Turkey - 3G auction

Turkey's Turkcell wins 3G phone tender

Turkey's top mobile phone operator Turkcell (NYSE:TKC) on Friday won a tender for the country's first third-generation phone licence with a bid of 321 mln eur (438.5 mln usd).

Turkcell was the only bidder in the televised tender held by the state regulatory body, the Telecommunications Board, for four different licences at four different frequencies that will allow operators to provide advanced services such as video telephony.

Turkcell made an initial bid of 311 mln eur, which it then increased by 10 mln eur to win the licence for the top frequency of 45 MHz.

With value added tax, the company will be paying the treasury some 510 mln usd, the Anatolia news agency said.

The deal is subject to approval by the Telecommunications Board.

Turkcell said in its bid that it would pay the price of the licence in cash if the deal is approved by the state.

'It would take us three to six months to introduce video telephony once we get the approval and make the necessary investments,' Turkcell CEO Sureyya Ciliv said after the tender.

The remaining three tenders for licences at lesser frequencies were cancelled due to a lack of bidders.

Vodafone (NYSE:VOD) and Avea, Turkey's second and third largest mobile phone operators, as well as the French operator Orange, were reported to have requested tender conditions, but none submitted a bid.

Both Vodafone and Avea have opposed the handing out of 3G licences by the Turkish state before number portability is allowed, on the grounds that such a move would only benefit Turkcell.

The Telecommunications Board issued a regulation earlier this year to allow subscribers to change operators without changing their numbers, but Turkcell opposed the regulation in court.

Turkcell, which controls about 60 percent of the Turkish market, said last month that it had posted a net profit of 274 mln usd in the second quarter of the year, increasing its consolidated revenues by 29 pct to 1.5 bln usd.

The company said it had also increased numbers of subscribers by 13 pct to reach 33.8 mln.