have restructured lifecell’s financial debt and strengthened the company’s balance sheet.

LIFECELL: CONTINUES TO GROW

In the third quarter of 2015, a significant part of lifecell’s debt was converted into subordinated loans and the remaining debt was restructured to prevent the risk of foreign currency fluctuation and eliminate its potential impact on consolidated financials. Accordingly, lifecell’s capital was increased by USD 686 million and lifecell had assumed loans of UAH 2.5 million and a subordinated loan of USD 66 million. Outstanding lifecell loans from financial institutions amounted to TRY 442 million, all denominated in local currency, as of December 31, 2015.

With annual revenue growth of 10% in local currency terms, Astelit’s EBITDA also increased by 20% to UAH 1.5 billion with effective cost management. Increasing year over year by 2.7 percentage points, the EBITDA margin rose to 33.2%. In Turkish Lira terms, Astelit’s revenue and EBITDA in 2015 declined by 26% and 19% to TRY 564 million and TRY 188 million, respectively, given the significant local currency devaluation.

BELARUS: BeST Belarus: BeST

In July 2008, Turkcell acquired an 80% stake in Belarusian Telecommunications Network (BeST). The first carrier in Belarus to launch 3G services, in November 2009, BeST had increased its population coverage to 99.8% (94.1% geographical coverage) within five years. BeST’s subscriber market share reached 12.4% by the end of September 2015. The company is the third-ranked mobile operator in the market with 1.5 million subscribers.

In the third quarter of 2015, the outstanding debt of BeST was restructured. Within this framework, BeST’s total existing intra-group loans have been converted into a subordinated loan, directly from Turkcell. As at the end of 2015, BeST had an outstanding loan of TRY 6 million to financial institutions.

NORTHERN CYPRUS: KKTCELL KKTCELL

Kuzey Kıbrıs Turkcell (KKTCELL) was established in 1999 as a 100% Turkcell-owned affiliate. Having operated until 2007 as part of a revenuesharing agreement with the Northern Cyprus Telecommunication Department, the company signed an 18-year GSM license contract in the same year. Offering 3G products and services in October 2008, Kuzey Kıbrıs Turkcell conducted its 4G technology tests, which were initially undertaken in 2009, publicly in 2014.

Having acquired international outflow in 2010, Kuzey Kıbrıs Turkcell obtained authorization for internet service provision, infrastructure installation and operation in 2012 under the Turkish Republic of Northern Cyprus’ (the KKTC’s) Electronic Communications Law.

The company is the market leader in the KKTC with an infrastructure covering 100% of the population and a market share of 71% according to data from the Information and Communication Technologies Authority as of the third quarter of 2015.

FİNTUR

Turkcell participates in mobile operations in Azerbaijan, Kazakhstan, Moldova and Georgia through Fintur Holdings B.V. (Fintur), in which it holds a 41.45% stake.

Fintur’s subscriber numbers decreased by 4.9% in 2015 on a yearly basis, to 17.3 million. Its consolidated revenues were USD 1,325 million on a yearly decrease of 26%. As accounted for by the equity method, Fintur’s contribution to Turkcell’s 2015 net profit was USD 136 million.

On September 17, 2015, TeliaSonera, one of the major Turkcell shareholders and 58.55% majority shareholder in Fintur, announced its intention to exit its Eurasia operations, including Fintur.

On November 25, 2015, the Turkcell Board of Directors disclosed its decision to offer a non-binding indicative offer for the acquisition of the remaining shares in Fintur.

Kazakhstan: Kcell

Owned 51% by Fintur, Kcell was founded in 1998. Kazakhstan’s mobile communication market leader Kcell’s total subscriber number had decreased by 0.8 million over the previous year to 10.4 million by the end of 2015 due to market competition.

Azerbaijan: Azercell

Fintur holds approximately a 51.3% stake in Azercell, a company established in 1996 as the first GSM carrier in Azerbaijan and positioned as the market leader. Azercell is also the majority shareholder of Azeronline, an Internet service provider. By the end of 2015, Azercell had 4.1 million subscribers.

Georgia: Geocell

Owned 100% by Fintur, Geocell was founded in 1996 as Georgia’s first GSM carrier. By the end of 2015, Geocell’s subscriber base was 1.9 million.

Moldova: Moldcell

Moldcell, 100%-owned by Fintur, was founded in 1999. By the end of 2015, Moldcell had 0.9 million subscribers .

Note: The definition of pre-paid mobile subscriber has changed at Fintur companies in Q115. A user is defined as a subscriber if any transaction has been done within the past 3 months. Previous periods have been recalculated according to this definition.

GERMANY: TURKCELL EUROPE

Turkcell Europe, which was established in Germany as a Virtual Mobile Network Operator in 2010, continues to operate through a “Marketing Partnership” agreement with Telekom Deutschland Multibrand (TDM) signed on August 27, 2014. As per the new business model, the customers and operations of Turkcell Europe were transferred to TDM on January 15, 2015. The Turkcell Europe brand continues to provide services to its subscribers in Germany with the advantages arising from the TDM partnership.