COMPANY TO WATCH: TURK TELEKOM/TURKEY
Türk Telekom, the country’s former fixed-line phone monopoly, is expanding rapidly into mobile phone and Internet services. The company has 5 million broadband Internet customers and expects that total to reach 9 million by the end of this year.
The Turkish government sold a 15% stake in the telecom last month for $1.9 billion in the second phase of the company’s privatization. In 2005 Dubai-based Oger Telecom bought a 55% stake in Türk Telekom for $6.55 billion. Oger Telecom is 35% owned by Saudi Telecom, which is 70% owned by the government of Saudi Arabia.
Türk Telekom’s equity offering last month was the largest ever in Turkey and valued the company at $12.8 billion. The previous record was Halkbank’s $1.85 billion IPO in May 2007.
Türk Telekom is present in the cellular market through its subsidiary, Avea, Turkey’s third-largest mobile phone operator.
Following the IPO, the company will face less government intervention and will be able to upgrade its technology more quickly. Türk Telecom plans to spend billions of dollars on system upgrades in the next five years.
The company’s shares are listed on the Istanbul Stock Exchange.