Turk Telekom sees slower 2008 growth

Turk Telekom expects revenue growth to slow to a high single-digit rate in 2008, as Turkey's leading fixed line operator eyes acquisitions in central Asia and Europe, its chief executive said. CEO Paul Doany told Reuters Turk Telekom aimed for mid single-digit growth in EBITDA for 2008.
"Turk Telekom is looking into opportunities for acquisitions in central Asia and central and eastern Europe either alone or with its parent Oger Telecom," Doany said. "If the right opportunity comes we may have a deal this year.
"We are also hoping the Azeri government will issue a tender for the fixed-line business this year. We are also hoping for other mobile opportunities in the region," he said. He declined to say which companies Turk Telekom was interested in purchasing as it seeks to expand regionally.
Turk Telekom's consolidated revenue, boosted by the inclusion of revenues from mobile phone operator Avea into the group balance sheet, rose 22.5 percent in 2007 to 9.23 billion lira ($7.5 billion). Net profit reached 399 million lira in the first quarter of 2008.
"2008 revenue growth is fundamentally organic whilst a large portion of 2007 revenue growth was inorganic," Doany said. Turk Telekom, controlled by Dubai-based Oger Telecom, was listed on the Istanbul stock exchange in May when the Turkish government cut its stake to 30 percent by listing a 15 percent holding.
"If the government decides to sell the 30 percent stake, we are definitely interested," Doany said. "However both the government and Oger are in a lock-up period of six months from the IPO date when we cannot do anything with our Turk Telekom stakes."
Turk Telekom competes in the country's booming mobile market through its unlisted Avea, the third biggest mobile phone operator in Turkey. Doany said Turk Telekom and Avea would soon appeal to the Turkish telecoms and competition watchdogs to resolve a dispute with the country's biggest mobile operator Turkcell.
Turk Telekom and Avea accuse Turkcell of offering services below cost and also of overcharging off-net calls - calls made from another operator to Turkcell phones - which Doany said amounted to "anti-competitive pricing policy and discriminatory mobile termination pricing. "There are two issues with Turkcell. One is the high mobile termination rates it imposes on Turk Telekom and Avea. The other is its low on-net pricing that undermines competition in the market when coupled with its very high off-net pricing," he said.