UP TO THE CHALLENGE

Turkey 2012 | TELECOMS & IT | INTERVIEW

TBY talks to Erkan Akdemir, CEO of Avea, on the company's position in the market, collaboration in the sector, and technological innovations.

Erkan Akdemir
BIOGRAPHY
Erkan Akdemir has been CEO of Avea since June 2009. Before joining Avea, he worked as the CEO of Cisco Systems Turkey. During his past career, he served as the Chairman of Board of Directors of Kablonet and Eurasiasat, as well as leading Türk Telekom as Chairman of Board of Directors from 2002 until the privatization of the company. Other highlights in his career include key leadership positions in the State Planning Organization and as the founding board member of the Telecommunications Regulatory Authority of Turkey. He has an undergraduate degree from the Department of Electrical and Electronics Engineering of Hacettepe University and a graduate degree in Telecommunications from the University of Colorado in the US.

Where does Avea fit into the rapidly growing ICT market in Turkey?

Avea is a young operator that is rapidly changing the Turkish market. Since we entered the market in 2004, we have brought dynamism to the sector, assuming the position of a challenger. The mobile market has enjoyed average growth of 12% annually over the last five years. By the end of 2011, Avea's revenues exceeded TL3 billion ($1.8 billion). Mobile technology constitutes an important share of ICT in Turkey, and GSM-based technology will continue to foster economic activity in the infrastructure segment. Avea invested TL799 million in infrastructure over 2011, and in the coming years, the value-added of widespread mobile application technology will increase.

How has Avea become a leading figure in the GSM market?

We prioritize network quality and focus on our sales channel. We have increased our 2G and 3G base stations in Turkey by 50% over the last 1.5 years. In sales, we have increased our footprint regarding the number of exclusive and non-exclusive sales points. We completely redesigned our stores, and we aim to raise customer satisfaction to the highest level in the sector. Every GSM user has benefited from the competition we present, as it forced the industry to provide better and more economic services. Our excellent team and our focus on innovation have helped us achieve and sustain this dynamism, and we will continue to invest in our strengths as a company.

What impact will the mutual understanding reached by Turkcell, Vodafone, and Avea to reach 2,128 villages in rural Turkey have on your company's operations?

This is a government-funded project with the objective of providing wireless communication services to remote areas with less than 500 inhabitants. Each major mobile operator will provide infrastructure for approximately one-third of the locations. All operators will have to provide roaming in their respective parts. Mobile services coverage will be expanded to these less-populated areas in a way that will enable operators to use their resources more economically. We are proud to be able to cooperate and bring services to these areas. Furthermore, we believe that this project is a crucial step in Turkey's 2023 vision. By cooperating with our counterparts, mobile technologies in Turkey will become ubiquitous, and we will provide important value-added products and services.

To what extent has Avea's R&D center become the preeminent technology base of the telecommunications sector in Turkey?

We have reached the highest levels of R&D investment in proportion to our revenues. Avea is the only operator in Turkey with an R&D certificate, and we have opened the doors of our incubation center, “AveaLabs." The spirit of innovation differentiates us tremendously in this market. In 2011, we invested TL33 million in R&D, and this substantial investment has started to bear fruit. Apart from leading the NFC initiative in Turkey, Avea began the “Smart Municipality" program by partnering with the Eyüp Municipality. Furthermore, we launched the “Augmented Reality Project" in cooperation with Rixos Hotels, which is a first in the world tourism sector. We also cooperate with universities. For example, we are collaborating with Galatasaray University on our “Mobile Health Project," and we have initiated a variety of projects in collaboration with UCLA, Boğaziçi University, and Sabancı University, among other academic institutions, as well as other smart projects in the health and logistics sectors.

What is the potential for foreign investment in Turkey's ICT sector?

Over the past decade, Turkey's compound annual growth rate (CAGR) has been a remarkable 10.7% of GDP growth annually. Over the same period, the ICT sector grew by 9.6%. With the increasing government focus on the industry, we believe that ICT growth levels will surpass overall economic growth. Turkey has a young and dynamic demographic, with flexible human resources that will meet the demand for increasing and changing skills. On the consumer side, Turkey is registering high growth levels for broadband and mobile usage, and this demand is expected to grow. In fact, foreign investors already have substantial equity in Turkey's larger companies. Additionally, global telecommunications companies such as AT&T, BT, Telecom Italia, and T-Mobile continue operating in electronic communications via companies founded in Turkey. Thus, there are favorable indications for ICT investment in Turkey. The sector's growth, combined with favorable demographics and a dynamic Turkish economy, will continue to encourage both domestic and foreign investors.