Message From The Chairman
Turkcell Group has concluded an important year of change, in which it registered successful results. With the great effort and determination of our employees, we trust that the actions implemented by Turkcell management on the basis of our Board of Directors’ decisions have created value for both our shareholders and our country.
2015 was quite a dynamic year for the region, our country and Turkcell itself. Ongoing civil wars to the south of our border, calamitous developments in global markets and two general elections in our country have resulted in a predominantly political agenda. We view the strong political stability on the back of the last general election as a promising progress for our country, and believe wholeheartedly that the planned fundamental changes and structural reforms will further carry Turkey forward from its current solid position.
2015 was a year of change, progress and growth for Turkcell where the Company has revisited its vision for the next three years. While doing this, we have taken Turkey’s 2023 vision as a cornerstone for us. Having set off with the target of contributing our share to Turkey’s aim of ranking among the top ten economies in the world, we leave behind this year of change with our focus of further progress and sustainable growth.
The record results we registered almost every quarter in 2015 have indicated that we, as Turkcell Group, can set stronger goals while planning our future. Turkcell Group grew by 6.0% on an annual basis, reaching TRY 12,769 million in revenues. The EBITDA margin increased to 32.4%, rising by 1.2 percentage points. Turkcell Turkey, the flagship of the Group, generated TRY 11,481 million revenue, while our international business recorded TRY 856 million revenue. Group net income rose to TRY 2,070 million with a 10.9% yearly increase. We continued to invest in our business in the amount of TRY 2,594 million (excluding license fees) in 2015 only, which has helped us take our service quality further forward.
This strong performance, which has encouraged us for the upcoming period, was the result of actions following the key decisions taken by the Board of Directors, the outstanding execution performance of the Turkcell management team, our new organizational structure providing efficiency and simplicity in our business processes and, above all, the support of our customers, who have continued to prefer Turkcell quality.
This was a year in which Turkcell’s vision, values and strategic priorities were reconsidered and renewed in accordance with current needs. We have set the vision of positioning Turkcell, which now became an integrated telecommunications services provider, as the market leader in revenue terms within three years. I truly believe that we have on board a determined and decisive management team and valuable employees necessary to achieve this goal, and trust that Turkcell, the leader in the mobile market, will also become the leader of the total telecommunication market by 2018. In this regard, we will continue to invest in both Turkcell and Turkey, and work towards providing the latest technologies for our people. In doing so, we also aim to register a double-digit top-line growth along with increasing profitability.
With the spectrum tender we participated and received authorization in 2015, not only did we secure being the fastest in 4.5G, but also the opportunity to pioneer in 5G. With these investments in Turkey’s future, Turkcell will, once again, be one of the biggest contributors to the economy.
We secured the largest number of frequencies (172.4MHz in total) at the most affordable price on a per subscriber basis, which will enable us taking the speed of mobile internet to the next level in Turkey. Following the tender held by the Information and Communication Technologies Authority on August 26, 2015, Turkcell will be the strongest contributor to our national economy in 4.5G with a total payment of EUR 1.9 billion including VAT to the Turkish Treasury.
Strategic collaborations; innovative actions
The next step toward our objectives, having succeeded at the spectrum tender, was strategic collaboration in the development of 5G technology.
Accordingly, we have signed a memorandum of understanding with Chinese technology giant Huawei for collaborative work, and research and development of 5G technology.
We also took a concrete step towards strengthening Turkey’s software and hardware research and development capacity by signing a framework document with Aselsan. As two national brands with the aim of making Turkey a producer country in 5G technology, we began to work on the 5G roadmap. Becoming a country that produces, rather than consumes technology remains our greatest motivation.
Strong management; swift execution
2015 was a year in which we strengthened our corporate governance structure, took important steps toward this objective, and shifted towards a more efficient process. A dividend distribution decision was taken at the General Shareholders’ meeting held in March. Accordingly, we distributed a total of TRY 3.9 billion in dividends, with which we hope to have pleased our shareholders, who had been waiting for this for five years.
We observe the positive outcome of the harmonious work between the strong management team and the Board of Directors, with its independent members. We believe that our actions towards improving our corporate governance practices have increased the trust in Turkcell in the financial markets. This was proven in the “investment grade” Turkcell received from the world’s three leading credit rating agencies. Our ability to raise USD 2.9 billion in funds, USD 500 million of which in Eurobonds, within an extraordinarily short period of time for infrastructure investments and potential new investments, clearly confirms our outstanding performance and the trust of the financial markets in Turkcell.
Strategic actions executed have proven that we are advancing towards becoming a regional power.
We have also taken important decisions concerning our subsidiaries with the aim of carrying Turkcell Group forward and creating greater value for our shareholders. Accordingly, we have established a consumer financing company to continue supporting the financing of our customers’ technology needs.
We restructured the outstanding debt of both lifecell, our subsidiary in Ukraine and BeST, our subsidiary in Belarus. Having eliminated the currency risk from the financial debt of these companies, we also enabled them to work more efficiently. Providing 3G services since June, lifecell is set to improve its market position going forward.
In accordance with Turkcell’s strategy of expanding in the region, we closely monitor M&A opportunities. We will continue with our disciplined and consistent decision making approach in this regard.
Apart from technology and the economy, 2015 was an important year with regards to our social responsibility investments in Turkey’s future.
We will continue our social responsibility investments for a better future
As Turkey’s Turkcell, we have been fulfilling our responsibilities to the community with projects in numerous areas including education, the arts and sports since the Company was established. 2015 was another important year with regards to our social responsibility investments in Turkey’s future.
Our aim is for Turkey to become a country without boundaries; one where our disadvantaged citizens enjoy equal opportunities with others in society; and where children have the opportunity and support required to achieve their dreams. With the new project under the auspices of the Ministry of Education, we are proud and pleased to have already realized a part of our objective. Our aim is to reach 10 thousand students at 80 schools within 2 years with the “Education Without Borders Program”. Over the coming years, we will continue to work with great enthusiasm and determination to remove obstacles from the lives of community.
Turkey’s international source of pride
2015 witnessed a historically important day for Turkcell. We celebrated the 15th anniversary of our listing at the traditional closing bell ceremony of the New York Stock Exchange on September 1, Tuesday. While the flags of Turkey and Turkcell were proudly raised at the NYSE building, we also wished to one day see the flags of other Turkish companies raised there.
Change, development and growth on our horizon
The year 2015, in which we achieved significant milestones, concluded on the back of harmonious work between the Board of Directors, the management team and Turkcell employees. We continue to take confident steps towards a future full of promising opportunities. By transforming these into value, we shall strive to grow our company and to contribute to the national economy, while increasing value for our shareholders. An even greater objective of ours is to prepare Turkey’s Turkcell for future decades along with our customers, the efforts of the entire Turkcell family, and the support of our shareholders. I sincerely thank all members of the Turkcell family, who are dedicated to making this objective a reality.
Chairman of the Board of Directors