Forward Looking Statements

In 2015, we delivered on our guidance for consolidated revenue growth, EBITDA margin and operational capex/sales ratio (excluding license fees).

For 2016, we expect a revenue growth target of 8%-10% for both Turkcell Turkey and Turkcell Group, consolidated EBITDA margin to be within the 31%-33% range and an operational capex (excluding license fees) over sales ratio of around 20%.


The headlines below with regards to financial, operational, strategic, legal and regulatory, reputational and business continuity risks are monitored within the context of our corporate risk governance practice:

  • Any challenges in competition in the Turkish market where majority of our revenues are generated;
  • The possibility of not attaining expected returns on new investments and new businesses;
  • Regulatory decisions and changes in the regulatory environment;
  • Any downturn in the macroeconomic environment or political instability in Turkey and internationally;
  • Any regulatory and legal regulations having adverse effect on our operations in those countries where we have operations;
  • Macroeconomic instability and currency fluctuations in those countries where we have operations;
  • Foreign exchange rate risks and risks relating to our cash balance management that could significantly affect our results of operation;
  • Increase in our borrowing requirements as a result of cash generated from operations and related costs;
  • Limitations on spectrum as a scarce resource in mobile telecommunication systems and speculation regarding base transceiver stations;
  • Turkcell’s existing ownership structure and ongoing disagreements among our main shareholders;
  • Our dependence on certain systems and third-party suppliers related to the products and services we provide;
  • Transition period in case of a resignation of our key personnel, our partners and their employees;
  • Resolutions in various claims and legal actions arising in the ordinary course of our business;
  • Risk of errors, misconduct or omissions in financial reporting despite regular internal controls;
  • Threats of natural disasters and/or cyber risks towards our information technology infrastructure;
  • Risk of decrease in our market share as a result of not being able to develop products and services that meet customers’ needs and expectations and
  • Risk of not being able to meet the expected increase in value as a result of falling behind of expected developments and improvements in sales channels.

Risk Management and Internal Control Mechanisms

The Group’s risk management policies are formed in order to proactively identify and analyze the risks that have the potential to negatively impact the Company achieving its targets, to set appropriate control systems and processes to manage these risks and turn them to opportunities, and to provide maximum contribution to the Company’s efforts in meeting its targets. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Group’s activities.

During our Company’s Ordinary General Shareholders’ Meeting held on March 26, 2015, DRT Bağımsız Denetim Serbest Muhasebeci Mali Müşavirlik A.Ş. was appointed as the Company auditor for auditing our Company’s financial statements of 2015 as per the Turkish Code of Commerce.

Moreover, the Internal Audit Unit operates with the Board of Directors and is responsible for the auditing of Turkcell İletişim A.Ş. and all of the Group Companies which are subsidiaries, and reports the results of the audit carried out within generally accepted international auditing standards to the Audit Committee and CEO. The auditing activities of the Internal Audit function mainly comprise of operational audits conducted pursuant to annual audit plans and audits in accordance with Article 404 of the Sarbanes-Oxley Act.

Operational audit activities are carried out according to annual audit plans prepared with respect to a risk based audit approach. The objective of these audits is to provide assurance with regard to the sufficiency and efficiency of business processes and suitability thereof with regulations so as to enable Company activities to be carried out in accordance with internal and external regulations and strategic objectives.

On the other hand, as we are listed on the New York Stock Exchange in the United States, audits are conducted within the framework of the annual plan to provide assurance in terms of the existence and sufficiency of an internal control structure across Turkcell and Turkcell Group Companies, which are consolidated, and whether this structure operates effectively, in compliance with the provisions of Article 404 of the Sarbanes-Oxley Act, which all publicly traded companies are required to comply with. All stages from the planning stage to the specified internal control insufficiencies and following and concluding actions of the audit activities carried out in accordance with said Article are reported to the Audit Committee, CEO and Chief Finance Officer at regular intervals.

The Internal Audit Unit also prepares research reports by providing consultancy in current matters and matters requested by the management.

The Internal Audit Unit reports the compliance practices as per Sarbanes Oxley Rule Act Section 404 to the Audit Committe and the CEO while Corporate Risk Management Unit reports to the Early Detection of Risks Committee and the CEO. The Internal Audit mechanism operates with a risk based audit perception. Within this scope, functionally and institutionally probable risks are continuously reviewed and the possible effects of these risks and risk appetite according to our managing capacity are determined. The risk analyses resulting from these conducted operations constitute the main input of audit activities.

Furthermore, there is an Enterprise Risk Management (ERM) process which comprises identifying the risks that may affect Turkcell’s performance in achieving its targets, to coordinating risk analysis activities, planning necessary actions, sharing, reporting and following the outcomes with the Company management. The Enterprise Risk Management Unit is responsible for coordinating the ERM process under the supervision of the Group Internal Audit Directorate. The Turkcell Enterprise Risk Management Unit aims at developing an approach, where the risk management process is conducted in an integrated manner with the fundamental management processes. While enabling this, a framework associated with the process was identified in accordance with an Enterprise Risk Management procedure as per the COSO framework and ISO 31000 standard. During the risk identification and evaluation period, different methods such as Delphi research, workshops, brainstorming sessions, reports from risk contacts, thorough interviews, research reports, etc. are used. Thus, the objective was to extensively identify, evaluate and effectively manage risks causing uncertainties.

As of the end of the financial year of 2012, the “Early Detection of Risks Committee” has been in operation in order to perform activities in a manner affiliated with the Board of Directors within the scope of Article 378 of the Turkish Commercial Code and the Communiqué on Corporate Governance of the Capital Markets Board. The Early Detection of Risks Committee supports the Board of Directors by performing studies for the purpose of early diagnosis of the risks which may jeopardize the existence, development and continuity of the Company, implementing the necessary measures related with the identified risks and managing the risks. The Committee reports to the Board of Directors once every 2 months and the reports are sent to an independent audit Company. The Board of Directors regularly provides an evaluation regarding the risks affecting the Company through the Early Detection of Risks Committee.

The Corporate Risk Management Unit is responsible for coordinating the risk assessment and risk avoidance activities at departments as well as reporting the results to the Early Detection of Risks Committee within the scope of Corporate Risk Management methodology. During this process, the ownership of the risks and the responsibility of risk avoidance activities belong to the business and not transferred to the responsibility of the Corporate Risk Management Unit.

In 2000, Turkcell formulated its business continuity plans in a manner also encompassing its technical operations and repositioned its business continuity plan as Business Continuity Management by broadening the extent thereof in 2004.

With the restructuring in 2011, the scope of the program expanded so as to comprise Turkcell Group companies and suppliers. Turkcell Group Business Continuity Management System has been structured and certified in a manner ensuring the continuity of our call, messaging, Internet and societal security services as per the “ISO 22301, Societal security - Business continuity management systems” standard. Regular drills are conducted for our business continuity plans formed by considering the customers’ expectations, corporate policies and legal obligations in order to guarantee their operation in emergency cases.

Thanks to our geographically dispersed technical infrastructure, extensive coverage, solution partner network, mobile exchanges, additional capacity, emergency centres and extensive experience in handling emergencies enable us to minimize the impact of risks as much as possible and additionally, the experience of our Group companies in customer services, our high speed fibre-optic infrastructure, data storage services and our experienced software development teams allow us to effectively manage any disasters from another centre, thereby ensuring the continuity of our activities.

Although Turkcell believes that the expectations reflected in such forward-looking statements are reasonable at this time, it can give no assurance that such expectations will prove to be correct. These statements are based on current expectations and assumptions that are subject to risks and uncertainties. For a discussion of certain risk factors and challenges that may affect the outcome of such forward looking statement, please visit our Investor Relations website and consult the financial and other reports available on such website, as well as the financial and other reports available on the websites of the regulators of the stock exchanges on which our shares are listed. All subsequent written and oral forward-looking statements attributable to us are expressly qualified in their entirety by reference to these cautionary statements.