Turkcell is a Turkbuy
Nick is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
“Turkcell 3G is faster than 4G in the US.” -- Steve Wozniak, Apple co-founder
Turkcell Superonline infrastructure puts Turkey in the top five fastest residential broadband territories (along with Hong Kong, Japan, Portugal, and Slovenia).
As Time magazine learned when Turkey’s founder Ataturk was voted the most important figure of last century in an online poll, and as Facebook knows from Turkish being its members’ second language, the young republic is going global. Visa (NYSE: V) even reports that in Europe Turkey is second to the UK in card usage, and Google (NASDAQ: GOOG) has made it a priority market.
Leading the digital Ottoman revival is Istanbul-based telecom Turkcell Iletisim Hizmetleri A.S. (NYSE: TKC)(ISE: TCELL), which has spent a decade showing it can successfully operate in highly-competitive Germany to highly-corrupt Ukraine (or as Turkcell representatives describe it, “a highly competitive market, recently facing macroeconomic volatility”). As the only Turkish company listed on the NYSE, Turkcell has aggressively tried to meet global standards and is one of Turkey’s most coveted multinationals (just ask the Arabs, Scandinavians, and Slavs currently embroiled in ownership disputes). Turkcell’s operations in nine countries represent less of a turkey, and more of a salmon indicating the health and viability of business in new markets.
The loss of a third of the share price this year reflects the founder’s role at the center of international disputes among its major shareholders that have recently resulted in a suspension of its most recent dividend. Observers like the Wall Street Journal and Forbes speculate that these ongoing problems should be resolved early next year, and remove the burden placed on the share price. Regardless, as its profits and margins indicate, six years of disputes have not seriously hampered the core business of the company, and certainly not its expansion and penetration of new markets. Unlike the clueless board at Hewlett-Packard, all parties vying for control of Turkcell have proven themselves capable, and all want Turkcell to continue doing what it has been doing all along.
In most of the countries in which it operates, Turkcell is either the provider of choice or the fastest growing alternative. The mobility of their consumers (be they Turkish guest workers or Slavic tourists) has made them highly active in transnational aspects of the mobile industry – Turkcell currently maintains the most roaming agreements in the world. Their related work in establishing Internet services in developing regions and providing award-winning call center support also bodes well for future revenue streams diversified through clients worldwide. The recent partnership with SoundHound, a top-ranked music application with Apple (NASDAQ: AAPL), Android, and Amazon (NASDAQ: AMZN), also shows that despite fights at the top, the business continues unabated.
In the US, long-term indentured servitude to a particular carrier is the norm, but most consumers in developing markets are pay-as-they-go and readily switch numbers or carry multiple devices to take advantage of fractional price differences. Moreover, an incredible amount of life and business are centered on people’s mobile devices in these markets (as they often lack or shun more involved home or office set ups). As emerging market consumers are young, fickle, and demanding about the services mobile carriers provide, Turkcell’s success is all the more impressive.
Nick Slepko has no position in any company mentioned here at the time of publication.
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