New spectrum allocations and a fourth mobile licence offering are expected to provide a fillip for Turkey's telecoms sector, which in recent years has benefitted from rising mobile and internet penetration, driven by its young, tech-savvy population. In March 2015 the transport and communications minister, Lütfi Elvan, announced a tender for 4G mobile data services, which is expected to end in August. Bids were sought in bandwidths of 800, 900, 1800, 2100 and 2600 MHz, with an initial roll-out planned by the end of 2015. The government aims to extend 4G services to at least 90% of the population within six years, Elvan said.
Turkey will also be opening the door to a fourth operator, which will be able to bid for the 2600-MHz bandwidth. Despite strong demand for services and the rapid development of 3G in recent years, a new operator will face tough competition. The three existing ones, Turkcell, Vodafone and Avea, have their network backbones in place, and the two larger players − Turkcell and Vodafone – are already testing 4G. These players are looking to advanced networks to provide next-generation mobile web services, hoping to boost revenues in a fiercely competitive market.
Service providers will also need deep pockets to fund the roll-out. The government has set a minimum price for the spectrum allocations of $2.44bn (€1.84bn), well above previous market expectations of around $1.6bn (€1.21bn). In addition to direct revenue from the spectrum auction, the government expects 4G services to provide a significant boost for the economy. The Ministry of Transportation, Maritime Affairs and Communication has estimated that the 4G roll-out – based on the assumption of a 10% increase in bandwidth − may add 1% to Turkey’s GDP growth.
To further boost sector growth, the government is implementing measures as part of the Ministry of Development’s 2015-18 Information Society Strategy and Action Plan. Under the scheme, announced in March 2015, families will receive free internet access, with a particular focus on families with students. Another measure will make it compulsory for new buildings to have adequate infrastructure for internet services.
Though the telecoms sector is hindered by high taxes, an increasing number of young Turks are embracing new technologies and mobile broadband services. These developments are in line with the government’s Vision 2023 plan, which seeks exponential growth in the telecoms sector over the next decade. The number of mobile subscribers in Turkey stood at 71.9m at the end of 2014, corresponding to a 92.5% penetration rate, according to the Information and Communication Technologies Authority.
Mobile and internet penetration is high in Turkey and rates are still climbing. In its most recent survey of household ICT usage, published in August 2014, state statistics agency Turkstat found that internet access in homes had spiked, with nearly two-thirds of households able to access internet at home as of April 2014, up from less than half as of a year earlier. In the first quarter of 2014, 44.9% of those aged 16-74 used the internet at least once a week, up from 39.5% a year earlier. There was also a strong rise in the number of subscribers using mobile or portable platforms: mobile phones made up 58% of all web connections, while portable computers contributed 28.5%, compared to 41.1% and 17.1%, respectively, a year earlier.
Penetration & Speed
Up-take by businesses was also strong: 89.9% of companies with at least 10 staff had internet access in 2014, rising to 98.7% for firms with at least 250 employees, according to a separate report by Turkstat released in November 2014. Though this is close to saturation, the need for faster, more capable ICT services will help drive sales of new devices and 4G subscriptions. The second Turkstat report also found that while most companies had broadband access, more than half subscribed to the slowest service available – with download speeds below 10 Mbps – while just 15.2% of enterprises had download speeds of above 100 Mbps. As services become available at higher speeds, many businesses are likely to opt for an upgrade.