TBY talks to two internet providers on their latest contributions to Turkey’s ICT sector and outlooks for the future.
How far has Turkcell Superonline come in implementing high-level network infrastructure, and how far do you think you have to go?
MURAT ERKAN We are in our fourth year, and have almost reached 30,000 kilometers of fiber optics in Turkey. As a private company, this is amazing. We have reached eight bordering countries. When I started this job, we had a strategy of transforming the Silk Road into the “Fiber Road.” In the old days, the Silk Road was a commercial route. Whoever traveled it became increasingly rich. This is now happening to digital highways; they are becoming digital Silk Roads. This is what we are trying to establish, based on Turkey’s geographic position. Recently, IDATE, which consults the Fiber to the Home (FTTH) Council on various projects, stated in its “Operators that Lead the World in Fiber Internet” report that Turkcell Superonline has become one of the top-10 global operators of the world. We aim to expand our reach. Accordingly, we have invested in countries in the Middle East, and our Regional Cable Network (RCN) Project will connect Saudi Arabia, Dubai, Jordan, Syria, and Fujairah in the UAE to Turkey. And now we want to reach Europe. Istanbul is becoming an internet capital and exchange hub, and all major internet providers would like to be a part of this infrastructure. In the past, everyone was using submarine cables, but they are not particularly reliable. If something goes wrong, you have to wait at least a month to fully recover services. Yet, with terrestrial lines, such as those from RCN Project Fujairah to Europe, you don’t face such problems. We have established an ultra-high capacity 12.8 TB, 7,750-kilometer fiber-optic cable extending from Fujairah to Istanbul, and are continuing to do business with our other neighbors as well.
As Turkey’s largest independent ADSL provider, how does TurkNet compete with providers backed by large conglomerates?
CEM ÇELEBİLER TurkNet has two foreign private equity backers, and they’ve been around since 1996. This gives us an edge in a couple of ways; one is that we have focus, so we’re purely focused on the telecoms market and on making investments at the right time and in the right way. We’re making investments based on each case and on the opportunities in the sector rather than any other parallel agenda. We do a lot of corporate communications—enterprise in addition to residential. We carry a lot of virtual private network (VPN) traffic, such as interoffice traffic for company ordering systems. Dealing with an independent player makes companies feel secure that there is no secondary agenda involved. I think it also lends us credibility, because a lot of conglomerates that have entered this sector over the past couple of years have subsequently left it. They didn’t find exactly what they wanted. Since this is the only thing we do, and we’ve been around since 1996, it is apparent that we are a player that is here to stay. We have a track record of innovation in the sector, and of doing things first. I think that’s a matter of focus. When you are only doing one thing, you’re able to get things out first and be a faster executor. ICT is a very rapidly changing sector, and this ability to innovate matters.
What are some of your company’s long-term goals?
ME The telecommunications business itself is an investment business. You cannot stop investing, and that’s why we’re constantly on the lookout for opportunities. You need to grow organically or inorganically. Two years ago we acquired an alternative operator, called Sabancı Telekom. Recently, we acquired Global Communications. This acquisition enabled Turkcell Superonline to provide services to its customers with more substantial infrastructure, enriching its overall telecoms services, such as cloud computing, data centers, and advanced security solutions. The telecommunications sector is showing signs of consolidation in the next three to five years, which is normal. You cannot have 200 ISP operators in a single country.
CÇ When you look at the Istanbul stock exchange (ISE), there are a few companies listed from the ICT sector. The two incumbent companies are listed, but other than that, when you look at comparable markets in Eastern and Western Europe, you see that alternative telecoms operators are also quoted. In Greece, Poland, and France there are some major success stories. Turkey has yet to experience this. We had 40% growth over 2011, and we had close to 60% the year before that. Our projections for this year call for 47% growth. I think 2013 is a realistic date for an IPO.
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