Turkey mulls unifying telecom fibre infrastructure in one entity, official says (updated)

Turkcell Iletisim Hizmetleri

11/11/2024 14:09

* 
      Official signals possible separate investments manager
    

        * 
      Potential boost for small telcos, challenge for Turk Tel
    

        * 
      Effort to boost broadband usage, speed countrywide 
    

  
 (Adds infrastructure ownership, past efforts at change, context
on Turkey's broadband usage)
    By Huseyin Hayatsever and Ebru Tuncay
       ANKARA, Nov 11 (Reuters) - Turkey is considering
adopting a unified fibre optic telecoms entity to expand its
network, signalling it could create a separate manager for the
expensive infrastructure investments, a senior official told
Reuters. 
    The study is at an early stage and all options remain on the
table, said the Turkish official, who has direct knowledge of
government telecoms policy but requested anonymity. 
    Such a consolidation of telecoms infrastructure could help
accelerate Turkey's broadband internet usage and speed, benefit
smaller service providers and pose a challenge for the network's
largest stakeholder, Turk Telekom  TTKOM.IS .
    "We are considering the unification of the fibre
infrastructure and conducting a study on it," the senior Turkish
official said when asked about some sector demands for
infrastructure and sales to be separated, and for the
establishment of a common infrastructure holding company.
    "It is in early stages and not yet finalised. By
establishing a common infrastructure, we aim to further
strengthen our country's fibre-optics network," the official
told Reuters. 
    For years Ankara has demanded that telecom operators invest
more to accelerate fibre network expansion. The companies have
grown the network by a bit more than 3% per year over the past
decade, and have partly blamed complicated permissions and high
costs for the slow progress. 
        
  
        NETWORK OWNERSHIP
  
        Turk Telekom owns and maintains 78% of Turkey's
577,000-kilometre (359,000-mile) national fibre network through
a concession agreement that is set to expire in 2026.
  
        A handful of other players, including Turkcell
 TCELL.IS , Turksat and Vodafone  VOD.L  own the rest. 
    Turk Telekom
     and Turkcell are controlled by the country's wealth fund. 
  
        Smaller service providers have long advocated that
investments should be made by a jointly-owned entity, rather
than largely by Turk Telekom, which also sells telecom services.
An effort in the mid-2010s to set up such an entity failed. 
  
        In July, UK-based Vodafone's Turkey unit again suggested
in a report that the business of selling telecoms services
should be separated from infrastructure investment and
management, which could be handled by a separate "common"
entity. 
  
        In September, Turk Telekom's chief executive rejected
the suggestion, saying it was aimed at carving away its
infrastructure assets, which are set to return to the government
once the concession period ends. 
  
        Turkey trails its peers on fixed-line broadband internet
usage, with 23 subscribers per 100 inhabitants as of last year,
below the Organisation for Economic Co-operation and Development
(OECD) average of 36. 
  
        It also lags on broadband speed with less than one
high-speed subscriber with greater than 100 Mbps speed per 100
people, compared to a 24 OECD average. 
  
        
  

 (Additional reporting and writing by Can Sezer; Editing by
Jonathan Spicer and Sharon Singleton)
 ((can.sezer@tr.com;))