Reporters of Reuters from Istanbul, Asli Kandermir and Ceyda Caglayan from Turkey reports that a row is brewing over demand for cheaper access to the state-owned Turk Telekom’s fiber optic networks among the telecom service providers. Turkey is preparing to launch 4F cellphone services from next month. The competition will depend on the availability of networks. Fixed line and mobile services are set to converge in Turkey. Turk Telekom own majority of the fiber optic networks in the country and the pricing depend on the availability of networks.
Turk Telekom has spent $7 billion over the last decade on building the country’s most extensive fiber-optic network and is now looking to bundle high-speed fixed line and mobile services into a single contract to attract more mobile customers after the April 1 launch of 4G services. Turk Telekom claims only 23.4 percent of the mobile market in Turkey. Rivals Turkcell and Vodafone has 46.2 and 30.4 percent market share respectively.
Turkey has a population of over 78 million where the median age is around 30, younger than anywhere else in Europe. The telecoms companies eye on the younger generation who demand more bandwidth to stream movies, play online games and communicate both at home and on the move. Turkish telecom operators are hopeful to reap from the growing demand for bandwidth in the country.
Turkey is home to fiber optic cable manufacturers such as Hes Kablo, Hascelik, Turkuaz Kablo, ETK Kablo, Cenkablo etc. Corning and Prysmian also have their manufacturing units in Turkey. It is estimated that Turkish cable manufacturers produce around 60,000 kilometers of sheathed fiber optic cables annually. While approximately 40,000 kilometers of fiber optic cables are consumed for domestic deployments, around 20,000 kilometers are exported to overseas customers.
Turk Telekom has laid 213,000 km of fiber optic cables, six times more than Turkcell, while Vodafone is further behind still. Turk Telekom rents its fiber optic cables and charges its rivals to use the network, setting the price itself. Turkcell and Vodafone want prices regulated and are pushing for the creation of a joint company to manage the network.
Turkcell wants to bring fiber to every household and that requires a mobilization for digital transformation. Turkcell estimates that by working together on building fiber optic networks, rather than investing separately, operators could save $12.5 billion. Turkcell has a fiber network of around 35,000 km, mostly in big cities. Its fiber network serves 900,000 subscribers, compared with 1.5 million for Turk Telekom.
Vodafone has the opinion that wiring up the rest of Turkey will require a joint effort. Turkey needs 250,000 km more fiber-optic networks in the next five years. To expect that network to be built in five years by just one operator is not fair or possible. Turk Telekom officials still believe that investing in fiber optic networks is still worth and viable in Turkey. Turk Telekom plans to invest close to 5 billion dollars in the next three years. Turk Telekom has invested in almost all areas in Turkey regardless of the region and the geographical conditions. Turk Telekom is not very positive towards the idea of sharing the networks and believes that other operators have not invested much into building networks in Turkey.
However, Turk Telekom would not rule out joint investments with the other two operators in rural areas. Turkey government also want to start fiber mobilization, but it is not clear whether the government will do anything to combine the forces. It seems that the government has little appetite for a sweeping move to force rivals to share their fiber networks.
Government sources said it is not fair to force Turk Telekom to transfer its fiber network.