Turkey sets minimum 4G auction price at €2.3B

Turkey's telecoms regulator has set €2.3 billion ($2.44 billion) as the minimum price that mobile operators must pay to secure frequency bands for an LTE (4G) network and services.

In a statement on Wednesday that cited a decision by the Council of Ministers, the Information and Communication Technologies Authority (ICTA) said 20 blocks in the 800, 900, 1800, 2100 and 2600 MHz bands will be auctioned off. The successful bidders will be able to pay the fee at once, or in four equal instalments every six months, plus interest.

The Hurriyet Daily News noted that the 4G auction will take place in May, and said the government's goal is to achieve 90 per cent 4G population coverage in the next six years.

Quoting Transport and Communication Minister Lütfi Elvan, the publication also noted that a new operator would be able to bid in the tender alongside existing operators Turkcell, Vodafone Turkey and Turk Telekom-owned Avea.

"The fourth operator will be able to bid only for the 2600 MHz, but will be free from other operating obligations," Elvan said.

Turkcell and Vodafone Turkey, which like Avea provide 3G and 2G services across the country, have long been preparing the ground for 4G by highlighting the benefits that such services will bring--even before they had a clear idea of when they would be in a position to offer the services on a commercial basis.

According to ICTA, there were around 72 million mobile subscribers in Turkey at the end of the third quarter of 2014. Excluding people aged nine or below, the mobile penetration rate exceeded 112 per cent. The number of 3G subscriptions stood at 56.8 million. Turkcell's market share in terms of subscribers was 48.3 per cent, compared with 29.1 per cent for Vodafone Turkey and 22.6 per cent for Avea. Almost 57 per cent of total mobile subscribers were prepaid users.

Meanwhile in a separate development this week, Russia's Alfa Telecom offered $2.8 billion to buy back a 13.8 per cent stake in Turkcell. Reuters noted that move that would give billionaire Mikhail Fridman's group control of the country's leading mobile operator.

Alfa has been fighting with Turkcell founder Mehmet Emin Karamehmet, chairman of Cukurova Holding, for control of the operator for nearly a decade, a tussle that Reuters said has also prevented some dividends from being paid.

Bloomberg noted that the offer is unlikely to succeed because Turkey's government wants the operator to keep Turkish owners.

For more:
- see this market report for Q3 2014 from ICTA
- see the ICTA 4G auction release (in Turkish)
- see this article from Hurriyet Daily News
- see this Reuters article
- see this Bloomberg article

Related Articles:
Vodafone slows revenue decline in Europe during Q3
Turkcell's controlling shareholder set to retake stake
Turkcell launches home grown smartphone
Smartphones take off in Middle East
Ankara takes action to end stalemate at Turkcell

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