Turkcell İletişim Hizmetleri A.Ş.
Turkcell İletişim Hizmetleri A.Ş.
Turkcell Küçükyalı Plaza, Aydınevler Mahallesi İnönü Caddesi
Turkcell Küçükyalı Plaza, Aydınevler Mahallesi İnönü Caddesi
No: 20 Küçükyalı Ofispark B Blok - Maltepe / Istanbul
No: 20 Küçükyalı Ofispark B Blok - Maltepe / Istanbul
Tel: +90 (212) 313 1000
Tel: +90 (212) 313 1000
Fax: +90 (216) 504 4058
Fax: +90 (216) 504 4058
Customer Services Tel: 532 or +90 (532) 532 0000
Customer Services Tel: 532 or +90 (532) 532 0000
www.turkcell.com.tr
www.turkcell.com.tr
Trade Register Number: 304844
Trade Register Number: 304844
Annual Report 2017
1440 Minutes
with
Turkcell
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About Turkcell
Turkcell is a digital operator headquartered in Turkey, serving
its customers with its unique portfolio of digital services along
with voice, messaging, data and IPTV services on its mobile
and fixed networks.
Turkcell Group companies operate in 9 countries – Turkey,
Ukraine, Belarus, Northern Cyprus, Germany, Azerbaijan(1),
Kazakhstan, Georgia(2), Moldova. Turkcell Group reported TRY
17.6 billion revenue in 2017 with total assets of TRY 34.0 billion
as of December 31, 2017.
Turkcell launched LTE services in its home country on April
1st, 2016, employing LTE-Advanced and 3 carrier aggregation
technologies in 81 cities. In 2G and 3G, Turkcell’s population
coverage in Turkey is at 99.61% and 97.94%, respectively, as of
December, 2017. Turkcell offers up to 10 Gbps fiber internet
speed with its FTTH services.
It has been listed on the NYSE and the BIST since July 2000,
and is the only NYSE-listed company in Turkey.
Read more at www.turkcell.com.tr
All financial results in this annual report are prepared in accordance with International Financial Reporting Standards (IFRS) and expressed in Turkish Lira
(TRY or TL) unless otherwise stated.
(1) On March 5, 2018, Fintur has transferred its 51.3% total shareholding in Azertel Telekomunikasyon Yatirim Diş Ticaret A.Ş, 100% shareholder of Azercell, to Azerbaijan International Telecom LLC.
(2) On January 25, 2018, Fintur signed a binding agreement with Silknet JSC, a joint stock company in Georgia, to transfer its 100% shareholding in Geocell.
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Table of Contents
TURKCELL GROUP
14 Chairman’s Message
18 Board of Directors
20 Message from the CEO
24 Executive Officers
26 Top Management of Subsidiaries
28 Turkcell Group
29 Our Vision and Target
30 2017 at a Glance
32 2017 Highlights
35 Our Digital Business Model: We are by Our Customers’ Side at Every
Moment of Their Lives
36 Internet to Your Heart’s Content with Lifecell
38 Your Digital Companion throughout the Day
40 Share, Read, Listen, Watch, Store, and Search with Turkcell...
42 Expanding Digital Value Propositions in E-commerce
2017 OPERATIONS
44 The Pioneering Digital Operator of the World: Turkcell
46 Our Superior Technology
50 Our Consumer Bussiness
56 Our Corporate Business
58 Turkcell on Communication
60 Our Digital Services
68 Turkcell Sales Channels
70 Operator Relations and Wholesales
71 Customer Experience Focus
74 Social Responsibility
82 Sponsorships
85 Human Resources
90 Turkcell Academy
94 Our Subsidiaries
99 Awards
CORPORATE GOVERNANCE
104 Investor Relations
106 Credit Ratings
107 Important Developments after the Reporting Period
128 2017 Financial Year Corporate Governance Principles Compliance Report
139 Conclusion of the Subsidiary Report
SECTORAL AND FINANCIAL INFORMATION
140 Telecommunications Sector in Turkey
141 New Developments in Our Companies
144 Turkcell Group: 2017 Financial & Operational Review
148 Forward Looking Statements
149 Review of Risk Assessment
151 Consolidated Financial Statements for the Year Ended 31 December 2017 and
Independent Auditor’s Report
252 Our Offices
253 Glossary
TURKCELL
2017
INDICATORS
TRY 17.6 BILLION
REVENUES
35.3%
EBITDA MARGIN
50.2 MILLION
GROUP SUBSCRIBERS
You can have access to the Digital
Annual Report with the QR Code.
09:10
While Emre was reading the
news on Dergilik at breakfast...
at the same moments,
we pursued our preparations
for 5G and achieved speed
record in our 5G tests.
10:40
While Okan was searching Yaani for the
nearest movie theater for the movie he
wanted to watch that evening...
at the same moments,
we continued to work on our
e-commerce platform to ensure a fast
and secure shopping experience.
12:40
While Yeşim was cheering herself up
with her favorite song list on fizy…
at the same moments,
we launched Lifecell for those who
increasingly use internet to meet their
communication needs, in other words,
whose life is the internet.
15:20
While Çiçek and her mother were
looking back at their memories
stored on lifebox...
at the same moments,
we were proud to see that our “Hello
Hope” application, which we developed
for Syrian refugees, was helping them
experience happier moments in Turkey.
20:10
While Mert was connecting to life
via BiP in his car on the way home...
at the same moments,
we started off to work on the
domestic car project, which will
connect Turkey to the future.
22:30
While Ayşe was charging her phone
to watch the episode of her favorite
show that she had missed on TV+...
at the same moments,
we accelerated our efforts to provide
uninterrupted electricity with the Home
Battery product developed by our Energy
Solutions Company.
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TURKCELL ANNUAL REPORT 2017
CHAIRMAN’S MESSAGE
As Turkcell Group, we have completed 2017 as a year in which we began
to witness the results of our long-term strategic plans…
We achieved all time high
results both in revenue and
EBITDA on a consolidated
basis.
TRY 4.1 billion
With the responsibility
of operating in a sector
of great importance for
Turkey’s sustainable
development, we made
significant progress in 2017.
We carried the quality of
our customer service to
even higher levels through
a TRY 4.1 billion investment
this year.
Dear shareholders,
2017 was a year of major global and regional
developments. While tension rose in the political
and social arenas worldwide, a recovery process was
observed in the economy. In spite of rising geopolitical
risks in our geography, our country has gained
strong momentum on the back of economic reforms
introduced and measures taken to boost economic
activity.
In 2017, as Turkcell Group, we registered record
results in step with our principle of creating value
for our shareholders with a team spirit. We achieved
all time high results both in revenue and EBITDA
on a consolidated basis. While we posted TRY 17.6
billion of consolidated revenues on 23.4% growth, we
increased our EBITDA margin by 3 percentage points
to 35.3%. We recorded net income of TRY 2.5 billion
excluding the one-off impact of the tax settlement.
At the Ordinary General Assembly Meeting held on
May 25, 2017, it was resolved to distribute TRY 3
billion of dividends to our shareholders. Previously,
we had distributed TRY 3.9 billion of dividends in
2015. Thus, by distributing 54% of our net income
recorded since 2010 in dividends to our shareholders,
we underlined our Company’s strong balance sheet
structure and growth potential.
With the responsibility of operating in a sector
of great importance for Turkey’s sustainable
development, we made significant progress in 2017.
We carried the quality of our customer service to even
higher levels through a TRY 4.1 billion investment
this year. We will press ahead to invest in innovative
products and services in the coming period that
contribute to Turkey’s future in fulfilment of our
responsibility to our shareholders, our customers and,
our country.
Two well-known fundamental criteria must be
observed in measuring the success of a company.
The first is the creation of value from an economic
perspective, and the second is the earning of respect
from a reputational standpoint. I believe that we
have given a performance befitting Turkcell as both a
reputable and a profitable company, which is admired
and appreciated on both fronts.
TOWARDS TURKCELL’S ECOSYSTEM...
Established in 1994 as Turkey’s first mobile operator,
Turkcell has now been a pioneer across many areas
for 23 years. Today, we continue to transform the
latest technologies into products that will provide the
highest benefit to our customers, and offer them as
our services.
When looking back, we note the major changes
that the technological world has undergone over
the past 23 years. Today, as new business areas
and occupations emerge that didn’t exist 23 years,
or even 3 years ago, we face both new risks and
opportunities. Ours is an era, in which it is impossible
for those who cannot pursue their strategies,
resource planning, business models and work force
by adapting to conditions shaped by the winds of
digitalization to succeed. As a brand at the center
of this significant change, particularly over the past
4-5 years, we are determined to remain among the
pioneers of change by keeping pace with progress,
rather than being swept away by those same winds of
change. Momentum in terms of our digitalization that
primarily started internally was quickly disseminated
into our operational areas. We digitalized all
business processes from our products and services
to our human resources policies, from sales channel
management to technological infrastructure tracking,
and from customer demand and complaint processes
to financial operations and made them instantly
trackable.
Another step in the digitalization process was the
swift launch of digital services most suitable to meet
the needs and expectations of our customers. With
our digital services developed by 1,000 R&D engineers,
we began to be referred to as a “digital operator” in
today’s world. This digital transformation is of vital
importance in carrying our solid financial structure
and strong customer base into the future. And so we
have continued to add value to our customers’ lives by
providing popular digital services, such as fizy, TV+,
BiP, lifebox, UpCall , Dergilik and Yaani, in addition to
legacy telecommunication services.
TURKCELL ANNUAL REPORT 2017
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In 2017, as Turkcell Group,
we registered record results
in line with our principle
of generating value for our
shareholders with a team
spirit.
WE ARE DEVELOPING PIONEERING
TECHNOLOGIES...
Successfully managing digital transformation has
now elevated our Company to the status of a global
exemplar. We provide all of these digital services via
our superior 4.5G network.
We also achieved considerable success in the area of
Internet of Things, which we expect to become one of
the carrier technologies of the Industry 4.0 world to
be established with 5G. We became the first operator
to open the Narrow Band – Internet of Things support,
required for the use of new generation applications,
for service in Turkey. We expect Narrow Band
technology, which enables real time measurement, to
make a great contribution to life with the difference
it creates in numerous areas from smart cities to the
health sector.
Another step we took as part of our vision of “Turkey
as producing technology, rather than consuming it”
was our support for the operation of the first local
base station. In this context, we became the first
operator to test Turkey’s first local 4.5G base station
antenna on the existing operational network.
We continued our studies towards the development
of 5G technologies this year to extend the leadership
we enjoy in 4.5G to 5G. We play a pioneering global
role in the development of 5G technologies with the
national and international collaborations we have
realized. As the mobile operator to have performed
the first speed test in Turkey with real 5G equipment,
we ranked among the countries to have shaped the
development of 5G technology in the world with the
knowledge and experience arising from our diverse
cooperation.
Another key development of 2017 is that we claimed
our place within Joint Initiative Group for Turkey’s
Automobile Project formed to locally manufacture
a national automobile. As Turkey’s Turkcell, we
are proud to support this domestic and national
automobile project initiated under the leadership of
our President. We believe we can make a significant
contribution to Turkey’s Automobile Project with our
superior communications infrastructure, and strong
engineering and software competencies.
We have conducted activities that confirm our
claim to be a “digital operator” in the field of health
informatics. Notably, we have delivered Yozgat and
Adana City Hospitals, Turkey’s first city hospitals,
where end-to-end technology infrastructure is
provided by Turkcell, to our Ministry of Health. Yozgat
City Hospital today ranks among the world’s most
reputable digital hospitals after being granted Level 6
certification from HIMSS (Healthcare Information and
Management Systems Society) Turkey, which accredits
Turkey’s best IT applications and solutions based on
innovation. We will continue to accelerate our support
for the City Hospitals model, recognized as a game
changer in the health sector, over the coming period.
Carrying its expertise and experience to different
business areas, Our Group continued to diversify its
service areas in 2017 as well. Turkcell Enerji Çözümleri
(Energy Solutions Company) commenced operations
upon being licensed by EMRA (Energy Market
Regulatory Authority). Backed by Turkcell’s network
capabilities and technological competence, Turkcell
Enerji will provide key solutions in energy efficiency, a
priority agenda item of our time.
A large team is working to transform Turkcell’s
intellectual capital and technological knowledge into
the products and services I have mentioned above,
and to offer them for the service of humanity, both
in Turkey and the world. Thanks to the R&D experts
employed by Turkcell Teknoloji, one of Turkey’s largest
and most reputable R&D centers, the number of
countries in which we export technology reached 15,
together with Turkcell Group.
We decisively support
the UN Sustainable
Development Goals as well
as 2023 Vision and direct
our social investments in
this direction.
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TURKCELL ANNUAL REPORT 2017
CHAIRMAN’S MESSAGE
Our projects geared towards the disabled, which hold a special
place in Turkcell’s social responsibility efforts, continued
successfully in 2017.
As the Board of Directors
and Management Team, we
are aware of the key role
played by the products
and services provided by
Turkcell in the sustainable
development of our national
economy, and in improving
the quality of life in Turkey
and the wider region.
SUSTAINABLE DEVELOPMENT GOALS AND OUR
SOCIAL INVESTMENTS FOCUSED ON VISION 2023...
We carried out many social responsibility and
sponsorship activities in 2017 aimed at creating social
added value with the participation of our stakeholders
ranging from our shareholders to non-governmental
organizations.
The number of classes we offer in the Whiz Kids
Project, initiated under the auspices of the Ministry of
National Education, has reached 20. With this project,
we aim to introduce uniquely talented students to new
generation technology and education within the scope
of our social investments in education. In addition to
the Gökçeada Greek Middle School and High School,
we swiftly completed the construction of three high
school buildings in Istanbul, handing them over to our
Ministry of National Education. Within the scope of
another scheme we carried out with the Governorship
of Istanbul, we undertook the restoration of the
historic Selimiye Barracks.
Additionally, our projects geared towards the
disabled, which hold a special place in Turkcell’s social
responsibility efforts, continued successfully in 2017.
The news that brought the greatest joy, both to us and
Turkey in general, came from our Amputee National
Team in 2017. Our National team, supported by
Turkcell competing at the European Amputee Football
Championship, were crowned the champions, in a
moment of great pride for all.
We reached out to over 10 thousand disabled students
with special education needs through the People
without Boundaries Project, which we launched
to include disabled young people in education and
business life. We also facilitated communication for
our disabled citizens with the My Dream Companion
and My Sign Language applications.
Meanwhile, the Hello Hope application, which we
developed to meet the primarily language-related
social needs of our Syrian guests for fuller adaptation
to social life, made a tremendous global impact.
Indeed, it has been awarded by respected global
institutions such as ITU, GSMA and UNESCO.
Elsewhere, while we initially provided 100 women
with remote employment opportunities within the
scope of the “Women Developers of the Future”
Project, launched jointly with TOBB (The Union of
Chambers and Commodity Exchanges of Turkey)
Women Entrepreneurs, a new course was launched for
the employment and entrepreneurial development of
women.
A source of great pride for us, whenever “humanitarian
aid” is mentioned in today’s world, the first country
that comes to mind is Turkey. We can state with
great pride that today, Turkey is both a superpower
and a major global figure in terms of its humanitarian
contribution as measured by the ratio of aid provided
to national income. Thus far, we have mobilized our
full potential on this front and diligently played our
part in the shared effort. Going forward, we will
continue our humanitarian activities with the same
determination, particularly in education, the active
participation of the disabled in social life, and the
assistance of refugees.
WE WILL MAINTAIN OUR POSITION, BOTH IN
ECONOMIC AND HUMANITARIAN ACTIVITIES...
As the Board of Directors and Management
Team, we are aware of the key role played by the
products and services provided by Turkcell in the
sustainable development of our national economy,
and in improving the quality of life in Turkey and the
wider region. And so, by drawing strength from our
advanced technological infrastructure at international
standards, and from our competent human resources,
we will continue to increase our service quality and
diversify our products in the coming period in line
with customer needs and expectations, with the same
determination and enthusiasm.
We express our gratitude to all our business partners
and employees, but primarily to our shareholders, who
have supported the activities of Turkey’s Turkcell in
2017. We hope to earn more for our shareholders, to
contribute further to the prosperity of our country,
and to live and share the peace and happiness of
fulfilling our duties...
Respectfully yours...
AHMET AKÇA
Chairman of the Board of Directors
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TURKCELL ANNUAL REPORT 2017
BOARD OF DIRECTORS
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TURKCELL ANNUAL REPORT 2017
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AHMET AKÇA
Chairman of the Board and Independent Board Member*
Ahmet Akça was appointed to the Board of Directors by Capital Markets Board
decision. From 1981 to 1988, Mr. Akça served as a Foreign Trade Manager in
the glass and food industry. In 1988, he became the CEO of an International
Trading Company, and held that responsibility until 1992. He later started his
own business, which he still runs. Mr. Akça is the Founder and Chairman of the
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He was a Member of the Committee of Trustees in January 2010, at the time
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Chairman of the Committee of Trustees since November 2011. After studying
mathematics at Middle East Technical University and sociology at Istanbul
University for a certain period, Mr. Akça graduated from the Bursa Economics
and Commercial Sciences Academy’s Department of Economics.
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Independent Board Member*
Atilla Koç was appointed to the Board of Directors by Capital Markets Board
decision. Having worked as an Undersecretary at the Ministry of Interior,
and as Chief of Police in Konya, he served as the District Governor of the
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Giresun provinces. He has also been the Prime Minister’s Undersecretary,
the General Secretary of Ankara Metropolitan Municipality, and the Central
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period of the Grand National Assembly of Turkey and as Minister of Culture
and Tourism in the 59th Government. He graduated from Ankara University’s
Faculty of Political Science.
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Independent Board Member*
Mehmet Hilmi Güler was appointed to the Board of Directors by Capital
Markets Board decision. He formerly worked as a Project Engineer and
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as Vice President and Board Member of the Scientific and Technological
(cid:18)(cid:59)(cid:73)(cid:59)(cid:55)(cid:72)(cid:57)(cid:62)(cid:221)(cid:3)(cid:69)(cid:75)(cid:68)(cid:57)(cid:63)(cid:66)(cid:221)(cid:69)(cid:60)(cid:221)(cid:20)(cid:75)(cid:72)(cid:65)(cid:59)(cid:79)(cid:221)(cid:148)(cid:20)(cid:53)(cid:2)(cid:216)(cid:20)(cid:1)(cid:11)(cid:149)(cid:125)(cid:221)(cid:55)(cid:73)(cid:221)(cid:3)(cid:62)(cid:55)(cid:63)(cid:72)(cid:67)(cid:55)(cid:68)(cid:221)(cid:55)(cid:68)(cid:58)(cid:221)(cid:7)(cid:59)(cid:68)(cid:59)(cid:72)(cid:55)(cid:66)(cid:221)(cid:13)(cid:55)(cid:68)(cid:55)(cid:61)(cid:59)(cid:72)(cid:221)
of the Machines and Chemical Industries Board (MKEK), as the General
Manager and Chairman of Etibank, as the Chief Undersecretary to the Prime
(cid:13)(cid:63)(cid:68)(cid:63)(cid:73)(cid:74)(cid:59)(cid:72)(cid:125)(cid:221)(cid:55)(cid:68)(cid:58)(cid:221)(cid:55)(cid:73)(cid:221)(cid:2)(cid:69)(cid:55)(cid:72)(cid:58)(cid:221)(cid:13)(cid:59)(cid:67)(cid:56)(cid:59)(cid:72)(cid:221)(cid:55)(cid:68)(cid:58)(cid:221)(cid:5)(cid:78)(cid:59)(cid:57)(cid:75)(cid:74)(cid:63)(cid:76)(cid:59)(cid:221)(cid:4)(cid:63)(cid:72)(cid:59)(cid:57)(cid:74)(cid:69)(cid:72)(cid:221)(cid:55)(cid:74)(cid:221)(cid:5)(cid:18)(cid:4)(cid:5)(cid:13)(cid:216)(cid:18)(cid:221)(cid:55)(cid:68)(cid:58)(cid:221)
(cid:216)(cid:7)(cid:4)(cid:1)(cid:217)(cid:128)(cid:221)(cid:13)(cid:72)(cid:128)(cid:221)(cid:7)(cid:109)(cid:66)(cid:59)(cid:72)(cid:221)(cid:55)(cid:66)(cid:73)(cid:69)(cid:221)(cid:73)(cid:59)(cid:72)(cid:76)(cid:59)(cid:58)(cid:221)(cid:55)(cid:73)(cid:221)(cid:13)(cid:63)(cid:68)(cid:63)(cid:73)(cid:74)(cid:59)(cid:72)(cid:221)(cid:69)(cid:60)(cid:221)(cid:5)(cid:68)(cid:59)(cid:72)(cid:61)(cid:79)(cid:221)(cid:55)(cid:68)(cid:58)(cid:221)(cid:14)(cid:55)(cid:74)(cid:75)(cid:72)(cid:55)(cid:66)(cid:221)(cid:18)(cid:59)(cid:73)(cid:69)(cid:75)(cid:72)(cid:57)(cid:59)(cid:73)(cid:221)
in the 58th, 59th and 60th Governments. Mr. Güler graduated from Middle
East Technical University’s Department of Metallurgical and Materials
Engineering where he obtained his Master’s and Doctorate degrees.
MEHMET BOSTAN
Board Member**
Mehmet Bostan was appointed to the Board of Directors by Capital Markets
Board decision. Mr. Bostan formerly worked as Senior Marketing Manager at
BNP Ak Dresdner Bank A.S., Manager at TSKB, Chief Turkey Representative
of Dresdner Bank AG and Deputy General Manager at Gunes Sigorta. Between
the years of 2010-2016, he served as the General Manager and Board Member
of Vakif Emeklilik and concurrently, between the years of 2010-2016, he was
responsible as the Board of Directors and Board Member of Pension Monitoring
Center. He has been serving as a Board Member of Petkim since 2016. During
his tenure as the President of the Turkish Prime Ministry Privatization
Administration, he was appointed Chairman of the Board and General Manager
of the Sovereign Wealth Fund of Turkey on November 2, 2016, holding the
position until September 2017. He is also a Board Member of the Turkish Tennis
Federation. Mr. Bostan graduated in International Relations from the Faculty of
Economics at Istanbul University. He holds an MBA from Bilgi University.
(cid:4)(cid:18)(cid:128)(cid:222)(cid:2)(cid:5)(cid:11)(cid:217)(cid:18)(cid:222)(cid:16)(cid:1)(cid:11)(cid:4)(cid:5)(cid:13)(cid:217)(cid:18)(cid:12)(cid:217)
Board Member**
Bekir Pakdemirli was appointed to the Board of Directors by Capital
Markets Board decision. Bekir Pakdemirli has been an entrepreneur in
food, computer and automotive industries, besides taking roles in the
establishment and management of various companies. During his career,
he also served as the General Manager of a ceramics company, which is
among the 500 industrial companies in Turkey and a publicly traded food
company. He has served in executive management positions at McCain
Foods, a multinational company, and still offers consultancy services
to McCain Company. Serving as a Member of the Board of Directors of
Albaraka Türk Participation Bank, Pakdemirli also continues his roles as a
(cid:67)(cid:59)(cid:67)(cid:56)(cid:59)(cid:72)(cid:221)(cid:69)(cid:60)(cid:221)(cid:74)(cid:62)(cid:59)(cid:221)(cid:2)(cid:69)(cid:55)(cid:72)(cid:58)(cid:221)(cid:69)(cid:60)(cid:221)(cid:4)(cid:63)(cid:72)(cid:59)(cid:57)(cid:74)(cid:69)(cid:72)(cid:73)(cid:221)(cid:69)(cid:60)(cid:221)(cid:20)(cid:55)(cid:72)(cid:65)(cid:59)(cid:67)(cid:221)(cid:20)(cid:55)(cid:72)(cid:63)(cid:62)(cid:63)(cid:221)(cid:11)(cid:59)(cid:67)(cid:59)(cid:72)(cid:55)(cid:66)(cid:74)(cid:96)(cid:221)(cid:1)(cid:128)(cid:217)(cid:128)(cid:125)(cid:221)(cid:20)(cid:75)(cid:72)(cid:65)(cid:63)(cid:73)(cid:62)(cid:221)
Foundation for Mental Healthcare, as well as being a Member of the Board
of Trustees of Anatolian Autism Foundation and a Member of Capital
Markets Investors Association with his attention to social responsibility. In
addition to this, Mr. Pakdemirli is also involved in visual media interviews
based on different aspects of economy. He is a captain, pilot and an
amateur radio operator. After graduating from Bilkent University, Faculty of
Business Administration, he completed his Master’s degree in Management
(cid:55)(cid:74)(cid:221)(cid:2)(cid:55)(cid:218)(cid:65)(cid:59)(cid:68)(cid:74)(cid:221)(cid:21)(cid:68)(cid:63)(cid:76)(cid:59)(cid:72)(cid:73)(cid:63)(cid:74)(cid:79)(cid:125)(cid:221)(cid:55)(cid:68)(cid:58)(cid:221)(cid:62)(cid:63)(cid:73)(cid:221)(cid:16)(cid:62)(cid:4)(cid:221)(cid:58)(cid:59)(cid:61)(cid:72)(cid:59)(cid:59)(cid:221)(cid:63)(cid:68)(cid:221)(cid:5)(cid:57)(cid:69)(cid:68)(cid:69)(cid:67)(cid:63)(cid:57)(cid:73)(cid:221)(cid:55)(cid:74)(cid:221)(cid:3)(cid:59)(cid:66)(cid:55)(cid:66)(cid:221)(cid:2)(cid:55)(cid:79)(cid:55)(cid:72)(cid:221)
University.
(cid:10)(cid:1)(cid:14)(cid:222)(cid:5)(cid:18)(cid:9)(cid:11)(cid:222)(cid:18)(cid:21)(cid:4)(cid:2)(cid:5)(cid:18)(cid:7)
Board Member***
Jan Erik Rudberg was appointed to the Board of Directors by Capital
Markets Board decision. He is currently Chairman of the Board of Directors
of Kcell JSC (Independent Director) and the Chairman of the Board of
Directors of Hogia AB. Since 2010, Mr. Rudberg has also been a Member of
the Board of Directors of PJSC MegaFon (Independent Director). Between
1994 and 2003 he held various executive positions at Telia AB, after having
served as the Chief Executive Officer of Tele2 AB, Executive Vice President
of Nordbanken AB, Chief Executive Officer of Enator AB, as well as the
Chief Executive Officer of Ericsson Information Systems Sweden AB, and
having held several managerial positions at IBM. Mr. Rudberg holds a
degree in Economics and Business Administration from the Gothenburg
School of Economics.
ERIK BELFRAGE
Board Member***
Erik Belfrage was appointed to the Board of Directors by Capital Markets
Board decision. In the 70´s and 80´s, Mr. Belfrage worked as a Swedish
Diplomat in Geneva, Washington, Bucharest, Beirut, and in Paris. He has
served as Senior Vice President at SEB between 1987 and 2011, and as
an advisor to Dr. Peter Wallenberg between 1987 and 2015. In 2011, Mr.
Belfrage set up a consultancy firm Consilio International AB, of which he
is also the Chairman. The firm advises large Nordic corporates. Currently,
Mr. Belfrage is Chairman of several boards. He holds an MBA from the
Stockholm School of Economics.
*
**
The Board Members who were appointed by the Capital Markets Board as “Independent
Board Members” pursuant to Article 17, second paragraph, of the Capital Markets Law
No.6362. The CMB decision was dated March 11, 2013.
The Board Members who satisfy independency criteria were appointed by the Capital
Markets Board pursuant to sub-paragraph (k) of the first paragraph of article 128 of Capital
Markets Law No.6362. The CMB decision was dated August 15, 2013.
*** The Board Members who satisfy independency criteria were appointed by the Capital
Markets Board pursuant to sub-paragraph (k) of the first paragraph of article 128 of Capital
Markets Law No.6362. The CMB decision was dated September 13, 2013.
20
TURKCELL ANNUAL REPORT 2017
MESSAGE FROM THE CEO
As Turkcell Group, we not only beat the records of previous years and
quarters in 2017, but also achieved our 3-year targets announced at
the end of 2015, one year ahead.
As Turkcell Group and
Turkcell Turkey, we
continued to create value
for our shareholders in
2017 by achieving record
revenue and profitability
performance, and through a
sustainable dividend policy.
1440
As Turkey’s leading digital
operator, in addition
to providing legacy
communication services, we
continued to develop digital
services that enrich the lives of
our customers throughout the
1440 minutes of their day.
We enhanced the messaging, audio and video calling
capabilities of our digital communications platform
BiP, by adding the group video call feature for up to
6 people. With 2 billion messages sent in the last
month of 2017, BiP surpassed the number of SMS
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capabilitiess, BiP offers a wide variety of solutions
and services ranging from multi-screen calls to
digitalized customer services, from entertainment to
banking, and from app-to-network calls to web-based
communication.
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which surpassed its international rivals as Turkey’s most
popular music application. During summer concerts,
each of which reached nearly 200 thousand viewers, the
number of users watching concerts over the application
at the same time reached 80 thousand people at any one
time. Proving our claim made during the launch of 4.5G
that we would change the TV experience on the small
screen, TV+ reached record viewing times. The mobile
users’ daily average TV viewing duration rose from
34 minutes by the end of 2016 to 63 minutes at 2017
year end. Our digital publishing app, Dergilik, which
offers users 413 magazines and 75 newspapers created
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(cid:73)(cid:57)(cid:63)(cid:59)(cid:68)(cid:74)(cid:63)(cid:206)(cid:57)(cid:221)(cid:64)(cid:69)(cid:75)(cid:72)(cid:68)(cid:55)(cid:66)(cid:73)(cid:221)(cid:55)(cid:68)(cid:58)(cid:221)(cid:66)(cid:63)(cid:60)(cid:59)(cid:73)(cid:74)(cid:79)(cid:66)(cid:59)(cid:221)(cid:70)(cid:75)(cid:56)(cid:66)(cid:63)(cid:57)(cid:55)(cid:74)(cid:63)(cid:69)(cid:68)(cid:73)(cid:221)(cid:74)(cid:62)(cid:72)(cid:69)(cid:75)(cid:61)(cid:62)(cid:69)(cid:75)(cid:74)(cid:221)
Turkey, even to areas that some publications could not
previously reach at all.
In the last quarter of the year, we launched Yaani,
Turkey’s search engine. Yaani, designed to understand
the unique syntax of Turkish, help internet users in
Turkey access the most accurate information and
local resources. Having reached 1 million downloads
in just 9 days, and 3.5 million downloads currently,
Yaani thereafter continues its impressive growth, a
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(cid:74)(cid:62)(cid:55)(cid:74)(cid:221)(cid:74)(cid:62)(cid:59)(cid:72)(cid:59)(cid:221)(cid:63)(cid:73)(cid:221)(cid:55)(cid:221)(cid:73)(cid:63)(cid:61)(cid:68)(cid:63)(cid:206)(cid:57)(cid:55)(cid:68)(cid:74)(cid:221)(cid:61)(cid:55)(cid:70)(cid:221)(cid:63)(cid:68)(cid:221)(cid:20)(cid:75)(cid:72)(cid:65)(cid:59)(cid:79)(cid:221)(cid:69)(cid:68)(cid:221)(cid:74)(cid:62)(cid:63)(cid:73)(cid:221)(cid:60)(cid:72)(cid:69)(cid:68)(cid:74)(cid:128)
Encouraged by our customers preferences and the
performance of our digital services, in September, we
launched Lifecell, which offers all services including
calling and messaging via mobile internet and the digital
platform.
In line with our vision of constant development, we
had initiated Turkcell’s digital transformation in 2015,
and on April 1st, 2016, we paved the way for a truly
digital world with our 4.5G launch. In 2017, this process
continued at an accelerated pace, and we reached the
point where we now position Turkcell as the world’s
(cid:206)(cid:72)(cid:73)(cid:74)(cid:221)(cid:58)(cid:63)(cid:61)(cid:63)(cid:74)(cid:55)(cid:66)(cid:221)(cid:69)(cid:70)(cid:59)(cid:72)(cid:55)(cid:74)(cid:69)(cid:72)(cid:128)(cid:221)(cid:23)(cid:62)(cid:63)(cid:66)(cid:59)(cid:221)(cid:69)(cid:75)(cid:72)(cid:221)(cid:57)(cid:75)(cid:73)(cid:74)(cid:69)(cid:67)(cid:59)(cid:72)(cid:73)(cid:135)(cid:221)(cid:70)(cid:72)(cid:59)(cid:60)(cid:59)(cid:72)(cid:59)(cid:68)(cid:57)(cid:59)(cid:73)(cid:221)
propelled the digital operator Turkcell to the leadership
position in Turkey, our transformation story also
became a best-case example on a global scale. Thanks
to this success story, we continued to add value to our
shareholders’ worth.
SUSTAINABLE, PROFITABLE GROWTH
PERFORMANCE
As Turkcell Group and Turkcell Turkey, we continued to
create value for our shareholders in 2017 by achieving
the record revenue and profitability performance, and
through a sustainable dividend policy. With the TRY 3
billion in dividends paid out in 2017, we have distributed
54% of our net income recorded since 2010.
Turkcell Group’s total revenue increased 23.4% to TRY
17.6 billion and EBITDA rose 34.8% to TRY 6.2 billion,
leading to an EBITDA margin of 35.3%. Turkcell Turkey,
which constitutes 88% of our group revenues, grew
20.8%, while raising its EBITDA margin to 36.2%.
Turkcell Turkey’s total subscriber number increased by
4% to 36.7 million, while the average data consumption
of the 4.5G user rose as of December to 6.0 GB. Turkcell
Turkey’s mobile triple play subscriber ratio reached
55.8% with a 14 percentage point increase, while the
multi-play with TV ratio stood at 44.4% level on the
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OUR DIGITAL SERVICES THAT ADD VALUE TO OUR
CUSTOMERS’ “1440 DAILY MINUTES”
As Turkey’s leading digital operator, in addition to
providing legacy communication services, we continued
to develop digital services that enrich the lives of
our customers throughout the 1440 minutes of their
day. We now measure our success in terms of the
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the value we create in their 1440 minutes. Thanks to
this approach, today, our digital services and solutions
play a bigger part in our customer’s lives than the
mere 31-minute phone call initiated and received by an
average phone user, or the raw data consumed on the
services offered by other service providers.
TURKCELL ANNUAL REPORT 2017
21
While our customers’
preferences propelled the
digital operator Turkcell to the
leadership position in Turkey,
our transformation story also
became a best-case example on
a global scale.
T
U
R
K
C
E
L
L
G
R
O
U
P
We aimed to digitize
Turkcell not only in the
world of services, but also
in every medium through
which we contact our
customers.
We aimed to digitize Turkcell not only in the world
of services, but also in every medium through which
we contact our customers. In line with the target of
enriching customer experience, we introduced a wide
variety of changes at our retail stores, ranging from
decoration and infrastructure to the trading model and
the cultural transformation of our employees. Today, all
customer transactions in Turkcell stores, including sales,
can be performed on tablets by sales representatives
serving customers wherever they are in the store. One
of the factors making this possible was our digital
signature application, the launch of which was another
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DIFFERENTIATED FINANCING SOLUTIONS
FROM TURKCELL
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(cid:207)(cid:59)(cid:78)(cid:63)(cid:56)(cid:66)(cid:59)(cid:221)(cid:206)(cid:68)(cid:55)(cid:68)(cid:57)(cid:63)(cid:68)(cid:61)(cid:221)(cid:73)(cid:69)(cid:66)(cid:75)(cid:74)(cid:63)(cid:69)(cid:68)(cid:73)(cid:221)(cid:60)(cid:69)(cid:72)(cid:221)(cid:69)(cid:75)(cid:72)(cid:221)(cid:57)(cid:75)(cid:73)(cid:74)(cid:69)(cid:67)(cid:59)(cid:72)(cid:73)(cid:135)(cid:221)(cid:73)(cid:67)(cid:55)(cid:72)(cid:74)(cid:221)
device needs, continued to serve at Turkcell’s
3 thousand stores across Turkey in 2017. It reached
total assets of TRY 4.6 billion, while granting TRY 4.2
billion in loans to approximately 3.1 million customers
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out its operations under the Financell brand, has
successfully participated in two asset-backed securities
(ABS) issuances in April and August in exchange for
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non-banking sector in Turkey.
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Payment Institution License obtained from BRSA
in 2016 into an Electronic Money License in 2017.
Providing fast and easy payment services to over
2 thousand member companies and over 5 million
customers with its Paycell brand, it offers fast payment
services that facilitate our customers’ lives, such as
utility bill payments, fuel payments without leaving the
vehicle, and Turkcell tariff purchases. The breadth of
services and customer satisfaction also led to successful
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CONTRIBUTION TO THE DIGITAL
TRANSFORMATION OF THE ECONOMY, FROM
HEALTH CARE TO TURKEY’S DOMESTIC CAR
As the presence of smart devices and digital services
in our lives grows, we also observe the emergence
of a new necessity. Our customers need secure
authentication and payment systems for products and
services they access over the internet. To meet this
demand, we created an e-commerce model that not only
facilitates the accessibility of our own digital services
but also provides solutions to our corporate partners in
Turkey’s rapidly growing e-commerce market. Internet
users are now able to securely access digital services
through a GSM-based and easy-to-use authentication
process with Mobile Connect, a GSMA-supported
technology. By using the capabilities of Paycell and
Financell, they can complete their online shopping
through easy and secure payment methods, while
receiving customer service support via BiP.
Our contribution to the technological transformation
of industries in Turkey is not limited to our e-commerce
platform. We are also taking concrete steps in
education, health and energy sectors. Cooperating
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Company), we successfully completed the information
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hospital, Yozgat City Hospital. Commencing its digitally-
supported services on January 15, Yozgat City became
one of the limited number of digital hospitals on the
global scale , while Turkcell has once again proved its
competence in integrated information technologies.
Within the framework of our vision of providing
integrated communication and technology services, we
launched Turkcell Enerji Çözümleri (Energy Solutions)
company this year to provide energy management
technologies. Besides providing our customers
uninterrupted electricity with Turkcell’s service quality,
we are excited to offer systems and solutions that will
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22
TURKCELL ANNUAL REPORT 2017
MESSAGE FROM THE CEO
As Turkcell, we registered significant achievements also in 2017, in line
with the objective of supporting Turkey on its domestic production
trajectory.
Now there is a new
milestone in the digital
transformation of both
the Turkish and global
economies: 5G technologies.
As Turkcell, we have made
all of our investments
within this framework
since 4.5G.
Encouraged by the value our technology has created
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participants of “Joint Initiative Group for Turkey’s
Automobile Project“ initiated under the auspices of our
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energy, smart cities and the Internet of Things, as well
as our success in producing innovative solutions.
STEP BY STEP TOWARDS 5G...
Now there is a new milestone in the digital
transformation of both the Turkish and global
economies: 5G technologies. As Turkcell, we have made
all of our investments within this framework
since 4.5G. During 2017, we equipped both our mobile
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technologies and accelerated our digital transformation
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to offer NB-IoT (Narrow Band - Internet of Things)
support in Turkey, Turkcell is one of the world’s
pioneering companies to have launched this technology.
We aim to contribute to Turkey’s sustainable future
by leveraging this technology, which ensures that
devices communicate swiftly and effectively, for longer
durations and over wider distances.
DOMESTIC AND NATIONAL TECHNOLOGICAL
INFRASTRUCTURE...
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achievements in 2017, in line with the objective
of supporting Turkey on its domestic production
trajectory. Having started to offer 4.5G communication
services from ULAK base stations, entirely produced
domestically, our Company provided strong support
to unleash the competence of the local R&D sector.
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successfully continues in line with our target of utilizing
and advancing Turkey’s academic facilities in our
5G-focused studies.
In 2017, we developed a wide portfolio of products and
projects that catered to a wide spectrum of individuals
ranging from our disabled brothers and sisters, and
friends from Syria who took refuge in Turkey, to
entrepreneur candidates, and our talented students. Our
contribution to the community also made itself heard
on at the global level. Our “Hello Hope” application,
which facilitates the lives of our Syrian guests, has been
deemed worthy of awards and received appreciation
from various institutions of the United Nations, such as
ITU, Global Compact and UNESCO, as well as GSMA,
the umbrella organization of our sector. We developed
an app for the hearing impaired by adding the “My Sign
Language” application to our digital solutions, having
thus far developed similar apps more for the use of the
visually impaired.
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an important gap in the Turkish innovation ecosystem
by paving the way for innovative projects such as Alya,
Bean, Otsimo, Zchool and Invidyo to become actual
products. We took steps both in and beyond Turkcell to
educate our children and equip the working population
with new competencies. Almost one in every three
Turkcell employees applied to the “Digital Masters”
program that we launched for them to develop their
competencies in digital technologies, while we provided
mobile application development training to over 1,000
women entrepreneurs beyond Turkcell.
OUR SUCCESS WILL CONTINUE MOUNTING WITH
THE DIGITAL TRANSFORMATION PROCESS…
We express deep gratitude to all our stakeholders,
especially to our shareholders, who supported us in our
breakthrough in 2017, in which we achieved milestones
within the scope of our digital transformation
process. We will continue to create value for all of
our stakeholders in the upcoming period by offering a
greater number of innovative products and services that
add value to our customers’ lives.
WE ARE A GLOBAL BRAND IN CORPORATE SOCIAL
RESPONSIBILITY.
Yours Sincerely,
One of the key focal points of our successful
applications in Turkey in terms of production of
technology and innovative use of produced technology,
is “technology for people”. In other words, the use of
our products by customers most in need of facilitating
their lives with technology.
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Turkcell CEO
T
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24
TURKCELL ANNUAL REPORT 2017
EXECUTIVE OFFICERS
9
7
8
3
1
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Chief Executive Officer
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2015. He began his professional life in 1990 as an Independent Auditor and
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USA as the IT Strategies and Security Specialist, and in 1994, began working at
Arthur Andersen Belgium as the Leader of Information Management and Digital
Strategy Services. In 1998, he was appointed Vice President of Consultancy
Services at Arthur Andersen Turkey Operations. Between 1999 and 2012, he
served as the Team Leader of E-Commerce Strategies for the EMEA Region,
Sales Director of Advanced Technologies for the EMEA Region, Managing
Director of Technology Marketing Organization for the EMEA Region, and Vice
President of EMEA, Central and Eastern Europe at the Cisco Systems Brussels
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Bülent Aksu has been appointed as the Chief Financial Officer, effective as
of July 20, 2016. He has 20 years of managerial experience in the field of
finance, accounting, tax and management in various sectors including energy,
petrochemicals, textiles and auditing. Bülent Aksu started his professional career
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the role of CFO and Board Member at Akfel Group between 2008 and 2012. He
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national oil and gas company SOCAR between 2012 and 2013, and most recently
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named among the 50 Most Efficient CFOs by Fortune Turkey Magazine. Mr. Aksu
graduated from the department of Business Administration (English) of Istanbul
University in 1996.
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Executive Vice President - Marketing
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Holding Moscow Office in 1996. Between 1997 and 2000, Mr. Bütün worked
at Enka Group Foreign Trade department in Moscow as Sales and Business
Development Manager. Starting from 2000, he worked at Nestle as CPW
Turkey Country Manager, Regional Marketing Director for Central Asia based
in Uzbekistan and later as Head of National Key Accounts for Nestle Turkey.
Starting from 2011, he served at Nestle’s Global Headquarters in Switzerland,
first as Business Excellence Manager at the Global Customer and Sales
Management Unit and then as Marketing Manager at the Beverages Strategic
Business Unit. Most recently, Mr. Bütün was the General Manager of Nestle
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joined Turkcell as Senior Vice President of Retail Sales on January 15, 2016.
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department in 1996.
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Executive Vice President - Legal and Regulation
Serhat Demir joined Turkcell as the Executive Vice President of Legal and
Regulation Function in May 2015. Mr. Demir started his professional career
in 1997 at Dun&Bradstreet. He worked as a lawyer and held executive and
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Serhat Demir graduated from the Faculty of Law at Istanbul University and has a
Masters of Business Administration degree.
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Executive Vice President - Sales
Murat Erkan joined Turkcell Group in June 2008 as the General Manager of
Turkcell Superonline and as of December 1, 2015, he was appointed Executive
Vice President of Sales. Mr. Erkan, who started his professional life at Toshiba,
became an Application Engineer at Biltam Mühendislik and then became the
first “System Engineer” of Turkey at Cisco Turkey. He served as Chief Officer at
Cisco Systems in charge of technology, sales, business development and channel
management for 10 years. Prior to his position at Turkcell Superonline, Mr. Erkan
had been the Business Unit Manager at Aneltech working on solutions related
to Telecommunication, Mobile, ICT, the defense industry and industrial products
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Electronics and Telecommunication Engineering Department in 1992. He
completed the Strategic Marketing Program at Harvard Business School in 2010.
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Executive Vice President - Human Resources
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July 2014. He began his career in MSC Consulting lnc. in 1998. He worked as a
HR professional at Tekstilbank and as the Human Resources Group Manager at
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TURKCELL ANNUAL REPORT 2017
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was appointed Vice Chairman and Member of the Executive Committee at Rixos
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at Middle East Technical University. He received a Master’s degree from the
Marmara University Business Administration Department in International
Quality Management. He completed the HR Management & Leadership Programs
at INSEAD.
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Executive Vice President - Strategy
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Risk Consolidation Division Head. In October 2015, he was appointed as the
Executive Vice President of Strategy. Previously, he served as Senior Vice
President of International Business under the Strategy Function. He has also
undertaken the roles of acting Chief of International Business, Chief Strategic
Projects Officer and Chief Network Operations Officer at Turkcell. Prior to
joining Turkcell, he had worked as Assistant General Manager at Turkcell Group
companies, including Show TV and Superonline. He had worked for Ericsson
Turkey as the Assistant General Manager responsible for Turkcell between
1994 and 2002. He graduated from the Department of Econometrics at Istanbul
University.
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Executive Vice President - Digital Services and Solutions
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In March 2017, she was appointed Executive Vice President of Digital Services
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as Quality System Engineer between 1993 and 1997. She was appointed
Strategic Consultancy Services Manager in Arthur Andersen in 1997. Joining
Cisco’s EMEA Region Organization in 2001 in Belgium, Ertopuz took managerial
roles in several functions including Strategic Planning, Business Intelligence,
Operations and Global Customer Management. She served as the Manager of
Business Intelligence Group within Cisco’s New York based Global Sales Strategy
and Planning organization between 2006 and 2015, focusing on the fields of
Service Providers sector, market and competition dynamics, business strategy
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Ertopuz graduated from Middle East Technical University Industrial Engineering
Department and received her MBA degree from New York University, Stern
School of Business.
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Executive Vice President - Customer Experience and Information
Technologies
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as Executive Vice President of Customer Experience and Information
Technologies as of August 2017. Previously, he worked as Project Supervisor
and Manager at Turkcell Project Management Office between 2000 and 2009.
He served as Chief Information Technologies Officer in Life-Ukraine between
2009 and 2010 and in Turkcell Superonline between 2010 and 2011. Prior his to
his recent appointment, he has been serving as Director of Customer Relations
Management and Business Intelligence Solutions (CRM & BIS) and Executive
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graduated from Middle East Technical University Electrical and Electronics
Engineering department. He received his MBA degree from Istanbul University.
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Executive Vice President - Network Technologies
Gediz Sezgin joined Turkcell as Network Engineer in 1995. He was appointed as
Executive Vice President of Network Technologies as of March 2017. Previously,
he served as Senior Vice President of Network Technologies under the
Technology Function, Senior Vice President of Information and Communication
Technologies, Director of Application Operations, Director of Service Network
under the ICT Function and held various executive positions in the Technology
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from Istanbul Technical University in Electronics and Communication
Engineering and received his Master’s degree from the same university.
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Executive Vice President - Supply Chain Management
Ali Türk joined Turkcell as Senior Vice President of Supply Chain Management
in 2016. He was appointed as Executive Vice President of Supply Chain
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Sigorta in 1999. Between 2002 and 2007, he held various managerial positions
responsible for logistics planning, warehouse and supply chain management
processes at Ülker Group Companies. Between 2007 and 2011, he worked
at Ceva Lojistik as Warehouse and Value Added Operations Group Manager.
Joining Turkish Airlines in 2011 as Cargo Operations Vice President, Mr. Türk
has served as Turkish Airlines Cargo Operations President between 2012-2016.
He graduated from the Industrial Engineering Department of Istanbul Technical
University in 1999 and completed Istanbul Technical University Executive MBA
program in 2001.
26
TURKCELL ANNUAL REPORT 2017
TOP MANAGEMENT OF SUBSIDIARIES
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Chief Executive Officer
Please see page 24 for detailed CV.
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General Manager of lifecell Ukraine
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Manager of lifecell, Turkcell’s subsidiary in Ukraine, as of May 2017. Prior to
this position, he worked as the Deputy General Manager of Sales and Business
Development between 2009 and 2010 and as the General Manager between 2010
and 2011 at Global Tower. He served as the General Manager of BeST, Turkcell’s
subsidiary in Belarus, between 2011 and 2015 and as the General Manager of Kuzey
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Romanian Country Manager, Product Marketing Manager, EMEA Region CDMA
Business Development Director, and Enterprise Leader, respectively, at the Turkey
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Electric-Electronic Engineering at Hacettepe University in 1992, and postgraduate
degrees in Political Science at Marmara University in 1998 and in International
Marketing and Management at the University of Texas in 2001. He completed his
second undergraduate degree from the Istanbul University, Faculty of Law in 2011.
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General Manager of BeST
In March 2016, Dina Tsybulskaya was appointed as the General Manager of BeST.
Prior to this position, Tsybulskaya worked as the Chief Marketing Officer of the
company from July 2012. She began her career in 2004 at the Belarus office of
Publicis, one of the largest advertising agencies in the world. Transferring to the
telecommunication sector in 2007, Tsybulskaya worked as the Marketing Director at
mobile operator velcom until joining Turkcell Group. Dina Tsybulskaya received her
bachelor’s degree of Foreign Languages and International Politics from the Minsk
University (Linguistics) in 2000, and her postgraduate degree in International Politics
at the European Humanitarian University. Tsybulskaya also received professional
certificates and diplomas in General Management and Economics from the Ontario
Business School in 1999, in Marketing from the Charted Institute of Marketing London
in 2007 and in Business Development for Top Management from the TAG Business
School and INSEAD Business School in 2012.
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General Manager of Lifecell Ventures
Yorgos joined Turkcell Group as the General Manager of Lifecell Ventures on February
20, 2017. He started his career in 1975 as a Telecom Engineer in OTE Greece and
then worked at various international firms. He worked as Core Network Engineering
and Network IT Manager in Panafon/Vodafone between 1993 and 1997, as CTO at
Cosmote between 1997 and 2000, as CEO at Otenet between 2000 and 2007 and as
CEO in Romtelecom between 2007 and 2011. He served as Member and Chairman of
the Board in Azerfon and AzerTelecom between 2012 and 2015. Before joining Lifecell,
he held consultancy positions in several telecom companies and worked as Member
of the Board and Advisor to Executives in Unisystems Turkey. He received his BSc
in Electrical Engineering from Bogazici University in 1973 and his MSc in Electrical
Engineering from University of Massachusetts at Lowell in 1975. He is fluent in
English, Greek and Turkish and speaks French, Azeri and Romanian professionally.
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General Manager of Turkcell Europe
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and Experience Management Function. He was appointed as Turkcell Europe General
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as Chief Sales and Operations Officer at Ericsson Turkey after holding executive
positions in sales, business development and internet solutions consultancy
within Cisco Systems and Microsoft Turkey organizations. Prior to his position in
Turkcell, he worked as a Partner at the Accenture Turkey Office responsible for the
telecommunication, media and technology sectors. Mr. Kuran graduated from Istanbul
Technical University, Electrical and Electronics Engineering department in 1995.
He received his Master’s degree in Management Engineering from Portland State
University in 1997.
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General Manager of Global Tower
Nihat Narin has been appointed as the General Manager of Global Tower as of June
2016. He also serves as Board Member at Inteltek Technology and Investments Co.
and UkrTower LLC. Mr. Narin began his career in investment banking in 1996 and
worked in various roles including corporate finance and research analyst. During his
position at Ata Invest as Telecom Analyst, he worked in many IPO projects, including
IPO of Turkcell. He joined Turkcell in 2000 and worked as senior specialist at Investor
Relations Department until 2004. Subsequently, he served as Director of Internal
Audit, Director of Investor Relations & International Media and Group M&A Director
at Turkcell. Mr. Narin received his BA degree from the Faculty of Economics and
Administrative Sciences at Marmara University and MBA degree from Middlesex
University while completing his graduation project on Capital Markets of U.K.
Mr. Narin also holds Turkish Capital Markets Advanced Degree License and Corporate
Governance Licenses.
TURKCELL ANNUAL REPORT 2017
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General Manager of Global Bilgi
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he was appointed as the General Manager of Turkcell Global Bilgi. Prior to his
appointment to this position, he had served as the Regional Manager in Charge
of Strategic Customers and Public Affairs, Sales Manager in Charge of Large
Scale Businesses, Corporate Sales Director in Charge of Large Scale Businesses
and Corporate Sales Director in Charge of Mid Scale Businesses. Beginning his
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Engineering at Middle East Technical University in 1993.
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General Manager of Turkcell Finansman
Mehmet Cantekin joined Turkcell as Group Internal Audit Director in 2014 and in May
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his professional career in 1992 within the Banking Regulation and Supervision Agency
(BRSA), Mr. Cantekin assumed various managerial positions until 2007. After working
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Credit Monitoring and Regional Offices Assistant General Manager. While working
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Chairman of the Risk Center of the Banks Association of Turkey in 2012. Mehmet
Cantekin completed his BA degree in 1990 at Ankara University, Faculty of Political
Sciences Finance Department. In 2006, he received a postgraduate degree in
Accounting from the University of Illinois.
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General Manager of Turkcell Payment and Electronic Money Services
Melike Kara has worked in managerial positions within Turkcell Mobile Financial
Services Department since 2011. In February 2015, Ms. Kara was appointed as Turkcell
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Middle East Technical University Department of Business Administration in 2004 and
began working at PricewaterhouseCoopers Istanbul Office the same year. After 2
years of PwC experience, she assumed various positions in the field of marketing and
business development within Garanti Bank Payment Services business line.
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General Manager of Inteltek
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career at Aselsan. Subsequently, he served as the System Engineer, Senior Deputy
General Manager, Deputy General Manager and General Manager at IBM Turk,
Intertech and Vestel Group and Vestel Consulting respectively, and as General
Manager at Probil. Ahmet Sezer graduated from the Electronics and Communication
Engineering Department at Istanbul Technical University in 1982.
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General Manager of Azerinteltek
Eren Eygi was appointed General Manager of Azerinteltek as of July 2015.
Beginning his professional career at Saben in 1993, Mr. Eygi subsequently worked
at Gama Construction Russia as a Resident Engineer between 1994 and 1995,
Uniroyal Chemical Company as the Regional Manager for Central Asian Countries
between 1996 and 1997, Colgate Palmolive as the Country Manager of Uzbekistan,
Turkmenistan, Tajikistan, and General Manager in Kazakhstan between 1997 and
2008, Kcell as the Marketing Director in 2008, and at Danone CIS as the Country
Manager of Belarus and Danone Russia as the Regional Commercial Director and
Regional Administrative Director between 2008 and 2015. Eren Eygi graduated from
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April 2017. Between 1986 and 1989, he started working as an Industrial Control and
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between 1989 and 2002, as a Technical Director (1989-1991), Product Development
Director (1991-1993), Sales and Marketing Coordinator (1993-1996) and Deputy
General Manager (1996-2002), respectively. Between 2002-2006, he served as
(cid:55)(cid:221)(cid:13)(cid:59)(cid:67)(cid:56)(cid:59)(cid:72)(cid:221)(cid:69)(cid:60)(cid:221)(cid:74)(cid:62)(cid:59)(cid:221)(cid:2)(cid:69)(cid:55)(cid:72)(cid:58)(cid:221)(cid:69)(cid:60)(cid:221)(cid:4)(cid:63)(cid:72)(cid:59)(cid:57)(cid:74)(cid:69)(cid:72)(cid:73)(cid:221)(cid:55)(cid:68)(cid:58)(cid:221)(cid:55)(cid:73)(cid:221)(cid:74)(cid:62)(cid:59)(cid:221)(cid:7)(cid:59)(cid:68)(cid:59)(cid:72)(cid:55)(cid:66)(cid:221)(cid:13)(cid:55)(cid:68)(cid:55)(cid:61)(cid:59)(cid:72)(cid:221)(cid:55)(cid:74)(cid:221)(cid:8)(cid:96)(cid:80)(cid:66)(cid:96)(cid:221)(cid:19)(cid:63)(cid:73)(cid:74)(cid:59)(cid:67)(cid:221)
(cid:2)(cid:63)(cid:66)(cid:63)(cid:218)(cid:63)(cid:67)(cid:221)(cid:55)(cid:68)(cid:58)(cid:221)(cid:55)(cid:66)(cid:73)(cid:69)(cid:221)(cid:55)(cid:73)(cid:221)(cid:55)(cid:221)(cid:13)(cid:59)(cid:67)(cid:56)(cid:59)(cid:72)(cid:221)(cid:69)(cid:60)(cid:221)(cid:74)(cid:62)(cid:59)(cid:221)(cid:2)(cid:69)(cid:55)(cid:72)(cid:58)(cid:221)(cid:69)(cid:60)(cid:221)(cid:4)(cid:63)(cid:72)(cid:59)(cid:57)(cid:74)(cid:69)(cid:72)(cid:73)(cid:221)(cid:55)(cid:74)(cid:221)(cid:8)(cid:96)(cid:80)(cid:66)(cid:96)(cid:221)(cid:19)(cid:63)(cid:73)(cid:74)(cid:59)(cid:67)(cid:221)(cid:13)(cid:55)(cid:215)(cid:55)(cid:80)(cid:55)(cid:57)(cid:96)(cid:66)(cid:96)(cid:65)(cid:128)(cid:221)(cid:9)(cid:68)(cid:221)
addition, Mr. Maden served as a Management Consultant at Türk Telekom in 2003 and
2004. He worked as the General Manager of Teletek Telekomünikasyon and Global
(cid:216)(cid:66)(cid:59)(cid:74)(cid:63)(cid:218)(cid:63)(cid:67)(cid:221)(cid:56)(cid:59)(cid:74)(cid:77)(cid:59)(cid:59)(cid:68)(cid:221)(cid:177)(cid:175)(cid:175)(cid:182)(cid:221)(cid:55)(cid:68)(cid:58)(cid:221)(cid:177)(cid:175)(cid:175)(cid:184)(cid:128)(cid:221)(cid:2)(cid:59)(cid:74)(cid:77)(cid:59)(cid:59)(cid:68)(cid:221)(cid:177)(cid:175)(cid:176)(cid:175)(cid:221)(cid:55)(cid:68)(cid:58)(cid:221)(cid:177)(cid:175)(cid:176)(cid:180)(cid:125)(cid:221)(cid:62)(cid:59)(cid:221)(cid:62)(cid:59)(cid:66)(cid:58)(cid:221)(cid:73)(cid:59)(cid:76)(cid:59)(cid:72)(cid:55)(cid:66)(cid:221)(cid:59)(cid:78)(cid:59)(cid:57)(cid:75)(cid:74)(cid:63)(cid:76)(cid:59)(cid:221)
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(cid:216)(cid:73)(cid:74)(cid:59)(cid:66)(cid:65)(cid:69)(cid:67)(cid:221)(cid:56)(cid:59)(cid:74)(cid:77)(cid:59)(cid:59)(cid:68)(cid:221)(cid:74)(cid:62)(cid:59)(cid:221)(cid:79)(cid:59)(cid:55)(cid:72)(cid:73)(cid:221)(cid:177)(cid:175)(cid:176)(cid:177)(cid:221)(cid:55)(cid:68)(cid:58)(cid:221)(cid:177)(cid:175)(cid:176)(cid:180)(cid:221)(cid:55)(cid:68)(cid:58)(cid:221)(cid:55)(cid:73)(cid:221)(cid:55)(cid:221)(cid:13)(cid:59)(cid:67)(cid:56)(cid:59)(cid:72)(cid:221)(cid:69)(cid:60)(cid:221)(cid:74)(cid:62)(cid:59)(cid:221)(cid:2)(cid:69)(cid:55)(cid:72)(cid:58)(cid:221)(cid:69)(cid:60)(cid:221)(cid:4)(cid:63)(cid:72)(cid:59)(cid:57)(cid:74)(cid:69)(cid:72)(cid:73)(cid:221)
(cid:55)(cid:68)(cid:58)(cid:221)(cid:7)(cid:59)(cid:68)(cid:59)(cid:72)(cid:55)(cid:66)(cid:221)(cid:13)(cid:55)(cid:68)(cid:55)(cid:61)(cid:59)(cid:72)(cid:221)(cid:69)(cid:60)(cid:221)(cid:216)(cid:2)(cid:2)(cid:221)(cid:2)(cid:59)(cid:66)(cid:56)(cid:63)(cid:67)(cid:221)(cid:56)(cid:59)(cid:74)(cid:77)(cid:59)(cid:59)(cid:68)(cid:221)(cid:177)(cid:175)(cid:176)(cid:175)(cid:221)(cid:55)(cid:68)(cid:58)(cid:221)(cid:177)(cid:175)(cid:176)(cid:180)(cid:128)(cid:221)(cid:13)(cid:72)(cid:128)(cid:221)(cid:13)(cid:55)(cid:58)(cid:59)(cid:68)(cid:221)(cid:77)(cid:69)(cid:72)(cid:65)(cid:59)(cid:58)(cid:221)
as the General Manager, as the Chairman of the Executive Board and as an Advisor
at PTT between 2015 and 2017. He is also a Member of the Board of Directors of
Turing and Automobile Association of Turkey since 2012. Harun Maden completed
his undergraduate studies in Istanbul Technical University at the Faculty of Electrics,
Department of Electronic Communication in 1982.
(cid:5)(cid:18)(cid:11)(cid:217)(cid:14)(cid:222)(cid:11)(cid:9)(cid:12)(cid:9)(cid:14)(cid:213)(cid:222)(cid:148)(cid:176)(cid:178)(cid:149)
General Manager of Turkcell Energy Solutions
(cid:5)(cid:72)(cid:65)(cid:63)(cid:68)(cid:221)(cid:11)(cid:96)(cid:66)(cid:96)(cid:68)(cid:213)(cid:221)(cid:64)(cid:69)(cid:63)(cid:68)(cid:59)(cid:58)(cid:221)(cid:20)(cid:75)(cid:72)(cid:65)(cid:57)(cid:59)(cid:66)(cid:66)(cid:221)(cid:5)(cid:68)(cid:59)(cid:72)(cid:61)(cid:79)(cid:221)(cid:19)(cid:69)(cid:66)(cid:75)(cid:74)(cid:63)(cid:69)(cid:68)(cid:73)(cid:221)(cid:63)(cid:68)(cid:221)(cid:177)(cid:175)(cid:176)(cid:182)(cid:221)(cid:55)(cid:73)(cid:221)(cid:74)(cid:62)(cid:59)(cid:221)(cid:7)(cid:59)(cid:68)(cid:59)(cid:72)(cid:55)(cid:66)(cid:221)(cid:13)(cid:55)(cid:68)(cid:55)(cid:61)(cid:59)(cid:72)(cid:128)(cid:221)
(cid:13)(cid:72)(cid:128)(cid:221)(cid:11)(cid:96)(cid:66)(cid:96)(cid:68)(cid:213)(cid:221)(cid:56)(cid:59)(cid:61)(cid:55)(cid:68)(cid:221)(cid:62)(cid:63)(cid:73)(cid:221)(cid:57)(cid:55)(cid:72)(cid:59)(cid:59)(cid:72)(cid:221)(cid:55)(cid:73)(cid:221)(cid:19)(cid:55)(cid:66)(cid:59)(cid:73)(cid:221)(cid:19)(cid:70)(cid:59)(cid:57)(cid:63)(cid:55)(cid:66)(cid:63)(cid:73)(cid:74)(cid:221)(cid:55)(cid:74)(cid:221)(cid:15)(cid:58)(cid:59)(cid:221)(cid:9)(cid:68)(cid:73)(cid:75)(cid:66)(cid:55)(cid:74)(cid:63)(cid:69)(cid:68)(cid:221)(cid:63)(cid:68)(cid:221)(cid:176)(cid:184)(cid:184)(cid:183)(cid:128)(cid:221)(cid:19)(cid:75)(cid:56)(cid:73)(cid:59)(cid:71)(cid:75)(cid:59)(cid:68)(cid:74)(cid:66)(cid:79)(cid:125)(cid:221)
(cid:62)(cid:59)(cid:221)(cid:73)(cid:59)(cid:72)(cid:76)(cid:59)(cid:58)(cid:221)(cid:55)(cid:73)(cid:221)(cid:19)(cid:55)(cid:66)(cid:59)(cid:73)(cid:221)(cid:19)(cid:70)(cid:59)(cid:57)(cid:63)(cid:55)(cid:66)(cid:63)(cid:73)(cid:74)(cid:221)(cid:55)(cid:74)(cid:221)(cid:4)(cid:69)(cid:215)(cid:55)(cid:68)(cid:221)(cid:6)(cid:69)(cid:72)(cid:59)(cid:63)(cid:61)(cid:68)(cid:221)(cid:20)(cid:72)(cid:55)(cid:58)(cid:59)(cid:221)(cid:111)(cid:221)(cid:1)(cid:61)(cid:59)(cid:68)(cid:57)(cid:79)(cid:221)(cid:15)(cid:70)(cid:59)(cid:72)(cid:55)(cid:74)(cid:63)(cid:69)(cid:68)(cid:73)(cid:221)
(2001-2003), as Energy Trade Group Manager at Akenerji (2003-2009), as Energy
Projects Coordinator at Akfel Group (2009-2011), as Turkey Sales Director at RWE
(2011-2015) and as Assistant General Manager at Limak Energy (2015-2017). Erkin
(cid:11)(cid:96)(cid:66)(cid:96)(cid:68)(cid:213)(cid:221)(cid:72)(cid:59)(cid:57)(cid:59)(cid:63)(cid:76)(cid:59)(cid:58)(cid:221)(cid:62)(cid:63)(cid:73)(cid:221)(cid:56)(cid:55)(cid:57)(cid:62)(cid:59)(cid:66)(cid:69)(cid:72)(cid:135)(cid:73)(cid:221)(cid:58)(cid:59)(cid:61)(cid:72)(cid:59)(cid:59)(cid:221)(cid:63)(cid:68)(cid:221)(cid:13)(cid:59)(cid:57)(cid:62)(cid:55)(cid:68)(cid:63)(cid:57)(cid:55)(cid:66)(cid:221)(cid:5)(cid:68)(cid:61)(cid:63)(cid:68)(cid:59)(cid:59)(cid:72)(cid:63)(cid:68)(cid:61)(cid:221)(cid:55)(cid:74)(cid:221)(cid:9)(cid:73)(cid:74)(cid:55)(cid:68)(cid:56)(cid:75)(cid:66)(cid:221)(cid:20)(cid:59)(cid:57)(cid:62)(cid:68)(cid:63)(cid:57)(cid:55)(cid:66)(cid:221)
(cid:21)(cid:68)(cid:63)(cid:76)(cid:59)(cid:72)(cid:73)(cid:63)(cid:74)(cid:79)(cid:221)(cid:63)(cid:68)(cid:221)(cid:176)(cid:184)(cid:184)(cid:183)(cid:125)(cid:221)(cid:55)(cid:68)(cid:58)(cid:221)(cid:5)(cid:78)(cid:59)(cid:57)(cid:75)(cid:74)(cid:63)(cid:76)(cid:59)(cid:221)(cid:13)(cid:2)(cid:1)(cid:221)(cid:58)(cid:59)(cid:61)(cid:72)(cid:59)(cid:59)(cid:221)(cid:55)(cid:74)(cid:221)(cid:9)(cid:218)(cid:96)(cid:65)(cid:221)(cid:21)(cid:68)(cid:63)(cid:76)(cid:59)(cid:72)(cid:73)(cid:63)(cid:74)(cid:79)(cid:221)(cid:63)(cid:68)(cid:221)(cid:177)(cid:175)(cid:175)(cid:178)(cid:128)(cid:221)
28
TURKCELL ANNUAL REPORT 2017
TURKCELL GROUP
Turkcell Group companies operate in nine countries
including Turkey, Ukraine, Belarus, TRNC, Germany,
Kazakhstan, Georgia, Moldova and Azerbaijan.
UKRAINE - lifecell
Mobile Customers (million) 11.1
Revenues (TRY million) 665
BELARUS - life
Mobile Customers (million) 1.6
Revenues (TRY million) 210
(cid:1)(cid:26)(cid:5)(cid:18)(cid:2)(cid:1)(cid:9)(cid:10)(cid:1)(cid:14)(cid:222)(cid:144)(cid:222)Azercell(cid:148)(cid:154)(cid:154)(cid:154)(cid:149)
GERMANY - TURKCELL Europe
Mobile Customers (million) 0.3
KAZAKHSTAN – Kcell
MOLDOVA – Moldcell
GEORGIA - Geocell(cid:148)(cid:154)(cid:154)(cid:149)
Turkcell TURKEY
Mobile Customers (million) 34.1
Fixed Customers (million) 2.1
IPTV Customers(*) (thousand) 506
Revenues (TRY million) 15,450
(cid:20)(cid:18)(cid:14)(cid:3)(cid:222)(cid:130)(cid:222)(cid:11)(cid:75)(cid:80)(cid:59)(cid:79)(cid:222)(cid:11)(cid:96)(cid:56)(cid:72)(cid:96)(cid:73)(cid:222)(cid:20)(cid:75)(cid:72)(cid:65)(cid:57)(cid:59)(cid:66)(cid:66)(cid:222)
Mobile Customers (million) 0.5
Revenues (TRY million) 158
(*) Our OTT TV customers are included in our total TV customers. Our total TV customers are 2.2 million as of 2017.
(**)On January 25, 2018, Fintur signed a binding agreement with Silknet JSC, a joint stock company in Georgia, to transfer its 100% shareholding in Geocell.
(***)(cid:221)(cid:15)(cid:68)(cid:221)(cid:13)(cid:55)(cid:72)(cid:57)(cid:62)(cid:221)(cid:180)(cid:125)(cid:221)(cid:177)(cid:175)(cid:176)(cid:183)(cid:125)(cid:221)(cid:6)(cid:63)(cid:68)(cid:74)(cid:75)(cid:72)(cid:221)(cid:62)(cid:55)(cid:73)(cid:221)(cid:74)(cid:72)(cid:55)(cid:68)(cid:73)(cid:60)(cid:59)(cid:72)(cid:72)(cid:59)(cid:58)(cid:221)(cid:63)(cid:74)(cid:73)(cid:221)(cid:180)(cid:176)(cid:128)(cid:178)(cid:186)(cid:221)(cid:74)(cid:69)(cid:74)(cid:55)(cid:66)(cid:221)(cid:73)(cid:62)(cid:55)(cid:72)(cid:59)(cid:62)(cid:69)(cid:66)(cid:58)(cid:63)(cid:68)(cid:61)(cid:221)(cid:63)(cid:68)(cid:221)(cid:1)(cid:80)(cid:59)(cid:72)(cid:74)(cid:59)(cid:66)(cid:221)(cid:20)(cid:59)(cid:66)(cid:59)(cid:65)(cid:69)(cid:67)(cid:75)(cid:68)(cid:63)(cid:65)(cid:55)(cid:73)(cid:79)(cid:69)(cid:68)(cid:221)(cid:25)(cid:55)(cid:74)(cid:63)(cid:72)(cid:63)(cid:67)(cid:221)(cid:4)(cid:63)(cid:218)(cid:221)(cid:20)(cid:63)(cid:57)(cid:55)(cid:72)(cid:59)(cid:74)(cid:221)(cid:1)(cid:128)(cid:217)(cid:125)(cid:221)(cid:176)(cid:175)(cid:175)(cid:186)(cid:221)(cid:73)(cid:62)(cid:55)(cid:72)(cid:59)(cid:62)(cid:69)(cid:66)(cid:58)(cid:59)(cid:72)(cid:221)(cid:69)(cid:60)(cid:221)(cid:1)(cid:80)(cid:59)(cid:72)(cid:57)(cid:59)(cid:66)(cid:66)(cid:125)(cid:221)(cid:74)(cid:69)(cid:221)(cid:1)(cid:80)(cid:59)(cid:72)(cid:56)(cid:55)(cid:63)(cid:64)(cid:55)(cid:68)(cid:221)(cid:9)(cid:68)(cid:74)(cid:59)(cid:72)(cid:68)(cid:55)(cid:74)(cid:63)(cid:69)(cid:68)(cid:55)(cid:66)(cid:221)(cid:20)(cid:59)(cid:66)(cid:59)(cid:57)(cid:69)(cid:67)(cid:221)(cid:12)(cid:12)(cid:3)(cid:128)
OUR VISION AND TARGET
TURKCELL ANNUAL REPORT 2017
T
U
R
K
C
E
L
L
G
R
O
U
P
OUR VISION
Digital Operator
Turkcell
OUR TARGET
Global Leadership
through Digital
Services
30
TURKCELL ANNUAL REPORT 2017
2017 AT A GLANCE
Remarkable results on the back of
digital transformation…
RECORD
REVENUE
AND
EBITDA
EBITDA MARGIN
35.3%
GROWTH IN
DATA AND DIGITAL
SERVICES
51.2%
Group revenues increased by 23.4% year-
on-year to TRY 17.6 billion while EBITDA
rose by 34.8% to TRY 6.2 billion.
Highest of past 9 years
Mobile triple play subscribers ratio(1) reached
55.8%, up 14pp year-on-year; and multiplay
with TV subscribers(2) reached 44.4%, up 9pp
year-on-year.
TRY
3
BILLION
DIVIDEND
MOBILE CHURN AT
20.5%
1.5
MILLION NET
ADDITIONS
With the 3 billion TL in dividends paid out
in 2017, we have distributed 54% of our net
income recorded since 2010.
Lowest of the past decade
36.7 million total subscriber base in Turkey
with a net addition of 1.5 million subscribers
in 2017
4.5G SUBSCRIBER
PENETRATION
87%
6.0 GB
DATA USAGE
LAUNCH OF
Lifecell
72% smartphone penetration, 15 million
4.5G compatible smartphones in our
subscriber base
As of December 2017, average monthly data
usage per 4.5G user
Our new brand Lifecell, that offers all
communication services via mobile internet
and the digital platform, reached 242 thousand
subscribers as of February 2018.
(1) Share among mobile voice users excluding subscribers who have not used their lines in the last 3 months
(2) Multiplay subscribers with TV: Internet + TV users & internet + TV + voice users
TURKCELL ANNUAL REPORT 2017
T
U
R
K
C
E
L
L
G
R
O
U
P
32
TURKCELL ANNUAL REPORT 2017
2017 HIGHLIGHTS
Turkcell Group revenues reached TRY
17.6 billion on 23.4% growth, while
EBITDA rose 34.8% to TRY 6.2 billion
and the EBITDA margin stood at 35.3%.
FINANCIAL HIGHLIGHTS
Turkcell Group Revenues
(cid:148)(cid:20)(cid:18)(cid:25)(cid:222)(cid:67)(cid:63)(cid:66)(cid:66)(cid:63)(cid:69)(cid:68)(cid:149)
2
3
6
,
7
1
7
1
0
2
8
2
2
,
6
7
1
0
2
6
8
2
,
4
1
6
1
0
2
0
2
6
,
4
6
1
0
2
23.4%
GROWTH
Turkcell Group EBITDA(cid:148)(cid:176)(cid:149)
(cid:148)(cid:20)(cid:18)(cid:25)(cid:222)(cid:67)(cid:63)(cid:66)(cid:66)(cid:63)(cid:69)(cid:68)(cid:149)
34.8%
GROWTH
Turkcell Group Net Income and Net Income
excluding Tax Settlement(cid:148)(cid:177)(cid:149)(cid:222)(cid:148)(cid:20)(cid:18)(cid:25)(cid:222)(cid:67)(cid:63)(cid:66)(cid:66)(cid:63)(cid:69)(cid:68)(cid:149)
9
7
9
,
1
7
1
0
2
2
9
4
,
1
6
1
0
2
9
7
4
,
2
7
1
0
2
7
4
6
,
1
6
1
0
2
Net Income
Net Income Excluding Tax
Settlement
Turkcell Group Financial Indicators
(cid:20)(cid:75)(cid:72)(cid:65)(cid:57)(cid:59)(cid:66)(cid:66)(cid:222)(cid:20)(cid:75)(cid:72)(cid:65)(cid:59)(cid:79)(cid:222)(cid:148)(cid:20)(cid:18)(cid:25)(cid:222)(cid:67)(cid:63)(cid:66)(cid:66)(cid:63)(cid:69)(cid:68)(cid:149)
Revenues
EBITDA
EBITDA Margin (%)
(cid:20)(cid:75)(cid:72)(cid:65)(cid:57)(cid:59)(cid:66)(cid:66)(cid:222)(cid:9)(cid:68)(cid:74)(cid:59)(cid:72)(cid:68)(cid:55)(cid:74)(cid:63)(cid:69)(cid:68)(cid:55)(cid:66)(cid:222)(cid:148)(cid:20)(cid:18)(cid:25)(cid:222)(cid:67)(cid:63)(cid:66)(cid:66)(cid:63)(cid:69)(cid:68)(cid:149)
Revenues
EBITDA
EBITDA Margin (%)
Turkcell Other Subsidiaries(cid:148)(cid:178)(cid:149)
(cid:148)(cid:20)(cid:18)(cid:25)(cid:222)(cid:67)(cid:63)(cid:66)(cid:66)(cid:63)(cid:69)(cid:68)(cid:149)
Revenues
EBITDA
2016
2017
Change
12,788
4,161
32.5%
875
235
26.9%
15,450
5,594
36.2%
1,067
264
24.7%
623
223
1,115
370
20.8%
34.4%
3.7 pp
22.0%
12.2%
(2.2pp)
78.9%
65.9%
(2.6pp)
EBITDA Margin (%)
35.8%
33.2%
(1)
(2)
(3)
EBITDA is a non-GAAP financial measure.
Excluding the TRY 500 million net income impact of the tax settlement in Q417 and TRY 136 million net income impact of
the tax amnesty in Q316.
“Other subsidiaries” is mainly comprised of our information and entertainment services, call center business revenues,
financial services revenues and inter-business eliminations.
TURKCELL ANNUAL REPORT 2017
33
In 2017, the total number of customers
was 50.2 million, of which 36.7 million
were in Turkey.
T
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OPERATIONAL INDICATORS
(cid:13)(cid:69)(cid:56)(cid:63)(cid:66)(cid:59)(cid:222)(cid:1)(cid:18)(cid:16)(cid:21)(cid:222)(cid:148)(cid:20)(cid:18)(cid:25)(cid:149)
(cid:15)(cid:70)(cid:59)(cid:72)(cid:55)(cid:74)(cid:63)(cid:69)(cid:68)(cid:55)(cid:66)(cid:222)(cid:9)(cid:68)(cid:58)(cid:63)(cid:57)(cid:55)(cid:74)(cid:69)(cid:72)(cid:73)(cid:222)(cid:148)(cid:20)(cid:75)(cid:72)(cid:65)(cid:57)(cid:59)(cid:66)(cid:66)(cid:222)(cid:20)(cid:109)(cid:72)(cid:65)(cid:63)(cid:79)(cid:59)(cid:149)(cid:222)
8
.
6
2
6
1
0
2
8
.
9
2
7
1
0
2
11.2%
GROWTH
(cid:14)(cid:75)(cid:67)(cid:56)(cid:59)(cid:72)(cid:222)(cid:69)(cid:60)(cid:222)(cid:19)(cid:75)(cid:56)(cid:73)(cid:57)(cid:72)(cid:63)(cid:56)(cid:59)(cid:72)(cid:73)(cid:222)(cid:148)(cid:67)(cid:63)(cid:66)(cid:66)(cid:63)(cid:69)(cid:68)(cid:149)
Mobile Postpaid (million)
Mobile Prepaid (million)
Fiber (thousand)
ADSL (thousand)
IPTV subscribers (thousand)
2016
35.3
17.4
15.7
2017
36.7
18.5
15.6
1,043.9
1,204.3
818.0
359.7
921.4
505.9
Change
4.0%
6.3%
(0.6%)
15.4%
12.6%
40.6%
On the mobile front, the number of our mobile
customers reached to 34.1 million with gain of
1.0 million new customers, the highest value
of the last six years. The share of our postpaid
customers increased to 54.2% of our total
mobile customer base.
On the fixed front, we reported 264 thousand
net additions to our fixed customer base
in 2017; 160 thousand were fiber and 103
thousand were ADSL customers. Our fixed
customers exceeded 2.1 million, while our fiber
customers reached 1.2 million. IPTV customers
reached 506 thousand on 146 thousand annual
net additions.
34
TURKCELL ANNUAL REPORT 2017
TURKCELL ANNUAL REPORT 2017
35
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Our Digital Business
Model: We are by
our customers’ side
at every moment of
their lives.
INTERNET TO YOUR HEART’S CONTENT WITH LIFECELL
p. 36
As the leading digital operator, we marked another first in Turkey: we started to offer
all communication services, including talking and messaging for our customers as they
wanted, exclusively via mobile internet and digital platforms.
YOUR DIGITAL COMPANION THROUGHOUT THE DAY
p. 38
1440 is the number of minutes in a day. We want to serve our customers in a substantial
portion of those 1440 minutes. Our aim is to facilitate our subscribers’ access to
information and their lives by extending this duration as much as possible.
SHARE, READ, LISTEN, WATCH, STORE, AND SEARCH WITH TURKCELL...
p. 40
We provide all of these digital services on our superior 4.5G network. Monthly data
usage of 4.5G users reached 6.0 GB in December; data traffic carried through the 4.5G
network reached 49% of total traffic.
EXPANDING DIGITAL VALUE PROPOSITIONS IN E-COMMERCE
p. 42
As Turkcell, we have established an e-commerce model both in order to meet
the expectations on our own digital services, and to provide solutions for our
corporate partners in Turkey’s rapidly growing electronic commerce market.
36
TURKCELL ANNUAL REPORT 2017
Internet to Your Heart’s Content
with Lifecell
We launched our Lifecell brand and offers in Turkey
in September.
TARGETING
DIGITAL
CUSTOMERS
AND ARPU
UPLIFT
CALLS VIA BiP,
GENEROUS
SERVICE AND
DATA OFFERS
GM6:
SMARTPHONE
DESIGNED
FOR LIFECELL
TARIFFS
242 THOUSAND
LIFECELL
SUBSCRIBERS
AS OF FEBRUARY
2018
Following TRNC, we also launched our Lifecell
brand and offers in Turkey in September. As the
leading operator in digital, we marked another first
in Turkey: we started to offer all communication
services, including talking and messaging for our
customers as they wanted, exclusively via mobile
internet and digital platforms. Within the packages
of new tariffs that we offered with the Lifecell
brand, our customers can meet their voice and video
calls and instant messaging needs via BiP; listen to
music on fizy, and watch movies on TV+; store all
their memories in the lifebox application, and can
also get 24/7 customer services support, again via
BiP.
TURKCELL ANNUAL REPORT 2017
TURKCELL ANNUAL REPORT 2017
37
37
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50GB + 7GB
LISTEN
LISTEN
15GB
SOCIALIZE
STORE
10GB
2GB
SHARE
Unlimited data
1,000 minutes
WATCH
WATCH
15GB
READ
8GB
SEARCH
Unlimited data
for search
38
TURKCELL ANNUAL REPORT 2017
Your Digital Companion
throughout the Day
We aim to increase customer engagement from basic
communications to potentially all digital activities.
1440 is the total number of minutes in a day. We want to serve
our customers in a substantial portion of those 1440 minutes. Our
customers talk on the phone for 31 minutes a day. They listen to music
for 24 minutes, watch TV for 63 minutes, spend 27 minutes reading
magazines online and further 13 minutes interacting over BiP. Our aim
is to facilitate our subscribers’ access to information and their lives by
extending this duration as much as possible. We focus on developing
our digital services to increase our engagement with customers.
TURKCELL ANNUAL REPORT 2017
39
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60
55
5
60
55
5
45
50
40
10
50
15
45
20
40
10
20
15
35
25
30
31 minutes calling
35
25
30
24 minutes listening
60
55
5
60
55
5
45
50
40
10
20
15
We are increasing
the duration within
1440 minutes when
we add value to our
subscribers’ lives
45
50
40
10
20
15
35
25
30
13 minutes interaction
33 minutes is the
duration of VOIP users
35
25
30
27 minutes reading
60
55
5
45
50
40
10
20
15
35
25
30
Mobile 63 minutes
40
TURKCELL ANNUAL REPORT 2017
Share, Read, Listen, Watch, Store,
and Search with Turkcell...
Our digital services are at the service of our
customers with new features.
Turkcell’s digital services continue to enrich the
lives of all of our customers, including non-
subscribers, as well as Lifecell users. Thanks to
the new feature we’ve added to BiP, Turkey’s
innovative instant messaging, voice and video
call application, reaching 4.3 million active
users, up to six people are now able to make
instant video calls simultaneously. We also
started to offer paid services such as unknown
number inquiry following the launch of the
payment infrastructure system on BiP. We
intend to increase such value-added services
over the coming quarters.
We enriched the content of fizy, Turkey’s most
widely known and used local digital music
platform, by adding various concert streams
this year. While the number of application
downloads came in at 14.2 million, the number
of songs listened to per day reached 9 million
on average.
Dergilik, which is the most popular platform for
digital publishing, reach a larger audience each
day with its increasing number of publications.
Dergilik features 413 magazines and 75
newspapers.
We provide all of these digital services on our
superior 4.5G network. Monthly data usage of
4.5G users reached 6.0 GB as of December 2017;
4.5G subscriber penetration rose to 87%.
App Store
Google Play
App Store
Google Play
Turkcell TV+
BiP
fizy
Yaani
Dergilik
My Account
lifebox
UpCall
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TURKCELL ANNUAL REPORT 2017
41
DOWNLOADS*
MONTHLY ACTIVE USERS
SERVICE KPIs
Instant
Messaging
17.6M
4.3M
Call Management
(UpCall )
2.0M
837K
Dergilik
4.2M
7.0M**
Music
TV+
14.2M
2.0M
6.3M
1.5M
Personal Cloud
(lifebox)
6.3M
1.4M
My Account
25.4M
17.3M
Yaani
3.5M***
1.2M
71M
Messages per day
737K
Calls per day
157K
Copies read per day
9M
Songs streamed
per day
2.3M
TV sessions per day
39
Number of documents
uploaded per person
per day
40%
More ARPU,
less Churn
1.0M
Search per day
The download figures are as of December 2017.
Includes users who utilised the zero rating benefit of Dergilik magazines and newspapers via browser.
*
**
*** Yaani download figures are as of February 2018.
42
TURKCELL ANNUAL REPORT 2017
Expanding the Digital Value
Proposition in E-commerce
Our goal is the digital transformation of the economy:
We are initiating our new e-commerce platform.
SERVICES
E-COMMERCE
PLATFORM
SECURE LOGIN
Mobile Connect (Fast Entry)
Digital authentication
Credentials management
SECURE PAYMENT
Secure digital payments
All access
Yaani
A search engine that knows and understands Turkish
Entry to the digital advertising market
CUSTOMER SERVICES
TURKCELL ANNUAL REPORT 2017
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We observe the rise of a new necessity as the use of digital services in our daily
lives grows. Our customers need secure authentication and payment systems for
the products and services they access online. As Turkcell, we have established
an e-commerce model both in order to meet the expectations on our own digital
services, and to provide solutions for our corporate partners in Turkey’s rapidly
growing electronic commerce market. Internet users will now be able to securely
login to digital services with GSMA-enabled Mobile Connect technology, which is a
GSM-based and easy-to-use authentication process. They will be able to complete
their shopping in the electronic medium through easy and safe payment methods by
using the possibilities of Paycell and Financell.
We extended this model, initially launched on the Piri travel application and
Turkcell Academy mobile application, so as to include the travel site Fulltrip, and
the digital TV platform BluTV. We aim to contribute to the expansion of Turkey’s
e-commerce market by spreading this model to our future corporate partners in the
periods to come.
44
TURKCELL ANNUAL REPORT 2017
THE PIONEERING DIGITAL OPERATOR
OF THE WORLD: TURKCELL
Being an operator that uses digital transformation and technology most
effectively for groups with special needs, Turkcell continued to be center
of attention for the international public. With the awards we have received
and with the visibility we’ve had in international media channels, we have
perfected our increasing active role in GSMA, World Economic Forum (WEF)
and the United Nations platforms.
We announced our record
2017 second quarter
results, ringing the closing
bell in the New York Stock
Exchange where we have
been proudly representing
Turkey for 17 years.
Richard Quest, the famous
Anchorman of CNN told
the whole world about our
story of transforming into
a digital operator on live
broadcast.
Our efforts and vision
about using technology
focusing on people,
brought Turkcell the most
prestigious award of GSMA;
“Important Contribution To
The Mobile Communication
Industry”. Our CEO Kaan
(cid:20)(cid:59)(cid:72)(cid:80)(cid:63)(cid:69)(cid:216)(cid:66)(cid:75)(cid:222)(cid:72)(cid:59)(cid:57)(cid:59)(cid:63)(cid:76)(cid:59)(cid:58)(cid:222)(cid:74)(cid:62)(cid:59)(cid:222)
award at the ceremony held
in Barcelona, where Felipe
the King of Spain was also
present.
Turkcell has become one of the companies leading
the telecom and technology industry in international
platforms. We have added another important medium
to our ongoing GSMA Board membership, and our
active participation in the GSMA working groups, and
we have become one of the founding partners of The
Fourth Industrial Revolution Center established by the
World Economic Forum (WEF) in San Francisco.
(cid:15)(cid:75)(cid:72)(cid:221)(cid:3)(cid:5)(cid:15)(cid:221)(cid:11)(cid:55)(cid:55)(cid:68)(cid:221)(cid:20)(cid:59)(cid:72)(cid:80)(cid:63)(cid:69)(cid:215)(cid:66)(cid:75)(cid:221)(cid:70)(cid:55)(cid:72)(cid:74)(cid:63)(cid:57)(cid:63)(cid:70)(cid:55)(cid:74)(cid:59)(cid:58)(cid:221)(cid:55)(cid:73)(cid:221)(cid:55)(cid:221)
spokesperson in GSMA Mobil World Congress, WEF
Sustainable Development Summit, and the meetings
(cid:69)(cid:72)(cid:61)(cid:55)(cid:68)(cid:63)(cid:80)(cid:59)(cid:58)(cid:221)(cid:58)(cid:75)(cid:72)(cid:63)(cid:68)(cid:61)(cid:221)(cid:74)(cid:62)(cid:59)(cid:221)(cid:21)(cid:68)(cid:63)(cid:74)(cid:59)(cid:58)(cid:221)(cid:14)(cid:55)(cid:74)(cid:63)(cid:69)(cid:68)(cid:73)(cid:221)(cid:77)(cid:59)(cid:59)(cid:65)(cid:128)(cid:221)(cid:20)(cid:59)(cid:72)(cid:80)(cid:63)(cid:69)(cid:215)(cid:66)(cid:75)(cid:221)
underlined the pioneering role of Turkcell both in
innovation and in using technology responsibly.
Innovations we have launched within the scope of the
activities we have been carrying out in new generation
communication technologies and 5G, were also
covered in the global media. News about Turkcell as
being one of the few operators in the world supporting
new generation Narrow Band Internet of Things
technology (NB-IoT) appeared in the international
publications about the industry.
Our latest digital brand “Lifecell”, which is one of
the greatest steps we have taken to become a digital
operator, was publicized in Financial Times as an
innovation that will make SMS and minutes past
history. Moreover, our local search engine “Yaani” was
also covered in numerous international publications,
especially in New York Times.
Our empathy towards the groups with special needs,
brought Turkcell awards from the UN institutions.
While the UN Global Compact listed our CEO Kaan
(cid:20)(cid:59)(cid:72)(cid:80)(cid:63)(cid:69)(cid:215)(cid:66)(cid:75)(cid:221)(cid:55)(cid:67)(cid:69)(cid:68)(cid:61)(cid:221)(cid:74)(cid:62)(cid:59)(cid:221)(cid:136)(cid:176)(cid:175)(cid:221)(cid:16)(cid:63)(cid:69)(cid:68)(cid:59)(cid:59)(cid:72)(cid:73)(cid:221)(cid:69)(cid:60)(cid:221)(cid:19)(cid:75)(cid:73)(cid:74)(cid:55)(cid:63)(cid:68)(cid:55)(cid:56)(cid:66)(cid:59)(cid:221)
Development” in the private sector, the UNESCO-
Pearson Initiative for Literacy chose our “Hello Hope”
application as one of the 14 projects which were
global examples in the field of technology’s support to
education.
In addition to the grand prize given by GSMA, “Hello
Hope” also brought Turkcell “Mobile Communication in
Emergency or Humanitarian Situations” award in the
category of “Social and Economic Development”.
TURKCELL ANNUAL REPORT 2017
45
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TURKCELL ANNUAL REPORT 2017
OUR SUPERIOR TECHNOLOGY
We are the first operator in Turkey to offer Enhanced Voice Service
(“EVS”) technology, which is being used by a very small number of
operators in the world, through our 4.5G network.
WE USE INTELLIGENT NETWORK SOFTWARE
THAT CAN OPTIMIZE AND ORGANIZE ITSELF.
We adopted Self-Organizing Network (“SON”) software,
the development of which we contributed to in line with
Turkcell’s need to automatically manage such activities
as optimization and configuration on our network,
structurally differing from the heterogeneous networks.
Considering the wide range of SON capabilities that we
have acquired with this locally-developed software, we
are among the leading operators in the world. Within this
context, we received the SON Deployment & Technical
Innovation award for the Smart Network Optimization
software that we have brought to the Turkcell network at
the Excellence in Automation at SON World Awards 2017
organized by Informa.
WE OFFER NEW SERVICES TO OUR CUSTOMERS.
1 Gbps
We became able to support
speeds of up to 1 Gbps
(cid:148)(cid:176)(cid:125)(cid:175)(cid:175)(cid:175)(cid:222)(cid:13)(cid:56)(cid:70)(cid:73)(cid:149)(cid:222)(cid:69)(cid:68)(cid:222)(cid:74)(cid:62)(cid:59)(cid:222)(cid:67)(cid:69)(cid:56)(cid:63)(cid:66)(cid:59)(cid:222)
network through 256 QAM
and 4x4 MIMO activations
across the network; by
doing so, we became one
of the few operators in the
world to offer its customers
such high speeds.
WE STARTED OFFERING GIGABIT SPEEDS ON 4.5G.
We became one of the first operators in the world to
test UL 2 CA (two carrier aggregation), 4x4 MIMO
and 256-QAM technologies reaching 800 Mbps speed
during the tests we carried out in January 2017
through the prototype terminal.
Through Turkey’s most advanced 4.5G network, we
introduced a brand-new service called SuperBox for the
first time in Turkey to our customers in order to bring high
speed internet to homes beyond the fiber access zone.
WE ACHIEVED FIRSTS IN THE INTERNET OF THINGS,
DEMONSTRATING SMART CITY APPLICATIONS.
Later, we became able to support speeds of up to
1 Gbps (1,000 Mbps) on the mobile network through
256 QAM and 4x4 MIMO activations across the
network; by doing so, we became one of the few
operators in the world to offer its customers such high
speeds. As the operator with the widest spectrum,
we will continue to use our spectrum advantage by
applying high carrier aggregation technologies.
WE STARTED TO PROVIDE THE MOST ADVANCED
AND HIGHEST QUALITY VOICE SERVICE ON 4.5G.
We are the first operator in Turkey to offer Enhanced
Voice Service (“EVS”) technology, which is being used
by a very small number of operators in the world,
through our 4.5G network. The new technology
offers much better audio quality than the HD Audio
service available on existing 4.5G networks. Thanks
to voice being transmitted on the spectrum closest
to the frequency range heard by the human ear,
Turkcell subscribers experience almost face-to-face
conversation quality.
We have tested NB-IoT (Narrow Band – Internet of
Things) technology, included in IoT technologies described
as the communication of objects with one another over
the internet, on our 4.5G network with the aim of creating
Smart Cities through new technologies and developing
pioneering applications that facilitate life and add value.
During the test, four conditions critical for smart cities,
such as determination of air pollution ratio, as well as
measurement of gas, temperature, and humidity were
transmitted through 4.5G for the first time in Turkey.
We aim to create smarter cities and provide our
customers a variety of services through 4.5G technology.
In this context, we demonstrated examples of applications
such as Smart Park and Smart Meter, which will ease
our customers’ lives, through the 4.5G network. We
also launched examples of infrastructure applications
of technologies and services required for the rapid
intervention and coordination of public institutions and
organizations in the event of major social incidents and
disasters.
TURKCELL ANNUAL REPORT 2017
47
We aim to create smarter
cities and provide our
customers a diversity of
services through 4.5G
technology. In this context,
we demonstrated examples
of applications such as
Smart Park and Smart
Meter, which will ease our
customers’ lives, through
the 4.5G network.
We implemented demos
for the development of 5G
technologies. During the
test conducted using 5G
equipment within the 71.5
- 73.5 GHz frequency band,
we achieved another speed
record in this area, reaching
70 Gbps per second.
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Following the tests we carried out in the beginning of
2017, we made our network ready for the use of NB-IoT
technology that can only be delivered by a few operators
in the world, for the first time in Turkey with Turkcell’s
difference. We became one of the two operators in the
world to simultaneously support NB-IoT and Cat-M
technologies (Source: GSMA IoT Database).
WE OPENED THE DOOR FOR 5G.
We implemented demos for the development of 5G
technologies. During the test conducted using 5G
equipment within the 71.5 - 73.5 GHz frequency band,
we achieved another speed record in this area, reaching
70 Gbps per second. This is the highest data transmission
speed ever achieved within the scope of 5G tests in
Turkey.
We registered significant progress on our 5G studies by
testing Massive MIMO (massive multi-antenna systems)
technique on our 4.5G network. This technique was
developed to enable the high-speed experience in dense
areas following the implementation of 5G. We became
the first operator to test this technique on a live network
in Turkey. In the next step, we became the first operator
in Turkey and the region, to test the FDD Massive MIMO
technique.
In the international arena, Turkcell leads the fieldwork
that will guide the roadmap of 5G technology by
participating in the NGMN and GSMA 5G studies within
the scope of NGMN Test & Trial studies. Thus, Turkcell
will play a role in uniting the academic world and industry
in 5G and in meeting the needs of the vertical sectors
through products developed by the academic world.
Turkcell, signing framework agreements with various
universities to support the 5G-oriented studies of local
academic research, undertakes processes that encourage
the implementation of local 5G products.
WE CONTINUE TO SUPPORT LOCAL PRODUCTS.
We took an active role in the “development of the 4.5G
local base station” under the agreement signed between
Turkcell and the Undersecretariat of Defense Industries
in March 2014. As our priority has always been to
support local production and technology, we continued
to provide our full support to the ULAK Project within
this context. ULAK is a highly important project that can
rank Turkey among technology producing countries in
mobile communications in the medium and long-term. By
transferring our mobile network operation know-how to
the project, we provide a variety of support for the local
base station to become a competitive product on the
market.
On the first anniversary of 4.5G, we performed the
first video call on the network through the Turkcell BiP
application using Turkey’s local base station (ULAK). This
call was realized by connecting two ULAK base stations
(cid:66)(cid:69)(cid:57)(cid:55)(cid:74)(cid:59)(cid:58)(cid:221)(cid:55)(cid:74)(cid:221)(cid:20)(cid:75)(cid:72)(cid:65)(cid:57)(cid:59)(cid:66)(cid:66)(cid:221)(cid:11)(cid:109)(cid:213)(cid:109)(cid:65)(cid:79)(cid:55)(cid:66)(cid:96)(cid:221)(cid:16)(cid:66)(cid:55)(cid:80)(cid:55)(cid:221)(cid:55)(cid:68)(cid:58)(cid:221)(cid:5)(cid:72)(cid:80)(cid:63)(cid:68)(cid:57)(cid:55)(cid:68)(cid:221)(cid:57)(cid:63)(cid:74)(cid:79)(cid:221)
center over the Turkcell network.
We commenced testing the local antenna developed by
ASELSAN on the live network. We were the first mobile
operator to test the local antenna, a project we took part
in the development right from the outset. We continue
to support the localization of the mobile communication
infrastructure by contributing to local antenna studies
together with the local 4.5G Base Station (ULAK) project.
Our studies regarding local products are not only
limited to 4.5G base stations and local antenna, we
also continue our studies into the local radio link and
small cell. In this context, we continue to conduct
studies on local/national product/production matters
with the Communication Technology Cluster (HTK)
formation that comes together with the guidance of
the Information and Communication Technologies
Authority (BTK).
48
TURKCELL ANNUAL REPORT 2017
OUR SUPERIOR TECHNOLOGY
We continue to provide the best quality and most advanced
solutions to our customers on all communication media through
our modernization projects.
WHILE CONTINUING TO INVEST IN 4.5G, WE ARE
ALSO RENEWING THE PRODUCTS WE USE ON 2G
AND 3G NETWORKS.
We continue to provide the best quality and
most advanced solutions to our customers on all
communication media through our modernization
projects. At the same time, we are taking an
environmentally-friendly approach that will contribute
to the national economy in terms of energy saving.
By closely monitoring sectoral developments,
we continue to pursue our aim of pioneering the
introduction of high-end technology to our customers
within the shortest time, and providing a unique
customer experience.
WE’RE BRINGING UNIVERSAL 4.5G COVERAGE TO
RURAL AREAS OF TURKEY.
Within the scope of the “Addition of Mobile Broadband
Internet Services to the Existing GSM Infrastructure
Under the Universal Service Law” Project, of which we
are the prime contractor, carried out by the Ministry
of Transport, Maritime Affairs and Communications,
Directorate General of Communications, we started
to roll out 4.5G coverage across 1,799 villages/1,146
fields where we already provided 2G coverage. In this
Project, to be completed in 2018, we also aim to use
Turkey’s first local base station product, ULAK, on the
network. In this context, we successfully completed
the RAN Sharing tests for ULAK 4.5G in three
(cid:75)(cid:68)(cid:63)(cid:76)(cid:59)(cid:72)(cid:73)(cid:55)(cid:66)(cid:221)(cid:60)(cid:63)(cid:59)(cid:66)(cid:58)(cid:73)(cid:221)(cid:63)(cid:68)(cid:221)(cid:74)(cid:62)(cid:59)(cid:221)(cid:212)(cid:55)(cid:68)(cid:65)(cid:96)(cid:72)(cid:96)(cid:221)(cid:70)(cid:72)(cid:69)(cid:76)(cid:63)(cid:68)(cid:57)(cid:59)(cid:125)(cid:221)(cid:55)(cid:68)(cid:58)(cid:221)(cid:73)(cid:74)(cid:55)(cid:72)(cid:74)(cid:59)(cid:58)(cid:221)(cid:74)(cid:69)(cid:221)
serve our customers on a live network through local
product ULAK.
WE PLAY AN ACTIVE ROLE IN THE DEVELOPMENT
OF NETWORK PRODUCTS.
We continue software development studies with
global telecom suppliers in an attempt to develop new
technologies and become one of the first operators in
the world to use them. By doing so, we are constantly
improving the network architecture that meets our
subscribers’ expectations in the best possible manner.
LEADERSHIP IN VIRTUALIZATION…
Pioneering steps were taken in the transformation
of virtualization, a precondition for cost reduction
by using a single platform in the central network
investments to be made in the telecommunications
sector, dynamic scaling of infrastructure, and the
spread of the central network layout to end points with
5G. Initiatives were identified to virtualize our central
network, which provides our data and voice services,
by 50% within three years. The most important of
these initiatives, the Central Virtualization Cloud
investment, was completed in 2017, providing the
common infrastructure to support all virtualization
studies to be carried out in the coming period. We
virtualized an infrastructure capacity of 200 Gbps on
our data service network and 2 million subscribers
on our voice service network, thereby becoming the
leading operator in Turkey in this respect.
DIGITALIZATION IN TERMS OF DATASCIENCE AND
ANALYTICS: DIGITAL COCKPIT
In the 21st century, across all areas of our lives we have
become individuals producing infinite volumes of data
every day as we examine, analyze, and evaluate this
data and reach conclusions. Today, we come across
digitalization in every moment and in every area of
our lives. Digitalization with respect to Data Science
and Analytics may be considered as an ability to fully
access all useful data in most up-to-date, healthy, fast,
meaningful and visualized way to guide and support
decision making whenever and wherever required.
Particularly, for executives at firms leading technology,
accessing all information resources through digital
media is of vital importance to take rapid actions.
At Turkcell, one of the largest steps in this area was
taken in November 2015 with the Digital Cockpit.
Digital Cockpit is an application where our executives
can keep track of all data, analysis and calculated
performance metrics 24/7, wherever they want on
their mobile devices, as they manage and lead a
technology company. It’s one of the most effective
applications our board members, CEO and other
senior executives use at managerial level as a decision
support tool. According to our sectoral experience, and
based on the needs of our executives;
Within the scope of
the “Addition of Mobile
Broadband Internet
Services to the Existing
GSM Infrastructure Under
the Universal Service Law”
Project, we started to roll
out 4.5G coverage across
1,799 villages/1,146 fields
where we already provided
2G coverage.
The Central Virtualization
Cloud investment, was
completed in 2017,
providing the common
infrastructure to support
all virtualization studies to
be carried out in the coming
period.
TURKCELL ANNUAL REPORT 2017
49
2
0
1
7
O
P
E
R
A
T
I
O
N
S
•
It is an application where approximately 2,000-2,500
KPIs can be tracked under 10 main topics in total, and
where new KPIs are added daily.
• Since its launch, approximately 250 screens have been
added with around 1,000 revisions made on existing
screens.
All KPIs in the Cockpit are developed entirely for
the needs of executives. Since November 2015, new
screens and details have been developed for each senior
executive level in order to track the main KPIs and
related analysis in the application in real-time, and in
greater detail.
We have detailed cockpits developed for the executives
of our Marketing, Network, Sales, DSS and Customer
Experience Management (CEM) teams, and have screens
where operational and real time monitoring (RTM) is
available for all analytical information and KPIs.
Our next target is to further develop and enrich our
application, and plot a route for the future of technology
through a more interactive structure.
(cid:74)(cid:69)(cid:221)(cid:72)(cid:59)(cid:57)(cid:59)(cid:63)(cid:76)(cid:59)(cid:221)(cid:74)(cid:62)(cid:59)(cid:221)(cid:9)(cid:19)(cid:15)(cid:221)(cid:176)(cid:179)(cid:175)(cid:181)(cid:179)(cid:221)(cid:130)(cid:221)(cid:1)(cid:57)(cid:57)(cid:69)(cid:75)(cid:68)(cid:74)(cid:63)(cid:68)(cid:61)(cid:221)(cid:55)(cid:68)(cid:58)(cid:221)(cid:22)(cid:59)(cid:72)(cid:63)(cid:206)(cid:57)(cid:55)(cid:74)(cid:63)(cid:69)(cid:68)(cid:221)
of Corporate Greenhouse Gas Emissions. Also in 2017,
(cid:77)(cid:59)(cid:221)(cid:56)(cid:59)(cid:57)(cid:55)(cid:67)(cid:59)(cid:221)(cid:59)(cid:68)(cid:74)(cid:63)(cid:74)(cid:66)(cid:59)(cid:58)(cid:221)(cid:74)(cid:69)(cid:221)(cid:72)(cid:59)(cid:57)(cid:59)(cid:63)(cid:76)(cid:59)(cid:221)(cid:9)(cid:19)(cid:15)(cid:221)(cid:176)(cid:179)(cid:175)(cid:181)(cid:179)(cid:221)(cid:3)(cid:59)(cid:72)(cid:74)(cid:63)(cid:206)(cid:57)(cid:55)(cid:74)(cid:63)(cid:69)(cid:68)(cid:221)
(cid:55)(cid:73)(cid:221)(cid:77)(cid:59)(cid:221)(cid:58)(cid:63)(cid:58)(cid:221)(cid:66)(cid:55)(cid:73)(cid:74)(cid:221)(cid:74)(cid:77)(cid:69)(cid:221)(cid:79)(cid:59)(cid:55)(cid:72)(cid:73)(cid:128)(cid:221)(cid:23)(cid:59)(cid:221)(cid:57)(cid:69)(cid:68)(cid:74)(cid:63)(cid:68)(cid:75)(cid:59)(cid:221)(cid:74)(cid:69)(cid:221)(cid:60)(cid:75)(cid:66)(cid:206)(cid:66)(cid:66)(cid:221)(cid:55)(cid:66)(cid:66)(cid:221)
responsibilities related to greenhouse gas standards. As
Turkcell, we work on the risks and opportunities that
climate change poses, and make these efforts a part of
our strategic plans.
We concentrate on energy efficiency studies to reduce
our carbon footprint.
(cid:23)(cid:63)(cid:74)(cid:62)(cid:221)(cid:74)(cid:62)(cid:59)(cid:221)(cid:68)(cid:59)(cid:77)(cid:221)(cid:61)(cid:59)(cid:68)(cid:59)(cid:72)(cid:55)(cid:74)(cid:63)(cid:69)(cid:68)(cid:221)(cid:59)(cid:68)(cid:59)(cid:72)(cid:61)(cid:79)(cid:221)(cid:59)(cid:60)(cid:206)(cid:57)(cid:63)(cid:59)(cid:68)(cid:74)(cid:221)(cid:59)(cid:71)(cid:75)(cid:63)(cid:70)(cid:67)(cid:59)(cid:68)(cid:74)(cid:73)(cid:221)
and energy saving implementation in our network, we are
continuing to invest in reducing our carbon footprint.
Key actions taken in this regard were as follows:
› 43.8 million kilowatt-hours saving per year from
inverter-type air conditioners at 18,270 sites with high
(cid:59)(cid:68)(cid:59)(cid:72)(cid:61)(cid:79)(cid:221)(cid:59)(cid:60)(cid:206)(cid:57)(cid:63)(cid:59)(cid:68)(cid:57)(cid:79)(cid:221)(cid:70)(cid:72)(cid:59)(cid:60)(cid:59)(cid:72)(cid:59)(cid:68)(cid:57)(cid:59)(cid:73)(cid:221)(cid:63)(cid:68)(cid:221)(cid:70)(cid:72)(cid:69)(cid:58)(cid:75)(cid:57)(cid:74)(cid:221)(cid:73)(cid:59)(cid:66)(cid:59)(cid:57)(cid:74)(cid:63)(cid:69)(cid:68)(cid:125)
› (cid:176)(cid:183)(cid:128)(cid:176)(cid:221)(cid:67)(cid:63)(cid:66)(cid:66)(cid:63)(cid:69)(cid:68)(cid:221)(cid:65)(cid:63)(cid:66)(cid:69)(cid:77)(cid:55)(cid:74)(cid:74)(cid:130)(cid:62)(cid:69)(cid:75)(cid:72)(cid:73)(cid:221)(cid:73)(cid:55)(cid:76)(cid:63)(cid:68)(cid:61)(cid:221)(cid:60)(cid:72)(cid:69)(cid:67)(cid:221)(cid:62)(cid:63)(cid:61)(cid:62)(cid:221)(cid:59)(cid:60)(cid:206)(cid:57)(cid:63)(cid:59)(cid:68)(cid:57)(cid:79)(cid:221)
power supplies at 14,200 sites,
› 8.31 million kilowatt-hours saving per year from
OUR ENVIRONMENTALLY CONSCIOUS APPROACH
passive cooling systems at 12,904 sites,
› 1.11 million kilowatt-hours saving per year from locally
(cid:1)(cid:73)(cid:221)(cid:20)(cid:75)(cid:72)(cid:65)(cid:57)(cid:59)(cid:66)(cid:66)(cid:125)(cid:221)(cid:77)(cid:59)(cid:221)(cid:56)(cid:59)(cid:57)(cid:55)(cid:67)(cid:59)(cid:221)(cid:74)(cid:62)(cid:59)(cid:221)(cid:206)(cid:72)(cid:73)(cid:74)(cid:221)(cid:74)(cid:59)(cid:66)(cid:59)(cid:57)(cid:69)(cid:67)(cid:67)(cid:75)(cid:68)(cid:63)(cid:57)(cid:55)(cid:74)(cid:63)(cid:69)(cid:68)(cid:73)(cid:221)
operator in Turkey to receive ISO 14064 - Accounting
(cid:55)(cid:68)(cid:58)(cid:221)(cid:22)(cid:59)(cid:72)(cid:63)(cid:206)(cid:57)(cid:55)(cid:74)(cid:63)(cid:69)(cid:68)(cid:221)(cid:69)(cid:60)(cid:221)(cid:3)(cid:69)(cid:72)(cid:70)(cid:69)(cid:72)(cid:55)(cid:74)(cid:59)(cid:221)(cid:7)(cid:72)(cid:59)(cid:59)(cid:68)(cid:62)(cid:69)(cid:75)(cid:73)(cid:59)(cid:221)(cid:7)(cid:55)(cid:73)(cid:221)(cid:5)(cid:67)(cid:63)(cid:73)(cid:73)(cid:63)(cid:69)(cid:68)(cid:73)(cid:221)
(cid:3)(cid:59)(cid:72)(cid:74)(cid:63)(cid:206)(cid:57)(cid:55)(cid:74)(cid:63)(cid:69)(cid:68)(cid:128)
manufactured outdoor cabinets at 1,912 sites,
› 25.2 million kilowatt-hours saving per year from
equipment modernizations at 4,066 sites in 2017
alone,
(cid:9)(cid:68)(cid:221)(cid:177)(cid:175)(cid:176)(cid:180)(cid:125)(cid:221)(cid:77)(cid:59)(cid:221)(cid:77)(cid:59)(cid:72)(cid:59)(cid:221)(cid:55)(cid:77)(cid:55)(cid:72)(cid:58)(cid:59)(cid:58)(cid:221)(cid:9)(cid:19)(cid:15)(cid:221)(cid:176)(cid:179)(cid:175)(cid:181)(cid:179)(cid:221)(cid:3)(cid:59)(cid:72)(cid:74)(cid:63)(cid:206)(cid:57)(cid:55)(cid:74)(cid:63)(cid:69)(cid:68)(cid:125)(cid:221)
which is the management standard of voluntary and
independent greenhouse gas emissions projects. As
(cid:20)(cid:75)(cid:72)(cid:65)(cid:57)(cid:59)(cid:66)(cid:66)(cid:125)(cid:221)(cid:77)(cid:59)(cid:221)(cid:62)(cid:55)(cid:76)(cid:59)(cid:221)(cid:60)(cid:75)(cid:66)(cid:206)(cid:66)(cid:66)(cid:59)(cid:58)(cid:221)(cid:55)(cid:66)(cid:66)(cid:221)(cid:69)(cid:75)(cid:72)(cid:221)(cid:72)(cid:59)(cid:73)(cid:70)(cid:69)(cid:68)(cid:73)(cid:63)(cid:56)(cid:63)(cid:66)(cid:63)(cid:74)(cid:63)(cid:59)(cid:73)(cid:221)
regarding greenhouse gas emissions standards, and we
(cid:56)(cid:59)(cid:57)(cid:55)(cid:67)(cid:59)(cid:221)(cid:74)(cid:62)(cid:59)(cid:221)(cid:206)(cid:72)(cid:73)(cid:74)(cid:221)(cid:74)(cid:59)(cid:66)(cid:59)(cid:57)(cid:69)(cid:67)(cid:67)(cid:75)(cid:68)(cid:63)(cid:57)(cid:55)(cid:74)(cid:63)(cid:69)(cid:68)(cid:73)(cid:221)(cid:69)(cid:70)(cid:59)(cid:72)(cid:55)(cid:74)(cid:69)(cid:72)(cid:221)(cid:63)(cid:68)(cid:221)(cid:20)(cid:75)(cid:72)(cid:65)(cid:59)(cid:79)(cid:221)
› 375 thousand kilowatt-hours saving per year through
the use of renewable energy systems,
› 170 thousand kilowatt-hours saving per year with
improvement works made in the climatization
infrastructures of buildings. Thus, we have saved as
much energy as the annual energy consumption of
35,950 households, by consuming 97 million kilowatt-
hours less energy annually.
Digital Cockpit is an
application where our
executives can keep track
of all data, analysis and
calculated performance
metrics 24/7, wherever
they want on their mobile
devices, as they manage and
lead a technology company.
50
TURKCELL ANNUAL REPORT 2017
OUR CONSUMER BUSINESS
As the world’s first digital operator, we launched many of our mass
retention campaigns in 2017 over our digital services.
In the last quarter, we enhanced our campaign in order for our
customers to experience the technology of initiating calls over
the internet in addition to messaging. With the Bi Ara (Just Call)
campaign, we highlighted BiP, with its innovative call features.
While telling our customers they could initiate voice or video
calls to any number and talk as they wished by allowing them
to experience calls over BiP, we also enabled them to earn
gifts, which rise up to 10GB as they initiate calls. Thanks to
the campaign, the number of daily BiP downloads increased by
(cid:180)(cid:175)(cid:186)(cid:125)(cid:221)(cid:74)(cid:62)(cid:59)(cid:221)(cid:68)(cid:75)(cid:67)(cid:56)(cid:59)(cid:72)(cid:221)(cid:69)(cid:60)(cid:221)(cid:76)(cid:63)(cid:58)(cid:59)(cid:69)(cid:221)(cid:57)(cid:55)(cid:66)(cid:66)(cid:73)(cid:221)(cid:72)(cid:69)(cid:73)(cid:59)(cid:221)(cid:206)(cid:76)(cid:59)(cid:130)(cid:60)(cid:69)(cid:66)(cid:58)(cid:125)(cid:221)(cid:55)(cid:68)(cid:58)(cid:221)(cid:74)(cid:62)(cid:59)(cid:221)(cid:68)(cid:75)(cid:67)(cid:56)(cid:59)(cid:72)(cid:221)
of voice calls increased by seven times.
BiP, Turkey’s most innovative communications and
entertainment platform, increased it popularity thanks to the
successful campaigns initiated with Turkcell. The total number
of downloads reached 18 million, ranking it among the most
popular applications both on Google Play and App Store in 2017.
With the 2017 Shake and Win Campaign, we started to offer
our customers packages, including internet, minutes, and
(cid:20)(cid:75)(cid:72)(cid:65)(cid:57)(cid:59)(cid:66)(cid:66)(cid:221)(cid:73)(cid:59)(cid:72)(cid:76)(cid:63)(cid:57)(cid:59)(cid:73)(cid:221)(cid:73)(cid:70)(cid:59)(cid:57)(cid:63)(cid:206)(cid:57)(cid:221)(cid:61)(cid:63)(cid:60)(cid:74)(cid:73)(cid:125)(cid:221)(cid:59)(cid:68)(cid:55)(cid:56)(cid:66)(cid:63)(cid:68)(cid:61)(cid:221)(cid:74)(cid:62)(cid:59)(cid:63)(cid:72)(cid:221)(cid:60)(cid:63)(cid:80)(cid:79)(cid:125)(cid:221)(cid:2)(cid:63)(cid:16)(cid:125)(cid:221)(cid:4)(cid:59)(cid:72)(cid:61)(cid:63)(cid:66)(cid:63)(cid:65)(cid:221)
(digital publishing), lifebox and TV+ usage. Thus, we increased
the use of our services by offering gifts.
TURKEY’S MUSIC PLATFORM: fizy
Turkey’s most widely known and used local digital music
platform fizy, marked firsts in 2017 through its cooperation
with Megastar Tarkan. Having brought Tarkan’s latest album
“10” to his fans, fizy announced its newest features that
will change the definition of digital music with Tarkan’s
album and concerts. Through fizy, which has so far been
downloaded 14.2 million times, users enjoyed every bit of
music while having the privilege of watching the Megastar’s
new clip for the first time with the video option. The number
of songs listened to on fizy increased three-fold compared
to last year.
Thanks to fizy’s live concert broadcasts that revolutionize
digital music, Tarkan’s concerts in Harbiye reached out live
to an audience all across Turkey.
TV+
TV+ meets customers with its rich content, much easier-to-use
renewed interface, and channel number in excess of 150. The
free TV+ mobile application is changing the habit of watching
TV by turning each tablet and smartphone into a television.
BiP, Turkey’s most
innovative communications
and entertainment
platform, increased its
popularity thanks to the
successful campaigns
initiated with Turkcell. The
total number of downloads
reached 18 million, ranking
it among the most popular
applications both on Google
Play and App Store in 2017.
Thanks to fizy’s live
concert broadcasts that
revolutionize digital
music, Tarkan’s concerts in
Harbiye reached out live
to an audience all across
Turkey.
WE ENRICH 1440 MINUTES THROUGH DIGITAL SERVICES.
As a digital operator, we enrich the offers extended to our
customers with traditional telecommunication services through
our popular digital services such as fizy, TV+, BiP, lifebox,
UpCall and Dergilik, and increase the value we add to the lives
of our users in 1440 minutes of a day. Thus, on a 1440-minute
day, our customers spend 63 minutes on the TV+ application, 27
minutes on Dergilik, 24 minutes listening to music on fizy, and
13 minutes interacting through BiP.
(cid:1)(cid:73)(cid:221)(cid:74)(cid:62)(cid:59)(cid:221)(cid:77)(cid:69)(cid:72)(cid:66)(cid:58)(cid:135)(cid:73)(cid:221)(cid:206)(cid:72)(cid:73)(cid:74)(cid:221)(cid:58)(cid:63)(cid:61)(cid:63)(cid:74)(cid:55)(cid:66)(cid:221)(cid:69)(cid:70)(cid:59)(cid:72)(cid:55)(cid:74)(cid:69)(cid:72)(cid:125)(cid:221)(cid:77)(cid:59)(cid:221)(cid:66)(cid:55)(cid:75)(cid:68)(cid:57)(cid:62)(cid:59)(cid:58)(cid:221)(cid:67)(cid:55)(cid:68)(cid:79)(cid:221)(cid:69)(cid:60)(cid:221)(cid:69)(cid:75)(cid:72)(cid:221)
mass retention campaigns in 2017 over our digital services.
To render communications more fruitful this year, we conducted
three brand new campaigns with the partnership of Turkcell BiP
(cid:63)(cid:68)(cid:221)(cid:74)(cid:62)(cid:59)(cid:221)(cid:67)(cid:69)(cid:68)(cid:74)(cid:62)(cid:221)(cid:69)(cid:60)(cid:221)(cid:18)(cid:55)(cid:67)(cid:55)(cid:58)(cid:55)(cid:68)(cid:125)(cid:221)(cid:58)(cid:75)(cid:72)(cid:63)(cid:68)(cid:61)(cid:221)(cid:74)(cid:62)(cid:59)(cid:221)(cid:6)(cid:59)(cid:55)(cid:73)(cid:74)(cid:221)(cid:69)(cid:60)(cid:221)(cid:19)(cid:55)(cid:57)(cid:72)(cid:63)(cid:206)(cid:57)(cid:59)(cid:221)(cid:55)(cid:68)(cid:58)(cid:221)(cid:63)(cid:68)(cid:221)
the last quarter.
We launched our traditional Ramadan campaign with BiP, which
stands out for its innovative features. During the month of
Ramadan, for all Turkcell users who used BiP, we gave out gifts,
reaching 10GB with increased volume of messaging. We gave
internet packages that increased in volume as users messaged
different people via BiP. With our campaign, the number of daily
(cid:2)(cid:63)(cid:16)(cid:221)(cid:58)(cid:69)(cid:77)(cid:68)(cid:66)(cid:69)(cid:55)(cid:58)(cid:73)(cid:221)(cid:55)(cid:68)(cid:58)(cid:221)(cid:74)(cid:72)(cid:55)(cid:60)(cid:206)(cid:57)(cid:221)(cid:72)(cid:69)(cid:73)(cid:59)(cid:221)(cid:56)(cid:79)(cid:221)(cid:177)(cid:128)(cid:180)(cid:221)(cid:74)(cid:63)(cid:67)(cid:59)(cid:73)(cid:125)(cid:221)(cid:77)(cid:62)(cid:63)(cid:66)(cid:59)(cid:221)(cid:74)(cid:62)(cid:59)(cid:221)(cid:68)(cid:75)(cid:67)(cid:56)(cid:59)(cid:72)(cid:221)
of active subscribers doubled.
(cid:1)(cid:66)(cid:73)(cid:69)(cid:221)(cid:58)(cid:75)(cid:72)(cid:63)(cid:68)(cid:61)(cid:221)(cid:74)(cid:62)(cid:59)(cid:221)(cid:6)(cid:59)(cid:55)(cid:73)(cid:74)(cid:221)(cid:69)(cid:60)(cid:221)(cid:19)(cid:55)(cid:57)(cid:72)(cid:63)(cid:206)(cid:57)(cid:59)(cid:125)(cid:221)(cid:77)(cid:59)(cid:221)(cid:69)(cid:60)(cid:60)(cid:59)(cid:72)(cid:59)(cid:58)(cid:221)(cid:69)(cid:75)(cid:72)(cid:221)(cid:57)(cid:75)(cid:73)(cid:74)(cid:69)(cid:67)(cid:59)(cid:72)(cid:73)(cid:221)(cid:74)(cid:62)(cid:63)(cid:73)(cid:221)
popular campaign, through which we have registered successful
results during the month of Ramadan. We doubled the daily
download and active user numbers of BiP, while connecting
millions to each other with our campaign.
TURKCELL ANNUAL REPORT 2017
51
In 2017 with its renewed visual world and rejuvenated
communication language, TV+ serves users of all operators
with its mobile application. With the “World’s Most Beautiful
Television TV+” communication campaign, customers were
introduced the rich content of TV+, its differentiation from the
competition through its superior technology, and its internet
offering, which is not deducted from their quotas.
With its user-friendly interface, it was granted the Best Digital
Television award at the “International Broadband World Forum”
awards.
We increased the ratio of our multiplay customers both on
(cid:67)(cid:69)(cid:56)(cid:63)(cid:66)(cid:59)(cid:221)(cid:55)(cid:68)(cid:58)(cid:221)(cid:206)(cid:78)(cid:59)(cid:58)(cid:221)(cid:73)(cid:59)(cid:61)(cid:67)(cid:59)(cid:68)(cid:74)(cid:73)(cid:128)
WE CONNECT OUR CUSTOMERS TO LIFE BOTH AT HOME
AND ON MOBILE.
We responded our customers’ rapidly increasing internet needs
(cid:77)(cid:63)(cid:74)(cid:62)(cid:221)(cid:69)(cid:75)(cid:72)(cid:221)(cid:206)(cid:78)(cid:59)(cid:58)(cid:221)(cid:56)(cid:72)(cid:69)(cid:55)(cid:58)(cid:56)(cid:55)(cid:68)(cid:58)(cid:221)(cid:70)(cid:72)(cid:69)(cid:58)(cid:75)(cid:57)(cid:74)(cid:73)(cid:221)(cid:74)(cid:62)(cid:55)(cid:68)(cid:65)(cid:73)(cid:221)(cid:74)(cid:69)(cid:221)(cid:69)(cid:75)(cid:72)(cid:221)(cid:63)(cid:68)(cid:74)(cid:59)(cid:61)(cid:72)(cid:55)(cid:74)(cid:59)(cid:58)(cid:221)
communication infrastructure. We provide them with an
(cid:59)(cid:78)(cid:70)(cid:59)(cid:72)(cid:63)(cid:59)(cid:68)(cid:57)(cid:59)(cid:221)(cid:69)(cid:60)(cid:221)(cid:20)(cid:75)(cid:72)(cid:65)(cid:57)(cid:59)(cid:66)(cid:66)(cid:221)(cid:71)(cid:75)(cid:55)(cid:66)(cid:63)(cid:74)(cid:79)(cid:221)(cid:74)(cid:62)(cid:72)(cid:69)(cid:75)(cid:61)(cid:62)(cid:221)(cid:69)(cid:75)(cid:72)(cid:221)(cid:206)(cid:56)(cid:59)(cid:72)(cid:125)(cid:221)(cid:1)(cid:4)(cid:19)(cid:12)(cid:221)(cid:55)(cid:68)(cid:58)(cid:221)(cid:22)(cid:4)(cid:19)(cid:12)(cid:221)
campaigns. We have the technology and infrastructure to serve
our customers with up to 10 Gbps particularly on the back of
(cid:69)(cid:75)(cid:72)(cid:221)(cid:206)(cid:56)(cid:59)(cid:72)(cid:221)(cid:63)(cid:68)(cid:60)(cid:72)(cid:55)(cid:73)(cid:74)(cid:72)(cid:75)(cid:57)(cid:74)(cid:75)(cid:72)(cid:59)(cid:125)(cid:221)(cid:70)(cid:59)(cid:72)(cid:60)(cid:69)(cid:72)(cid:67)(cid:63)(cid:68)(cid:61)(cid:221)(cid:55)(cid:74)(cid:221)(cid:74)(cid:62)(cid:59)(cid:221)(cid:73)(cid:70)(cid:59)(cid:59)(cid:58)(cid:221)(cid:69)(cid:60)(cid:221)(cid:66)(cid:63)(cid:61)(cid:62)(cid:74)(cid:128)(cid:221)(cid:23)(cid:59)(cid:221)
reached a total of 1.2 million (residential + SOHO + wholesale)
(cid:57)(cid:75)(cid:73)(cid:74)(cid:69)(cid:67)(cid:59)(cid:72)(cid:73)(cid:221)(cid:63)(cid:68)(cid:221)(cid:177)(cid:175)(cid:176)(cid:182)(cid:221)(cid:63)(cid:68)(cid:221)(cid:206)(cid:56)(cid:59)(cid:72)(cid:128)(cid:221)(cid:9)(cid:68)(cid:221)(cid:177)(cid:175)(cid:176)(cid:182)(cid:125)(cid:221)(cid:77)(cid:59)(cid:221)(cid:57)(cid:69)(cid:68)(cid:74)(cid:63)(cid:68)(cid:75)(cid:59)(cid:58)(cid:221)(cid:74)(cid:69)(cid:221)(cid:60)(cid:69)(cid:57)(cid:75)(cid:73)(cid:221)(cid:69)(cid:68)(cid:221)
our multi-play strategy through our TV+ service, which we offer
(cid:55)(cid:74)(cid:221)(cid:66)(cid:63)(cid:61)(cid:62)(cid:74)(cid:221)(cid:73)(cid:70)(cid:59)(cid:59)(cid:58)(cid:221)(cid:69)(cid:68)(cid:221)(cid:69)(cid:75)(cid:72)(cid:221)(cid:206)(cid:56)(cid:59)(cid:72)(cid:221)(cid:68)(cid:59)(cid:74)(cid:77)(cid:69)(cid:72)(cid:65)(cid:128)(cid:221)(cid:179)(cid:179)(cid:186)(cid:221)(cid:69)(cid:60)(cid:221)(cid:69)(cid:75)(cid:72)(cid:221)(cid:72)(cid:59)(cid:73)(cid:63)(cid:58)(cid:59)(cid:68)(cid:74)(cid:63)(cid:55)(cid:66)(cid:221)(cid:206)(cid:56)(cid:59)(cid:72)(cid:221)
customers also watch TV+ at home.
In 2017, we continued to connect our customers to life, both
at home and on mobile. With our “4x4” and “5 in 1” campaigns,
we continued to offer a single package of solutions for our
customers’ communication needs both mobile and at home.
Currently, we are the only operator in Turkey to offer all
communication needs on a single bill.
As part of the initiative, which started back in 2014 with
(cid:74)(cid:62)(cid:59)(cid:221)(cid:69)(cid:70)(cid:59)(cid:68)(cid:63)(cid:68)(cid:61)(cid:221)(cid:75)(cid:70)(cid:221)(cid:69)(cid:60)(cid:221)(cid:69)(cid:75)(cid:72)(cid:221)(cid:206)(cid:56)(cid:59)(cid:72)(cid:221)(cid:63)(cid:68)(cid:60)(cid:72)(cid:55)(cid:73)(cid:74)(cid:72)(cid:75)(cid:57)(cid:74)(cid:75)(cid:72)(cid:59)(cid:221)(cid:74)(cid:69)(cid:221)(cid:69)(cid:74)(cid:62)(cid:59)(cid:72)(cid:221)(cid:68)(cid:55)(cid:74)(cid:63)(cid:69)(cid:68)(cid:55)(cid:66)(cid:221)
operators, we also continue to create new business areas in
2017 and launch successful and major projects contributing to
the technological transformation of our country.
(cid:25)(cid:1)(cid:1)(cid:14)(cid:217)
(cid:20)(cid:75)(cid:72)(cid:65)(cid:57)(cid:59)(cid:66)(cid:66)(cid:221)(cid:57)(cid:69)(cid:68)(cid:74)(cid:63)(cid:68)(cid:75)(cid:59)(cid:73)(cid:221)(cid:74)(cid:69)(cid:221)(cid:74)(cid:55)(cid:65)(cid:59)(cid:221)(cid:206)(cid:72)(cid:67)(cid:221)(cid:73)(cid:74)(cid:59)(cid:70)(cid:73)(cid:221)(cid:69)(cid:68)(cid:221)(cid:63)(cid:74)(cid:73)(cid:221)(cid:58)(cid:63)(cid:61)(cid:63)(cid:74)(cid:55)(cid:66)(cid:221)(cid:69)(cid:70)(cid:59)(cid:72)(cid:55)(cid:74)(cid:69)(cid:72)(cid:221)
journey with its products and services that were developed
in Turkey and has opened up to the world. Having launched
Turkey’s largest data center last year, and reached millions of
users with its digital services such as BiP, fizy, lifebox, TV+
and Dergilik, Turkcell took major steps to keep Turkey’s data
within Turkey. And today with the Yaani search engine, Turkcell
has moved Turkey among countries having their own search
engines.
Among the features differentiating Yaani, its good
(cid:57)(cid:69)(cid:67)(cid:70)(cid:72)(cid:59)(cid:62)(cid:59)(cid:68)(cid:73)(cid:63)(cid:69)(cid:68)(cid:222)(cid:69)(cid:60)(cid:222)(cid:20)(cid:75)(cid:72)(cid:65)(cid:63)(cid:73)(cid:62)(cid:222)(cid:57)(cid:69)(cid:67)(cid:59)(cid:73)(cid:222)(cid:206)(cid:72)(cid:73)(cid:74)(cid:128)
During searches in Turkish, Yaani will present users with more
accurate results. Having been represented with the traditional
evil eye icon, a symbol synonymous with Turkey, Yaani swiftly
learns the habits of its users and what they really want to
search for, based on their previous searches. While the users
initiate the search, similar searches to those previously made
are already being displayed to them.
Also, a new era begins with Yaani, which displays the closest
(cid:55)(cid:66)(cid:74)(cid:59)(cid:72)(cid:68)(cid:55)(cid:74)(cid:63)(cid:76)(cid:59)(cid:73)(cid:222)(cid:63)(cid:68)(cid:222)(cid:74)(cid:62)(cid:59)(cid:222)(cid:206)(cid:72)(cid:73)(cid:74)(cid:222)(cid:72)(cid:55)(cid:68)(cid:65)(cid:73)(cid:222)(cid:58)(cid:75)(cid:72)(cid:63)(cid:68)(cid:61)(cid:222)(cid:66)(cid:69)(cid:57)(cid:55)(cid:74)(cid:63)(cid:69)(cid:68)(cid:130)(cid:56)(cid:55)(cid:73)(cid:59)(cid:58)(cid:222)(cid:73)(cid:59)(cid:55)(cid:72)(cid:57)(cid:62)(cid:59)(cid:73)(cid:128)
Yaani users can view the closest locations to them based on the
location from which they initiated their search. For example,
when Yaani users search for movies playing at theatres, they
can directly view the closest theatre that displays the movie
they want to see, along with session times. Or else, those,
looking for alternatives to eat, can view the nearest restaurants
and cafés along with their contact information when searching
on Yaani.
Working in integration with Turkcell services, Yaani eases the
lives of its users.
Thus, for example, when you search for a song on Yaani, you
begin to listen to the song searched for on the fizy application,
thanks to fizy integration.
You can use the search engine by downloading it free of charge
to your phone and tablet from both App Store and the Google
Play application store.
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*Connect to life with Turkcell
In 2017, we continued to
connect our customers to
life, both at home and on
mobile. With our “4x4”
and “5 in 1” campaigns, we
continued to offer a single
package of solutions for our
customers’ communication
needs both mobile and at
home.
Having launched Turkey’s
largest data center last
year, and reached millions
of users with its digital
services such as BiP, fizy,
lifebox, TV+ and Dergilik,
Turkcell took major steps to
keep Turkey’s data within
Turkey. And today with
the Yaani search engine,
Turkcell has moved Turkey
among countries having
their own search engines.
Mobile (cid:148)(cid:176)(cid:149)(TriplePlay)
Fiber Residential(cid:148)(cid:177)(cid:149) (Multiplay with TV)
46.7%
50.4%
55.8%
41.8%
42.4%
35.9%
38.7%
40.5%
42.3%
44.4%
4Q16
1Q17
2Q17
3Q17
4Q17
4Q16
1Q17
2Q17
3Q17
4Q17
(1) Share among mobile voice users excluding subscribers who have not used their lines in the last 3 months
(2) Multiplay subscribers with TV: Internet + TV users & internet + TV + voice users
52
TURKCELL ANNUAL REPORT 2017
OUR CONSUMER BUSINESS
We offered our Lifecell offer that meets all of communication needs
through digital services and mobile internet and that is fully built on mobile
data to our customers in Turkey.
NEW DIGITAL BRAND LIFECELL THAT GETS
EVERYTHING DONE THROUGH INTERNET
WE FACILITATE LIFE.
We offer our Lifecell brand in Turkey with various
offers that meets all of communication needs through
digital services and mobile internet and that is fully
built on mobile data to our customers.
Lifecell was a corner stone in our journey towards
digital transformation. In line with the digitalization of
customer behavior and rising need for internet, with
Lifecell, we created a new brand that gets everything,
including traditional telecom services such as voice and
messaging, done on internet, providing generous data
incentives within its offers specific to applications,
and to be used on the internet. With Lifecell, customer
services are also provided over the digital platform.
We meet the basic internet requirements of our Lifecell
customers by offering generous calls and messaging
through BiP, music with fizy, movies and series with
TV+, magazines and newspapers with Dergilik, personal
cloud services with lifebox, and also a generous social
media package with dedicated internet to connect to
Facebook and Twitter. In addition, we give them the
opportunity to explore the infinite world of the internet
with internet offers to be used on their discretion. With
the product launch on 25th of September, we presented
three different packages, which respectively have 7GB,
9GB and 12GB internet quotas, on top of the 50GB
internet quota to be used on applications and 1,000
minute calls to all directions from BiP.
According to the results of the first month, customer
demand exceeded our targets and 60% of Lifecell users
were new customer acquisitions.
ONE DAY IS 24 HOURS, SO 1440 MINUTES!
Lifecell drew attention to the value of the use of
internet in daily life, by taking customers on a journey
with a movie showing how much internet we use on an
average day.
We ask users who visit www.lifecell.com.tr how many
minutes of internet they use during the day, after
which they watch our video, and see that their internet
consumption acutally exceeds their perceived level. In
that manner, they become fully aware of their need for
Lifecell.
Digitalization in Service Channels - My Account
When switching packages, we focused on Digital as
well as traditional channels. We started to provide our
customers the right offers at the right time through
the remaining usage fields. We provided offers with
increased incentives and advantageous prices at times
of need according to their usage.
The Nearest Turkcell Store - turkcell.com.tr
We ensure that our customers can access Turkcell
easily anytime, anywhere through turkcell.com.tr,
which has 24 million monthly visits. Moreover, we
provide a quick and easy experience by enabling
(cid:74)(cid:62)(cid:59)(cid:67)(cid:221)(cid:74)(cid:69)(cid:221)(cid:62)(cid:55)(cid:76)(cid:59)(cid:221)(cid:55)(cid:221)(cid:73)(cid:59)(cid:57)(cid:75)(cid:72)(cid:59)(cid:221)(cid:66)(cid:69)(cid:61)(cid:63)(cid:68)(cid:221)(cid:56)(cid:79)(cid:221)(cid:136)(cid:20)(cid:59)(cid:65)(cid:221)(cid:20)(cid:96)(cid:65)(cid:66)(cid:55)(cid:137)(cid:221)(cid:144)(cid:221)(cid:136)(cid:15)(cid:68)(cid:59)(cid:221)
Click” through the Fast Entry feature. We were one
of the first operators in the world to use Fast Entry
technology, which is supported by the World GSM
Association (GSMA) Mobile Connect. Our integration
of this technology into our own websites and mobile
applications enables the number of those using the
Fast Entry method to rapidly increase.
We continue to enrich our customers’ e-commerce
experience daily through smartphone and accessory
sales at turkcell.com.tr where 86% of our visitors
are mobile internet users. Thanks to our “36 month
contract” and “payment with invoice” features, we
bring our customers together with Turkcell Store,
which is full of our products, services and digital
services.
Turkcell Users also Freely Connect to Life Abroad.
In 2017, Turkcell enriched the offers provided to its
customers abroad and strengthened the Turkcell brand
perception by offering new applications that facilitate
customers’ lives and accompany them, even abroad.
Your Tariff is Valid in 73 Countries
Turkcell users can utilize their domestic tariffs in 73
countries as if they were using them in Turkey, without
dealing with any additional procedures, by just paying
an additional daily fee. In order for customers to
use this feature, regardless of their tariff price, or
their segment; they need to be on a postpaid tariff,
including internet, minute, and SMS at the same time.
In line with the
digitalization of customer
behavior and rising need
for internet, with Lifecell,
we created a new brand
that gets everything,
including traditional
telecom services such as
voice and messaging, done
on internet, providing
generous data incentives
within its offers specific to
applications, and to be used
on the internet.
76 countries
Thanks to “Advantageous
Abroad” package, which
is valid in Turkey as well
as in 76 other countries,
Turkcell customers with
prepaid lines can also
conveniently communicate
with their loved ones with
rich incentives and remain
connected to life while
abroad with Turkcell.
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TURKCELL ANNUAL REPORT 2017
53
“Roam Like Home” is Now Available for Tablets and
Computers
For our corporate customers, “Roam Like Home” feature is
now available for tablets and computers. It will be available
for our individual customers within the first quarter of
2018.
Advantageous Smart World Tariff
When our customers travel abroad without choosing a
package, they benefit from our “Smart World” tariff for
safety purposes, instead of being charged at unfavorable
linear fees.
Unrivalled Abroad Offers for Prepaid Lines from Turkcell
Thanks to “Advantageous Abroad” package, which is
valid in Turkey as well as in 76 other countries, Turkcell
customers with prepaid lines can also conveniently
communicate with their loved ones with rich incentives and
remain connected to life while abroad with Turkcell.
Your Prepaid Tariff is Valid Abroad
Our prepaid customers, who buy Uçuran Packages provided
as part of our 4.5G customer offerings, can use their tariffs
abroad as they wish, in exchange for an additional daily fee.
Professional Tour Guide on Your Mobile Abroad
Thanks to the Piri application, Turkcell users have their
own professional tour guide on their mobile phones when
abroad. The overseas tours prepared with unique content
prepared by Saffet Emre Tonguç, Turkey’s most traveling
tour guide, tells Piri users the unknown story of the city
they’re visiting. Turkcell customers can enjoy discovering
the beauty and stories about the cities they are visiting, by
listening to Piri, a free of charge audio walking application
in Turkish prepared specifically for them. With Piri’s
overseas tours, users can explore London, Amsterdam,
Paris, Rome and Barcelona by listening to a guide in their
own language.
Video Call with BiP Abroad
All Turkcell customers are able fulfil their longings with
their loved ones by initiating video calls through BiP,
talking and messaging as they wish, with BiP’s Abroad
Campaign valid in 77 countries, which provides free
of charge 1GB within BiP. Thanks to BiP’s new group
conversation feature, no matter how far they may be from
their loved ones, they also have the opportunity to talk
to all of them simultaneously. If they need to call Turkcell
customer services while abroad, they can do so free of
charge via BiP. Moreover, calls from BiP in all directions are
charged as domestic calls.
CONTINOUS 4.5G GROWTH WITHOUT DECELERATION
The free SIM Card campaign, the campaign folding the
internet packages of customers who change their SIM
cards, and the 4.5G Shake and Win campaign provided
the most significant contribution during the 4.5G
transformation period. In addition, on the anniversary
of the launch of 4.5G technology, the 4.5G Anniversary
Campaign, on which we doubled our customers’
internet packages, saw the participation of 4.4 million
customers. Moreover, we increased our penetration of
4.5G compatible devices with the “Bring your old phone,
get a new smartphone at a discount” campaigns. At the
end of 2017, the ratio of smartphone users using 4.5G
compatible devices on the network rose from 35% to 49%.
We started to see the return on our investments through
these campaigns and managed to increase the number of
subscribers in 2017.
To ensure the longevity of our strong bond, we provided
our customers our rich content services TV+ and fizy, all
day, free of charge in addition to callig and internet gifts,
during our national and religious days such as July 15,
August 30 and October 29. As an operator that embraces
important occassions, we confirmed that we stand by
our customers and remain confident in our network.
Smartphone penetration reached 72% in 2017. 68% of
smartphones on our network support 4.5G.
With increasing demand for our mobile data and digital
service offers, average mobile data usage per user grew
by 63%. Average mobile data usage of 4.5G users was at
5.6GB in 2017.
NUMBER OF SMARTPHONES & SP PENETRATION
AVERAGE DATA USAGE PER MONTH
72%
64%
M
2
.
9
1
6
1
0
2
M
1
.
2
2
7
1
0
2
52%
M
1
.
6
1
5
1
0
2
4
.
2
6
1
0
2
3
.
4
6
1
0
2
4
.
1
5
1
0
2
6
.
5
7
1
0
2
9
.
3
7
1
0
2
Total Subscribers (GB/subscribers)
4.5G Users (GB/users)
54
TURKCELL ANNUAL REPORT 2017
OUR CONSUMER BUSINESS
Shake and Win has a positive effect on valuable customer
retention activities, due to the continuous benefit perception it
gives to customers owning a smartphone.
Shake and Win has been granted awards in the “Best Use
of Gamification to Enhance Loyalty” and “Best Loyalty
Program within Telecoms” categories during The Loyalty
Magazine Awards held in London in June and one prize in
the “Best Marketing Campaign” category from the “Global
Telecom Awards” organized again in London in November.
Shake and Win, which awarded 104 million GB data, 37
billion minutes and 19 billion BiP minutes to Turkcell
customers, provided them with a feeling of privilege.
Shake and Win, where 28% of gifts granted to customers
were TV+, fizy, Dergilik, lifebox, BiP and Paycell, became a
substantive medium for Turkcell subscribers to meet with
and experience digital services. At the same time, Turkcell’s
service penetration focus was supported by additional
benefits. For example, subscribers who participated Shake
and Win received additional gifts within the Dergilik Gift
Campaign when downloaded magazines from Dergilik
application.
Shake and Win greatly benefited Turkcell’s 4.5G focus
thanks to the campaign’s participation prerequisite of 4.5G
SIM card ownership and 800 thousand 4.5G subscription
approvals taken while participating in the campaign.
Since the launch of the campaign, the number of downloads
of the My Account application, which enables customers to
access Shake and Win, rose from 10 million to 25 million,
whereas the number of active users rose to 17 million per
month.
Shake and Win has a positive effect on valuable customer
retention activities, due to the continuous benefit
perception it gives to customers owning a smartphone.
We Always Stand by Our Platinum Customers with Our
Privileged Services.
As Turkcell Platinum, we renewed and relaunched our
application and brand this year, and we reached almost
two million users with the innovations in our application.
Besides, we again enriched the lives of our customers
with our sponsorships and privileges offered this year.
We stood by our customers with sponsorships such as
the Turkcell Platinum Bosphorus Cup, Turkcell Platinum
(cid:9)(cid:68)(cid:74)(cid:59)(cid:72)(cid:68)(cid:55)(cid:74)(cid:63)(cid:69)(cid:68)(cid:55)(cid:66)(cid:221)(cid:1)(cid:66)(cid:55)(cid:213)(cid:55)(cid:74)(cid:96)(cid:221)(cid:6)(cid:63)(cid:73)(cid:62)(cid:63)(cid:68)(cid:61)(cid:221)(cid:20)(cid:69)(cid:75)(cid:72)(cid:68)(cid:55)(cid:67)(cid:59)(cid:68)(cid:74)(cid:221)(cid:55)(cid:68)(cid:58)(cid:221)(cid:20)(cid:75)(cid:72)(cid:65)(cid:57)(cid:59)(cid:66)(cid:66)(cid:221)
Platinum Golf Challenge, and with seasonal sponsorships
for venues. While continuing our current benefits offered
(cid:73)(cid:75)(cid:57)(cid:62)(cid:221)(cid:55)(cid:73)(cid:221)(cid:57)(cid:63)(cid:68)(cid:59)(cid:67)(cid:55)(cid:125)(cid:221)(cid:57)(cid:55)(cid:72)(cid:221)(cid:72)(cid:59)(cid:68)(cid:74)(cid:55)(cid:66)(cid:125)(cid:221)(cid:60)(cid:72)(cid:59)(cid:59)(cid:221)(cid:76)(cid:55)(cid:66)(cid:59)(cid:74)(cid:221)(cid:55)(cid:68)(cid:58)(cid:221)(cid:8)(cid:55)(cid:76)(cid:55)(cid:218)(cid:125)(cid:221)(cid:77)(cid:59)(cid:221)(cid:55)(cid:66)(cid:73)(cid:69)(cid:221)
collaborated with major brands such as THY and D&R to
provide our customers a diversity of benefits.
My Account Application
SHAKE AND WIN CAMPAIGN
PRIZES
VOICE 29%
SERVICE 28%
DATA 43%
(cid:23)(cid:59)(cid:222)(cid:18)(cid:59)(cid:58)(cid:59)(cid:206)(cid:68)(cid:59)(cid:222)(cid:8)(cid:69)(cid:67)(cid:59)(cid:222)(cid:9)(cid:68)(cid:74)(cid:59)(cid:72)(cid:68)(cid:59)(cid:74)(cid:222)(cid:77)(cid:63)(cid:74)(cid:62)(cid:222)(cid:19)(cid:21)(cid:16)(cid:5)(cid:18)(cid:2)(cid:15)(cid:24)(cid:222)(cid:74)(cid:62)(cid:72)(cid:69)(cid:75)(cid:61)(cid:62)(cid:222)(cid:179)(cid:128)(cid:180)(cid:7)(cid:222)
internet.
We continuously conduct our studies to bring our customers
the most innovative solutions. We launched a new era
in home internet with SUPERBOX in a first for Turkey,
by providing internet to homes through the air at 4.5G
speed, without the need for a cable internet infrastructure.
Customers without fixed internet in their area, who want
a fast internet connection, or else to move their fixed
internet to their summer house at the same time, prefer
the most innovative 4.5G technology product: SUPERBOX,
which can be transported anywhere that has an electrical
outlet, without any need for cables. Our customers in all the
provinces have already started to use SUPERBOX, and enjoy
the pleasure of home internet at 4.5G speed.
CUSTOMER RETENTION AND LOYALTY
(cid:19)(cid:62)(cid:55)(cid:65)(cid:59)(cid:222)(cid:55)(cid:68)(cid:58)(cid:222)(cid:23)(cid:63)(cid:68)(cid:222)(cid:148)(cid:19)(cid:55)(cid:66)(cid:66)(cid:55)(cid:222)(cid:11)(cid:55)(cid:80)(cid:55)(cid:68)(cid:149)
The most popular campaign, Shake and Win, has now
delivered 225 million gifts to 13.7 million Turkcell mobile
customers since its launch on November 28, 2016. With this
campaign, which grants customers the right to shake every
Friday, two shakes were granted on the week of Ramadan
and Feast of Sacrifice.
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We renewed the Platinum package world with enriched
content so as to meet the rising internet needs of our
customers. Within a short time, we switched a significant
portion of Platinum customers to new Platinum packages
with data offerings from 12GB to 35GB. Through our
trial campaigns, we enabled customers, who had not yet
experienced the privileges of the Platinum world, switch
to Platinum. We ensured customer loyalty by adding TV+,
fizy, lifebox, BiP and Dergilik services to all our Platinum
packages and significantly increasing their active usage.
In this new period, Turkcell Platinum aims to offer more
to the target group, who lives life in the fast lane, by
improving our offers in light of the changing habits and
social needs of its customers.
The brand’s pledge to its customers is that by choosing
Turkcell Platinum they can break their daily routine for a
better life. Turkcell Platinum, which says “Choose Turkcell
Platinum to live an exclusive life,” reflects all the privileges
and benefits provided in its commercials. Thus, Turkcell
Platinum, a highly popular brand growing daily, becomes
even more dynamic, appealing, convenient and privileged.
We Win Women’s Hearts and Make Them Feel Valuable
with Our Sim Application.
As Turkcell, we launched Sim, Turkey’s first and only Digital
Integrated Women’s Platform in 2017. The Sim application,
which is created with our new service perception that
closely matches our customers’ lifestyles, is to reach our
women customers winning their hearts and make them feel
valuable as “women”.
We set off on this path with the statement, “Who
knows? Sim knows.” providing content we believed would
collectively add value to their lives in one convenient place
without getting lost in the digital world. We enabled them
to conveniently access useful information by compiling
content under the categories of “For Me”, “For My Child”,
and “For My Home”. Each category contains its own unique
set of information. While, “For Me” is a category featuring
beauty secrets, “For My Child” is a resource for useful
information about children. Meanwhile, “For My Home”
shares practical and smart tips for their homes. With our
Sim content, we wanted both to ease women’s lives and
bring some additional joy.
We maximized their customer experience by ensuring that
the videos they watched on Sim were not deducted from
their data packages. We also aimed to give them added
value by offering benefits specific to each category.
Yellow Box
This year, we have enabled our customers to earn points in
a more dynamic structure within the scope of Yellow Box,
a loyalty program that benefits all Turkcell customers. Our
members gained points not only by staying with Turkcell,
but also by paying bills, topping up TRY, or by using My
Account, BiP and lifebox applications. We also celebrated
TURKCELL ANNUAL REPORT 2017
55
the birthdays of our members with gift of points. In addition
to internet gifts, we have added the most popular Turkcell
services, Turkcell branded promotions and close to 40
brand advantages since the beginning of the year to the gift
catalogue of Yellow Box. Yellow Box’s membership number
has approached 9 million, while gift usage has reached 1
million per month.
GNÇ
Being the most preferred operator of young people, we
maintain our market leadership. Having turned our GNÇ
offerings, providing generous internet incentives together
with our digital services, into the most preferred ones, we
increased the share of GNÇ among new postpaid customers
under the age of 26 to 76%. Through our focus on postpaid
customers, the share of postpaid in GNÇ offers doubled to
66% at the end of 2017, from 33% at end of 2016.
Customer Loyalty
With 20.5% annual mobile churn rate as of the end of
2017, we recorded our best performance since 2008. Our
offering portfolio, which was renewed in April 2016 with
the launch of 4.5G, was revised in July 2017, taking into
account customer needs and market conditions. Our new
offerings, which were differentiated in terms of enriched
digital service content, price, and experience compared to
previous one, also performed better in terms of customer
churn. Throughout 2017, we observed the positive effect
of the rapid rise in the customer base of these offers on
the customer churn. We planned targeted mass campaigns
for those who tend to churn, and rapidly followed up the
competition level as well as market dynamics, whereby we
enjoyed a successful year, in particular regarding customers
with higher risk to churn. Additionally, campaigns offered
to all Turkcell customers, such as Shake and Win, and BiP
Ramadan, etc. contributed to customer loyalty and helped
reduce our churn rates.
(cid:14)(cid:5)(cid:20)(cid:222)(cid:16)(cid:18)(cid:15)(cid:13)(cid:15)(cid:20)(cid:5)(cid:18)(cid:222)(cid:19)(cid:3)(cid:15)(cid:18)(cid:5)(cid:222)(cid:148)(cid:14)(cid:16)(cid:19)(cid:149)(cid:222)(cid:144)(cid:222)(cid:7)(cid:1)(cid:16)(cid:222)(cid:23)(cid:9)(cid:20)(cid:8)
COMPETITION
We widen the gap with our competitors in terms of our
net promoter score with our customer-focused approach,
service quality, and product range offered.
+41
+38
+28
+24
+31
+32
+21
+19
1Q17
2Q17
3Q17
4Q17
Points over the next best competitor
Points over the third best competitor
“Who knows? Sim
knows.”
We set off on this path with
the statement, “Who knows?
Sim knows.” providing
content we believed would
collectively add value to their
lives in one convenient place
without getting lost in the
digital world.
This year, we have enabled
our customers to earn
points in a more dynamic
structure within the scope
of Yellow Box, a loyalty
program that benefits all
Turkcell customers. Our
members gained points
not only by staying with
Turkcell, but also by paying
bills, topping up TRY, or by
using My Account, BiP and
lifebox applications.
56
TURKCELL ANNUAL REPORT 2017
OUR CORPORATE BUSINESS
In the corporate segment, our triple-play customer base that uses one of
mobile voice, data and digital services grew by 66%.
With the help of our
multi-play offers provided
with TV+, fizy, BiP, lifebox,
Dergilik, and BiP Fax
products, we reduced
customer churn rates to its
lowest level of the last 11
years.
Legendary Artisans
With the Legendary Artisans
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combined fixed and mobile
internet in a single invoice.
DIGITAL SERVICES HAVE BECOME THE
LOCOMOTIVE OF MOBILE MULTIPLAY.
In the corporate segment, our triple-play customer
base that uses one of mobile voice, data and digital
services grew by 66%. With the help of our multi-play
(cid:69)(cid:60)(cid:60)(cid:59)(cid:72)(cid:73)(cid:221)(cid:70)(cid:72)(cid:69)(cid:76)(cid:63)(cid:58)(cid:59)(cid:58)(cid:221)(cid:77)(cid:63)(cid:74)(cid:62)(cid:221)(cid:20)(cid:22)(cid:188)(cid:125)(cid:221)(cid:206)(cid:80)(cid:79)(cid:125)(cid:221)(cid:2)(cid:63)(cid:16)(cid:125)(cid:221)(cid:66)(cid:63)(cid:60)(cid:59)(cid:56)(cid:69)(cid:78)(cid:125)(cid:221)(cid:4)(cid:59)(cid:72)(cid:61)(cid:63)(cid:66)(cid:63)(cid:65)(cid:125)(cid:221)
and BiP Fax products, we reduced customer churn
rates to its lowest level of the last 11 years. Thanks to
our data gifts to be used for our digital services, we
enabled all our customers to experience these services
without consuming the internet on their packages. We
accelerated our customers’ switch to superior packages,
(cid:74)(cid:62)(cid:72)(cid:69)(cid:75)(cid:61)(cid:62)(cid:221)(cid:63)(cid:68)(cid:57)(cid:72)(cid:59)(cid:55)(cid:73)(cid:63)(cid:68)(cid:61)(cid:221)(cid:56)(cid:59)(cid:68)(cid:59)(cid:206)(cid:74)(cid:73)(cid:125)(cid:221)(cid:58)(cid:63)(cid:60)(cid:60)(cid:59)(cid:72)(cid:59)(cid:68)(cid:74)(cid:63)(cid:55)(cid:74)(cid:59)(cid:58)(cid:221)(cid:57)(cid:69)(cid:68)(cid:74)(cid:59)(cid:68)(cid:74)(cid:221)(cid:55)(cid:68)(cid:58)(cid:221)
the campaigns attached to these packages.
WE DOUBLED OUR CUSTOMER BASE ON
(cid:1)(cid:18)(cid:20)(cid:9)(cid:19)(cid:1)(cid:14)(cid:19)(cid:222)(cid:148)(cid:5)(cid:19)(cid:14)(cid:1)(cid:6)(cid:149)(cid:222)(cid:15)(cid:6)(cid:6)(cid:5)(cid:18)(cid:222)(cid:23)(cid:9)(cid:20)(cid:8)(cid:222)(cid:20)(cid:8)(cid:5)(cid:222)
CONTRIBUTION OF OUR DIGITAL SERVICES.
Through Artisans offers that we launched at the end
of 2016, we have not only responded to our customers’
rapidly increasing data need, but also enriched package
(cid:57)(cid:69)(cid:68)(cid:74)(cid:59)(cid:68)(cid:74)(cid:73)(cid:221)(cid:77)(cid:63)(cid:74)(cid:62)(cid:221)(cid:58)(cid:63)(cid:61)(cid:63)(cid:74)(cid:55)(cid:66)(cid:221)(cid:73)(cid:59)(cid:72)(cid:76)(cid:63)(cid:57)(cid:59)(cid:73)(cid:221)(cid:73)(cid:75)(cid:57)(cid:62)(cid:221)(cid:55)(cid:73)(cid:221)(cid:20)(cid:22)(cid:188)(cid:125)(cid:221)(cid:206)(cid:80)(cid:79)(cid:125)(cid:221)(cid:2)(cid:63)(cid:16)(cid:125)(cid:221)
lifebox and Dergilik, differentiating ourselves from
the competition. Today our artisans are listening
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other programs on TV+, and reading newspapers on
Dergilik. While we enabled our artisans customers to
experience digital services, we continued to develop
those services to facilitate their daily life. We offered
BiP Fax, one of our corporate solutions, for the use of
our artisans enabling them to send faxes anywhere in
the world simply by using their mobile phones. With the
Legendary Artisans (Efsane Esnaf) offers we launched
(cid:63)(cid:68)(cid:221)(cid:13)(cid:55)(cid:72)(cid:57)(cid:62)(cid:125)(cid:221)(cid:77)(cid:59)(cid:221)(cid:57)(cid:69)(cid:67)(cid:56)(cid:63)(cid:68)(cid:59)(cid:58)(cid:221)(cid:206)(cid:78)(cid:59)(cid:58)(cid:221)(cid:55)(cid:68)(cid:58)(cid:221)(cid:67)(cid:69)(cid:56)(cid:63)(cid:66)(cid:59)(cid:221)(cid:63)(cid:68)(cid:74)(cid:59)(cid:72)(cid:68)(cid:59)(cid:74)(cid:221)(cid:63)(cid:68)(cid:221)
single invoice. While we doubled our artisans customer
base along with the rise in the penetration of our digital
services, we achieved an increase in both market share
and brand image criteria.
4.5G - WE BECAME THE MOST ADMIRED BRAND IN
TURKEY, WITH THE WORLD’S FASTEST INTERNET.
By offering the world’s fastest internet with 4.5G, we
accelerated the business of our corporate customers
and became the most admired brand among operators.
The periodic campaigns (10GB Bonus, 4.5G Anniversary
Shake and Fold, Free SIM Card Change, Doubling Data
for SIM Card Change, Corporate MODEM Change)
that we designed for our customers to quickly adapt
to new technology were welcomed, and contributed
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with the contribution of these campaigns, the number
of corporate 4.5G subscribers on the Turkcell network
grew by 60% in 2017, and the ratio continues to rise.
In addition, we grew the customer base by 50% on
corporate tariffs, which we designed to meet the
increasing data needs of our customers, and which were
enriched with digital services during the 4.5G transition.
We added value to companies of every scale, operating
(cid:63)(cid:68)(cid:221)(cid:73)(cid:59)(cid:57)(cid:74)(cid:69)(cid:72)(cid:73)(cid:221)(cid:60)(cid:72)(cid:69)(cid:67)(cid:221)(cid:59)(cid:68)(cid:59)(cid:72)(cid:61)(cid:79)(cid:221)(cid:74)(cid:69)(cid:221)(cid:206)(cid:68)(cid:55)(cid:68)(cid:57)(cid:59)(cid:125)(cid:221)(cid:55)(cid:68)(cid:58)(cid:221)(cid:60)(cid:72)(cid:69)(cid:67)(cid:221)(cid:70)(cid:72)(cid:69)(cid:58)(cid:75)(cid:57)(cid:74)(cid:63)(cid:69)(cid:68)(cid:221)
to retail, through our services strengthened with 4.5G
internet speed.
We started to offer
solutions to our customers’
telecom and IT needs
from a single point by
supporting our end-to-end
solution approach adopted
in our corporate business
area, with our System
Integration and IT Services
organization.
6 points
As Turkcell, we not only
maintained our leadership
among corporate
customers’ Net Promoter
Score since the first quarter
of 2017, but also increased
the gap between our closest
competitor by 6 points, by
developing products and
services tailored to our
customers’ needs.
TURKCELL ANNUAL REPORT 2017
57
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WE ARE THE LEADER IN NET PROMOTER SCORE
(cid:148)(cid:14)(cid:16)(cid:19)(cid:149)(cid:128)
As Turkcell, we not only maintained our leadership
among corporate customers’ Net Promoter Score
(cid:73)(cid:63)(cid:68)(cid:57)(cid:59)(cid:221)(cid:74)(cid:62)(cid:59)(cid:221)(cid:206)(cid:72)(cid:73)(cid:74)(cid:221)(cid:71)(cid:75)(cid:55)(cid:72)(cid:74)(cid:59)(cid:72)(cid:221)(cid:69)(cid:60)(cid:221)(cid:177)(cid:175)(cid:176)(cid:182)(cid:125)(cid:221)(cid:56)(cid:75)(cid:74)(cid:221)(cid:55)(cid:66)(cid:73)(cid:69)(cid:221)(cid:63)(cid:68)(cid:57)(cid:72)(cid:59)(cid:55)(cid:73)(cid:59)(cid:58)(cid:221)
the gap between our closest competitor by 6 points,
by developing products and services tailored to our
customers’ needs. At a time when competition was
losing ground in every aspect (market share, NPS,
image), Turkcell strengthened its leading position as the
most promoted operator through its internet speed, a
key dynamic, and its innovative digital services.
WE OFFER END-TO-END SOLUTIONS WITH
INTEGRATION AND IT SERVICES.
We started to offer solutions to our customers’ telecom
and IT needs from a single point by supporting our
end-to-end solution approach adopted in our corporate
business area, with our System Integration and IT
Services organization. We responded to our customers’
data center solution, access, cloud infrastructure and
application needs with Managed Services capabilities.
(cid:20)(cid:62)(cid:75)(cid:73)(cid:125)(cid:221)(cid:63)(cid:68)(cid:221)(cid:55)(cid:58)(cid:58)(cid:63)(cid:74)(cid:63)(cid:69)(cid:68)(cid:221)(cid:74)(cid:69)(cid:221)(cid:63)(cid:68)(cid:57)(cid:72)(cid:59)(cid:55)(cid:73)(cid:63)(cid:68)(cid:61)(cid:221)(cid:74)(cid:62)(cid:59)(cid:63)(cid:72)(cid:221)(cid:59)(cid:60)(cid:206)(cid:57)(cid:63)(cid:59)(cid:68)(cid:57)(cid:79)(cid:125)(cid:221)(cid:77)(cid:59)(cid:221)(cid:56)(cid:69)(cid:74)(cid:62)(cid:221)
provided cost advantages and reduced their operational
burdens.
The strategic infrastructure and solution projects we
offered for our customers’ mobile transformation
(cid:55)(cid:68)(cid:58)(cid:221)(cid:59)(cid:68)(cid:58)(cid:130)(cid:74)(cid:69)(cid:130)(cid:59)(cid:68)(cid:58)(cid:221)(cid:9)(cid:20)(cid:221)(cid:68)(cid:59)(cid:59)(cid:58)(cid:73)(cid:125)(cid:221)(cid:70)(cid:72)(cid:69)(cid:76)(cid:63)(cid:58)(cid:59)(cid:58)(cid:221)(cid:73)(cid:63)(cid:61)(cid:68)(cid:63)(cid:206)(cid:57)(cid:55)(cid:68)(cid:74)(cid:221)(cid:61)(cid:72)(cid:69)(cid:77)(cid:74)(cid:62)(cid:221)
and greater potential, especially in large customer
segments. We have added value to more than 250
of our business partners over the past two years,
and achieved a revenue increase of more than 100%
in Mobile Transformation, IT Managed Services and
System Integration projects.
In addition to our System Integration and IT Services
approach, our mission is to become a critical business
partner in the restructuring process that contribute to
the advancement of our country. We are also bringing
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in line with this mission.
We started the digital hospital era with the City
Hospital projects that we initiated with Rönesans
(cid:19)(cid:55)(cid:215)(cid:66)(cid:96)(cid:65)(cid:221)(cid:25)(cid:55)(cid:74)(cid:96)(cid:72)(cid:96)(cid:67)(cid:128)(cid:221)(cid:3)(cid:63)(cid:74)(cid:79)(cid:221)(cid:8)(cid:69)(cid:73)(cid:70)(cid:63)(cid:74)(cid:55)(cid:66)(cid:73)(cid:125)(cid:221)(cid:63)(cid:68)(cid:221)(cid:77)(cid:62)(cid:63)(cid:57)(cid:62)(cid:221)(cid:77)(cid:59)(cid:221)(cid:73)(cid:59)(cid:74)(cid:221)(cid:75)(cid:70)(cid:221)(cid:55)(cid:66)(cid:66)(cid:221)(cid:74)(cid:62)(cid:59)(cid:221)
technological digital infrastructure and prepared the
Information Management System, are being opened.
Yozgat City Hospital was opened on January 15 and
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digital hospital, Yozgat City Hospital, took its place
among the most prestigious digital hospitals in the
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HIMSS Turkey, which accredits the best IT practices and
the innovation-based solutions in Turkey.
We undertook all technology and IT infrastructure
requirements of the EYOF 2017 XIII European Youth
Olympics organized in Erzurum, successfully launching
this mega project.
WE ARE INCREASING THE CAPACITIES OF OUR
DATA CENTERS.
The Gebze Data Center Module 1, which we opened
in June 2016, reached full capacity utilization by July
with its 1,000 m2 available space (“White space”). We
continue to provide services to our customers with the
2nd module, which we commissioned on November 15,
and which has new available space of 1,000 m2.
We increased the capacity of our disaster recovery
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introduction of the new hall, we provided our corporate
customers with space to back up their systems and data
for them to use in the event of a disaster.
58
TURKCELL ANNUAL REPORT 2017
TURKCELL ON COMMUNICATION
As the first and only digital operator in the world, we
continue to connect our customers to life today, and will
do so tomorrow, just as we did yesterday.
Connect to life with Turkcell
Registering successful
results with the activities
that we conducted
throughout the year, we
were ranked the most-
loved company of Turkey
receiving the “Lovemark
2017 Award”.
On the road to leadership, we have concluded another
successful year as leader, with our communication
solutions that add value to life, projects that manifest
our social responsibility, and our family of 37 million
people.
In 2016, we announced our tariffs and offers with
animated characters, the Emocans. We facilitated our
customers’ lives by delivering them tens of innovations
and advantages showcased by these much-loved
characters.
We once again differentiated Turkcell with our digital
services, the definitive characteristics of being a digital
operator. We underlined our leader status in terms
of customer perception through BiP’s renewed and
developing world on a daily basis; Yaani, Turkey’s first
and only native search engine; Dergilik, which grows by
adding further newspapers to hundreds of magazines,
and a full range of innovative digital services. Moreover,
Megastar Tarkan, who released his first album after
seven years, chose fizy, Turkey’s most well-known and
used domestic digital music platform for collaboration,
whereby we have accomplished many innovations
together.
Marking a first in Turkey with our new digital brand
Lifecell, we provided our customers a solution offering
all communication services, including calls and
messaging, wholly from the internet and digital platform.
We were granted “Ookla 2016 Turkey’s Fastest
Internet” award as a result of speed tests undertaken
by internet users in Turkey on the Speedtest by
Ookla® application and the speedtest.net website. We
announced this great development in 2017 through our
much appreciated Emocan commercial film.
We once again reinforced our leadership in the
hearts of our users, through our strong presence
during special days such as Republic Day, Mother’s
Day, and Father’s Day. We pleased our elder fold in
nursing homes with our “Bayram Olsun” campaign.
We touched the hearts of millions, scaling the heights
of interaction in social media while celebrating the
Republic Day. The support we gave to Turkish sports
and the championship of our National Amputee Team
crowned our leadership in the hearts of our users.
Registering successful results with the activities that
we conducted throughout the year, we were ranked
the most-loved company of Turkey receiving the
“Lovemark 2017 Award”. As the first and only digital
operator in the world, we continue to connect our
customers to life today, and will do so tomorrow, just
as we did yesterday.
TURKCELL ANNUAL REPORT 2017
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2 million
We used outstream video
commercials on our fizy
Tarkan campaign for the
first time in Turkey. We
were able to run video
broadcast commercials on
websites within the Google
Display Network with the
outstream video commercial
model. While we reached
over 2 million additional
users within the campaign,
targeted interaction figures
were also achieved.
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We continue to pioneer firsts in the media.
We used outstream video commercials on our fizy
Tarkan campaign for the first time in Turkey. We were
able to run video broadcast commercials on websites
within the Google display network with the outstream
video commercial model. While we reached over
2 million additional users within the campaign, targeted
interaction figures were also achieved.
With our Superonline TRY 69.90 campaign, we marked
another first by using YouTube trueview for action,
which is a communication model directly guiding
actions such as download and sales from YouTube
video commercials. When we compared the instream
campaign designed with the same video, to the targeted
search query campaign, the form cost was noted to be
50% lower.
In line with our vision of pioneering innovation and
delivering firsts, we also brought novelty to our
creative process. We designed a technological creative
with interactive transitions for our CSR campaign, in
media first beta partnerhip with Adcolony-Aurora. By
simultaneously targeting people with disabilities and
their relatives, we were able to design a communication
that embraced all our citizens within the scope of our
corporate social responsibility efforts.
At Superonline, we reinforced the power of targeting
through our differentiated creatives. According to the
speed test we performed simultaneously on different
operators, we showcased offers related to different
creatives. We finalized the sales cycle by directing the
consumer to the nearest TIM (Turkcell Communication
Center).
We remained at the forefront of the telecom sector with
another first in Facebook targeting. With integrations
initiated in September, we can reach out to people
interested in our (or similar) products, whether or not
they visit turkcell.com.tr or our applications through
Facebook Dynamic Product Ads’ (DPA) broad targeting
capability.
We entered the data-based planning period by
advancing beyond traditional planning methods not only
in digital, but all media channels. We can make planning
on TV based on business results (such as download
figures and cost per download) together with common
media metrics. As for the campaigns where we trace
image key performance indicators such as business
results, we launched our optimization strategy that
considers TV watching habits of users who comment
positively on our commercials on social media.
We also initiated the first data-based digital open-air
broadcast with a similar mission. We are able to deliver
appropriate messages according to the density of our
target mass in one location. Additionally, by utilizing
cinemaximum card data at movie theatres, we are able
to add important criteria such as gender, concession
expenditure, and age to our hall planning.
60
TURKCELL ANNUAL REPORT 2017
OUR DIGITAL SERVICES
BiP was used in 192 countries in total, and downloaded by 18
million people, including two million abroad as of the end of 2017.
BiP
Over BiP, which has 4.3
million monthly active
subscribers, approximately
two billion messages
are transmitted over the
application while more than
25 million calls are placed
and over a million hours of
calls are made each month.
With over 150 services
positioned under the
Discover platform, total
number of followers
exceeded 12 million. The
paid and free services
launched in many areas,
from sports to finance,
and from magazines
to entertainment and
information categories,
continue to meet end users.
BiP – YOUR NEW COMMUNICATION AND LIFE
PLATFORM
In 2017, Turkey’s most innovative communications and
life platform BiP added “Group Video Call” and “Game,”
in addition to its existing messaging, voice and video call
features, as well as the “Discover” platform positioned as
a new market place. Furthermore, it advanced the in-app
customer experience to a highly improved level compared
to previous years by continuing to renew the design in
accordance with user preferences throughout the year.
Continuing to grow its customer base at an accelerating
pace, BiP was used in 192 countries in total, and
downloaded by 18 million people, including 2 million
abroad as of the end of 2017. Over BiP, which has 4.3
million monthly active subscribers, approximately two
billion messages are transmitted over the application while
more than 25 million calls are placed and over a million
hours of calls are made each month.
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daily basis on every topic over BiP, which has enormously
enriched the sticker and CAPS space throughout the year
which is highly favored by the users. In the last quarter
of 2017, content-wise, BiP strengthened its position
compared to its competitors by adding brand-new stickers
and CAPS for its users abroad. The most popular sticker
sets of the year were the World of Hearts, Step by Step
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Thanks to its feature enabling calls through the GSM
network, BiP can initiate calls whether or not the receiving
party has BiP on their phone. In addition, BiP supports
the “Group Video Call” feature for up to six people
simultaneously.
The “Game” area where users enjoyed themselves in 2017,
was clicked on by more than two million unique visitors,
more than eight million times. While the number of games
on BiP continues to increase each and every day, those
most enjoyed by users in 2017 are bubble shooter, bricks
and sudoku.
With over 150 services positioned under the Discover
platform, total number of followers exceeded 12 million.
The paid and free services launched in many areas, from
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and information categories, continue to meet end users.
The number of new services to be launched under BiP
Discover is expected to accelerate in 2018 as well.
Furthermore, the cooperation of the Red Crescent with BiP
allowed for donations to be made via BiP, whereby such
donations were made via a communication application in a
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The BiP name was heard in 2017, not only with its
innovative features, but also through its campaigns with
Turkcell. In line with Turkcell’s goal of becoming a digital
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Autumn Campaigns reached more than 4.5 million people
with BiP, whereby BiP became one of the most used and
popular applications of 2017.
*Send a fax
With the Smart Fax service,
BiP has the feature of being
the first application to send
faxes through an instant
messaging application.
506 thousand
We reached 506 thousand
customers by growing our
IPTV customer base by 146
thousand. Offers, in which
we provided television,
fiber internet and fixed call
needs in a single package,
ranked among our most
popular campaigns.
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TURKCELL ANNUAL REPORT 2017
61
BiP SMART FAX - FREEDOM OF FAX
TRANSMISSIONS OVER BIP TO ANYWHERE IN THE
WORLD!
Smart Fax channel, positioned at the end of 2016 under
the “Discover”, which is positioned as the market
place for the next generation digital communication
platform BiP application, was followed by 195 thousand
users within a year. Followers conveniently sent 34.8
thousand fax pages through BiP Smart Fax without
having to look for a fax machine. With the Smart Fax
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to send faxes through an instant messaging application.
TV+ REACHED 2.2 MILLION USERS.
TV+ continues to play an important role in Turkcell’s
digital operator vision by enabling its users to access
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wherever and whenever they want. Popular for its user-
centric experience, rich content and tailored offers in
2017, TV+ was awarded the “Best Consumer Facing OTT
Service” prize at the world-famous Broadband Awards
2017.
Thanks to the new generation mobile viewing habits of
our growing customer base, TV viewing time on mobile
phones and tablets increased from 34 minutes to 63
minutes per day.
We reached 506 thousand customers by growing our
IPTV customer base by 146 thousand. Offers, in which
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needs in a single package, ranked among our most
popular campaigns. While meeting our customers’
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our convergence offers, we also provide users the
convenience of receiving a single invoice with our TV
service.
In addition to the rich content and superior technical
features of TV+, which enables easier use, we introduced
our customers to a diversity of new content this
year. We continued to enrich our national and local
channel choice by increasing the number of channels
broadcasting in HD format. The selection of radio
channels, a popular feature of TV platforms, was offered
to TV+ users.
In addition to the UK Premier League, the most
prestigious football league in the world, the NBA, home
to the best basketball players in the world and the key
motor sport events such as Formula 1 and MotoGP can
be viewed on TV+. The world’s leading tennis tournament
Wimbledon, and FIBA Champions League were also
broadcasted on TV+. Additionally, summer and winter
Olympics from 2018 till 2024 will be viewed on TV+.
We enriched our e-sports content by adding FB TV,
which is the club channel with the widest access in
Turkey, as well as e-sports channel Gametoon, to our
platform.
By renewing the movies, we began to feature
Hollywood’s blockbuster hit movies. The selection of
content in our movie channels is much stronger than
in previous years. The movies such as Martian, John
Wick 2, The Revenant, Interstellar, Mad Max: Fury Road
are just to name a few... TV+ attract the attention of
our customers with its 4K channel, movie and video
selection, and distinctive features.
We began to offer popular Hollywood movies with
an English subtitle option on English education and
entertainment channel English Club TV.
In an era where TV series draw much greater interest
than movies, we present our customers new series both
on our series channels and our optional video viewing
service. We will continue to shape our content strategy
by placing greater emphasis on Turkish movies and
foreign series.
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as Mars and The Gifted, were presented to customers
under Nat Geo brand.
We launched our specially designed new box in order to
provide a better service to our home users, and enable
them to enjoy a new generation television experience in
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lifebox and YouTube, as well as TV+ on their televisions.
We continue to offer the best viewing experience to
home users on demand with our Ultra HD supported 4K
content box and 4K content on our platform. In addition,
with our application world feature, all our home users
will shortly have access to hundreds of applications such
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Within the scope of our strategy of appearing on every
screen, we deployed TV+, which we offer to the home
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on Apple TV, Android TV, and Smart TV applications,
respectively. Thereby, we increased the number of
screens on which our users can have the next generation
television experience. Our users can also watch
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feature on their mobile devices.
We offer a unique TV and video viewing experience with
infrastructure improvements that will enhance TV+’s
performance and enable us provide tailor made offers to
the users. By listening to our users, we take into account
their changing needs as well as global trends, and are
working every day to improve the entire TV+ experience.
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OUR DIGITAL SERVICES
At fizy, Turkcell subscribers do not consume their mobile data while listening
to their favorite music, radio stations, or watching video clips.
High Sound Quality: fizy Premium users can listen with
high sound quality at 320 kbps (AAC).
More Radio Stations: With fizy Premium subscription,
users can access all of Turkey’s most-loved radio stations
in the radio section.
Special Video Content: Users have access to video content,
acoustic sessions, and the recordings of fizy concerts,
exclusive to fizy Premium subscribers, and which cannot
be accessed elsewhere.
In 2017, 14 concerts were broadcasted live on fizy.
In 2017, fizy users experienced live concert excitement.
With the Tarkan Harbiye Open Air Concerts being the
leading event, we broadcasted many live concerts via fizy
performed by key artists and many groups such as Oscar
and The Wolf, Kaan Tangöze, Baba Zula, Deniz Tekin,
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Between June 2 and 10, 2017, we broadcasted six
Tarkan Harbiye concerts live via fizy. With the concert
broadcasts, we reached out to an audience 35 times
higher than the average audience size in Harbiye. The
microsite prepared for Tarkan, on which concerts were
broadcasted, was visited by more than 1.3 million users
in total.
fizy users truly loved the radio and video feature.
In 2017, users preferred radio and video feature much
more. With the radio feature, fizy offers its users a
different and extensive archive spanning many musical
genres, as well as Turkey’s most popular radio stations.
We won the appreciation of music lovers by further
expanding the video content, taking into account
the ever-increasing video viewing numbers, and
incorporating the video section to our content in line with
user expectations.
We quintupled the music archive.
We expanded the music archive in line with the
expectations of our users. Enriching the music experience
with features such as radio, videos and a weekly
discovery list, fizy offers a better experience for users by
quintupling its music archive.
Ukraine is listening to fizy, too.
In May 2017, we launched fizy to Ukrainian users with
the radio application. Providing access to the country’s
35 most popular radio stations, including Jam FM, Auto
Here with his new album!
In 2017, fizy users
experienced live concert
excitement. With the
Tarkan Harbiye Open Air
Concerts being the leading
event, we broadcasted
six live concerts via fizy
performed by key artists
and many groups such as
Oscar and The Wolf, Kaan
Tangöze, Baba Zula, Deniz
Tekin, Vega Mor ve Ötesi.
fizy
Turkey’s best-known and
most widely used platform
fizy music has been
downloaded 14.2 million
times as of 2017. Only in
2017, more than 2.2 billion
songs were played on the
fizy.
fizy - TURKEY’S MUSIC PLATFORM
fizy is Turkey’s music platform with its high sound quality,
live concert broadcasts, exclusive artists’ performances,
Turkey’s most popular radio stations, and its many other
features. At fizy, Turkcell users do not consume their
mobile data while listening to their favorite music, radio
stations, or watching video clips. We achieved important
successes in 2017 with fizy, which is preferred by more
and more users every day.
The 20th High School Music Contest was organized with
the sponsorship of fizy.
Turkey’s largest youth organization “fizy 20th High
School Music Contest” began with record high number
of applications. The number of visits to fizy.org platform,
which we created particularly for the contest, having
the “Most Successful Youth Organization of the World”
award, and which includes the contestants’ performance
videos, received record number of visits.
On the final day, we had a live 12-hour broadcast on
fizy with concerts, behind-the-scenes footage and
conversation with artists and other interviews.
We launched fizy Premium Subscription.
In June 2017, we offered fizy Premium subscription
to the approval of users. We positioned fizy Premium
subscription as a top-level subscription model, including
high sound quality, video content exclusive to fizy
Premium subscribers, and more radio stations, in addition
to existing fizy subscription offers.
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Yaani works through integration with Turkcell services,
whereby for example, users who search for songs on Yaani
can directly listen to the song they are searching for on
the fizy application.
Yaani also remembers important days for Turkey and
displays a distinct logo for users on its main page for each
special day.
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READING HABITS
Dergilik offers the opportunity to read hundreds of Turkey’s
popular magazines and newspapers digitally on one platform.
We concluded 2017 with 7 million(1) monthly active users,
after the launch of our Dergilik application with a new face
in 2016. While improving its user-friendly experience also
in 2017, we made it more enjoyable for our users to read
magazines and newspapers by enhancing magazine and
newspaper downloading and reading performance.
Increasing the number of magazines in its portfolio from
250 to 413 in 2017, Dergilik added the most popular
local magazines, as well as Turkey’s most widely read
newspapers to its platform. Turkey’s richest and most
popular digital magazine and newspaper reading platform,
Dergilik, continues to take firm steps to become Turkey’s
digital publishing dealer by offering many features that
enrich the reading experience.
Among others, reading offline and automatically
downloading the current edition of the magazine with
one instruction, being informed of the current edition of
magazines listed on the favorite list, and a subscription
offer that enables the reading of hundreds of magazines
at the price of a single magazine are some of the features
offered by Dergilik.
In an attempt to add value to our customers’ lives, in
September 2016, we started to offer a monthly 5GB
mobile internet package that can be used to download and
read magazines in the Dergilik application. The package
was offered within the scope of consumer tariffs. Users
pay no extra fees in addition to their tariffs for these
benefits that serve to support Turkcell loyalty.
lifebox - MEMORY PROBLEM OF SMART PHONES HAS
BEEN RESOLVED WITH LIFEBOX!
With its features allowing the safe storage and sharing of
photos, videos, music and documents, lifebox presented
its brand-new features to users all over the world in 2017.
While the volume of stored content is approaching two
billion, lifebox started to offer a solution regarding the
loss of phone books during the change of devices with its
phone book back-up feature initiated in 2017.
Yaani stands out for its
precise comprehension
of Turkish, more relevant
demonstration of results
corresponding to searched
content, and the ability
to offer the search
results pages for Turkcell
subscribers without
consuming their data
packages, and makes a
difference by displaying the
closest places to users in
location-based searches.
Radio, Radio Rocks, Retro FM, Nashe Radio, Kiss FM and
others, fizy also grows its user base in the Ukraine. With
its easy-to-use and handy interface, fizy will soon enable
access not only to radio stations in Ukraine, but also to
all songs and features of the application.
Easier to use fizy
In September 2017, we simplified the menu by switching
the application navigation from the Hamburger Menu to
the Tab Bar. Thus, users had a better music experience
with an application on which they can easily access radio
and video, as well as their lists and favorite songs, and
where flows are more user-friendly.
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Turkey’s search engine Yaani was introduced to users
in October 2017. Yaani stands out for its precise
comprehension of Turkish, more relevant demonstration
of results corresponding to searched content, and the
ability to offer the search results pages for Turkcell
subscribers without consuming their data packages, and
makes a difference by displaying the closest places to
users in location-based searches. The data content of
Yaani is stored at Turkey’s largest data center, opened
by Turkcell last year. Yaani, which received intense user
interest, was downloaded more than 1.5 million times in
its first two weeks and reached 3.5 million downloads
currently. Yaani was ranked first on the most downloaded
free apps list within just two days at both App Store and
in Google Play app markets.
Being initially designed as a mobile browser, Yaani
enables location-based searches. Yaani users can view
the closest results according to their location. For
example, while Yaani users search for movies at movie
theatres, they can also view the showtimes of the closest
one. Meanwhile, those seeking alternative places to eat,
can easily access the restaurants and cafes closest to
them, and get there with contact information.
(1)Includes users who utilized the zero rating benefit of Dergilik magazines and newspapers via browser.
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TURKCELL ANNUAL REPORT 2017
OUR DIGITAL SERVICES
With its features allowing the safe storage and sharing of photos, videos,
music and documents, lifebox presented its brand-new features to users all
over the world in 2017.
lifebox, offering Apple TV
and TV+ applications to
its users in 2017, enables
its users to enjoy their
memories on the large
screen.
155 countries
Available to all operators
across the world, and
providing language support
in Turkish, English, Arabic,
German, Russian, Ukrainian
and Romanian, lifebox has
millions of users in 155
countries, especially in
Ukraine, Germany and the
USA.
‘Free-up Space’ feature, which was launched in 2017 as
a brand-new ability, provides a solution to the memory
limitation of smartphones. lifebox now finds photos and
videos which are safely backed up on both lifebox on the
device, and erases them from the device memory according
to the preferences of users.
Another innovative feature enables users to safeguard all
photos and videos they have accumulated so far on social
media, by conveniently transferring them to lifebox with
one click. Besides, users can add extra security to their
memories that they had safely backed up through lifebox’s
touch ID feature.
lifebox, offering Apple TV and TV+ applications to its users
in 2017, enables its users to enjoy their memories on the
large screen. And with its photo edit feature, users can
edit their photos, add filters, frames, and stickers, with the
opportunity to share them.
Available to all operators across the world, and providing
language support in Turkish, English, Arabic, German,
Russian, Ukrainian and Romanian, lifebox has millions of
users in 155 countries, especially in Ukraine, Germany and
the USA. Everyone who downloads and logs into the lifebox
application is given a free of charge 5GB of storage space.
UPCALL - THE APPLICATION THAT TRANSFORMS THE
CALLING EXPERIENCE
UpCall is an application enriching and facilitating our
customers’ calling experience with the many different
features it offers. When a call is received from a number
that is not saved in the phonebook, the caller can be seen
on the screen while the phone rings; the calling experience
can be made fun by adding picture and Emocan stickers,
while the call is being initiated; a note stating the reason
for the call can be delivered to the other party while the
phone is ringing.
The UpCall application also has a smart search features
that enables to access the number of an unknown person
or place through number query with name; identify the
owner of an unknown number; as well as initiate a group
call with a single click and speak to everyone in the group
simultaneously.
Users can easily track all call-related service notifications
from one screen with UpCall, and manage calls more
effectively.
With the UpCall application, which has also started
to create solutions for institutions, users in the same
institution can see name and title information when
they call each other, even if the number is not on their
phonebook. In addition, with the feature of adding topics
to calls, call centers will now be able to communicate
the reason for calling their customers while the phone
is ringing. The initial implementation was carried out at
Turkcell call center calls.
GOALS ON MOBILE - A SPECIAL SERVICE FOR FANS
With our Goals on Mobile applications, which have been
exclusively designed for fans of the four largest teams
(Goals on Mobile 1903, Goals on Mobile 1905, Goals on
Mobile 1907, Goals on Mobile 1967), and which enriched
its content in 2017, we provide our customers with live
goals, newsflashes, special videos, live scores from all
over the world, as well as score stats, league tables and
live commentary during games. Through our Goals on
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(a betting business brand in Turkey) lovers, we offer live
scores from all over the world and make a difference
with our application with Turkey’s Smart Analysis system
enriched with artificial intelligence. Our applications
enable fans on the stands to chat with other fans, and
provide them the opportunity to discuss the agenda, and
share prizes by organizing tournaments through its soccer
game PisBurun - DirtyNose, in a first in Turkey. More than
150,000 videos were viewed per week through our service
with its renewed content structure, which this season
started displaying images from Spain’s La Liga, England’s
Premier League and many other important leagues of the
world.
Piri Travel
Application
With our brand-new
application, Piri, which
we launched in 2017, our
customers enjoyed an audio
tour guide service while
traveling in Turkey and
abroad. They were able
to hear about the history
of places they visited, as
well as local stories of the
regions from famous guides,
who are experts in their
field, in Turkish.
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TURKCELL ACADEMY
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Turkcell Academy allows users to freely access the training
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The Turkcell Academy service, which was launched in 2014
to reshape the learning experience, brings users digital
learning content in various categories such as technology,
innovation, personal development, marketing, leadership, and
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application.
The Turkcell Academy application has been created as
a platform where users can plan their own personal
development with more than 1,500 trainings prepared by
experts, including world renowned educators, and one where
they can access all necessary information on their mobile, and
track their developments.
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step was taken to offer paid training packages aimed at
different needs across various categories to the market.
With the implementation of Fast Entry and Paycell
integration in September 2017, we allowed our customers to
quickly purchase the packages they required, with automatic
entry to the application, and mobile payment.
The Turkcell Academy mobile application was downloaded
by 2 million users in 2017. Approximately 2 million learning
videos were viewed in 2017.
Enriched with Turkcell’s technology and education know-how,
as well as its content network partnership with the world’s
foremost institutions, Turkcell Academy creates opportunities
in the information access and personal development of users
supported by Turkcell’s mobile strength.
With our brand-new application, Piri, which we launched
in 2017, our customers enjoyed an audio tour guide service
while traveling in Turkey and abroad. They were able to
hear about the history of places they visited, as well as local
stories of the regions from famous guides, who are experts
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can easily follow their local route to discover must-see places
in the city, along with their stories, according to their own
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its customers travelling abroad, serves as a unique travel
guide application for those who like to travel. Thanks to the
“Your Tariff is Valid Abroad” service, Turkcell subscribers
travelling abroad do not face a shocking invoice experience,
and can initiate video calls with their loved ones over the BiP
application. And thanks to Piri, they can experience their trips
with tours voiced by professional tour guides.
Within the scope of the application, tours abroad are offered
in London, Amsterdam, Rome, Paris and Barcelona; and
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Launched in May 2017, Piri was downloaded by 130 thousand
people, and the tours were viewed by 13 thousand people.
TURKCELL FAST ENTRY
Turkcell Fast Entry, which is a customer authentication
service provided via mobile phone number, is compatible
with the Mobile Connect service rendered by the World GSM
Association (GSMA). In 2017, the service was opened to non-
Turkcell users and made available for use by OTT services.
Turkcell Fast Entry realized more than 10% of the Mobile
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TURKCELL E-COMMERCE PLATFORM
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which we offered by combining the valuable information in
government agencies with our mobile infrastructure; our
subscribers can track their children’s school exam results and
report cards approved by the Ministry of National Education;
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(cid:74)(cid:62)(cid:59)(cid:63)(cid:72)(cid:221)(cid:75)(cid:68)(cid:70)(cid:55)(cid:63)(cid:58)(cid:221)(cid:74)(cid:55)(cid:78)(cid:221)(cid:66)(cid:63)(cid:55)(cid:56)(cid:63)(cid:66)(cid:63)(cid:74)(cid:79)(cid:125)(cid:221)(cid:59)(cid:66)(cid:59)(cid:57)(cid:74)(cid:72)(cid:63)(cid:57)(cid:63)(cid:74)(cid:79)(cid:221)(cid:56)(cid:63)(cid:66)(cid:66)(cid:73)(cid:125)(cid:221)(cid:55)(cid:68)(cid:58)(cid:221)(cid:74)(cid:72)(cid:55)(cid:60)(cid:206)(cid:57)(cid:221)(cid:206)(cid:68)(cid:59)(cid:73)(cid:125)(cid:221)(cid:63)(cid:60)(cid:221)
any; and query their Findeks credit note. When purchasing
a new vehicle, they can discover its damage status from the
Tramer service, prepared in cooperation with the Insurance
Information and Monitoring Center, the sole competent
authority. In 2017, 28.3 million inquiries were made on the
application, which can send the requested information to our
subscribers without them having to query repeatedly.
Turkcell developed a new model that enables users to
faster become members on the internet platforms, easily
reach customer services via BiP, and make payment more
smoothly. With “Fast Entry” service, users can sign up
simply by entering phone numbers on the websites, while
24/7 customer service is provided via BiP. Payments can
(cid:56)(cid:59)(cid:221)(cid:70)(cid:59)(cid:72)(cid:60)(cid:69)(cid:72)(cid:67)(cid:59)(cid:58)(cid:221)(cid:59)(cid:63)(cid:74)(cid:62)(cid:59)(cid:72)(cid:221)(cid:56)(cid:79)(cid:221)(cid:72)(cid:59)(cid:207)(cid:59)(cid:57)(cid:74)(cid:63)(cid:68)(cid:61)(cid:221)(cid:74)(cid:69)(cid:221)(cid:74)(cid:62)(cid:59)(cid:221)(cid:63)(cid:68)(cid:76)(cid:69)(cid:63)(cid:57)(cid:59)(cid:221)(cid:74)(cid:62)(cid:72)(cid:69)(cid:75)(cid:61)(cid:62)(cid:221)
Paycell integration, credit card, or Turkcell Consumer Finance
Company by drawing credit.
While, double-level security is ensured with the mobile
phone and the SIM card within, web platforms, providing
services online, offer their visitors a swifter experience.
The new technology developed by Turkcell started to
be used initially on the new generation TV platform, Blu
TV and travel site Fulltrip. In the process of Turkcell’s
transition to a service-oriented experience provider
from a technology-focused infrastructure provider, the
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TURKCELL ANNUAL REPORT 2017
OUR DIGITAL SERVICES
Turkcell manages marketing activities in a wiser manner with
Corporate Marketing and Big Data Services.
any, in the application phase. We also made numerous
improvements in the section that can be connected to
through Login, and transitioned to a more user-friendly
structure.
We completed the first phase of the DSS partnership
dashboard project. We can now track the monthly
revenue trend information of our business areas, list the
most successful business partners both in each business
area and the total ecosystem, and view profile pages,
which have the introductory, revenue, shareholder, and
contact information of our revenue-generating business
partners on B2C business.
BUSINESS APPLICATIONS
Smart Fax
Our Smart Fax application helps protect nature by
reducing the use of paper, allowing our customers to
send, and receive their faxes via mobile phones, e-mails
and the internet. In addition, with Cloud technology, all
these operations can be done anywhere without having
to reach the office. In 2017, our customers utilized this
benefit by sending and receiving 3.1 million faxes via
Smart Fax.
E-Company
We developed the Turkcell E-Company platform to
support the digital transformation of companies. We
provide our customers with the facility to manage
e-books, e-invoices, e-archive invoices, accounting,
smart fax and e-mails through devices such as phones,
computers, tablets etc., in all environments with internet
access, from a single platform, and via Cloud Technology.
Thus, our clients can instantly follow up their company’s
current financial situation, and generate the reports they
need. On our platform that we have developed according
to international security standards with Turkcell quality
and assurance, all of our customers’ data is stored safely
at the Turkcell Data Center.
Turkcell secure e-commerce platform created a layer that
provides the most secure customer acceptance, 24/7
customer service, and payment.
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PLATFORM
Beehive is a crowd-funding platform initiated in January
2016 to support Turkey’s entrepreneurial ecosystem and
it pioneers a first in this area for technology initiatives
in Turkey.
Beehive enables the project owners to get the financial
resources they need for launching the products they work
on with the support of individuals in society in large and
small amounts, instead of a certain person or institution.
More than 4,500 project applications have submitted
to Beehive thus far. Out of 44 projects selected, 18
successfully have completed their campaigns and raised
more than TRY 2.7 million in funds. The campaigns of our
other projects are ongoing.
There is a wide range of projects on Beehive, which
soon became the market leader in terms of the scale of
funds raised, from the Smart Note Book to the Smart
Stick for the visually impaired. We help further grow
entrepreneurs, who successfully completed the crowd
funding campaign in this wide scope, by introducing them
to investors.
PARTNERSHIP ECOSYSTEM MANAGEMENT
The Turkcell Partner Network, one of Turkey’s long-
established business ecosystems, has been working with
business partner companies since 2004, and manages
an ecosystem of more than 200 business partners, who
employ over 10 thousand people, including distribution
channels. The Partner Network creates and announces
business models for companies within the ecosystem;
monitors business partners’ compliance with stipulated
criteria and regulations.
We continued development studies on partner.turkcell.
com.tr, the window of Turkcell Partner Network on
the world. We switched to a new application form,
enabling external business partner candidates to better
introduce themselves and be evaluated more soundly by
Turkcell. We began to receive the financial metrics of
partner candidates and proposed project information, if
10 thousand
The Turkcell Partner
Network, one of Turkey’s
long-established business
ecosystems, has been
working with business
partner companies since
2004, and manages an
ecosystem of more than
200 business partners,
who employ over 10
thousand people, including
distribution channels.
We launched the Turkcell
Academy Corporate learning
platform in 2015. We provide
end-to-end services to our
corporate customers through
online training, which is
available on the platform,
creating a more efficient
employee development path.
With Turkcell Corporate
Marketing and Big Data
Services, companies can
reach their current and
potential customers at the
right place and time, and
obtain the insights into their
customers they require.
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Turkcell Academy Corporate
We continue to accompany employees’ developmental
journey with the Turkcell Academy Corporate learning
platform.
We launched the Turkcell Academy Corporate learning
platform in 2015. We provide end-to-end services to
our corporate customers through online training, which
is available on the platform, creating a more efficient
employee development path.
With new generation learning methods, we have helped
to develop over 100,000 employees from companies of
diverse dynamics operating in sectors such as retail,
health, and technology, finance, food, services and
energy, right across Turkey. Through this platform we
enable companies to personalize their own training
management platforms and design end-to-end in-house
learning processes such as planning, reminders, and
reporting of trainings. We provide mobile access to
rich content trainings at any time. We support mobile
transformation initiatives by contributing to the
more efficient development of human resources and
ecosystems of corporations, and to the way they do
business.
CORPORATE MARKETING SOLUTIONS
With Turkcell Corporate Marketing and Big Data
Services, companies can reach their current and potential
customers at the right place and time, and obtain the
insights into their customers they require.
While companies digitally manage their marketing
activities with the Self Service Messaging Platform
(Mesaj Üssü), they communicate with their customers
more effectively with Rich Content Messaging. Moreover,
they can realize efficient and cost-effective campaigns
and enrich their marketing activities by giving free
TRY-min, SMS-MMS and internet to their customers with
Digital Promotion products. They can also provide mobile
website and application based free connection services
with Bulk Data. In addition, they can keep their databases
updated using device and process capabilities through
Turkcell Smart Capabilities services. Through Smart
Map and Mobility Index, companies can regularly report
on their current and potential customers’ habits based
on density and mobility data, and have the opportunity
to make their planning correctly and realistically. With
Analytical Services, companies can use both their own
data and Turkcell capabilities, and thereby feed their
decision supporting mechanisms for various business
units.
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TURKCELL SALES CHANNELS
As Turkcell, we started to reflect our “digital operator” vision to all our
sales channels. We started digital transformation primarily in the retail
channel. We continue to digitalize our stores, which are the faces of
Turkcell, with changes we will make in the trading model.
We continue to provide
services and solutions to
our customers through our
Turkcell Consumer Sales
Channel, Alternative Sales
Channels, Turkcell Fiber and
DSL Solution Centers and
Corporate Sales Channel.
OUR SALES CHANNEL STRUCTURE
We bring all advantages, campaigns, devices,
services and facilities offered by Turkey’s leading
communication and technology company Turkcell,
to our customers. We continue to provide services
and solutions to our customers through our Turkcell
Consumer Sales Channel, Alternative Sales Channels,
Turkcell Fiber and DSL Solution Centers and Corporate
Sales Channel.
Within the framework of our integrated structure,
we present our fixed and mobile converged Turkcell
solutions all over Turkey through our Turkcell and
Turkcell Plus stores. We work to provide our customers
with the same service quality at each point.
OUR RETAIL CHANNEL
We commenced our holistic digital transformation
journey in our retail channel, at the beginning of
2017. Within the framework of retail transformation,
in our stores, which face our customers, we realize
the transformation in the decoration, infrastructure,
trading model and culture of our employees, by
focusing on our customers and their expectations.
In our digital stores, which were renewed with a focus
on experience, there are designated areas where our
customers can experience all of our new products,
services and technologies, as well as smart devices.
This comprehensive digital retail transformation is
taking place for the first time in Turkey at Turkcell.
With this transformation, in our stores, we bring our
customers together with digital screens that can be
managed centrally, online store in store, a mobile
service that enables every employee to perform
every transaction, secure digital signature and digital
label, as well as applications such as after sales
smart support. In our new stores, we realize all of our
communication and interaction with our customers
through digital screens. In all of our transforming
stores, we manage digital content on LCD screens,
having entirely removed paper posters and brochures.
We pioneered another first for Turkey by introducing
secure digital signature technology via tablets. All
of our employees have the flexibility to serve our
customers in our stores with tablets in hand and digital
signatures. Thus, transactions, which were previously
time consuming, have become faster to complete. Our
customers also have the opportunity to purchase the
devices and accessories they want from our online
store screen within our stores without ever having to
stop by the cashier and have them delivered to their
In our digital stores, which
were renewed with a focus
on experience, there are
designated areas where our
customers can experience all
of our new products, services
and technologies, as well as
smart devices.
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TURKCELL ANNUAL REPORT 2017
69
homes. We have realized a transformation, wherein
our physical stores and online store were integrated
together, and where the customer could buy the
desired product from the channel of their choice.
sales digital sales scheme used to shorten the average
speech duration, which was one of the biggest cost
items of the channel, achieved a 16% sales success
rate and began to see use for all products.
Along with transformation, for our indispensable
employees, we initiated Turkey’s first “Certification
Program” in the retail sector. Now, all of our employees
working at Turkcell stores are evaluated and certified,
after receiving specific retail training. All training
and evaluation processes within the scope of the
certification program are also designed entirely
in digital format. A total of 80 thousand hours of
training was provided for approximately 11 thousand
employees. Our employees who succeeded in the
digital test and evaluation centers were entitled to
receive certificates.
We offer our fixed and integrated Turkcell solutions,
new digital services, smart devices and new
technologies across Turkey through our Turkcell
Stores, which are renewed and digitalized within the
scope of our integrated structure. We work towards
ensuring same service quality at each and every sales
point.
In the Exclusive Channel, we serve our customers with
a team of 8,200 service personnel, 4,610 of which have
already been certified, at 1,404 Turkcell store. With our
certified experts in fixed and mobile communications
technologies, we offer coaching services to around
18 million customers visiting our stores each month
regarding new technologies that ease their lives and
enable them to experience products.
In the Non-exclusive Channel, we supply products to
1,853 Authorized Sales Points and 4,126 Turkcell Sales
Points (TSN) through 7 Turkcell Distribution Centers
(TDM) and provide information about our products and
services. We introduce our new technologies, services
and offers to our customers.
OUR ALTERNATIVE SALES CHANNEL
On our Individual Telesales Channel, which increased
sales volume by 18% compared to the previous year
and reached 11 million units, we focused on bringing
products and services to our customers when in need.
We gained sales competence and focus on written
channels such as Social Media, WEB Chat, proactive
chat, and turned every channel where we reach the
customer, into a sales channel. The Consumer Telesales
Channel became a vital channel for DSS products with
the Activity Project aimed at increasing the share of
channel’s sales over 95% in products such as TV+ and
fizy, starting the sales of lifebox establishing a sales
bonus scheme, increasing the active usage of BiP,
Dergilik, and My Account. The IVR technology Robot
OUR CORPORATE SALES CHANNEL
We serve all our public, strategic, large and small-scale
customers in Turkey through a segmented structure.
We provide end-to-end integrated telecom services
with Turkey’s largest and most widely spread sales
force on our Corporate Sales Channel. We are
digitalizing companies with our system integration,
IT services, corporate applications, data center and
cloud solutions. In 2017, we increased the revenue
share of products on the fixed front and contributed
to profitability of the Company with these products
of strategic value. We continue to lead the digital
transformation of corporate customers.
A team of approximately 2,000 employees at our
Corporate Solutions Centers realizes active sales
to small-scale companies. Additionally, we provide
services from our Global Bilgi Call Center for all
company requests. We also provide portfolio
management services by conducting regular calls with
nearly 500 portfolio managers.
OUR ONLINE SALES CHANNEL
Our Online Sales Channel also continued its steady
growth in 2017. It became one of the vital players in
its category in Turkey’s e-commerce sector through
the services offered on our online sales channels
(Mobile, Web and in the My Account application).
With a digitalization vision, many products and
services offered at our TIM stores since 2017, are today
accessible 24/7 through our Online Channels.
We continue to facilitate our customers’ lives with
innovative services. With the “Payment with Invoice”
service that we launched as a first in Turkey, we give
our customers the option to pay for their purchases
of up to TRY 250 on our online sales channels, by
reflecting the purchase amount to their Turkcell
invoices. In accordance with Omni-Channel approach,
with the “Online Store Screens” located in our TIM
stores we also provide access in our stores to products
sold digitally. We started to meet the demand of our
customers with these screens under all circumstances,
even if a product cannot be found in TIM’s inventory.
We expand our portfolio daily in terms of product
diversity. We achieved a 40% increase in terms of
customer preference compared to 2016 on the back of
campaigns, business partnerships and launches, as well
as the attractive product and price proposals we offer.
We offer our fixed and
integrated Turkcell
solutions, new digital
services, smart devices and
new technologies across
Turkey through our Turkcell
Stores, which are renewed
and digitalized within the
scope of our integrated
structure.
In the Exclusive Channel,
we serve our customers
with a team of 8,200 service
personnel, 4,610 of which
have already been certified,
at 1,404 Turkcell store.
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TURKCELL ANNUAL REPORT 2017
OPERATOR RELATIONS AND WHOLESALES
We give direction to the telecommunication sector in Turkey. We have
become the most important capacity and internet provider of many
neighboring countries.
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By enabling other national operators to utilize our own
infrastructures, we both created new business areas and
pioneered successful and major projects that contribute
to the technological transformation of our country.
We played a role in the initiation of studies to establish
a common infrastructure company that will enable our
country to reach information in the fastest and cheapest
manner, facilitate information processing, ensure the
preservation of information and create a competitive
environment for all service providers, with a focus on
real productivity in the area of service richness.
TURKCELL USERS NO LONGER TURN OFF THEIR
PHONES ABROAD.
We began to act as a group regarding agreements
reached with other operators within the scope of
international roaming. And we have been able to
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our consumer and corporate customers’ international
tariffs. And so, even when our subscribers are abroad,
we are in a position to meet all their communication
needs with advantageous offers.
By enabling other national
operators to utilize our
own infrastructures, we
both created new business
areas and pioneered
successful and major
projects that contribute
to the technological
transformation of our
country.
3.5 Tbps
Within the scope of our
wholesale data services,
our international carrying
capacity exceeded 3.5 Tbps.
We have cooperated with
the world’s largest global
traffic exchange platforms
and played a major role in
their decision to come to
Turkey.
We stand by to the change in Turkey’s
telecommunications sector through business
partnerships realized with national and international
operators in roaming, interconnection, wholesale voice
and wholesale data services.
TURKEY, MAIN INTERNET ROUTE
We have become the most important capacity and
internet provider of many neighboring countries with
the activities that we have been carrying out since 2008
towards our vision of transforming the silk road into a
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as the main internet route, with Istanbul as the regional
internet hub.
Through our collaborations with the world’s leading
operators, we have served as a bridge providing
wholesale customers with seamless access from east to
west, at the speed of light.
THE CENTER OF TRAFFIC EXCHANGE IN REGION:
ISTANBUL
Within the scope of our wholesale data services, our
international carrying capacity exceeded 3.5 Tbps.
We have cooperated with the world’s largest global
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their decision to come to Turkey. Thus, we have taken
another crucial step in transforming Istanbul into the
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point where they wish to provide their services from
Istanbul.
WE EVALUATED 2018 ISSUES AT THE WHOLESALE
CUSTOMER EVENT.
In 2017, we organized an event to contribute to the
strategy of turning Turkey into a regional digital hub
and positioning Istanbul as its technology center. During
the event, participated in by 250 senior executives from
40 countries, we talked over 2018 issues and evaluated
new cooperation opportunities that will add value to
the sector.
TURKCELL ANNUAL REPORT 2017
71
CUSTOMER EXPERIENCE FOCUS
Within the scope of Turkcell customer experience service model, we create
confidence, provide convenience, and offer personalized solutions in the
service we provide to our customers.
Voice of the
Customer
As the customer experience
team, we listen to the “voice
of the customer” at every
interaction, and based on
the feedback we receive, we
strive to provide customers
the most feasible value
propositions.
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We stand by our customers during incidents that require
urgent communication, such as natural disasters or terror
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of charge Emergency Communication Packages, including
internet, minutes, and SMSs, to our customers’ lines in the
region. Accordingly, our efforts were deemed worthy of
the “Best Technology Use” award at the Loyalty Magazine
Awards in the UK for customer experience and loyalty.
Service to Immigrants
As Turkcell, we are providing services to facilitate the lives
and meet the needs of our immigrant customers. In addition
to their basic needs, we are structuring our service processes
and channels with an awareness of the importance of mobile
communication for this customer segment.
Through our center in Siirt, we started to provide call center
services in Arabic language in Turkey and served 9 thousand
customers per month in Arabic. We send some SMSs that
our customers receive about their Turkcell subscriptions in
Arabic. With the Arabic language option at turkcell.com.tr,
we target our customers’ fast and easy access to the basic
information they need in the digital environment, marking a
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With the “Hello Hope” mobile application, we offer Turkish
language learning, simultaneous audio translation from
Turkish to Arabic and Arabic to Turkish, access to critical
information that facilitates everyday life, and training videos
for more than 3 million Syrian refugees living in Turkey.
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all operators’ Syrian customers, users can call the Turkcell
Arabic call center with one touch.
Voice of the Customer
As the customer experience team, we listen to the “voice
of the customer” at every interaction, and based on the
feedback we receive, we strive to provide customers the
most feasible value propositions.
We receive a diversity of feedback from our customers;
during their calls and through the sales channels, and My
Account, My Company, application consultant, chat and
other digital channels, as well as social media among many
others, after which we evaluate their wishes and complaints.
We conduct and evaluate customer questionnaires, focus
group studies, and similar market surveys regarding our
products and services at each point; from the initial idea
stage to presentation to the customer, and from usage
to pricing. In so doing, we are able to provide necessary
feedback to our employees, improve ourselves, and offer a
better customer experience. We share all these customer
focused activities with our employees during annual
evaluations held with management every year, as well as
meetings and site visits.
#mycustomer
Within the scope of Turkcell customer experience service
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offer personalized solutions in the service we provide to our
customers.
We work on the #mycustomer project on all mobile/
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customers are contacted. We conduct this project with
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design the effective customer experience targeted, and
create behavioral models that we aim for our customers to
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ICTA Experience Store
Within the context of The Information and Communication
Technologies Authority (ICTA), we serve in three areas;
namely, ICTA Experience Area, ICTA Store, and ICTA
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ICTA Experience Area
Our visitors can experience hundreds of items of content
and user-friendly features of TV+, the TV platform, which
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generation instant communication application; UpCall , which
offers a brand-new call experience; lifebox, which ensures
you safely enjoy keeping your memories with you at all
times; Dergilik, which brings hundreds of popular magazines
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thousands of items of training in the digital environment.
In this area, visitors can also view “the Beehive Platform”,
where we aim to realize technology initiatives, and the
“Hello Hope” application, which connects Syrians to daily life
in Turkey. Turkcell’s Gebze Data Center, one of the largest
and most important digital transformation investments in
Turkey of recent years, can be visited with VR technology in
the same area.
72
TURKCELL ANNUAL REPORT 2017
CUSTOMER EXPERIENCE FOCUS
With Secure Digital Signature, we ensure a paper free environment in all our
stores, and provide our customers a more reliable, swift and easy
digital experience.
Thanks to the studies
undertaken to assure that
our customers get the best
quality service, not only in
Turkey, but also wherever
they are in the world; they
are now able to use as
much internet as they want,
without the fear of being
invoiced as if abroad.
Our ICTA Store
This is our store where customers can carry out all
transactions with secure digital signature technology and
also get “Smart Support” service for their devices.
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This is our Complaints Office, where we meet our clients
who apply to the ICTA to communicate their complaints.
Our Proactive Services
Proactive Roaming Services
Thanks to the studies undertaken to assure that our
customers get the best quality service, not only in Turkey,
but also wherever they are in the world; they are now able
to use as much internet as they want, without the fear of
being invoiced as if abroad. We prevent invoice shocks by
reaching out to customers who have a high current invoice
amount due to roaming, informing them and offering
package switching options. In so doing we continue to
reassure our customers that we are always with them. For
our customers who want to reach us in alternative ways,
we offer the BiP service channel; help SMS, as well as
International Help Service available in 20 countries.
Tariff Consultancy
Along with the launch of 4.5G and the increase in mobile
internet usage of our customers, the right package
selection has become crucial. For this reason, we warn our
corporate and retail customers against the risk of exceeding
their package quota both through traditional and digital
channels such as IVR and My Account. We offer them more
convenient packages for their use, and facilitate switch
transactions.
With our Tariff Consultancy team, we take actions for
our postpaid subscribers who have 30 days left for their
contract, or a high current/invoice risk score. We manage
their invoice experience, meet all demands and requirements
related to the invoice, and prevent them from having a bad
surprise by managing their invoice expectations.
New Generation Digital Services and Solutions
Secure Digital Signature
Thanks to our Secure Digital Signature solution, signatures
can be appended by pressure pen devices such as a tablet,
etc. in the digital medium instead of paper, while the
agreement is stored in the digital environment. Elements
that distinguish the signature are measurable technical data
such as pressure, acceleration and speed information.
With Secure Digital Signature, we ensure a paper free
environment in all our stores, and provide our customers
a more reliable, swift and easy digital experience. As
a customer benefit, we accelerate our efforts towards
advantage provision and digitalization. With the secure
digital signature, we improve the time productivity with a
reduction in transaction time of 60%, collecting the needs
of our customers on one page. To date, we have saved TRY
2.3 million in costs. We are planning to digitalize 150 million
documents and achieve TRY 40 million in cost savings once
we complete the digital signature transformation in all
service points. While Turkcell pioneered a first for Turkey
in digital customer experience, Turkey also ranked among
the first three countries in the world to utilize a biometric
signature in this manner, along with the Czech Republic
and Spain. Its contribution to Turkey’s economy is expected
to be around TRY 300 million. By this means, 20 thousand
mature trees and 342 thousand tons of water are conserved.
Environmentally Friendly Invoice
We aim to ensure that invoices are always sent to our
customers in a safe, timely and transparent manner. In
this respect, by using digital channels in the transmission
of the invoices, we are contributing to both fast delivery
to our customers and the preservation of nature. In 2017,
we ranked first in the world among telecom companies
by reaching an environmentalist invoice subscription and
transmission rate of 97% for consumer mobile and 85%
for fixed.
Being a Digital Operator
In today’s world where digital leads technology, as Turkcell,
our main goal is to have our customers enjoy a unique
experience. We also stand with them on our digital channels
in order to facilitate their lives and enable them to access
everything they need to know about Turkcell, wherever
they are. With the holistic experience Turkcell customers
enjoy when using all of our products and services, we are
designing an end-to-end journey experience in pre-sales and
after-sales processes utilizing our integrated communication
and technology services. Thus, we offer seamless services
that are converged across all service channels through
which we communicate with our customers.
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With the holistic experience
Turkcell customers enjoy
when using all of our
products and services, we
are designing an end-to-
end journey experience in
pre-sales and after-sales
processes utilizing our
integrated communication
and technology services.
400 million
On the My Account
application, 400 million
transactions are made
per month. The remaining
balance is checked
73 million times while
the amount and details of
invoices is requested
17 million times.
TURKCELL ANNUAL REPORT 2017
73
By joining to the OTT world together with the latest
developments, we provide a digital customer experience not
only to our customers who are Turkcell subscribers, but also
to customers of other operators. In our globalizing world, we
started to serve our customers in new markets we entered
through our OTT services to the same level of quality and
reliability that we have been offering to date in Turkey.
In order for our customers to get the same service from
all channels, we undertook the new subscription, port in
transactions on the web enabling us to provide service from
the home without the need to visit a store. We enabled an
in-store sales experience, by selling online products through
our website. At the same time, we enabled the help pages
on our website turkcell.com.tr to serve in four languages
(English, Russian, Arabic and Ukrainian) to assist foreign
national customers.
Fast Entry
By integrating Fast Entry to Turkcell’s many digital channels
and applications, we improved customers’ login experience
and removed the problem of a forgotten password. Fast
Entry is a customer authentication service provided via
mobile phone number, and is supported by many GSM
operators across the world through World GSM Association
(GSMA) Mobile Connect infrastructure, which is a global
solution. Used 2.5 times by a customer per month, Fast
Entry’s monthly usage reached 700 thousand.
My Account
We reached 25 million downloads with our My Account
application, which we developed to meet the needs and
facilitate the digital habits of our customers. We created a
free application for our customers on which they can process
their transactions instantaneously, and that can be accessed
24/7. We carried out many studies to provide our customers
offers, services and applications that best suit their usage,
and proactively introduced our offers. On the My Account
application, 400 million transactions are made per month.
The remaining balance is checked 73 million times while the
amount and details of invoices is requested 17 million times.
The application, which is well adopted through gamification
schemes such as Shake and Win, our customers pay their
bills, top-up TRY, benefit from offers that best suit them
and earn gifts by shaking their phones. At the same time,
My Account has become a 360-degree digital application
enriched daily by its innovative capabilities such as making
an appointment from Turkcell stores and following requests
submitted to Turkcell.
We enabled our customers using Superonline to track all
their products from My Account and realize transactions. At
the same time, we took steps to support our omnichannel
strategy with functions such as making an appointment from
our stores, following requests submitted to us, and tracking
mutual SMS communication carried out with Turkcell. In
addition to these, we have increased customer loyalty with
our gamification activities such as Shake and Win.
My Company
With the My Company application used by our company
representatives to provide convenience and advantages to
our corporate customers, all of our customers can process
transactions 24 hours a day, 7 days a week, whether from
their mobiles or computers, and access information on our
products and services. In 2017, 120 thousand companies
used the Turkcell My Company application with 400
thousand users to realize 150 million online transactions.
At the same time, we brought the speed and convenience of
making transactions without paper to our representatives’
lives through transactions specific to My Account such as
collective payment, online campaign approval, SIM card
activation, and approval of user line transactions.
Application Consultant
We provide services for 13 applications, and meet 25
thousand requests per month with our application consultant
team, another area where we have increased the momentum
of our activities. We will start to serve instantaneously
via app chat in the near future. We respond to complaints/
comments regarding our applications on the App Store and
Google Play with our Application Consultant team to provide
better and faster customer solutions. A platform was created
where our customers can take “Feed Up” screenshots
concerning any problems they may have with the My
Account application, one of our biggest digital contact points
with customers, and automatically communicate with the
application consultant team. As a result, we have enabled
our customers to reach faster and easier solution. Our next
goal is to integrate this platform to all applications.
Tariff Consulting with Chat
In order to be closer to all our GSM users and solve their
problems faster and easier, we provide tariff consulting for
our customers who login to the My Account application, any
time they are in need, and support their technical needs.
We had served our customers 1.4 million times through BiP
Customer Services, 9.3 million times on My Account, and
also provided a live and on-site chat service through the
GNÇ application and turkcell.com.tr.
We launched ChatBot on BiP Turkcell Customer Services
on December 7, 2016. We received 19% of incoming calls
through ChatBot.
Via simultaneous Proactive Chat, we proactively offer help
on our web page for customers who are interested in our
devices and packages. We also sell devices here.
SOCIAL MEDIA
We handle 100 thousand responses on average per month
from 22 accounts on Twitter, Instagram and Facebook,
our social media channels, and among our closest contact
points for the problems and suggestions of our customers
regarding their digital experiences. We respond to all user
requests, complaints and suggestions within 30 minutes. We
provide the most accurate instructions and solutions through
uninterrupted dialogue.
74
TURKCELL ANNUAL REPORT 2017
SOCIAL RESPONSIBILITY
In recognition of its social responsibilities, Turkcell
continued to pursue its social-benefit focused projects in
2017, at the same pace.
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The Syrian war that started in 2012 created a vast
humanitarian drama, causing the broadest migration
movement that have taken place in the region since
World War that. As more than 5 million Syrians left
their country, Turkey opened its doors to over 3.2
million of them, in so doing becoming the nation to
host the largest number. As Turkey’s Turkcell, aware
of our responsibility, we have planned all actions
according to the needs of these Syrians. Within
the scope of the Hello Hope project; we initiated
partnerships with experts such as the AFAD (Disaster
and Emergency Management Authority) and Turkish
Red Crescent. The Hello Hope Project continues in two
phases, and we continue to provide services through
our mobile application and Hello Hope Technology
Center.
The “Hello Hope” mobile application, launched in
support of Syrians to overcome the language barrier
problem, a major obstacle to their participation to
social life, completed its first year. The application
contains the features of audio translation, learning
Turkish words and phrases commonly used in daily
life in written and audio format, easy access to
information useful in daily life in Turkey, and easy
access to the Turkcell Arabic Call Center. Aimed
at facilitating the daily lives of Syrians, and at
providing an opportunity to live an adopted lifestyle,
the application was designed to be available to all
operators’ customers, and has to date registered
approximately 700,000 downloads.
In another phase of the Hello Hope project, we
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Temporary Housing Center in association with AFAD
and Prodea Systems.
At our Hello Hope Technology Center, we provide;
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offered for the education of Syrians in Turkey,
› The Hello Hope application, which is a solution to
the need to learn Turkish, to communicate and access
information over Turkcell T tablets,
› Opportunity of listening to music with fizy and
watching TV on Turkcell TV+, and Khan Academy’s
K12 training, content on news and health.
Turkcell was the only Turkish
company awarded by the
United Nations in New York,
for its humanitarian services
provided to Syrians.
Since our establisment we have met our responsibility to
society through projects that we carried out together with
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education, culture, the arts and sports.
As Turkcell, the basis of our corporate social responsibility
projects is formed by the United Nations Sustainable
Development Goals and Turkey’s Vision 2023. As much as
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business processes, we also build our social responsibility
projects in line with focus of “equality of opportunity”.
HUMANITY AWARD TO TURKCELL
The UN Global Compact, the sustainability platform
launched by the United Nations to eliminate poverty
and ensure that all people live in peace and prosperity,
determined the 10 private sector leaders in the world
most supportive of their development goals this year.
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due to Turkcell’s services and support for Syrian
refugees.
TURKCELL ANNUAL REPORT 2017
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Talented students, who
attend the Science and Art
Centers that we supported
within the scope of the Whiz
Kids project in 2017 under
the auspices of the Ministry
of National Education, came
together in Antalya.
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Our efforts to ensure a greater inclusion of Syrians in
social life through technology and communication have
been communicated at various organizations including the
GSMA, the United Nations and the World Economic Forum
and have received numerous awards on international
platforms.
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Turkcell hit the road to assist Turkey’s greatest resource,
talented students, to overcome impossibilities and access
the educational opportunities required to develop through
new generation technology and learning. The “Turkcell
Whiz Kids Project”, which gathered under the roof of
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auspices of the Ministry of National Education for unique
students from all over Turkey with the potential to steer
the future. The project aims to enable such students to
realize their potential and access future technologies.
The trainings that aim to bring out the creativity and
potential of talented children, allow students to create
their own product by combining various variables, such
as teaching them to design and produce using three-
dimensional printers, write their own mobile applications
with App Inventor training, and construct their own
circuits with electronic training.
The project was initiated in 2016 in seven provinces
including Istanbul (Bahçelievler), Adana, Ankara,
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Amasya, Erzurum and Rize were completed in the
second year. The project continues with the laboratories
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the scope of the Turkcell Whiz Kids Project, the number
of classrooms opened throughout Turkey reached 20.
Within the scope of the project; we also provide
technological support to some of the successful schools
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classes formed in 2017 in Gökçeada Greek Middle School
and High School, Mardin Midyat Sivrice Middle School
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opportunity to benefit from the project.
Within the scope of the project, we aim to create
educational and developmental opportunities in Science
and Art Centers, and create value for 10 thousand children
within three years.
In another phase of the project, more than 20 thousand
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Coding kits. Thanks to these kits, all students can realize
their dream projects relying on their handicraft, by using
modules that communicate with each other through
special magnets.
Antalya Science and Art Festival
Talented students, who attended the Science and Art
Centers that we supported within the scope of the Whiz
Kids project in 2017 under the auspices of the Ministry of
National Education, came together in Antalya.
A total of 1,200 students, teachers and parents
participated in the Science and Art Centers Festival
from 94 Science and Art Center. The festival unites the
Science and Art Centers to share information, products
and technology, as well as ideas and projects that enable
our country’s talented students to become production-
oriented and project-based minded individuals.
During the event, where Turkcell held five workshops,
children met with experts in their fields and enjoyed
the opportunity to exchange ideas. Over four days, a
selection of literature, robotic and technology-related
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arts, Traditional Turkish Arts, music, software-informatics,
astronomy and photography were organized. Along
with workshops and contests, interviews were realized
on leadership, science, literature and art. The festival
ended with exhibitions of visual arts and photography
workshops, student concerts and an awards ceremony.
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TURKCELL ANNUAL REPORT 2017
SOCIAL RESPONSIBILITY
In the collaborative project “Women Developers of the Future” conducted by Turkcell,
TOBB (The Union of Chambers and Commodity Exchanges of Turkey), and the “TOBB
Women Entrepreneurs Council”, our aim was to help women keep pace in the software
era, and become entrepreneurial leaders by learning mobile technologies.
During the Women Developers of the Future Provincial
Finals staged within the framework of our project, 319
women competed with 203 projects across 18 provinces. 48
successful projects qualified to participate in the semi-finals
held on 6 October 2017. In the Grand Finale, 10 teams
selected in the semi-final made a presentation and the first
three groups were announced at the awards ceremony.
In addition to receiving support at the commercialization
stage, winning projects will benefit from internship at the
technoparks, employment and incubation center in their
provinces. Furthermore, we created employment for 100
tester women who were successful in the selection process
out of 664 women in total, who were entitled to participate
in project development process upon completing the
Women Developers of the Future’s classroom trainings and
received achievement certificates. In this manner, we aim at
having end-user tests of Turkcell products and services. In
the first phase of the tester women project with a duration
of six months, we employed 100 tester women, who live
in various regions and cities of Turkey, and who have
successfully completed the selection and training process,
at Turkcell Group, offering them the possibility of remote
working. We will also provide women with the opportunity
to realize their entrepreneurial dreams and ideas by opening
up successful projects for funding on Beehive, Turkcell’s
crowd funding platform.
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People Without Boundaries Program
As the Turkcell family, we attach great importance to equal
opportunities among all segments of our society for the
economic and social development of our country, and are
taking concrete steps in this regard. In light of this vision,
we provide solutions in a diversity of fields under the roof
of “People Without Boundaries” to make the lives of our
disabled citizens easier, and to better integrate them into
daily life.
Education Without Boundaries Program
We support the development of disabled students in
education and employment within the framework of
the Education Without Boundaries Program initiated in
June 2015 under the auspices of the Ministry of National
Education. The program aims to increase the competence
of disabled children with special education needs, and to
ensure their participation in social life.
As the Turkcell family, we
attach great importance to
equal opportunities among
all segments of our society
for the economic and social
development of our country,
and are taking concrete steps
in this regard.
WOMEN DEVELOPERS OF THE FUTURE
We took our “Future Developers” Project, launched five
years ago to activate our country’s potential in the IT
sector, to another level in 2017 with “Women Developers
of the Future”.
As Turkcell, we initiated a project in association with
TOBB (Union of Chambers and Commodity Exchanges of
Turkey) and the TOBB Women Entrepreneurs Council.
The purpose of the project is to support women in
developing mobile applications by educating them on
software, and improving women’s employment capacity
and entrepreneurship in this area. We support them
in keeping pace with software developments, and in
being one step ahead in terms of entrepreneurship by
recognizing mobile technology.
In the first stage, the program was realized by almost
1.400 women. Within the framework of the “Women
Developers of the Future” trainings, we provided online
mobile application development lectures across Turkey
during weekdays, and classroom lectures in 18 cities
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Trabzon, Kayseri, Antalya, Denizli, Van, Adana, Karabük,
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weekends. Following the trainings, in the process of
“Project Development”, we encouraged participants to
prepare their own projects, and provided consultancy
through Turkcell’s volunteer trainers, and business
mentors guided by TOBB.
TURKCELL ANNUAL REPORT 2017
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As Turkcell, we touched 1 million disabled people’s lives in 23 years
on our way to value the future of Turkey. We use every means
available like our products and services to remove social barriers
against disabled people.
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Within the “Education Without Boundaries Program”, we
organized cultural tours for disabled students and parents.
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visually impaired students and their parents participated
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Disabled People week. Saffet Emre Tonguç, the historian
and writer, guided children and parents on the Istanbul
Bosphorus Tour.
Turkcell Dialogue Museum
In addition to the products and services we have
developed under the roof of “People Without Boundaries”
to add value to the lives of the disabled, and to ensure
their active and equal participation in daily life, we are
also conducting new social responsibility projects to
provide thorough and permanent solutions. We believe
in the importance of creating awareness of the need for
solutions to social problems. Hence, we transformed the
“Dialog in the Dark” Exhibition, which was initiated in
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Museum” with the addition of the “Dialogue in the
Silence” Exhibition. The museum, which has been hosting
the Dialogue in the Dark Exhibition with the support of
Turkcell since 2014, introduces visitors to a different
world along with visually and hearing-impaired guides,
together with the “Dialogue in the Silence” Exhibition.
Within the scope of the project, almost 40 visually and
hearing impaired people are employed in Istanbul with the
support of Turkcell.
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Companion Workshops Leadership Training Program
The Turkcell –YGA My Dream Companion Workshops
Leadership Training Program is a leadership program
active since 2015, in which visually-impaired, secondary
education students have been discovered and raised as
role models.
Since day one of the project, close to 200 visually
impaired students in seven provinces have taken their first
steps towards becoming the leaders of the future. During
10-week workshops held on two occasions, students took
730 hours of science, art and leadership training. They
received one-on-one mentorship from role models after
four camp programs, in which 40 speakers participated.
Within the “Education
Without Boundaries
Program”, we organized
cultural tours for disabled
students and parents. City
tours were held in five cities,
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tour guides.
Within the scope of the program, more than 10 thousand
disabled students with special education needs were
reached in 84 schools across 45 provinces within two
years.
› Students with mild mental disabilities are being
prepared for post-school business life in professional
workshops in 48 Special Education Centers established
through the Turkcell Education Without Boundaries
Program.
› With the skills they acquire in accommodation and
travel services, food and beverage services, and
handicrafts workshops, students are prepared for
employment after school.
› With the technology classes established at all
16 schools for the visually impaired throughout
Turkey, students are prepared for employment and
developmental opportunities are provided through
technology training.
In 20 schools for the hearing-impaired, computer
classes and other necessary workshops are established
to prepare young people for employment in graphic
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›
› Detailed trainings are provided according to individual
interests to contribute to their development in classes
where they gain fundamental computer skills required
for employment at state institutions and private
companies.
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TURKCELL ANNUAL REPORT 2017
SOCIAL RESPONSIBILITY
Within the framework of disability football sponsorships that we initiated
in cooperation with the Turkish Football Federation, we provide sponsorship
support for both national team and leagues of four federations.
With the audio description technology we launched in
December 2015, the visually impaired can follow all movies,
at all movie theaters in Turkey without missing any visual
detail. The audio description service, a first for the world,
and which made available for 70 movies screened in
theaters to the visually impaired, has been awarded in the
category of Accessibility and Integration to Social Life at
GSMA 2016. It was also selected as the application with the
highest social impact in the MEFFYS 2016. Following this,
another global first was achieved, enabling the visually
impaired to access audio descriptions of broadcast TV
programs via My Dream Companion.
My Sign Language Application
The My Sign Language application facilitates
communication between the hearing-impaired and those
who do not know sign language, thereby supporting the
personal development of the former. Within the scope of
this application, a simultaneous translator of written and
spoken text into Sign Language is provided, along with a
digital dictionary, in which sign equivalents of more than
3,500 words can be found, current news and personal
development in sign language, and child development
and sign language trainings. At the same time, users can
start video calls via BiP through the application, and
communicate in sign language free of charge.
Federation of Disability Football Sponsorship
We support our work in different fields with our projects
in sports, so that our disabled citizens can enjoy a more
active life. We continue our disability sports sponsorships
initiated with the cooperation of the Blind Sports
Federation, with Hearing Impaired Sports Federations,
the Physically Disabled Sports Federation, and the
Special Athletes Federation in the football branch. Within
the framework of disability football sponsorships that
we initiated in cooperation with the Turkish Football
Federation, we provide sponsorship support for both
national team and leagues of four federations.
Our Amputee National Team became the European
Champions in 2017, sustaining the European Championship
success of our Visually Impaired National Team of 2015.
We hope to achieve similar successes in other disability
branches over the coming years.
Within the scope of My
Dream Companion mobile
application, visually
impaired people can follow
the agenda in different
categories such as science
and technology, health,
sports, politics, economics,
and disability, as well as
through the current articles
of over 150 columnists.
Additionally, they can
access intellectual content,
including hundreds of
audio books, journals and
magazines.
Turkcell My Dream Companion
Within the scope of My Dream Companion mobile
application, visually impaired people can follow the
agenda through different categories such as science and
technology, health, sports, politics, economics, as well
as through the current articles of over 150 columnists.
Additionally, they can access intellectual content, including
hundreds of audio books, trainings and magazines.
Visually impaired users can obtain detailed information on
stores in their vicinity through the My Dream Companion
application with beacon technology at 23 Shopping Malls
in cities such as Istanbul, Ankara, Gaziantep, Adana,
Konya, Izmir, Kocaeli, Antalya and Mersin. They can use
the navigation service for areas such as a shop they wish
to visit, an elevator, reception, or toilet facilities. With the
same technology, users can access commentary on the art
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Center, listening to audio descriptions of each art work
through the application.
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Academy without Boundaries
Turkcell Academy’s online education platform
www.turkcellakademi.com offers special trainings for
visually impaired and hearing impaired people under
the category of “Education without Boundaries”. Many
training programs for the hearing impaired ranging
from technology to personal development, and from
the business world to leadership are provided with
the language sign option. There are trainings for the
hearing impaired that teach “Turkish Sign Language”
prepared in cooperation with the Turkish Federation
of the Hearing Impaired, as well as trainings for the
visually impaired that teach smartphone usage specific
to iOS and Android. Turkcell Academy has also started
to offer educational programs for parents with hearing
and visually impaired children that can support child
development.
Gökçeada Greek Middle School and High School
Renovation Work
One of the projects we initiated in line with our
principle of creating equality of opportunity and
adding value to Turkey’s future was the work we
carried out in the development of historical Gökçeada
Greek Middle School and High School, which resumed
its academic life in 2015 after a break of half a century.
We created a technology class to maximize the
educational opportunities for students and designed
them a special program. Accordingly, students in the
technology class will receive education in technology
with the use of three-dimensional printers, Arduino
electronic learning kits and software equipment, and
will be able to produce local software of the future
by creating their own software with the coding kits
given as a gift to them. Additionally, in the teaching
process, students also benefit from the outdoor sports
area, amphitheater and botanical garden, thanks to
the sports and recreational facilities built with our
support.
We reintegrated Sâmiha Ayverdi Anatolian High
School, Fatih Vocational and Technical Anatolian
High School, and Vatan Vocational and Technical
Anatolian High School to Education.
Three projects were added in 2017 to the school
renewal and construction work initiated within the
framework of the protocol signed with the Ministry of
National Education and Istanbul Governorship. Within
this scope, Turkcell built Sâmiha Ayverdi Anatolian
High School, as well as Fatih and Vatan Vocational and
Technical Anatolian High Schools, and earned them to
education.
The schools were built to meet all student needs from
open-closed gymnasiums to fully-equipped conference
rooms, and from laboratory areas to classrooms, in a
healthy environment. Schools also featured special
platforms, ramps and elevators for people with
physical disabilities.
Within the scope of education scholarships, Turkcell
continues to provide education scholarship support
for about 7,500 high school and university students
every year.
Turkcell Academy’s online
education platform
www.turkcellakademi.com
offers special trainings for
visually impaired and hearing
impaired people under the
category of “Education
without Boundaries”.
Three projects were added
in 2017 to the school
renewal and construction
work initiated within the
framework of the protocol
signed with the Ministry
of National Education and
Istanbul Governorship.
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TURKCELL ANNUAL REPORT 2017
SOCIAL RESPONSIBILITY
In order to improve our energy efficiency, we focus on energy
saving in our process improvement efforts. We also reduce our
waste and dispose of it by separating it at its source.
As Turkcell, we detect our
environmental impact areas
with a keen awareness
of our environmental
responsibilities, and
manage our operations
by taking these into
consideration.
TRY 33 million
Turkcell saved TRY 33
million worth of energy
with its conservation
solutions.
SUSTAINABILITY INITIATIVES
As Turkcell, we detect our environmental impact
areas with a keen awareness of our environmental
responsibilities, and manage our operations by taking
these into consideration. We are aware of the fact
that innovations in the telecommunication sector we
operate in contribute significantly to reducing the
environmental impact of business world overall.
We attach great importance to compliance with
environmental principles, which are among the
United Nations Development Program’s Sustainable
Development Goals. While supporting sustainable
industrialization with our technology, we build our
infrastructure considering the future of the climate
and the environment. And in developing our services,
we aim to reduce our environmental impact.
We closely monitor our carbon footprint in combating
climate change and in targeting reduced carbon
emissions, we annually increase the use of renewable
energy sources in our business processes. In order to
improve our energy efficiency, we focus on energy
saving in our process improvement efforts. We also
reduce our waste and dispose of it by separating it at
its source.
Sustainability Report 2016
With our sustainability report published in August
2017, we shared our sustainability management
approach and the sustainability practices and
performance of the operating period between January
1, 2016 and December 31, 2016 with our stakeholders
in full transparency.
This report, in which we adopted the internationally
accepted sustainability reporting standard of the
Global Reporting Initiative (GRI) G4 Sustainability
Reporting Principles as a guide, also contains the
seventh Communication on Progress of the United
Nations Global Compact (UNGC), of which we have
been a signatory party since 2007. We have declared
our support for UNGC’s principles regarding human
and employee rights, the environment and the fight
against corruption, as well as our progress in these
fields.
Data for 2012, 2013, 2014 and 2015 has been included
to illustrate our economic, social and environmental
performance, and to enable comparisons. Stakeholder
feedback is important for us to enhance our
sustainability performance and improve our reporting.
For this reason, stakeholder opinions gathered from
different channels, and related to several of our
applications and initiatives, are included in the report.
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As a company that has long internalized sensitivity
to climate change, we have been studying the risks
and new opportunities created by climate change, and
have turned these studies into a part of our strategic
plans. In 2017, we participated in CDP Turkey (Carbon
Disclosure Project) and shared the comprehensive
report we prepared for our 2016 performance with the
public.
In 2015, we received the “CDP 2015 Turkey Climate
Disclosure Leadership” award as one of the five
companies included in the top 10% of the index.
Energy Conservation Activities
Seeing people, economy and environment as a whole,
Turkcell takes each of its steps with the awareness of
sustainability. Putting the energy-saving technologies
and practices at every stage of business processes into
practice for this purpose, Turkcell contributes both to
protecting the environment and to reducing Turkey’s
energy bill. As a result of the energy efficiency and
conservation solutions it has implemented throughout
2017, Turkcell saved TRY 33 million worth of energy
which was more than 97 million kilowatt hours. The
amount of energy saved was equivalent to the total
electricity consumed by 36 thousand homes per year.
Not limiting the energy conservation to infrastructure,
but turning it into a life style, Turkcell has accomplished
successful projects that focused on energy conservation
while modernizing its network as well. Also this year,
Turkcell added new ones to the solar panels and wind
turbines it had installed in 26 locations in the previous
years. As a result of these recently built solar panels
and wind turbines; the communication units that run
on renewable energy have contributed significantly
to energy conservation. Thus, only by modernizing its
network, Turkcell saved 25 million kilowatt hours of
energy in 2017, which was equivalent to the electricity
consumed by 9 thousand homes per year.
We adopt the principle
of sustaining our
effectiveness in social,
environmental and
corporate governance
areas, with the
responsibility of being
Turkey’s digital operator,
and in light of our position
within the industry.
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BIST Sustainability Index
We adopt the principle of sustaining our effectiveness
in social, environmental and corporate governance
areas, with the responsibility of being Turkey’s
digital operator, and in light of our position within
the industry. The BIST Sustainability Index provides
a performance evaluation means to companies for
making improvements of their future plans, and of
establishing new objectives. The index also provides
the opportunity for companies to develop their risk
management skills regarding corporate transparency,
accountability and sustainability. As Turkcell, we
experience the pride of protecting our place in 2017
BIST Sustainability Index with our actions meeting the
selection criteria.
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We are moving forward with a systematic, transparent
and proactive approach in our studies to combat
climate change. We follow our performance in line
with our set targets. We continue to develop practices
to lead the sector in energy and greenhouse gas
management.
We have proven to be an environmentally friendly
company with human and benefit-oriented initiatives
related to international standards in social, economic
and environmental areas of influence. We have
fulfilled all our responsibilities regarding greenhouse
gas emissions standards, and in 2015 we became the
first telecom operator to receive the “ISO 14064 –
Accounting and Verification of Corporate Greenhouse
Gas Emissions” certificate in Turkey. In 2017, we
continued our studies and have again received ISO
14064 certification.
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TURKCELL ANNUAL REPORT 2017
SPONSORSHIPS
In 2017, we continued our support of our National Teams in football,
basketball, athletics, swimming, sailing and disability football.
Continuous Support of Football and Basketball
Since 2005, we have maintained our sponsorship of the
A National Football Team, as the “Main Sponsor”, having
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Sponsor” in 2002. And for the past two years we have
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adding our Super League Communication sponsorship,
Turkcell Super Cup, to which we gave our name, as well as
sponsorship of the Football Summit.
We have continued to support our National Basketball
Team for 15 years. We were also by the side of our A
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round of the European Basketball Championship this year.
Our A National Women’s Team that participated in the
European Women’s Basketball Championship in Prague,
Czechia in 2017, completed the tournament in fifth place
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Championship.
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National Team!
In 2017, we continued to support our efforts across
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disabled people greater involvement in daily life. This
year, we broadened the scope of our support for disability
sports, which we started in cooperation with the Blind
Sports Federation. We ran sponsorships for the Hearing-
Impaired Sports Federation, the Physically Disabled
Sports Federation, and the Special Athletes Federation,
again in the discipline of football. Within the framework
of these sponsorships that we realize in cooperation with
the Turkish Football Federation, we support both the
respective National Team and league of each federation.
Our visually-impaired National Team became in the
European Champion in 2015 and participated Rio
Paralympics Games in 2016. This success was followed by
our Amputee National Team’s European Championship in
2017. We are working to provide all necessary support to
register similar achievements over the coming years, in
other disabled categories.
Our Swimming and Athletics Projects
We give the greatest support to amateur sports.
By 2020, we plan to invest TRY 28 million in the swimming
and athletics projects initiated in partnership with the
Turkish Ministry of Youth and Sports in 2013. With this
project, we have, thus far, provided the greatest and
longest term support to amateur sports in Turkey.
We are proud of our
Ampute National Team. As
their first and only sponsor,
we shared the joy of the
trophy in the European
Championship together.
Our Support for the Development of Turkish Sports
Continues.
For so many years now, Turkcell has maintained its
pioneering efforts to develop sports in Turkey, and to
help Turkish athletes and National Teams enjoy a solid
reputation nationally and internationally. In 2017, we
continued our support of our National Teams in football,
basketball, athletics, swimming, sailing and disability
football.
Within the scope of individual amateur sports, we
continued our support for the disciplines of running,
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throughout the year.
We have gathered all our sports projects and
sponsorships under the “Turksporu” roof.
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83
Guliyev. With his success reported in the international
media, Guliyev was nominated for the “Athlete of the Year in
Europe” award by the European Athletics Federation.
Our other young talent, Mizgin Ay, who came through the
project, won a gold medal in the 100 meters competition
at the 2017 World Star Athletics Championship, realizing a
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Our national athlete Yasemin Can has been nominated
for the “Rising Star of the Year - Women” award by the
European Athletics Federation for the gold medals and
championship records she won in the European U23 and
European Indoor Championships.
Thousands of sports fans ran for peace in the Turkcell
Gallipoli Marathon.
On October 1 with the participation of our CEO Kaan
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of the historical Gallipoli Peninsula. Over 5 thousand
athletes participated in the marathon.
In the activity area, we brought together public and
celebrities; namely, Pascal Nouma, Kadir Çöpdemir, Burcu
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area. We reached over 10 thousand people at the 3-day
marathon fair, in which more than 10 brands participated
as supporter and sponsor. We reached thousands of
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concert that we organized at the Marathon Fair under fizy
sponsorship, and broadcasted both in the area itself and on
the application. Through a dedicated marathon channel aired
within BiP, we shared information regarding the marathon
and communicated with participants personally. On the day
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chips and enabled them to listen to the Turkish/foreign
jogging lists, custom made for the marathon. This year, we
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of registering for the marathon using mobile payment.
We planted over 10 thousand seedlings in the forest area
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which we created last year by planting 10 thousand trees in
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We will continue our support for the marathon, where we
provided athletes and sports fans with a unique running
experience, over the years to come.
The Turkcell Platinum Golf Challenge brought golf
enthusiasts together in Bodrum.
Turkcell Platinum united golf lovers in Bodrum in 2017.
Over 100 golfers competed in the tournament held this
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Turkcell Platinum Golf Challenge. The two-day tournament
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Cemal Kalyoncu.
We are actively involved at every step of the project, which
aims to increase the successes and the number of licensed
athletes of Turkish sports in the international arena.
We work with the Athletics and Swimming Federations
across many areas, ranging from the implementation of
innovative and modern management models and expansion
of the pool of young athletes, to continuity of elite
athletic development and consultancy on corporate and
technological development.
As of 2017, we have supported increasing the number of
licensed athletes in swimming from 18 thousand to
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Swimming Learning System of Turkey and taught 34,000
children to swim with the right techniques in 40 provinces.
With the Bob Bowman Program, we have provided 6
athletes and 21 coaches with the opportunity of sportive
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our 2 swimmers from the National Team obtained the right
to join the Olympics with an A Ranking. With the Turkcell
High Performance Program ongoing in six cities, we have
developed more than 40 elite athletes for National Teams
and won more than 80 medals in international competitions.
In athletics, we have reached over 32 thousand young
athletes in 64 contests, to which we gave our name and
support. We supported the number of licensed athletes to
increase over 158,500 as of 2017.
We continue the construction of the Turkcell Olympic High
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education and camp center, in Izmir.
In 2017, we enabled our country to register numerous
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Championship in London with a record number of athletes.
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medal in its history thanks to our national athlete, Ramil
99 thousand
In respect of 2017, we
have supported increasing
the number of licensed
athletes in swimming from
18 thousand to 99 thousand.
We have established the
first certified Swimming
Learning System of Turkey
and taught 34,000 children
to swim with the right
techniques in 40 provinces.
With the Bob Bowman
Program, we have provided
6 athletes and 21 coaches
with the opportunity of
sportive development in
the US.
84
TURKCELL ANNUAL REPORT 2017
SPONSORSHIPS
We will continue to support culture and the arts by integrating our
technology that improves and facilitates life, into museums.
Culture and the Arts
Our vision perceives culture and the arts as being among
Turkey’s most important values. And in an attempt
to support and raise these values, we became the
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(cid:13)(cid:75)(cid:73)(cid:59)(cid:75)(cid:67)(cid:221)(cid:63)(cid:68)(cid:221)(cid:177)(cid:175)(cid:176)(cid:179)(cid:128)(cid:221)(cid:6)(cid:69)(cid:72)(cid:221)(cid:74)(cid:62)(cid:59)(cid:221)(cid:206)(cid:72)(cid:73)(cid:74)(cid:221)(cid:74)(cid:63)(cid:67)(cid:59)(cid:221)(cid:63)(cid:68)(cid:221)(cid:20)(cid:75)(cid:72)(cid:65)(cid:59)(cid:79)(cid:125)(cid:221)(cid:77)(cid:59)(cid:221)(cid:58)(cid:59)(cid:73)(cid:63)(cid:61)(cid:68)(cid:59)(cid:58)(cid:221)
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months, enabling them to visit the museum together with
their parents.
We will continue to support culture and the arts by
integrating our technology that improves and facilitates
life, into museums.
Tarkan fizy Partnership
We provided privileges to fizy users in tandem with the
release of the new album of Turkey’s megastar Tarkan.
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(cid:58)(cid:69)(cid:77)(cid:68)(cid:66)(cid:69)(cid:55)(cid:58)(cid:59)(cid:58)(cid:221)(cid:55)(cid:68)(cid:58)(cid:221)(cid:73)(cid:74)(cid:72)(cid:59)(cid:55)(cid:67)(cid:59)(cid:58)(cid:221)(cid:60)(cid:69)(cid:72)(cid:221)(cid:74)(cid:62)(cid:59)(cid:221)(cid:206)(cid:72)(cid:73)(cid:74)(cid:221)(cid:74)(cid:63)(cid:67)(cid:59)(cid:221)(cid:75)(cid:73)(cid:63)(cid:68)(cid:61)(cid:221)fizy, was
exclusively available on fizy for a week.
We broadcasted Tarkan fizy concerts staged between
July 1-10, live on our fizy application. We brought Tarkan
together with about 40 thousand people at the Cemil
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the application. We organized an additional concert on
September 15 in response to strong demand. We hosted
nearly 4 thousand invitees at all our concerts.
Lastly, we provided a further privilege for fizy users. We
launched Tarkan’s second clip in December exclusively for
fizy users for two weeks, and achieved record viewing
numbers.
fizy High School Music Contest
The 20th anniversary of the high school music contest
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realized with the intense participation of 500 high schools.
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contest platform, visited by 1.7 million users, had received
over 220 thousand votes within three weeks.
(cid:7)(cid:55)(cid:66)(cid:55)(cid:74)(cid:55)(cid:73)(cid:55)(cid:72)(cid:55)(cid:79)(cid:221)(cid:8)(cid:63)(cid:61)(cid:62)(cid:221)(cid:19)(cid:57)(cid:62)(cid:69)(cid:69)(cid:66)(cid:221)(cid:77)(cid:69)(cid:68)(cid:221)(cid:74)(cid:62)(cid:59)(cid:221)(cid:206)(cid:72)(cid:73)(cid:74)(cid:221)(cid:70)(cid:72)(cid:63)(cid:80)(cid:59)(cid:221)(cid:63)(cid:68)(cid:221)(cid:74)(cid:62)(cid:59)(cid:221)(cid:59)(cid:76)(cid:59)(cid:68)(cid:74)(cid:125)(cid:221)(cid:63)(cid:68)(cid:221)
which 34 high schools competed on the final day.
Golf enthusiasts met again during the Turkcell Platinum
Golf Challenge.
The Turkcell Platinum Golf Challenge was held at the Kemer
Country Golf Club in Istanbul on October 20-22. Over 250
golf players participated in the three-day tournament, which
was organized for the third time this year. The tournament,
which attracted the attention of leading executives from the
business world, as well as celebrities, concluded with the
awarding of the top-three ranked golfers in 28 categories.
Set the sail for freedom with Turkcell Platinum
Bosphorus Cup!
Turkcell Platinum Bosphorus Cup 2017, one of Turkey’s
key sporting events in the international arena, saw its
16th outing on May 11-14, 2017, and was attended by over
100 vessels from around the world. After four days of
uninterrupted excitement, the team to lift the cup this year
was “Orient Express VI” led by Bülent Atabay.
Turkcell Platinum Bodrum Challenge took place for the
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The Turkcell Platinum Bodrum Challenge, organized for
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participation of 16 vessels and 150 sailors on August 12-13.
The colorful event attended by the recreational craft of
spectators, drew great interest from local and international
sailors.
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(cid:20)(cid:69)(cid:75)(cid:72)(cid:68)(cid:55)(cid:67)(cid:59)(cid:68)(cid:74)(cid:221)(cid:77)(cid:55)(cid:73)(cid:221)(cid:62)(cid:59)(cid:66)(cid:58)(cid:221)(cid:63)(cid:68)(cid:221)(cid:16)(cid:69)(cid:72)(cid:74)(cid:221)(cid:1)(cid:66)(cid:55)(cid:213)(cid:55)(cid:74)(cid:96)(cid:221)(cid:69)(cid:68)(cid:221)(cid:15)(cid:57)(cid:74)(cid:69)(cid:56)(cid:59)(cid:72)(cid:221)5-8. For
two days, 300 notable individuals from the business world,
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(cid:76)(cid:59)(cid:73)(cid:73)(cid:59)(cid:66)(cid:73)(cid:128)(cid:221)(cid:20)(cid:62)(cid:59)(cid:221)(cid:20)(cid:75)(cid:72)(cid:65)(cid:57)(cid:59)(cid:66)(cid:66)(cid:221)(cid:16)(cid:66)(cid:55)(cid:74)(cid:63)(cid:68)(cid:75)(cid:67)(cid:221)(cid:1)(cid:66)(cid:55)(cid:213)(cid:55)(cid:74)(cid:96)(cid:221)(cid:9)(cid:68)(cid:74)(cid:59)(cid:72)(cid:68)(cid:55)(cid:74)(cid:63)(cid:69)(cid:68)(cid:55)(cid:66)(cid:221)(cid:6)(cid:63)(cid:73)(cid:62)(cid:63)(cid:68)(cid:61)(cid:221)
Tournament, an international event since its outset due
to the considerable interest of foreign participants, again
hosted many contestants from across the world this year.
1.7 million
The audition videos posted
on the fizy high school
music contest platform,
visited by 1.7 million users,
had received over
220 thousand votes
within three weeks.
TURKCELL ANNUAL REPORT 2017
85
HUMAN RESOURCES
Our aim is to make Turkcell a place where talented people can achieve
their goals successfully. Thus we want to create a seamless employer
experience which will lead to satisfied customers experience.
As a result of our digital
transformation, we have
opened a way for new
working models for a unique
working experience. We have
put pioneering applications
into practice such as;
establishing agile work
teams, mobile working, and
“office station”.
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HR ONCE AGAIN…
The brands need to clearly define the experience that
they want to offer to their employees, as they do to
their customers, because talents are important to us
like our customers. We, as Turkcell Human Resources,
have re-designed employee experience end-to-end.
We started to see the important outcomes of our “HR
Once Again” initiative that we have been pursuing
with this aim since 2016. Within Project teams that we
have formed under this initiative in order to provide
an excellent employee experience, 800 Turkcell
employees are working from Human Resources teams
as well as from all levels and different functions.
In this process, we enrich our Human Resources
practices with mechanisms that will create further
added value for our employees, and reassess our
communications language in line with the promise
of our brand and employee experience we want to
create. Thanks to our agile working teams, we develop
applications that can be the first in our country, and
even in the World. We run quick tests and apply the
appropriate ones.
Our goal is to make Turkcell a place where talented
people are carrying out successful operations. So that,
we want to create a seamless employer experience
which will lead to satisfied customers experience.
Career Management
Within the scope of the Career Management project,
we started to launch new applications that further
touch Turkcell employees in parallel with the
employee experience we want to create. Our goal
with this project is to create opportunities for our
employees to guide their career journeys, and ensure
them to discover their potential.
Among them, within the framework of Turkcell
Apprenticeship Program, we started to bring together
Turkcell employees from different departments in
physical environment, and enabled them to share
their experiences in very different venues. Within the
framework of the program, our employees worked in a
department they want for a week, to figure out how it
functions and experienced that department.
With structured mentoring and reverse mentoring
programs, they improved their dialogue skills between
generations at Turkcell. Thanks to these programs,
we have provided an environment in which we can
support our employees in their careers and the
opportunity to develop themselves with continuous
learning independent from time and place.
A New Approach to Performance Management: Flex
Performance System
One of the most important outcome of our
transformation journey that we launched in 2016 to
prepare Turkcell for a human resources management
approach beyond its time, was the Flex Performance
86
TURKCELL ANNUAL REPORT 2017
HUMAN RESOURCES
We take advantage of analytical data as an advantage of our digitalization.
We know that communication with our employees is the key to personal and
collective performance.
TURKCELL EMPLOYEE PROFILE
Female
Manager
21%
Male
Manager
79%
Master &
PhD 22%
Two-year
Degree 5%
High School
4%
Graduate 69%
Female 30%
Male 70%
The number of Turkcell
employees is 3,967 and the
number of Turkcell Group
employees is 19,768, as
from December 31, 2017.
System. This year, we initiated the Flex Performance
system, which is compatible with our strategic goals, and
based on the needs and dynamics of each business.
Within the system, “Performance Coaches” who are
selected from the business units to identify targets that
meet the definition of SMART (Specific, Measurable,
Achievable, Realistic, Timely) are guiding our employees
by providing counseling in order to be of further support
to them in their target setting process. Evaluations
based on the specified SMART targets can be made
in an updated manner, thanks to the structure of Flex
Performance System that supports the continuous
feedback. Thus, our employees are able to closely monitor
the impact of their work on their performance.
Continuous Feedback
All our employees can now give instant feedback to each
other via the Mobilim system in connection with the
identified main target and sub-targets. Thanks to the
feedback that is given and received, Turkcell employees
have the opportunity to instantly and continuously
monitor their progress and their contribution to the
business.
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We have become the first publicly traded company in
Turkey to implement the LTI plans that we have developed
for Turkcell in order to create a common interest with our
shareholders, support sustainable success by focusing on
our three-year strategic goals, and ensure the loyalty of
talented employees.
The LTI plans, which eliminate the “short term results
and decisions that will benefit the Company in the long
run” contradiction that has been going on between the
professional managers and shareholders for years, are
used worldwide by the companies to reach long-term
strategic goals and to build common interests with
shareholders. By this means, it contributes employees
to focus on the long-term sustainable success of the
Company, and initiate new and innovative approaches.
We have studied many different models in the world while
launching the plan we developed specifically for Turkcell.
We designed the most appropriate model in accordance
with the direction that we want to go as Turkcell and our
three-year strategic goals. Thus, we took our pioneering
step in our industry by launching our LTI plan since 2016.
The performance indicators in our Turkcell UVT plan
are the share return ratio calculated by subtracting the
weighted average cost of capital (WACC) from the total
share return ratio and our share performance compared
to the peer companies in BIST and our emerging markets.
According to these evaluations, the bonus amount
is determined, and the reward amount obtained is
distributed to employees with a three-year payment plan.
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At Turkcell, we are working to make our employee
journey, which starts with the job interviews, a unique
and best experience for all of our employees. While
shaping this journey, the feeling that we want to pass
on our employees is that Turkcell always enables its
employees to have the firsts and the best in terms of
experience, and it values its employees.
We constantly improve ourselves by continuously
measuring our employee journey through various
surveys, making improvements in our processes, and on
the matters, which we can take useful actions.
At Our Technology Service: We removed the
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At the point where we reached today in terms of
technology, Turkcell employees are able to speedily
communicate within themselves both in written, audio
and visual manner through our instant messaging
application BiP. We can seamlessly access our e-mails
and all of our files in the system by means of VPN
anytime, from anywhere in the world. Thanks to the high
speed home internet that we offer to Turkcell employees,
they can comfortably work also from their homes, as if
they are in the office. As human resources, we turned
the working ability, independent from time and location,
into an opportunity, and we brought innovative working
models into the lives of Turkcell employees. Among
those, thanks to “plan the day” practice, our employees
are able to decide themselves, together with their
managers, to the hours they will be in the office, provided
that they fill in their daily working hours. “Mobile work”
is a practice specific for Turkcell employees, enabling
them to work from anywhere they want for four times
a month. As for “Office Station” practice, Turkcell
employees can work from any Turkcell location they want
by using the office station space particularly prepared
for them.
TURKCELL ANNUAL REPORT 2017
87
Our young employees who
started to work through
the GNÇYTNK program
were included in a unique
orientation and training
program. Young employees
experienced an intensive and
efficient orientation process
featuring applications
carrying Turkcell to virtual
reality environment,
activities that combine
games and training, and
social responsibility projects.
Our Human Resources
Analytics studies, which we
conducted to determine our
strategies and actions with
data-based foresight, was
one of our key focus areas
also this year.
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Being “Mother” at Turkcell
We know what it means to be a working mother.
We have observed that when our working mothers
spent more quality time with their children, it reflects
positively in their productivity at work. Therefore,
we provided some privileges to working mothers at
Turkcell:
• We provided new mothers with the opportunity
to work from office between 10:00-15:00 and from
wherever they want for the rest of the time. Our
new mothers can benefit from this practice until
their baby is 16 months old. With this practice, we
increased the efficiency of our employees while
supporting them protect their work-life balance.
• Our working mothers are granted leave of absence
to be with their children on the first day the schools
are opened, without any deduction from their annual
leave. We do the same for the days when the report
cards are given.
Human Resources Analytics
Our Human Resources Analytics studies, which we
conducted to determine our strategies and actions with
data-based foresight, was one of our key focus areas
also this year.
We started to reach more accurate and reliable
employee data through our Data Quality Initiative
that we launched to improve the data quality of our
employees in 2017.
Analyzing the internal interactions of our employees
through analytical data models, we generated
information that would provide foresight into our
organizational studies, and made interactions between
processes visible.
By examining the career movements of our employees
through descriptive models, we revealed foresight that
would allow us to better manage our Human Resources
processes.
Our studies in the area of Human Resources Analytics
pioneer the extension of data-based decision making
culture in the Human Resources field in Turkey.
Next Generation Recruitment: GNÇYTNK
Tens of thousands of successful young people, who
graduated from Turkey’s best universities applied also
this year, to our GNÇYTNK, Turkey’s first and most
comprehensive young talent recruitment program,
which targets new generation talents born in the digital
world. 225 young people selected from 82 thousand
young candidates who applied to the program, in which
application, selection and recruitment processes were
realized through mobile platforms, as well as game
structures and video interviews, started to work in
Turkcell on a full-time basis.
Our young employees who started to work through
the GNÇYTNK program were included in a unique
orientation and training program. Young employees
experienced an intensive and efficient orientation
process featuring applications carrying Turkcell to
virtual reality environment, activities that combine
games and training, and social responsibility projects.
In August, GNÇYTNKs, who stepped into business
life at Turkcell, were included in an intensive training
program prepared by Turkcell Academy in order for
them to quickly adapt to Turkcell. In this context, while
young people were trained with the Massachusetts
Institute of Technology (MIT), they also had the chance
to participate in special programs with global brands
such as Cisco, Huawei, Nokia, Oracle and Verscom.
88
TURKCELL ANNUAL REPORT 2017
HUMAN RESOURCES
Cyber Camp, which earns qualified human power, specialized in cyber
security that is increasingly growing in importance in the world and our
country, has been sponsored by Turkcell this year.
In order to raise awareness
about the impact of digital
transformation on humans,
we organized psychology
seminars where the effects
of digital transformation,
internet, new technologies
and social media on our
psychology were shared.
Our 69 young talents, who
succeeded in post-training
exams, were able to study
abroad.
(cid:177)(cid:175)(cid:176)(cid:182)(cid:222)(cid:7)(cid:14)(cid:213)(cid:25)(cid:20)(cid:14)(cid:11)(cid:222)(cid:20)(cid:72)(cid:55)(cid:63)(cid:68)(cid:63)(cid:68)(cid:61)(cid:222)(cid:10)(cid:69)(cid:75)(cid:72)(cid:68)(cid:59)(cid:79)(cid:222)(cid:63)(cid:73)(cid:222)(cid:63)(cid:68)(cid:222)(cid:69)(cid:75)(cid:72)(cid:222)(cid:66)(cid:63)(cid:76)(cid:59)(cid:73)(cid:221)
Through Turkcell Academy GNÇYTNK Training
Journey, we aimed for our 225 young talents to be
specialized with a development path, consisting of
six modules, spreading about two years, with Turkcell
leaders, development partners who are experts in
their subject, and the world’s leading universities.
Turkcell Employees Are Here Module
In this module, the youngsters received information
from our Chairman of the Board, Mr. Ahmet Akça,
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Presidents regarding Turkcell’s vision, the journey
of Digital Turkcell and our corporate culture. In
addition, in this module, they had training that will
raise their awareness on topics such as corporate life,
professional stance etc. and they participated in the
social responsibility activities.
Customer is Here Module
After receiving theoretical training on Turkcell
customer values and principles, our GNÇYTNK gained
experience on the field by serving to our customers
for 19 days, in Call Centers, Turkcell Communication
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Turkey. They came back with 900 detection and
suggestion that will further improve the customer
experience.
Technology is Here
In this module, our young people also received
trainings from Turkcell ICT/NT teams and different
institutional universities in order to improve their
technology visions. They developed 46 different
applications by getting MIT App Inventor training.
Our 69 young talents, who succeeded in post-training
exams, were able to study abroad.
Our New Business World is Here Module
Our New Business World is Here Module, through
which our GNÇYTNKs developed their financial
perspectives; listened to Turkcell’s activities in
different business areas; and learned about the
regulative approaches in all of our businesses, has
been realized with 12 different seminars.
Culture is Here Module
We are moving towards a “civilization consciousness”,
which is being built on common values agreed by
whole humanity, and coinciding with the changing
and evolving needs of the globalized world. This
new civilization consciousness is not only of capital
importance to our country and region, but also to the
whole world. Therefore, in order for Turkcell’s young
talents to gain the civilization consciousness, and be
inspired by all civilizations while building holistic,
comprehensive and permanent systems, we realized
“Alliance of Civilization Seminars” with Prof. Dr. Bekir
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(cid:216)(cid:73)(cid:74)(cid:55)(cid:68)(cid:56)(cid:75)(cid:66)(cid:221)(cid:3)(cid:59)(cid:68)(cid:74)(cid:59)(cid:72)(cid:221)(cid:60)(cid:69)(cid:72)(cid:221)(cid:9)(cid:68)(cid:74)(cid:59)(cid:72)(cid:68)(cid:55)(cid:74)(cid:63)(cid:69)(cid:68)(cid:55)(cid:66)(cid:221)(cid:3)(cid:63)(cid:76)(cid:63)(cid:66)(cid:63)(cid:80)(cid:55)(cid:74)(cid:63)(cid:69)(cid:68)(cid:221)(cid:19)(cid:74)(cid:75)(cid:58)(cid:63)(cid:59)(cid:73)(cid:221)
and Alliance of Civilizations Turkey. In addition, in
order to raise awareness about the impact of digital
transformation on human, we organized psychology
seminars where the effects of digital transformation,
internet, new technologies and social media on our
psychology were shared.
Entrepreneur Leaders are Here Module
Turkcell Academy GNÇYTNK Training Journey will
continue with the “Entrepreneur Leaders are Here”
module, which we will realize with MIT as of March
2018.
Cyber Camp
Cyber Camp, which earns qualified human power
specialized in cyber security that is increasingly
growing in importance in the world and our country,
has been sponsored by Turkcell this year. 40
participants selected from 35 thousand applicants
received training on cyber security for two weeks.
After the lectures given by the expert trainers, the
participants had the opportunity to practice what
they learned with the Capture the Flag and Bug
Bounty contests. As a result of the evaluations, we,
as Turkcell, employed 11 successful participants in
various fields.
TURKCELL ANNUAL REPORT 2017
89
Turkcell Volunteers is an assistance community, which is formed of Turkcell
Group employees who have voluntarily gathered together.
The Turkcell Volunteer Team
in 2017 focused on children
suffering financial distress,
and set off once again this
year with the goal of raising
our children as tech-savvy,
curious, environmentalist,
questioning individuals
with strong communication
skills.
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TURKCELL VOLUNTEERS
Turkcell Volunteers, made up of Turkcell Group
employees who have voluntarily gathered together,
again initiated pioneering aid projects in 2017 with the
material and spiritual support of Turkcell employees.
The Turkcell Volunteer Team in 2017 focused on
children suffering financial distress, and set off once
again this year with the goal of raising our children
as tech-savvy, curious, environmentalist, questioning
individuals with strong communication skills.
One of the projects, for which great effort is made this
year, was the conversion of two unused classrooms
in Merkez Gazi Middle School in Hatay, into libraries.
These empty classrooms, not efficiently used before,
were entirely renovated and transformed into libraries,
which was equipped with rich content, featuring
reading corners and to computer stations. In addition,
the children attending the school were provided with
stationery support.
Other prominent Volunteers projects in 2017 were as
follows;
• (cid:20)(cid:62)(cid:59)(cid:221)(cid:70)(cid:62)(cid:69)(cid:74)(cid:69)(cid:57)(cid:69)(cid:70)(cid:63)(cid:59)(cid:72)(cid:221)(cid:68)(cid:59)(cid:59)(cid:58)(cid:59)(cid:58)(cid:221)(cid:56)(cid:79)(cid:221)(cid:74)(cid:62)(cid:59)(cid:221)(cid:8)(cid:55)(cid:74)(cid:55)(cid:79)(cid:221)(cid:19)(cid:55)(cid:67)(cid:55)(cid:68)(cid:58)(cid:55)(cid:215)(cid:221)
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also distributed to this village school, which faces
tough conditions during the winter months, while
stationery support was also provided.
• First aid and sports equipment support was
provided to 163 students in Kars Akçakale Middle
School. Books were sent for their library.
• School trousers, t-shirts and sweaters were bought
as uniform support for 280 students attending
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School, and books were also sent. Additionally,
stationery packages were prepared and delivered to
the children.
• Books were sent to the library of Edirne Merkez
Gazi Elementary School. New boots were bought
for 210 children to ensure that they spent a warm
winter.
90
TURKCELL ANNUAL REPORT 2017
TURKCELL ACADEMY
We are striving to strengthen the knowledge and competence of
employees of Turkcell and Turkey, who can capture the business
opportunities in all sectors that are newly formed and changing.
WE ARE PREPARING TURKCELL ECOSYSTEM
TO 21ST CENTURY!
With digitalization, our learning and teaching habits, and
methods are changing. Our ability to access to a wide
variety of information resources is accelerating and our
storage capability is becoming easier. Many research and
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intelligence, smart devices, robots, virtual reality, big
data, internet of things.
We are striving to strengthen the knowledge and
competence of employees of Turkcell and Turkey, who can
capture the business opportunities in all sectors that are
newly formed and changing. We design the future with
our competent human resources in the world where the
rules are rewritten by Industry 4.0.
As Turkcell Academy, we realized trainings, for Turkcell
employees, that we prepared with the global strategic
cooperations, by supporting the classical effective
methods such as “on the job learning and mentoring” with
the most recent training technologies. Thus, we initiated
the mobilization of the longest running programs ever
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We offer equal opportunities for our employees to gain
the competencies they will use in the jobs of the “the
future”. Through the integrated learning model offered by
Turkcell Academy, we earn all our employees brand new
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(cid:57)(cid:55)(cid:72)(cid:72)(cid:79)(cid:221)(cid:74)(cid:62)(cid:59)(cid:221)(cid:71)(cid:75)(cid:55)(cid:66)(cid:63)(cid:206)(cid:59)(cid:58)(cid:221)(cid:77)(cid:69)(cid:72)(cid:65)(cid:60)(cid:69)(cid:72)(cid:57)(cid:59)(cid:221)(cid:63)(cid:68)(cid:74)(cid:69)(cid:221)(cid:74)(cid:62)(cid:59)(cid:221)(cid:60)(cid:75)(cid:74)(cid:75)(cid:72)(cid:59)(cid:221)(cid:55)(cid:74)(cid:221)(cid:20)(cid:75)(cid:72)(cid:65)(cid:57)(cid:59)(cid:66)(cid:66)(cid:221)
and in Turkey.
“TURKCELL DIGITAL MASTERS”: TRAINING
PROGRAM THAT WILL MOVE TURKCELL FORWARD
IN DIGITAL TRANSFORMATION
We launched “Turkcell Digital Masters Program” in
October with Udacity, one of the world’s leading Mooc
platforms, in parallel to the vision of the skills that
will serve them to transform their digital knowledge
and experience at Turkcell into technologies making a
difference in IoT field, With this comprehensive program,
it is targeted to support Turkcell to be a data driven
company, and its strategies in the direction of digital
transformation, also to enhance Turkcell employees’ job
descriptions by equipping them with new competencies
brought by the new world and earn them expertise.
Within the scope of Turkcell Digital Masters Program,
there are six different nanodegree programs that
Udacity has created in cooperation with the world’s
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AT&T, Salesforce, Cloudera). With these programs,
such as Data Foundation, Introduction to Programming,
Business Analyst, Data Analyst, Machine Learning
(cid:55)(cid:68)(cid:58)(cid:221)(cid:1)(cid:72)(cid:74)(cid:63)(cid:206)(cid:57)(cid:63)(cid:55)(cid:66)(cid:221)(cid:9)(cid:68)(cid:74)(cid:59)(cid:66)(cid:66)(cid:63)(cid:61)(cid:59)(cid:68)(cid:57)(cid:59)(cid:125)(cid:221)(cid:77)(cid:62)(cid:63)(cid:57)(cid:62)(cid:221)(cid:77)(cid:63)(cid:66)(cid:66)(cid:221)(cid:57)(cid:69)(cid:68)(cid:60)(cid:72)(cid:69)(cid:68)(cid:74)(cid:221)(cid:75)(cid:73)(cid:221)
in Industry 4.0, it is aimed to educate personnel at
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provide productivity in Company operations through
these competencies. The program continues with 1,189
participants.
WE LAUNCHED TURKEY’S PARAMOUNT
MARKETING PROGRAM!
As Turkcell Academy, continue to add value work for
our Company and our employees within the framework
of our strategic priorities. With the Turkcell Marketing
Masters Program, which we carried out in 2017, we
both aimed to earn our employees a common marketing
point of view, and to add a brand-new expertise in their
careers.
Our employees, whichever team they work for, and
whatever expertise they have, had the opportunity to
participate in the Marketing Masters Program that was
taught by the cognoscentis from world class universities
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This 100-hour training program, spreading over a year,
is the most comprehensive marketing program provided
in a company. With this program, our employees had
the opportunity to learn many subjects from theory
to practice, from conventional marketing to digital
marketing, from our country’s and the world’s most
valuable teachers. On this Program that we particularly
supported with online training, and digital projects, our
participants discovered the delicacies of marketing in
the digital world especially in the second semester with
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1,150 people applied for the program, after the launch
we realized throughout Turkcell, and 780 of them were
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semester and added value to their career. At the end of
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We offer equal
opportunities for our
employees to gain the
competencies they will use
in the jobs of the “future”.
Through the integrated
learning model offered by
Turkcell Academy, we earn
all our employees brand
new competencies outside
of their field or expertise,
and we carry the qualified
workforce into the future at
Turkcell and in Turkey.
In addition to online
trainings, we conducted
face to face knowledge
sharing meetings with 10
thousand students in 105
universities in 81 provinces
of Turkey and in the TRNC,
in order to introduce our
young people to current
information in the software
field.
We started the second
GNÇYTNK program with 225
young talents, which aims
to recruit successful young
people.
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eligible to continue the program in the second semester. We
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grade as a result of the evaluation carried out at the end of
each period with a master’s degree in Turkey or overseas
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development.
WE EQUIPPED OUR EMPLOYEES WITH DATA SCIENCE!
While we embrace technology and digital in our every
training program in parallel to our strategy of being a digital
operator; it was also one of our important priorities to raise
Turkcell employees who make data-based analyses, question
and take decisions.
With Data Science Enablement program, we aimed to
explore our competent employees who set their heart on
data science and analytics, however working with different
teams in Turkcell, and position them as “Data Science
Messengers” in our Company.
These people will continue to add value to our Company
by learning data science from A to Z and participating in
different projects within Turkcell. At the first stage, we
received 700 applications for the program, in which 36
people would be selected and trained. In our program,
which encompasses a wide range of topics from statistics
to programming and data design, we supported them with
assignments, projects, on-the-job coaching, and platforms
where they can apply what they learn, as well as in-class
training. After our six-month training path, our participants
began to lead big data and analytical projects on different
teams of Turkcell.
WE RAISE TURKEY’S SOFTWARE DEVELOPERS WITH
TURKCELL DEVELOPERS OF THE FUTURE.
With Turkcell’s Developers of the Future program, which
has been carried out since 2013, we aimed to teach all
participants, especially young people, the software and
programming, starting from the mobile world.
In this context, we provided a pool of Turkish content related
to Android, iOS and web programs. In five years, we have
reached 113 thousand registered users, 37 million page
views, and 3 million users. In addition to online trainings,
we conducted face to face knowledge sharing meetings with
10 thousand students in 105 universities in 81 provinces of
Turkey and in the TRNC, in order to introduce our young
people with current information in the software field.
In 2017, we initiated “Women Developers of the Future”
Project, in association with TOBB (Union of Chambers
and Commodity Exchanges in Turkey) and TOBB Women
Entrepreneurs Council in order to support women to
develop mobile applications by educating them about
software, and improve women’s employment capacity and
entrepreneurship on this area.
TURKCELL ANNUAL REPORT 2017
91
Nearly 1,400 women applied to “Women Developers
of the Future”. Our volunteer Developers of the Future
Messengers provided online training across Turkey during
weekdays and in-class training in 18 cities during weekends,
on Android Programming. 664 women, who successfully
completed the training, were entitled to participate in a
two-month “Project Development” process, in which they
received technical assistance from Volunteer Developers of
the Future Messengers and one-to-one consultancy from
business mentors guided by TOBB. The Grand Finale was
realized with top 10, out of 48 most successful Project teams
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to supporting women on their path to entrepreneurship,
we provide employment for 100 successful tester women
and continue to create new job opportunities by having
them carry out the end user tests of Turkcell products and
services.
WE RAISE LEADERS OF THE FUTURE.
We continued to raise the leaders of the future also this
year in parallel with the vision of becoming a “Digital
Operator”, mission of creating global leaders, and through
grade-based leadership development programs targeting
nearly 700 managers. On ICE, which stands for “Information-
Communication-Entertainment” and participated by all
our directors and managers different from the previous
years, we mentioned about the relationship of positivity-
efficiency in productivity of the team, as well as change
processes. In addition, we also hosted C-Lounge sessions
where exemplary leaders within Turkcell Group and outside
the Company conveyed their success stories and leadership
paths.
With the 2017 Director Development Program, we aimed
at differentiating our services we offer to our customers
through our global products and services, which are among
Turkcell’s important initiatives, and looking at all the work
we do from a broader perspective. In this context, with IMD
Business School, we included all our directors and directors’
successors in the Global Leadership Program. With the IMD
Global Leadership Program, we aimed to strengthen the
vision of leadership in the region, leadership in the digital,
and leadership in integrated telecom, which are among key
strategic priorities of Turkcell.
With the “Learning from the Leaders” approach, we
implemented the internal mentorship program within the
entire Turkcell group. With the internal mentorship program,
by having our experienced managers working in Turkcell
Group companies share their knowledge and expertise with
the employees in need, we aimed to ensure the development
of our employees and support to establish a common
management culture. In this context, we positioned all of our
volunteer, experienced managers as mentors in the program
that includes young talents, new managers and director
successors as mentee. This comprehensive journey has
been accredited by the EMCC (European Mentoring Coach
Council), a leading institution in setting standards related to
the mentorship.
92
TURKCELL ANNUAL REPORT 2017
TURKCELL ACADEMY
As Turkcell Academy, we continue to add value to our
Company and our employees within the framework of our
strategic priorities.
In December, we realized
a “Turkcell Information
Sharing lecture” where we
brought Turkcell CEO Kaan
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MIT students to convey
Turkcell’s work on IoT,
artificial intelligence and
mobile technologies, and
the opportunities to be
derived in these areas.
A FIRST IN THE WORLD FROM TURKCELL AND
MIT: TURKCELL NEW FRONTIERS PROGRAM &
INNOVATION AND LEADERSHIP DEVELOPMENT
PROGRAM SPECIFIC TO TURKCELL
Turkcell Academy initiated two major training
programs in 2017 with the Massachusetts Institute of
Technology, one of the world’s leading universities.
The MIT New Frontiers Program and the MIT-Turkcell
Innovation & Leadership Bootcamp have the feature
of being the first training program specifically tailored
for a company by the MIT. By investing in the future
with Turkcell New Frontiers Program, we are preparing
Turkcell management for the digital transformation.
Under the MIT -Turkcell Innovation & Leadership
Bootcamp program, through which Turkcell planned
to train new and young leaders, the GNÇYTNKs had a
special and intensive training blended together with
MIT content and practices, for a week. The selected
project teams went to MIT’s Boston campus and were
entitled to participate in the “Global Bootcamp”.
Young people were trained in setting up business plans
and developing presentation skills while learning
global new technologies and global product / service
life cycles. Later, young talents who attended MIT’s
globally renowned “New Venture” program learned
how to lead a process of a product or a service, from
idea to the implementation phase, and what kind of
know-how they should have. Following one-week
intensive program, the project teams working on
the “Internet of Things, Face Recognition Systems
and Video Call” topics that are the champions of the
Turkcell-MIT Leadership and Innovation Bootcamp,
continued to develop their projects together with
globally renowned professors and mentors on MIT’s
Boston campus. In March 2018, we plan to carry out
the “IoT & Leadership Bootcamp” study with MIT for
our new GNÇYTNKs.
In December, we realized a “Turkcell Information
Sharing lecture” where we brought Turkcell CEO
(cid:11)(cid:55)(cid:55)(cid:68)(cid:221)(cid:20)(cid:59)(cid:72)(cid:80)(cid:63)(cid:69)(cid:215)(cid:66)(cid:75)(cid:221)(cid:74)(cid:69)(cid:61)(cid:59)(cid:74)(cid:62)(cid:59)(cid:72)(cid:221)(cid:77)(cid:63)(cid:74)(cid:62)(cid:221)(cid:13)(cid:9)(cid:20)(cid:221)(cid:73)(cid:74)(cid:75)(cid:58)(cid:59)(cid:68)(cid:74)(cid:73)(cid:221)(cid:74)(cid:69)(cid:221)(cid:57)(cid:69)(cid:68)(cid:76)(cid:59)(cid:79)(cid:221)
Turkcell’s work on IoT, artificial intelligence and
mobile technologies, and the opportunities to be
derived in these areas.
WE ENABLE OUR MESSENGERS TO SPECIALIZE WITH
CERTIFICATION.
The biggest transformation in the retail sector is being
carried out at an accelerated pace at points where we
meet with our customers, primarily in our Turkcell
Communication Centers located throughout Turkey. We
perceive our store staff as the most important part of the
major transformation initiated at Turkcell stores.
We improved our store staff, who are in direct contact
with our customers and who are the most important
messengers of transformation, with the latest and newest
trainings in the world and we added value to their careers
with “Certification Training Journey”. We made our staff
ready for the field transformation, by combining different
training technologies with many training courses, from
orientation training for the staff on the field to focus
trainings compatible with business strategies.
7,622 field staff who successfully completed the
certification journey were entitled to receive the
“Turkcell Academy Certificate”. The satisfaction rate of
our employees who were satisfied with the certification
process on the field was measured as 92%. In this process,
while we provide our employees with the opportunity to
improve themselves, we are also leading the way to raise
qualified workforce in the retail sector. In this program
that we created to train more competent and more
qualified dealer employees, we develop our employees
with both digital and in-class trainings by utilizing the
experience of Turkcell Academy’s extensive training staff,
business partners, industry-leading consultants and
various universities.
We expanded the program this year by also including our
Corporate and Fiber Solution Center employees in our
certificate program, along with our Turkcell store staff. If
our employees, who receive trainings specific to profile,
become successful at online examinations and then online
evaluations, they begin to enjoy the privileges of being a
certified employee.
WE ALSO DEVELOP THE EXPERTISE OF OUR
DISTRIBUTORS.
We continue to develop KVK and GENPA employees in
accordance with the needs of the future world. In this
(cid:58)(cid:63)(cid:72)(cid:59)(cid:57)(cid:74)(cid:63)(cid:69)(cid:68)(cid:125)(cid:221)(cid:77)(cid:59)(cid:221)(cid:58)(cid:59)(cid:73)(cid:63)(cid:61)(cid:68)(cid:59)(cid:58)(cid:221)(cid:57)(cid:59)(cid:72)(cid:74)(cid:63)(cid:206)(cid:57)(cid:55)(cid:74)(cid:63)(cid:69)(cid:68)(cid:221)(cid:70)(cid:72)(cid:69)(cid:61)(cid:72)(cid:55)(cid:67)(cid:73)(cid:221)(cid:73)(cid:70)(cid:59)(cid:57)(cid:63)(cid:206)(cid:57)(cid:55)(cid:66)(cid:66)(cid:79)(cid:221)
for the needs and performance targets of KVK and GENPA
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In parallel to our vision of
becoming a digital operator,
with the university-
industry cooperations,
we support young people
in being equipped for the
jobs that are shaped with
new technologies on their
development path.
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trainings, developed
by Turkcell Academy
to support personal
development, were carried
out also in 2017.
TURKCELL ANNUAL REPORT 2017
93
busıness partner
development programs
3K
33K
PARTICIPANTS
HRS TRAINING
LEARNING
PARTNERS
200
INSTITUTIONS
UNIVERSITY
RELATIONS
25K
50
ACTIVITIES
STUDENTS
TOTAL LEARNING
1.2M
2.1M
PARTICIPANTS
HRS TRAINING
DISTANCE LEARNING
72 %
OF TOTAL LEARNING
ACADEMY
INTERNAL TRAINERS
4400
675
TRAINERs
HRS TRAINING
WOMEN TESTERS
PROJEct
EMPLOYMENT FOR
100
WOMEN TESTERS
CHILDREN
DEVELOPERS
OF THE FUTURE
CODING ACTIVITY FOR
487
TURKCELL EMPLOYERS’
KIDS
STRATEGIC
BUSINESS
PARTNERS
READINESS SCORE
95%
623
FOR
TURKCELL GROUP MANAGERS
6
LEVELS
27
TITLES
IMD
GLOBAL LEADERSHIP
6
96
DAYS
PARTICIPANTS
DEVELOPERS
of the FUTURE
WEB PLATFORM
118k
35k
MEMBERS
(cid:14)(cid:157)(cid:217)(cid:89)(cid:176)(cid:167)(cid:176)(cid:147)(cid:134)(cid:226)(cid:157)(cid:220)
DEVELOPERS
OF THE FUTURE
2017
women
DEVELOPERS
OF THE future
761
203
(cid:214)(cid:134)(cid:217)(cid:226)(cid:176)(cid:147)(cid:176)(cid:214)(cid:134)(cid:197)(cid:226)(cid:220)
MOBILE APPS
HIGH-TECH
PROGRAMS
70K
500
TITLES
HRS TRAINING
FUTURE SKILLSET
DEVELOPMENT
SALES CERTIFICATION
%75
10k
SALES
PERSON
CERTIFICATED
FUTURE LEADER
DEVELOPMENT
INTERNAL
MENTORSHIP
160
VOLUNTARY
MENTORS
225
MENTEES
MIT NEW
FRONTIERS PROGRAM
13
30
HIGH LEVEL
LEADERs
HRS
PROGRAM
NT EXPERT
34
140
DATA SCIENTIST
36
300
DIGITAL MASTERS
1189
6
MARKETING MASTERS
1150
100
YOUNG TALENTS
PROGRAM
225
300
HRS TRAINING
PARTICIPANTS
HRS TRAINING
PARTICIPANTS
PROGRAMS
PARTICIPANTS
HRS TRAINING
CERTIFICATES
PARTICIPANTS
HRS TRAINING
employees with the leadership of Turkcell Academy.
We have implemented 25 thousand hours of digital and
in-class training solutions to a total of 900 employees,
with 10 different training programs on leadership, sales,
(cid:70)(cid:72)(cid:69)(cid:58)(cid:75)(cid:57)(cid:74)(cid:221)(cid:67)(cid:55)(cid:68)(cid:55)(cid:61)(cid:59)(cid:67)(cid:59)(cid:68)(cid:74)(cid:125)(cid:221)(cid:57)(cid:69)(cid:72)(cid:70)(cid:69)(cid:72)(cid:55)(cid:74)(cid:59)(cid:221)(cid:57)(cid:75)(cid:66)(cid:74)(cid:75)(cid:72)(cid:59)(cid:221)(cid:55)(cid:68)(cid:58)(cid:221)(cid:73)(cid:70)(cid:59)(cid:57)(cid:63)(cid:206)(cid:57)(cid:221)
functional focus areas. We ensured that 100% of sales and
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We prepared the 2018 development plan parallel to the
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professionals, questionnaire study, output of the 2017
training programs and top management strategies.
WE SUPPORT YOUNG PEOPLE THROUGH UNIVERSITY
COOPERATIONS.
In parallel to our vision of becoming a Digital Operator,
with the university-industry cooperations, we support
young people in being equipped for the jobs that are shaped
with new technologies on their development path. Within
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the IT sector by accessing more than 3,000 students in
(cid:176)(cid:180)(cid:221)(cid:75)(cid:68)(cid:63)(cid:76)(cid:59)(cid:72)(cid:73)(cid:63)(cid:74)(cid:63)(cid:59)(cid:73)(cid:221)(cid:77)(cid:63)(cid:74)(cid:62)(cid:221)(cid:68)(cid:63)(cid:68)(cid:59)(cid:221)(cid:57)(cid:59)(cid:72)(cid:74)(cid:63)(cid:206)(cid:57)(cid:55)(cid:74)(cid:59)(cid:221)(cid:70)(cid:72)(cid:69)(cid:61)(cid:72)(cid:55)(cid:67)(cid:73)(cid:221)(cid:70)(cid:72)(cid:59)(cid:70)(cid:55)(cid:72)(cid:59)(cid:58)(cid:221)
with the corporate knowledge and experience of Turkcell
Academy in the October 2017-December 2017 period.
TURKCELL ACADEMY IS THE BEST CORPORATE
UNIVERSITY AGAIN!
Having won more than 45 international prestigious
awards since its establishment, Turkcell Academy has been
awarded the “Best in the Sector - The BEST” prize for the
second time, by the Association for Talent Development
(ATD), one of the authorities in employee training and
performance development on global scale. Turkcell
Academy added another one to its achievements that
make a difference in training and development by bringing
home “Best in the Sector - The BEST” prize awarded
(cid:56)(cid:79)(cid:221)(cid:1)(cid:20)(cid:4)(cid:221)(cid:74)(cid:69)(cid:221)(cid:74)(cid:62)(cid:59)(cid:221)(cid:56)(cid:59)(cid:73)(cid:74)(cid:221)(cid:57)(cid:69)(cid:67)(cid:70)(cid:55)(cid:68)(cid:63)(cid:59)(cid:73)(cid:221)(cid:63)(cid:68)(cid:221)(cid:74)(cid:62)(cid:59)(cid:63)(cid:72)(cid:221)(cid:206)(cid:59)(cid:66)(cid:58)(cid:128)(cid:221)(cid:9)(cid:68)(cid:221)(cid:177)(cid:175)(cid:176)(cid:182)(cid:125)(cid:221)(cid:63)(cid:74)(cid:221)
was also deemed worthy of three separate prizes in the
Brandon Hall Group Excellence in Learning Awards with
its training and development projects prepared for “4.5G”
and “Convergence”. Indeed, Turkcell Academy, annually
the recipient of prizes at the awards organization held
by Brandon Hall, one of the most prestigious consulting
companies in the world, has added further achievement
to its global success. This year, Turkcell Academy
received awards in the categories of “Best Sales Training
and Performance Program”, “Best Business Strategy
Transformation Support Program” and “Best Creative and
Extensive Education Initiative Program”.
Turkcell Academy has won 3 prizes at Brandon Hall HCM
Excellence in Technology Awards with the Turkcell Academy
Corporate Education Management Platform, My Academy
Mobile Application and Turkcell Service Sales Model
Simulation. Turkcell’s success was registered in the “Best
Development in Education Management Technologies”
category, with the Turkcell Academy Corporate; at the “Best
Mobile Education Technology” category, with My Academy
Mobile Application; and at the “Gaming and Simulation
Applications” category, with the Turkcell Service Sales
Model Simulation. Turkcell Academy General Manager Banu
(cid:216)(cid:218)(cid:213)(cid:63)(cid:221)(cid:19)(cid:59)(cid:80)(cid:59)(cid:68)(cid:221)(cid:77)(cid:55)(cid:73)(cid:221)(cid:55)(cid:77)(cid:55)(cid:72)(cid:58)(cid:59)(cid:58)(cid:221)(cid:74)(cid:62)(cid:59)(cid:221)(cid:136)(cid:20)(cid:69)(cid:70)(cid:221)(cid:180)(cid:175)(cid:221)(cid:12)(cid:59)(cid:55)(cid:58)(cid:59)(cid:72)(cid:73)(cid:221)(cid:69)(cid:60)(cid:221)(cid:74)(cid:62)(cid:59)(cid:221)(cid:23)(cid:69)(cid:72)(cid:66)(cid:58)(cid:137)(cid:221)
prize in the “Strategic Use of Technology in HR” at the
“World HR Congress “ organized for the 25th time.
94
TURKCELL ANNUAL REPORT 2017
OUR SUBSIDIARIES
lifecell continues to offer unique digital products, and
leads the development of the telecommunication market
in its home country.
In line with the need for
payment services without
cards and cash in the
Ukrainian market, lifecell
launched an online money
transfer service through the
oplata. lifecell.ua portal.
lifecell
Having commenced operations as a mobile operator
in February 2005 in Ukraine, lifecell has a population
coverage rate of 99% and a geographical coverage rate
of 95%. A wholly-owned subsidiary of Turkcell, lifecell
has 8 million three-month active subscribers and 11
million registered subscribers as of the end of 2017. 53%
of registered subscribers actively use mobile internet
services.
lifecell stands out for its mobile internet services on
the back of 3G speed, and is a leader by smartphone
penetration. Its revenue in TRY terms increased by 16.5%
to TRY 664.7 million at the end of 2017.
The Company continues to offer unique digital products,
and leads the development of the telecommunication
market in its home country. lifecell initiated many new
applications in Ukraine in 2017. These include cloud
storage application “lifebox”, music application “fizy”,
online magazine application “lifecell Magazines”,
sports application “LifeSport” and the first free
application packages (video, social networks and digital
communication). All of these products are also offered to
the users of other operators.
In line with the need for payment services without cards
and cash in the Ukrainian market, lifecell launched an
online money transfer service through the oplata.lifecell.
ua portal. Paycell LLC was established in August 2017
as a subsidiary of lifecell LLC to serve as a financial
institution and provide credit, leasing, money transfer
and electronic money services. Financial leasing and
lending licenses were obtained in October 2017, while
additional licenses are planned to be obtained in 2018.
Within the scope of the social education program
“lifecell Universities”, the Company opened up a
telecommunications laboratory for students offering
technical expertise training at the Lviv National
Polytechnic University (“LPNU”) in December 2017.
The aim of the project is to equip the largest technical
universities of Ukraine with modern telecommunication
equipment, and to support the professional development
of students.
At the end of 2017, lifecell signed a cooperation and
sponsorship protocol with the National Sports Committee
for the Disabled of Ukraine.
In November, lifecell conducted a speed test together
with Ericsson to demonstrate to the public the fastest 4G
connection, reaching a speed of 453.89 Mbps.
The Company is fully prepared for the launch of 4G
LTE in Ukraine and expects the launch of mobile
number portability in order to offer the fastest internet
connection, greatest quality service and freedom of
choice for the Ukrainian people.
BEST
Having joined in Turkcell Group in July 2008, BeST
(Belarusian Telecommunications Network) was
the first operator to offer 3G service in Belarus in
November 2009. The coverage area of BeST reached
99.7% in 2017 (geographical coverage: 93.0%).
Being the third operator in the market with its
1.6 million customers, BeST started to offer 4G
service through LTE infrastructure established by
beCloud in August 2016. BeST has a wide ranging
product portfolio consisting of various voice and
data packages, and further enriches its portfolio
with digital services in line with Turkcell’s strategy
of providing digital services and solutions on a global
scale. Within this context, BeST included BiP, Apps
Club, Yandex Music and ITV digital services in its
portfolio.
With a growing subscriber base and increasing
device sales, BeST’s revenues grew by 13.4% in local
currency, reaching BYN 111.8 million in 2017. On a TRY
basis, Company revenues increased by 40.3% to TRY
210.4 million.
Lifetech, established as a 100% affiliate of
BeST to serve in the area of telecommunication
and infrastructure solutions, information and
communication technologies, software development
and security services, successfully carries out Turkcell
Group projects with close to 200 employees as of
2017. Lifetech advances with the vision of also
providing its services to non-group companies.
KUZEY KIBRIS TURKCELL
(cid:11)(cid:75)(cid:80)(cid:59)(cid:79)(cid:221)(cid:11)(cid:96)(cid:56)(cid:72)(cid:96)(cid:73)(cid:221)(cid:20)(cid:75)(cid:72)(cid:65)(cid:57)(cid:59)(cid:66)(cid:66)(cid:221)(cid:77)(cid:55)(cid:73)(cid:221)(cid:59)(cid:73)(cid:74)(cid:55)(cid:56)(cid:66)(cid:63)(cid:73)(cid:62)(cid:59)(cid:58)(cid:221)(cid:63)(cid:68)(cid:221)(cid:176)(cid:184)(cid:184)(cid:184)(cid:221)(cid:55)(cid:73)(cid:221)(cid:55)(cid:221)
100% Turkcell-owned affiliate. Having operated until
2007 as part of a revenue-sharing agreement with the
Northern Cyprus Telecommunication Department, the
Company signed an 18-year GSM license contract in
the same year.
(cid:11)(cid:75)(cid:80)(cid:59)(cid:79)(cid:221)(cid:11)(cid:96)(cid:56)(cid:72)(cid:96)(cid:73)(cid:221)(cid:20)(cid:75)(cid:72)(cid:65)(cid:57)(cid:59)(cid:66)(cid:66)(cid:125)(cid:221)(cid:77)(cid:62)(cid:63)(cid:57)(cid:62)(cid:221)(cid:62)(cid:55)(cid:73)(cid:221)(cid:56)(cid:59)(cid:59)(cid:68)(cid:221)(cid:69)(cid:60)(cid:60)(cid:59)(cid:72)(cid:63)(cid:68)(cid:61)(cid:221)(cid:178)(cid:7)(cid:221)
products and services since October 2008, pioneered a
first in Turkcell Group, TRNC, and the world in 2016. It
became the world’s first digital operator, launching its
new digital brand Lifecell, which exclusively operates
on the internet.
TURKCELL ANNUAL REPORT 2017
95
The Company is the market leader in the TRNC with
an infrastructure covering 100% of the population,
and has a market share of 62% according to data from
the Information and Communication Technologies
Authority as of the third quarter of 2017.
Lifecell Digital Ltd., established in December 2017
(cid:77)(cid:63)(cid:74)(cid:62)(cid:221)(cid:55)(cid:221)(cid:184)(cid:184)(cid:128)(cid:184)(cid:184)(cid:186)(cid:221)(cid:70)(cid:55)(cid:72)(cid:74)(cid:63)(cid:57)(cid:63)(cid:70)(cid:55)(cid:74)(cid:63)(cid:69)(cid:68)(cid:221)(cid:69)(cid:60)(cid:221)(cid:11)(cid:75)(cid:80)(cid:59)(cid:79)(cid:221)(cid:11)(cid:96)(cid:56)(cid:72)(cid:96)(cid:73)(cid:221)(cid:20)(cid:75)(cid:72)(cid:65)(cid:57)(cid:59)(cid:66)(cid:66)(cid:221)
to provide Internet Service Provider (ISP) services,
also supports the vision of being an integrated digital
operator.
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and were realized as TRY 158.2 million.
TURKCELL EUROPE
Founded in Germany in 2010 as a Mobile Virtual
Network Operator (MVNO), Turkcell Europe provides
services to approximately over 300 thousand
customers through marketing cooperation realized
with Deutsche Telekom. Operating under the Lifecell
brand as of 2018, Turkcell Europe has begun to
introduce its innovative digital services to its users in
Germany in parallel with Turkcell’s global vision.
The Lifecell brand differentiates itself from its
competitors with its special digital offers in addition
to the mobile voice, mobile internet services and
advantage packages offered through the T-Mobile
network within the scope of the marketing agreement
signed with Deutsche Telekom. Lifecell unites its
customers with the rich world of digital services
through BiP, acting as a bridge between countries with
its messaging, audio and video call abilities; fizy, which
brings customers millions of local and foreign songs,
video-clips and live concerts; Dergilik enabling them
to easily track magazines in Turkey and throughout the
world on their mobile phones and tablets; and TV+,
through which they can watch films, TV series and
programs from all around the world, anywhere they
choose.
Among the growth targets of the Lifecell brand
beyond Germany are other countries in Europe with
dense Turkish populations and a diversity of customer
segments. As a global player, Lifecell is set to continue
on its path in Europe by adding many more innovative
products such as payment systems and travel
applications to its portfolio, with the vision of bringing
its services to all potential customers.
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1.6 million
Being the third operator
in the market with its 1.6
million customers, BeST
started to offer 4G service
through LTE infrastructure
established by beCloud in
August 2016.
The Company is the market
leader in the TRNC with
an infrastructure covering
100% of the population,
and has a market share
of 62% according to data
from the Information
and Communication
Technologies Authority as
of the third quarter of 2016.
96
TURKCELL ANNUAL REPORT 2017
OUR SUBSIDIARIES
Turkey’s 1st telecommunications infrastructure company
with a total site portfolio of 10,337...
BELARUS
UKRAINE
With its more than 10 thousand
unique portfolio of sites in four countries
1st in Turkey Tower Co
5th in Europe Tower Co
World’s fifteenth largest tower
and infrastructure operator
TURKEY
CYPRUS
With 14 locations in Turkey
and 4 locations in Ukraine,
Turkcell Global Bilgi
operates in 18 locations in
total as of the end of 2017
and provides employment to
approximately 12 thousand
people with 8 thousand
table capacity.
(cid:20)(cid:21)(cid:18)(cid:11)(cid:3)(cid:5)(cid:12)(cid:12)(cid:222)(cid:7)(cid:12)(cid:15)(cid:2)(cid:1)(cid:12)(cid:222)(cid:2)(cid:217)(cid:12)(cid:7)(cid:217)
Turkcell Global Bilgi offers new generation creative
solutions in customer experience by closely monitoring
technological innovations in addition to its 18-year
experience in customer service. Acting as the strategic
business partner of its customers, Turkcell Global
Bilgi aims to increase the customer satisfaction and
revenues of companies by delivering customized
solutions meeting the needs of over 60 companies,
including Turkcell itself.
With 14 locations in Turkey and 4 locations in Ukraine,
Turkcell Global Bilgi operates in 18 locations in total
as of the end of 2017 and provides employment to
approximately 12 thousand people with 8 thousand
table capacity. With 7,300 female employees, the ratio
of female employees employed by Turkcell Global Bilgi
is 60%.
Turkcell Global Bilgi, which realized the first
technology investment in the east of Turkey with the
Erzurum Call Center, is also the first, and still the only
Turkish call center to serve abroad with its Ukrainian
investment. It ranks among the top 500 IT companies
in Turkey.
Turkcell Global Bilgi won the first prize in the
“Best Sales Campaign” and “Best Self-Service
Technology” categories and the second prize in the
“Best Outsourcing Business Partnership” category at
the EMEA regional finals of the “2017 Top Ranking
Performers” awards of “ContactCenterWorld”, the
world’s largest call center industry organization.
Turkcell Global Bilgi manages communication with the
end consumer from many channels such as face-to-
face service, telephone, audio and video response
systems (IVR and IVVR), e-mail, SMS, web chat, the
next generation customer experience platform BiP and
social media. It also develops tailor-made solutions for
its customers through its design team, which handles
customer services end-to-end to create a unique
customer experience.
GLOBAL TOWER
Global Tower was established as a 100% subsidiary of
Turkcell in 2006 to provide tower and infrastructure
services. Operating in four countries, Global Tower
became an international player by establishing
UkrTower in Ukraine in 2009 and BelTower in Belarus
in 2016. It provides the infrastructure needs of
telecom operators, the media, ISPs, and the energy,
public and private sectors.
Global Tower recorded net revenues of TRY 212 million
in 2016 and increased its revenues by 21% to TRY 257
million in 2017. In the medium-term, Global Tower
targets to increase its revenues on average by 15%-
20%. In 2017, EBITDA increased by 24% to TRY 139
million. Mid-term EBITDA growth target is 12%-16%
on average. Consolidated tenancy ratio was 1.53x in
2017 and is expected to reach 1.80x-1.90x in mid-term.
Global Tower is Turkey’s first and Europe’s fifth largest
telecommunications infrastructure company with a
total site portfolio of 10,337, of which,
› 8,288 are in Turkey
› Owned: 3,724
› Operated: 2,354
› Contract Management: 2,210
› 1,103 are in Ukraine (Owned)
› 831 are in Belarus (Right of use)
› 115 are in TRNC (Right of use)
Global Tower’s main areas of activity are:
› Leasing services
› Build-and-sell services
› Contract management services
› Maintenance services
(cid:20)(cid:47)(cid:8)(cid:1)(cid:218)(cid:222)(cid:69)(cid:60)(cid:60)(cid:59)(cid:72)(cid:73)(cid:222)(cid:71)(cid:75)(cid:63)(cid:57)(cid:65)(cid:222)(cid:55)(cid:68)(cid:58)(cid:222)
easy payment services to
over two thousand member
merchants and over five
million customers with the
(cid:16)(cid:55)(cid:79)(cid:57)(cid:59)(cid:66)(cid:66)(cid:222)(cid:56)(cid:72)(cid:55)(cid:68)(cid:58)(cid:128)(cid:222)(cid:20)(cid:47)(cid:8)(cid:1)(cid:218)(cid:222)(cid:55)(cid:63)(cid:67)(cid:73)(cid:222)
to enable its customers to
use their Paycell accounts
more effectively with
the Paycell Application,
which made its way to the
application markets in
August.
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Global Tower serves its customers in the growing
telecommunication sector with an end-to-end service
understanding. To this end, it expands its product range
with the introduction of new business lines such as
satellite services. Global Tower expects the growth
momentum achieved to date to continue in the upcoming
period, and aims to take its long-term sustainable
business plan abroad.
(cid:20)(cid:21)(cid:18)(cid:11)(cid:3)(cid:5)(cid:12)(cid:12)(cid:222)(cid:6)(cid:217)(cid:14)(cid:1)(cid:14)(cid:19)(cid:13)(cid:1)(cid:14)(cid:222)
(cid:148)(cid:3)(cid:15)(cid:14)(cid:19)(cid:21)(cid:13)(cid:5)(cid:18)(cid:222)(cid:6)(cid:9)(cid:14)(cid:1)(cid:14)(cid:3)(cid:5)(cid:222)(cid:3)(cid:15)(cid:13)(cid:16)(cid:1)(cid:14)(cid:25)(cid:149)
(cid:20)(cid:75)(cid:72)(cid:65)(cid:57)(cid:59)(cid:66)(cid:66)(cid:221)(cid:6)(cid:63)(cid:68)(cid:55)(cid:68)(cid:73)(cid:67)(cid:55)(cid:68)(cid:221)(cid:1)(cid:128)(cid:217)(cid:128)(cid:221)(cid:72)(cid:59)(cid:57)(cid:59)(cid:63)(cid:76)(cid:59)(cid:58)(cid:221)(cid:63)(cid:74)(cid:73)(cid:221)(cid:69)(cid:70)(cid:59)(cid:72)(cid:55)(cid:74)(cid:63)(cid:69)(cid:68)(cid:55)(cid:66)(cid:221)(cid:70)(cid:59)(cid:72)(cid:67)(cid:63)(cid:74)(cid:221)(cid:60)(cid:72)(cid:69)(cid:67)(cid:221)
the Banking Regulation and Supervision Agency in March
2016 and started to serve in approximately 3,000 Turkcell
stores throughout Turkey with Financell brand, by carrying
Turkcell quality to the finance sector to provide flexible
payment solutions to customers’ equipment needs through
financial loans.
(cid:20)(cid:75)(cid:72)(cid:65)(cid:57)(cid:59)(cid:66)(cid:66)(cid:221)(cid:6)(cid:63)(cid:68)(cid:55)(cid:68)(cid:73)(cid:67)(cid:55)(cid:68)(cid:221)(cid:1)(cid:128)(cid:217)(cid:128)(cid:221)(cid:62)(cid:55)(cid:73)(cid:221)(cid:61)(cid:72)(cid:55)(cid:68)(cid:74)(cid:59)(cid:58)(cid:221)(cid:20)(cid:18)(cid:25)(cid:221)(cid:179)(cid:128)(cid:177)(cid:221)(cid:56)(cid:63)(cid:66)(cid:66)(cid:63)(cid:69)(cid:68)(cid:221)(cid:63)(cid:68)(cid:221)(cid:66)(cid:69)(cid:55)(cid:68)(cid:73)(cid:221)
to around 3.1 million customers and became one of the most
important players in the Turkish financing sector with an
asset size of more than TRY 4.6 billion by year-end of 2017.
Having started to serve in the Turkish Republic of Northern
Cyprus as of October 2017, Financell provides financing
support for the sale of technological products at Turkcell
stores there.
(cid:20)(cid:21)(cid:18)(cid:11)(cid:3)(cid:5)(cid:12)(cid:12)(cid:222)(cid:47)(cid:4)(cid:5)(cid:13)(cid:5)(cid:222)(cid:22)(cid:5)(cid:222)(cid:5)(cid:12)(cid:5)(cid:11)(cid:20)(cid:18)(cid:15)(cid:14)(cid:217)(cid:11)(cid:222)(cid:16)(cid:1)(cid:18)(cid:1)(cid:222)
(cid:8)(cid:217)(cid:26)(cid:13)(cid:5)(cid:20)(cid:12)(cid:5)(cid:18)(cid:217)(cid:154)(cid:222)(cid:148)(cid:20)(cid:21)(cid:18)(cid:11)(cid:3)(cid:5)(cid:12)(cid:12)(cid:222)(cid:16)(cid:1)(cid:25)(cid:13)(cid:5)(cid:14)(cid:20)(cid:222)(cid:19)(cid:5)(cid:18)(cid:22)(cid:9)(cid:3)(cid:5)(cid:19)(cid:149)
(cid:20)(cid:75)(cid:72)(cid:65)(cid:57)(cid:59)(cid:66)(cid:66)(cid:221)(cid:47)(cid:58)(cid:59)(cid:67)(cid:59)(cid:221)(cid:76)(cid:59)(cid:221)(cid:5)(cid:66)(cid:59)(cid:65)(cid:74)(cid:72)(cid:69)(cid:68)(cid:63)(cid:65)(cid:221)(cid:16)(cid:55)(cid:72)(cid:55)(cid:221)(cid:8)(cid:63)(cid:80)(cid:67)(cid:59)(cid:74)(cid:66)(cid:59)(cid:72)(cid:63)(cid:221)(cid:1)(cid:128)(cid:217)(cid:128)(cid:221)(cid:148)(cid:20)(cid:47)(cid:8)(cid:1)(cid:217)(cid:149)(cid:125)(cid:221)
the payment services company, extended the scope of its
Payment Institution license obtained from the BRSA in
2016 to an Electronic Money license in 2017, and made
collaborations with many new business partners and
conducted projects during the year.
(cid:20)(cid:47)(cid:8)(cid:1)(cid:217)(cid:221)(cid:69)(cid:60)(cid:60)(cid:59)(cid:72)(cid:73)(cid:221)(cid:71)(cid:75)(cid:63)(cid:57)(cid:65)(cid:221)(cid:55)(cid:68)(cid:58)(cid:221)(cid:59)(cid:55)(cid:73)(cid:79)(cid:221)(cid:70)(cid:55)(cid:79)(cid:67)(cid:59)(cid:68)(cid:74)(cid:221)(cid:73)(cid:59)(cid:72)(cid:76)(cid:63)(cid:57)(cid:59)(cid:73)(cid:221)(cid:74)(cid:69)(cid:221)(cid:69)(cid:76)(cid:59)(cid:72)(cid:221)(cid:177)(cid:221)
thousand member merchants and over 5 million customers
(cid:77)(cid:63)(cid:74)(cid:62)(cid:221)(cid:74)(cid:62)(cid:59)(cid:221)(cid:16)(cid:55)(cid:79)(cid:57)(cid:59)(cid:66)(cid:66)(cid:221)(cid:56)(cid:72)(cid:55)(cid:68)(cid:58)(cid:128)(cid:221)(cid:20)(cid:47)(cid:8)(cid:1)(cid:217)(cid:221)(cid:55)(cid:63)(cid:67)(cid:73)(cid:221)(cid:74)(cid:69)(cid:221)(cid:59)(cid:68)(cid:55)(cid:56)(cid:66)(cid:59)(cid:221)(cid:63)(cid:74)(cid:73)(cid:221)(cid:57)(cid:75)(cid:73)(cid:74)(cid:69)(cid:67)(cid:59)(cid:72)(cid:73)(cid:221)
to use their Paycell accounts more effectively with the
Paycell Application, which made its way to the application
markets in August.
Having obtaining its electronic money license, Paycell added
Paycell Card, its prepaid card designed for its customers who
don’t use credit cards and banking products, and Paycell
Digital Money, which can be uploaded to Paycell accounts,
among its payment solutions. In addition, bringing into
use rapid payment services that will ease the lives of its
customers, such as institution bill payments, fuel payments
without leaving the vehicle, and Turkcell Invoice and Package
uploads, Paycell aims to rapidly increase its payment services
in 2018 as well.
*After the registration of the General Assembly resolution on
(cid:177)(cid:175)(cid:128)(cid:175)(cid:177)(cid:128)(cid:177)(cid:175)(cid:176)(cid:182)(cid:125)(cid:221)(cid:74)(cid:62)(cid:59)(cid:221)(cid:74)(cid:72)(cid:55)(cid:58)(cid:59)(cid:221)(cid:68)(cid:55)(cid:67)(cid:59)(cid:221)(cid:69)(cid:60)(cid:221)(cid:20)(cid:75)(cid:72)(cid:65)(cid:57)(cid:59)(cid:66)(cid:66)(cid:221)(cid:47)(cid:58)(cid:59)(cid:67)(cid:59)(cid:221)(cid:8)(cid:63)(cid:80)(cid:67)(cid:59)(cid:74)(cid:66)(cid:59)(cid:72)(cid:63)(cid:221)(cid:1)(cid:128)(cid:217)(cid:128)(cid:221)(cid:77)(cid:63)(cid:66)(cid:66)(cid:221)(cid:56)(cid:59)(cid:221)
(cid:72)(cid:59)(cid:60)(cid:59)(cid:72)(cid:72)(cid:59)(cid:58)(cid:221)(cid:74)(cid:69)(cid:221)(cid:55)(cid:73)(cid:221)(cid:20)(cid:75)(cid:72)(cid:65)(cid:57)(cid:59)(cid:66)(cid:66)(cid:221)(cid:47)(cid:58)(cid:59)(cid:67)(cid:59)(cid:221)(cid:76)(cid:59)(cid:221)(cid:5)(cid:66)(cid:59)(cid:65)(cid:74)(cid:72)(cid:69)(cid:68)(cid:63)(cid:65)(cid:221)(cid:16)(cid:55)(cid:72)(cid:55)(cid:221)(cid:8)(cid:63)(cid:80)(cid:67)(cid:59)(cid:74)(cid:66)(cid:59)(cid:72)(cid:63)(cid:221)(cid:1)(cid:128)(cid:217)(cid:128)
(cid:217)(cid:14)(cid:20)(cid:5)(cid:12)(cid:20)(cid:5)(cid:11)
(cid:216)(cid:68)(cid:74)(cid:59)(cid:66)(cid:74)(cid:59)(cid:65)(cid:221)(cid:148)(cid:69)(cid:77)(cid:68)(cid:59)(cid:58)(cid:221)(cid:180)(cid:180)(cid:186)(cid:221)(cid:56)(cid:79)(cid:221)(cid:20)(cid:75)(cid:72)(cid:65)(cid:74)(cid:59)(cid:66)(cid:66)(cid:125)(cid:221)(cid:177)(cid:175)(cid:186)(cid:221)(cid:56)(cid:79)(cid:221)(cid:9)(cid:68)(cid:74)(cid:72)(cid:55)(cid:66)(cid:69)(cid:74)(cid:221)(cid:19)(cid:1)(cid:125)(cid:221)(cid:55)(cid:68)(cid:58)(cid:221)
25% by Intralot Iberia Holding SA) conducts Head Agency,
Central System Administration and Risk Management
operations within the scope of sports betting games
administration in Turkey.
(cid:216)(cid:68)(cid:74)(cid:59)(cid:66)(cid:74)(cid:59)(cid:65)(cid:221)(cid:55)(cid:57)(cid:62)(cid:63)(cid:59)(cid:76)(cid:59)(cid:58)(cid:221)(cid:74)(cid:62)(cid:59)(cid:221)(cid:57)(cid:69)(cid:68)(cid:58)(cid:63)(cid:74)(cid:63)(cid:69)(cid:68)(cid:221)(cid:69)(cid:60)(cid:221)(cid:56)(cid:59)(cid:63)(cid:68)(cid:61)(cid:221)(cid:69)(cid:68)(cid:59)(cid:221)(cid:69)(cid:60)(cid:221)(cid:74)(cid:62)(cid:59)(cid:221)(cid:77)(cid:69)(cid:72)(cid:66)(cid:58)(cid:135)(cid:73)(cid:221)
largest operators in the state-controlled betting games sector
with its “iddaa” game and brand created in 2004. The added
value of “iddaa” in terms of tax and public contribution to the
Turkish economy exceeded TRY 4 billion in 2017.
(cid:216)(cid:68)(cid:74)(cid:59)(cid:66)(cid:74)(cid:59)(cid:65)(cid:221)(cid:62)(cid:55)(cid:73)(cid:221)(cid:56)(cid:59)(cid:59)(cid:68)(cid:221)(cid:73)(cid:75)(cid:57)(cid:57)(cid:59)(cid:73)(cid:73)(cid:60)(cid:75)(cid:66)(cid:66)(cid:79)(cid:221)(cid:69)(cid:70)(cid:59)(cid:72)(cid:55)(cid:74)(cid:63)(cid:68)(cid:61)(cid:221)(cid:63)(cid:68)(cid:221)(cid:74)(cid:62)(cid:59)(cid:221)(cid:73)(cid:55)(cid:67)(cid:59)(cid:221)(cid:206)(cid:59)(cid:66)(cid:58)(cid:221)
in Azerbaijan through its 51% subsidiary “Azerinteltek” by
creating “Topaz” brand.
(cid:216)(cid:68)(cid:74)(cid:59)(cid:66)(cid:74)(cid:59)(cid:65)(cid:221)(cid:55)(cid:63)(cid:67)(cid:73)(cid:221)(cid:74)(cid:69)(cid:221)(cid:56)(cid:59)(cid:57)(cid:69)(cid:67)(cid:59)(cid:221)(cid:74)(cid:62)(cid:59)(cid:221)(cid:66)(cid:55)(cid:72)(cid:61)(cid:59)(cid:73)(cid:74)(cid:221)(cid:73)(cid:69)(cid:57)(cid:63)(cid:55)(cid:66)(cid:221)(cid:61)(cid:55)(cid:67)(cid:59)(cid:221)(cid:70)(cid:72)(cid:69)(cid:76)(cid:63)(cid:58)(cid:59)(cid:72)(cid:221)
by reproducing its success in games within the games of
chance in the “games” sector. It has stepped into the gaming
industry with its gaming platform developed on Turkcell BiP
application, with www.playcell.com, which has games for
children and teens, and with www.gamecell.com for adults.
(cid:20)(cid:21)(cid:18)(cid:11)(cid:3)(cid:5)(cid:12)(cid:12)(cid:222)(cid:20)(cid:5)(cid:11)(cid:14)(cid:15)(cid:12)(cid:15)(cid:10)(cid:217)(cid:222)(cid:148)(cid:20)(cid:21)(cid:18)(cid:11)(cid:3)(cid:5)(cid:12)(cid:12)(cid:222)
(cid:20)(cid:5)(cid:3)(cid:8)(cid:14)(cid:15)(cid:12)(cid:15)(cid:7)(cid:25)(cid:149)
As Turkey’s largest R&D center built at a single campus,
Turkcell Technology carries out its R&D and innovation
(cid:55)(cid:57)(cid:74)(cid:63)(cid:76)(cid:63)(cid:74)(cid:63)(cid:59)(cid:73)(cid:221)(cid:77)(cid:63)(cid:74)(cid:62)(cid:221)(cid:69)(cid:76)(cid:59)(cid:72)(cid:221)(cid:182)(cid:175)(cid:175)(cid:221)(cid:18)(cid:111)(cid:4)(cid:221)(cid:70)(cid:59)(cid:72)(cid:73)(cid:69)(cid:68)(cid:68)(cid:59)(cid:66)(cid:221)(cid:63)(cid:68)(cid:221)(cid:11)(cid:109)(cid:213)(cid:109)(cid:65)(cid:79)(cid:55)(cid:66)(cid:96)(cid:221)
Technology Plaza. In addition to Turkcell Group, this center
runs product and service development processes under the
same structure, and provides services to 15 countries with
different products, services and infrastructures.
The focus areas of Turkcell Technology include; Big Data
Processing, Business Intelligence Applications, Customer
Relationship Management and Solutions, Network
Management Solutions, Location Based Technologies, New
Generation Value Added Services, SIM Technologies, Mobile
Financial Systems, Music and Entertainment Services,
IPTV Services, Revenue Management Competencies, Cloud
Computing, Terminal Applications, Mobile Marketing
Solutions, Internet of Things (IoT), Campaign Management
Systems and Over-The-Top (OTT) solutions.
Turkcell Technology carries out technology and software
export activities in the CIS, Middle East, Africa and European
regions, and continues its sales and after-sales maintenance
activities abroad with 24 products in total. RoamSelect, one of
the locomotive products designed and developed by Turkcell
Technology, is used in 10 countries, while SimSelect is used in
7 countries, and Campaign Management System in 5 countries.
With national and international patent applications, Turkcell
Technology aims to be a pioneering technology company on
a global scale. Patent application process makes a significant
contribution to differentiating the services and products of
98
TURKCELL ANNUAL REPORT 2017
OUR SUBSIDIARIES
Lifecell Ventures’ mission is to deliver digital communications,
entertainment, music, TV, money transfer, e-commerce applications,
and cloud solutions.
Turkcell Technology has
received many prestigious
awards in consequence
of the innovative and
original technologies it has
produced in 2017.
Turkcell Technology, and rendering them competitive, with
export potential. The Company continues to work intensively
and shares this experience with universities, incubators,
SMEs and other business partners to ensure that the process
gains wider recognition. Since 2008, Turkcell Technology has
been the leader in Turkey’s telecommunications sector with
its 788 national and 79 international patent applications.
Continuing its R&D activities by taking part on the
EUREKA platform within the scope of international
collaborations, Turkcell Technology continues to
work on new project applications in the H2020
program. With the responsibility of being on the
board of ITEA3 and CELTIC+ clusters, and with the
(cid:73)(cid:75)(cid:70)(cid:70)(cid:69)(cid:72)(cid:74)(cid:221)(cid:69)(cid:60)(cid:221)(cid:20)(cid:53)(cid:2)(cid:216)(cid:20)(cid:1)(cid:11)(cid:125)(cid:221)(cid:20)(cid:75)(cid:72)(cid:65)(cid:57)(cid:59)(cid:66)(cid:66)(cid:221)(cid:20)(cid:59)(cid:57)(cid:62)(cid:68)(cid:69)(cid:66)(cid:69)(cid:61)(cid:79)(cid:221)(cid:63)(cid:73)(cid:221)(cid:77)(cid:69)(cid:72)(cid:65)(cid:63)(cid:68)(cid:61)(cid:221)
hard to move the R&D companies in its ecosystem to
international platforms. In this manner, in areas such
as industry 4.0, 5G, cognitive IT and Fintech that can
carry the scientific and technological development
of our country one step further, research continues
to explore the known state of various techniques. In
this manner, ideas capable of transferring our country
to a more advanced level are discovered, and their
architectural designs are developed and constructed.
In line with business partnerships and the vision of
a digital operator, Turkcell Technology takes part
as a project partner in a number of new project
applications in areas such as (Artificial Intelligence,
Large Data Analysis and Analytical Applications and
IoT solutions) under ITEA and CELTIC cluster programs
in 2017.
Turkcell Technology has received many prestigious
awards in consequence of the innovative and original
technologies it has produced in 2017.
Pioneering the production of new technologies,
Turkcell Technology has also conducted important
research into the dissemination of technology, and
produced many Academic and Technical Publications
on national and international platforms in 2017.
Turkcell Technology enriched its collaborations with
universities in 2017. These include joint R&D projects
determined in line with strategic focus areas that
generate innovative solutions to enrich customer
experience; postgraduate and PhD programs organized
at the Turkcell Technology campus; trainings and
conferences providing technology transfer at various
universities, and the Young Talent Program aimed at
enabling new graduates start their career at Turkcell
Teknoloji in line with their targets.
LIFECELL VENTURES
Lifecell Ventures is a 100% Turkcell subsidiary
established in the Netherlands. In line with Turkcell
Group’s strategic priority of enhancing its operations
both in international and domestic markets, Lifecell
Ventures aims to spread its digital products and
services and OTT (over-the-top) services to regional
and global markets.
Lifecell Ventures’ mission is to deliver digital
communications, entertainment, music, TV, money
transfer, e-commerce applications, and cloud
solutions. It also leverages technology to provide
consumers with a new digital experience around the
world, and to enable telecom operators to compete
effectively.
Lifecell Ventures aims to digitalize the
telecommunications industry.
(cid:20)(cid:21)(cid:18)(cid:11)(cid:3)(cid:5)(cid:12)(cid:12)(cid:222)(cid:5)(cid:14)(cid:5)(cid:18)(cid:10)(cid:217)(cid:222)(cid:213)(cid:47)(cid:26)(cid:53)(cid:13)(cid:12)(cid:5)(cid:18)(cid:217)(cid:222)(cid:22)(cid:5)(cid:222)(cid:5)(cid:12)(cid:5)(cid:11)(cid:20)(cid:18)(cid:217)(cid:11)(cid:222)(cid:19)(cid:1)(cid:20)(cid:9)(cid:218)(cid:222)
(cid:20)(cid:217)(cid:3)(cid:1)(cid:18)(cid:5)(cid:20)(cid:222)(cid:148)(cid:20)(cid:21)(cid:18)(cid:11)(cid:3)(cid:5)(cid:12)(cid:12)(cid:222)(cid:5)(cid:14)(cid:5)(cid:18)(cid:7)(cid:25)(cid:222)(cid:19)(cid:15)(cid:12)(cid:21)(cid:20)(cid:9)(cid:15)(cid:14)(cid:19)(cid:149)(cid:222)
(cid:20)(cid:75)(cid:72)(cid:65)(cid:57)(cid:59)(cid:66)(cid:66)(cid:221)(cid:5)(cid:68)(cid:59)(cid:72)(cid:64)(cid:63)(cid:221)(cid:212)(cid:102)(cid:80)(cid:109)(cid:67)(cid:66)(cid:59)(cid:72)(cid:63)(cid:221)(cid:76)(cid:59)(cid:221)(cid:5)(cid:66)(cid:59)(cid:65)(cid:74)(cid:72)(cid:63)(cid:65)(cid:221)(cid:19)(cid:55)(cid:74)(cid:96)(cid:218)(cid:221)(cid:20)(cid:63)(cid:57)(cid:55)(cid:72)(cid:59)(cid:74)(cid:221)
(cid:1)(cid:128)(cid:217)(cid:128)(cid:221)(cid:72)(cid:59)(cid:57)(cid:59)(cid:63)(cid:76)(cid:59)(cid:58)(cid:221)(cid:55)(cid:68)(cid:221)(cid:59)(cid:66)(cid:59)(cid:57)(cid:74)(cid:72)(cid:63)(cid:57)(cid:63)(cid:74)(cid:79)(cid:221)(cid:73)(cid:75)(cid:70)(cid:70)(cid:66)(cid:79)(cid:221)(cid:66)(cid:63)(cid:57)(cid:59)(cid:68)(cid:73)(cid:59)(cid:125)(cid:221)(cid:76)(cid:55)(cid:66)(cid:63)(cid:58)(cid:221)(cid:60)(cid:69)(cid:72)(cid:221)(cid:55)(cid:221)
period of 20 years from the Energy Market Regulatory
Authority on May 11, 2017 to trade electricity energy
and/or capacity. With its license, it serves both
eligible individual and/or institutional customers
across Turkey, leading the change in the energy sector
and providing the best customer experience in the
industry.
The Company, which handles energy supply activity
within the framework of digital and intelligent energy
solutions, carries out studies to spread the renewable
energy based off-grid applications in parallel to its
vision of providing its customers uninterrupted energy.
TURKCELL ANNUAL REPORT 2017
99
AWARDS
We were granted the GSMA’s most prestigious and oldest award,
“Outstanding Contribution to the Mobile Communication Industry”.
At the EU Excellence
Awards in HR, Europe’s
most prestigious human
resources organization,
we were ranked first with
GNÇYTNK “Recruitment
and Talent Acquisition”
category, overtaking the
leading competitors in the
world.
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Webrazzi Awards
Our Company was named the “Most Digital Brand of the
Year” by Webrazzi readers.
(cid:180)(cid:175)(cid:222)(cid:13)(cid:69)(cid:73)(cid:74)(cid:222)(cid:5)(cid:60)(cid:60)(cid:59)(cid:57)(cid:74)(cid:63)(cid:76)(cid:59)(cid:222)(cid:8)(cid:18)(cid:222)(cid:13)(cid:55)(cid:68)(cid:55)(cid:61)(cid:59)(cid:72)(cid:73)(cid:222)(cid:18)(cid:59)(cid:73)(cid:59)(cid:55)(cid:72)(cid:57)(cid:62)
Turkcell’s Executive Vice President of HR, Seyfettin
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Effective HR Managers” research, organized by Fortune
Turkey and DataExpert.
FEBRUARY
MARCH
The Human Resources Summit Respect for Humanity
Award
Our Company received an award in the “Screening
the Highest number of Candidates” category at the
Human Resources Summit, Respect for Humanity Award
ceremony held annually by Kariyer.net.
Global Mobile Awards
Turkcell has been deemed worthy of the GSMA’s most
prestigious and long-standing “Outstanding Contribution
to the Mobile Industry” award. Turkcell CEO Kaan
(cid:20)(cid:59)(cid:72)(cid:80)(cid:63)(cid:69)(cid:215)(cid:66)(cid:75)(cid:221)(cid:57)(cid:69)(cid:66)(cid:66)(cid:59)(cid:57)(cid:74)(cid:59)(cid:58)(cid:221)(cid:74)(cid:62)(cid:59)(cid:221)(cid:55)(cid:77)(cid:55)(cid:72)(cid:58)(cid:221)(cid:60)(cid:72)(cid:69)(cid:67)(cid:221)(cid:7)(cid:19)(cid:13)(cid:1)(cid:221)(cid:3)(cid:62)(cid:55)(cid:63)(cid:72)(cid:67)(cid:55)(cid:68)(cid:221)(cid:19)(cid:75)(cid:68)(cid:63)(cid:66)(cid:221)
(cid:13)(cid:63)(cid:74)(cid:74)(cid:55)(cid:66)(cid:221)(cid:69)(cid:68)(cid:221)(cid:56)(cid:59)(cid:62)(cid:55)(cid:66)(cid:60)(cid:221)(cid:69)(cid:60)(cid:221)(cid:206)(cid:76)(cid:59)(cid:221)(cid:69)(cid:70)(cid:59)(cid:72)(cid:55)(cid:74)(cid:69)(cid:72)(cid:73)(cid:125)(cid:221)(cid:77)(cid:62)(cid:63)(cid:57)(cid:62)(cid:221)(cid:62)(cid:55)(cid:76)(cid:59)(cid:221)(cid:72)(cid:59)(cid:57)(cid:59)(cid:63)(cid:76)(cid:59)(cid:58)(cid:221)
the award.
For its “Hello Hope” mobile application, our Company
also received the “Mobile in Emergency or Humanitarian
Situations” award under the “Social and Economic
Development” category in the Glomo Awards organized
by the GSMA.
Mixx Awards
(cid:23)(cid:63)(cid:74)(cid:62)(cid:221)(cid:206)(cid:80)(cid:79)(cid:221)(cid:148)(cid:8)(cid:59)(cid:55)(cid:72)(cid:74)(cid:221)(cid:18)(cid:55)(cid:74)(cid:59)(cid:149)(cid:125)(cid:221)(cid:179)(cid:128)(cid:180)(cid:7)(cid:221)(cid:148)(cid:19)(cid:55)(cid:68)(cid:55)(cid:66)(cid:63)(cid:65)(cid:55)(cid:149)(cid:221)(cid:55)(cid:68)(cid:58)(cid:221)(cid:136)(cid:212)(cid:55)(cid:68)(cid:55)(cid:65)(cid:65)(cid:55)(cid:66)(cid:59)(cid:135)(cid:79)(cid:59)(cid:221)
Mektuplar” (Letters to Çanakkale), Turkcell was granted
awards in 4 different categories at the IAB Mixx Awards.
(cid:20)(cid:62)(cid:59)(cid:222)(cid:20)(cid:69)(cid:70)(cid:222)(cid:180)(cid:175)(cid:222)(cid:12)(cid:59)(cid:55)(cid:58)(cid:59)(cid:72)(cid:73)(cid:222)(cid:69)(cid:60)(cid:222)(cid:74)(cid:62)(cid:59)(cid:222)(cid:23)(cid:69)(cid:72)(cid:66)(cid:58)(cid:222)(cid:63)(cid:68)(cid:222)(cid:19)(cid:74)(cid:72)(cid:55)(cid:74)(cid:59)(cid:61)(cid:63)(cid:57)(cid:222)(cid:21)(cid:73)(cid:59)(cid:222)(cid:69)(cid:60)(cid:222)
Technology in HR
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received an award at the 25th World HR Congress by
making the list of the “Top 50 Leaders of the World in
Strategic Use of Technology in HR”.
A.C.E. Awards
We have been deemed worthy of three prizes at the
A.C.E. (Achievement in Customer Excellence) Awards
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which measures customer satisfaction and evaluates
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leaving the competition behind in the communication
category. In addition, in the ISP category, Turkcell
Superonline, and in the digital platform category, TV+;
won third place.
EU Excellence Awards in HR
At the EU Excellence Awards in HR, Europe’s most
prestigious human resources organization, we were
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Recruiting Event” category, overtaking the leading
competitors in the world.
100
TURKCELL ANNUAL REPORT 2017
AWARDS
Turkcell has been awarded five prizes for four projects
at the Association of Direct Marketing Communicators’
traditional Direct Marketing Awards.
During the Golden Compass
Awards organized by the
Turkish Public Relations
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the 16th time this year, our
Company has received
awards for the “Turkcell
Gallipoli Marathon” in
the sports sponsorship
communication category,
and for “Letters to
Çanakkale” in the corporate
responsibility digital
communications category.
The Peer Awards for Excellence
At The Peer Awards for Excellence, which takes the pulse of
(cid:74)(cid:62)(cid:59)(cid:221)(cid:56)(cid:75)(cid:73)(cid:63)(cid:68)(cid:59)(cid:73)(cid:73)(cid:221)(cid:77)(cid:69)(cid:72)(cid:66)(cid:58)(cid:125)(cid:221)(cid:77)(cid:59)(cid:221)(cid:77)(cid:69)(cid:68)(cid:221)(cid:206)(cid:72)(cid:73)(cid:74)(cid:221)(cid:70)(cid:66)(cid:55)(cid:57)(cid:59)(cid:221)(cid:63)(cid:68)(cid:221)(cid:74)(cid:62)(cid:59)(cid:221)(cid:72)(cid:59)(cid:61)(cid:63)(cid:69)(cid:68)(cid:55)(cid:66)(cid:221)(cid:57)(cid:55)(cid:74)(cid:59)(cid:61)(cid:69)(cid:72)(cid:79)(cid:221)
for the Turkcell Employee Journey project.
IDC CIO Awards
We received the third prize in the Business Enablement
category under the IDC CIO Awards with the Collaborative
Analytics Platform.
APRIL
MAY
Global Council of Corporate University
(cid:2)(cid:59)(cid:63)(cid:68)(cid:61)(cid:221)(cid:55)(cid:221)(cid:206)(cid:68)(cid:55)(cid:66)(cid:63)(cid:73)(cid:74)(cid:221)(cid:63)(cid:68)(cid:221)(cid:74)(cid:62)(cid:72)(cid:59)(cid:59)(cid:221)(cid:73)(cid:59)(cid:70)(cid:55)(cid:72)(cid:55)(cid:74)(cid:59)(cid:221)(cid:57)(cid:55)(cid:74)(cid:59)(cid:61)(cid:69)(cid:72)(cid:63)(cid:59)(cid:73)(cid:125)(cid:221)(cid:20)(cid:75)(cid:72)(cid:65)(cid:57)(cid:59)(cid:66)(cid:66)(cid:221)
Academy was deemed worthy of an award in the “Best
Corporate University-Business Impact” category for the 4.5G
Convergence Development Program at the award ceremony
organized by the Global Council of Corporate Universities, a
joint platform of the world’s leading institutional universities.
Direct Marketing Awards
(cid:15)(cid:75)(cid:72)(cid:221)(cid:3)(cid:69)(cid:67)(cid:70)(cid:55)(cid:68)(cid:79)(cid:221)(cid:62)(cid:55)(cid:73)(cid:221)(cid:56)(cid:59)(cid:59)(cid:68)(cid:221)(cid:55)(cid:77)(cid:55)(cid:72)(cid:58)(cid:59)(cid:58)(cid:221)(cid:206)(cid:76)(cid:59)(cid:221)(cid:70)(cid:72)(cid:63)(cid:80)(cid:59)(cid:73)(cid:221)(cid:60)(cid:69)(cid:72)(cid:221)(cid:60)(cid:69)(cid:75)(cid:72)(cid:221)(cid:70)(cid:72)(cid:69)(cid:64)(cid:59)(cid:57)(cid:74)(cid:73)(cid:221)
at the Association of Direct Marketing Communicators’
traditional Direct Marketing Awards.
Our Awards:
› A Good Day from GNÇ / Best Roadshow Activity (1st), Best
Guerrilla Activities (3rd)
› What a Beautiful Thing Football Is / Best Sports Marketing
Activities (2nd)
› Letters to Çanakkale / Best Integrated Interactive
Marketing Campaigns (2nd)
› Bayram Olsun / Best Integrated Interactive Marketing
Campaigns (3rd)
TBD, R&D Special Award
We received the Special Award from the Turkish Informatics
Association (TBD) for our contributions to the sector in the
area of R&D, employment and productivity. We received
our award at a ceremony organized by the TBD at the 24th
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held in Antalya.
European Business Awards
Turkcell Academy has been named the Best Corporate
University for Business Impact within the scope of the
European Business Awards.
Shorty Awards
(cid:15)(cid:75)(cid:72)(cid:221)(cid:70)(cid:66)(cid:55)(cid:74)(cid:60)(cid:69)(cid:72)(cid:67)(cid:125)(cid:221)(cid:136)(cid:25)(cid:59)(cid:74)(cid:59)(cid:72)(cid:221)(cid:212)(cid:59)(cid:65)(cid:74)(cid:63)(cid:215)(cid:63)(cid:68)(cid:137)(cid:221)(cid:63)(cid:68)(cid:63)(cid:74)(cid:63)(cid:55)(cid:74)(cid:59)(cid:58)(cid:221)(cid:55)(cid:66)(cid:69)(cid:68)(cid:61)(cid:221)(cid:77)(cid:63)(cid:74)(cid:62)(cid:221)(cid:20)(cid:75)(cid:72)(cid:65)(cid:57)(cid:59)(cid:66)(cid:66)(cid:221)
Starry Nights concerts, has won the grand award in social
media tool category in the Shorty Awards, among the most
important global events of the social media world.
UNESCO-Pearson Initiative for Literacy Award
Our company’s “Hello Hope” application has been selected
as one of the best 14 applications within the scope of the
UNESCO-Pearson Initiative for Literacy Awards.
Global Telecoms Business Innovation Awards
With our Daily Optimization and Real Time Action projects,
our Company has been granted two separate awards in the
Global Telecoms Business Innovation Awards 2017, in the
“Software and Service Innovation” category.
International Business Excellence Awards
Within the scope of the International Business Excellence
Awards, we have been deemed worthy of a prize with our
“Home Service and Disabled-Friendly Store” project.
(cid:20)(cid:53)(cid:8)(cid:217)(cid:4)(cid:222)(cid:7)(cid:69)(cid:66)(cid:58)(cid:59)(cid:68)(cid:222)(cid:3)(cid:69)(cid:67)(cid:70)(cid:55)(cid:73)(cid:73)(cid:222)(cid:1)(cid:77)(cid:55)(cid:72)(cid:58)(cid:73)
During the Golden Compass Awards organized by the Turkish
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year, our Company has received awards for the “Turkcell
Gallipoli Marathon” in the sports sponsorship communication
category, and for “Letters to Çanakkale” in the corporate
responsibility digital communications category.
Social Media Awards
Within the scope of Social Media Awards organized by
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deemed worthy of four awards in total, as Turkcell. We have
been the leader of the Telecommunications category within
the scope of BoomSonar’s “Social Media Brand Index”.
(cid:20)(cid:62)(cid:59)(cid:221)(cid:55)(cid:77)(cid:55)(cid:72)(cid:58)(cid:73)(cid:221)(cid:77)(cid:59)(cid:221)(cid:72)(cid:59)(cid:57)(cid:59)(cid:63)(cid:76)(cid:59)(cid:58)(cid:221)(cid:60)(cid:69)(cid:72)(cid:221)(cid:136)(cid:25)(cid:59)(cid:74)(cid:59)(cid:72)(cid:221)(cid:212)(cid:59)(cid:65)(cid:74)(cid:63)(cid:215)(cid:63)(cid:68)(cid:137)(cid:221)(cid:63)(cid:68)(cid:221)(cid:74)(cid:62)(cid:59)(cid:221)(cid:19)(cid:69)(cid:57)(cid:63)(cid:55)(cid:66)(cid:221)
Media Campaign category, “Letters to Çanakkale” in the
Special Day Campaign category, and “Turkcell Social Media
Experience Management” in the Social CRM Management
category, have crowned our achievements.
Great Place to Work 2017
Turkcell Global Bilgi has been named the Best Employer of
2017 in the Best Employers of Turkey Survey, announced
by the Great Place to Work Institute, for the 5th time in our
country.
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The Loyalty Magazine Awards
Our Company has been awarded in two categories for
Shake and Win, and in one category for each of the
GNÇ and Turkcell Emergency programs, at The Loyalty
Magazine Awards 2017. Separately, our Company was
considered deserving of the Central and Eastern Europe
and Turkey Region Grand Prize for its achievements.
Contribution to Reading Award
Our Dergilik application has won the “Contribution to
Reading” award of the Turkish Journalists’ Association.
CSR Awards
Our Turkcell Volunteers project has been awarded in two
categories by the CSR Awards. In the ceremony held at the
London Parliament Building, Turkcell received the silver
medal in the Corporate Social Responsibility category, and
the bronze medal in the Employee Loyalty category.
(cid:10)(cid:21)(cid:12)(cid:25)
ATD BEST Awards
The Turkcell Academy has been considered deserving
of “The BEST” award by the Association for Talent
Development (ATD), which is regarded as one of the
global authorities in employee training and performance
development.
AUGUST
Stevie Awards
We were deemed worthy of the HR Department of the
Year award by the Stevie International Business Awards
(IBA).
SEPTEMBER
UN Global Compact
The UN Global Compact, the sustainability platform
launched by the United Nations to eliminate poverty and
ensure all people in the world live in peace and prosperity,
(cid:58)(cid:59)(cid:73)(cid:63)(cid:61)(cid:68)(cid:55)(cid:74)(cid:59)(cid:58)(cid:221)(cid:20)(cid:75)(cid:72)(cid:65)(cid:57)(cid:59)(cid:66)(cid:66)(cid:221)(cid:3)(cid:5)(cid:15)(cid:221)(cid:11)(cid:55)(cid:55)(cid:68)(cid:221)(cid:20)(cid:59)(cid:72)(cid:80)(cid:63)(cid:69)(cid:215)(cid:66)(cid:75)(cid:221)(cid:74)(cid:62)(cid:59)(cid:221)(cid:136)(cid:19)(cid:75)(cid:73)(cid:74)(cid:55)(cid:63)(cid:68)(cid:55)(cid:56)(cid:66)(cid:59)(cid:221)
Development Goals” leader due to his studies related
(cid:74)(cid:69)(cid:221)(cid:19)(cid:79)(cid:72)(cid:63)(cid:55)(cid:68)(cid:221)(cid:72)(cid:59)(cid:60)(cid:75)(cid:61)(cid:59)(cid:59)(cid:73)(cid:128)(cid:221)(cid:20)(cid:59)(cid:72)(cid:80)(cid:63)(cid:69)(cid:215)(cid:66)(cid:75)(cid:221)(cid:77)(cid:55)(cid:73)(cid:221)(cid:74)(cid:62)(cid:59)(cid:221)(cid:69)(cid:68)(cid:66)(cid:79)(cid:221)(cid:70)(cid:59)(cid:72)(cid:73)(cid:69)(cid:68)(cid:221)(cid:60)(cid:72)(cid:69)(cid:67)(cid:221)
Turkey to make the list of 10 names.
GTB Power 100 for 2017
(cid:20)(cid:75)(cid:72)(cid:65)(cid:57)(cid:59)(cid:66)(cid:66)(cid:221)(cid:3)(cid:5)(cid:15)(cid:221)(cid:11)(cid:55)(cid:55)(cid:68)(cid:221)(cid:20)(cid:59)(cid:72)(cid:80)(cid:63)(cid:69)(cid:215)(cid:66)(cid:75)(cid:221)(cid:62)(cid:55)(cid:73)(cid:221)(cid:56)(cid:59)(cid:59)(cid:68)(cid:221)(cid:63)(cid:68)(cid:57)(cid:66)(cid:75)(cid:58)(cid:59)(cid:58)(cid:221)(cid:63)(cid:68)(cid:221)(cid:74)(cid:62)(cid:59)(cid:221)
Power 100 for 2017 list compiled by Global Telecoms
(cid:2)(cid:75)(cid:73)(cid:63)(cid:68)(cid:59)(cid:73)(cid:73)(cid:128)(cid:221)(cid:20)(cid:59)(cid:72)(cid:80)(cid:63)(cid:69)(cid:215)(cid:66)(cid:75)(cid:221)(cid:77)(cid:55)(cid:73)(cid:221)(cid:69)(cid:68)(cid:59)(cid:221)(cid:69)(cid:60)(cid:221)(cid:74)(cid:62)(cid:59)(cid:221)(cid:176)(cid:177)(cid:221)(cid:68)(cid:55)(cid:67)(cid:59)(cid:73)(cid:221)(cid:69)(cid:68)(cid:221)(cid:74)(cid:62)(cid:59)(cid:221)(cid:66)(cid:63)(cid:73)(cid:74)(cid:221)
from Europe.
Brandon Hall HCM Excellence Awards
Within the scope of the Brandon Hall HCM Excellence
Awards, a leading organization globally, we have received
four different awards for our HR and training projects;
namely for; Employee Loyalty, Information Security
Training and Convergence Trainings.
Our Turkcell Volunteers
project has been awarded
in two categories by
the CSR Awards. In the
ceremony held at the
London Parliament Building,
Turkcell received the silver
medal in the Corporate
Social Responsibility
category, and the bronze
medal in the Employee
Loyalty category.
Contact Center World.com EMEA Region
(cid:20)(cid:75)(cid:72)(cid:65)(cid:57)(cid:59)(cid:66)(cid:66)(cid:221)(cid:7)(cid:66)(cid:69)(cid:56)(cid:55)(cid:66)(cid:221)(cid:2)(cid:63)(cid:66)(cid:61)(cid:63)(cid:221)(cid:77)(cid:69)(cid:68)(cid:221)(cid:206)(cid:72)(cid:73)(cid:74)(cid:221)(cid:70)(cid:66)(cid:55)(cid:57)(cid:59)(cid:221)(cid:77)(cid:63)(cid:74)(cid:62)(cid:221)(cid:63)(cid:74)(cid:73)(cid:221)(cid:70)(cid:72)(cid:69)(cid:64)(cid:59)(cid:57)(cid:74)(cid:73)(cid:221)
in Ukraine in the “Best Sales Campaign” and “Best
Self-Service Technology Use” categories in the EMEA
(cid:148)(cid:5)(cid:75)(cid:72)(cid:69)(cid:70)(cid:59)(cid:130)(cid:13)(cid:63)(cid:58)(cid:58)(cid:66)(cid:59)(cid:221)(cid:5)(cid:55)(cid:73)(cid:74)(cid:221)(cid:55)(cid:68)(cid:58)(cid:221)(cid:1)(cid:60)(cid:72)(cid:63)(cid:57)(cid:55)(cid:149)(cid:221)(cid:72)(cid:59)(cid:61)(cid:63)(cid:69)(cid:68)(cid:55)(cid:66)(cid:221)(cid:206)(cid:68)(cid:55)(cid:66)(cid:73)(cid:221)(cid:62)(cid:59)(cid:66)(cid:58)(cid:221)
in London, by “ContactCenterWorld.com”, the world’s
largest call center industry organization. Turkcell
Global Bilgi also received the second prize in the “Best
Outsourcing Business Partnership” category for the call
center outsourcing service offered to MediaMarkt.
(cid:20)(cid:69)(cid:70)(cid:222)(cid:180)(cid:175)(cid:175)(cid:222)(cid:9)(cid:20)(cid:222)(cid:3)(cid:69)(cid:67)(cid:70)(cid:55)(cid:68)(cid:63)(cid:59)(cid:73)(cid:222)(cid:19)(cid:75)(cid:72)(cid:76)(cid:59)(cid:79)
Within the scope of Top 500 IT Companies Survey, our
Company ranked second in the communications sector
based on sales revenue performance. According to the
(cid:73)(cid:55)(cid:67)(cid:59)(cid:221)(cid:73)(cid:75)(cid:72)(cid:76)(cid:59)(cid:79)(cid:125)(cid:221)(cid:20)(cid:75)(cid:72)(cid:65)(cid:57)(cid:59)(cid:66)(cid:66)(cid:221)(cid:7)(cid:66)(cid:69)(cid:56)(cid:55)(cid:66)(cid:221)(cid:2)(cid:63)(cid:66)(cid:61)(cid:63)(cid:221)(cid:72)(cid:55)(cid:68)(cid:65)(cid:59)(cid:58)(cid:221)(cid:206)(cid:72)(cid:73)(cid:74)(cid:221)(cid:63)(cid:68)(cid:221)(cid:74)(cid:62)(cid:59)(cid:221)(cid:3)(cid:55)(cid:66)(cid:66)(cid:221)
Center Service category.
Best of Digital Awards
(cid:15)(cid:75)(cid:72)(cid:221)(cid:206)(cid:80)(cid:79)(cid:221)(cid:55)(cid:70)(cid:70)(cid:66)(cid:63)(cid:57)(cid:55)(cid:74)(cid:63)(cid:69)(cid:68)(cid:221)(cid:77)(cid:55)(cid:73)(cid:221)(cid:68)(cid:55)(cid:67)(cid:59)(cid:58)(cid:221)(cid:74)(cid:62)(cid:59)(cid:221)(cid:136)(cid:2)(cid:59)(cid:73)(cid:74)(cid:221)(cid:13)(cid:75)(cid:73)(cid:63)(cid:57)(cid:221)
Platform” as chosen by young people at the Best of
Digital Awards.
(cid:10)(cid:21)(cid:14)(cid:5)
WSIS Prizes 2017
At the WSIS Prizes 2017 organized by ITU (International
Telecommunication Union), the organization responsible
for the information and communication sector of the
United Nations, we have been considered worthy of an
award in the “Cultural Diversity and Identity, Linguistic
Diversity” category for the “Hello Hope” application.
(cid:7)(cid:66)(cid:69)(cid:56)(cid:55)(cid:66)(cid:222)(cid:20)(cid:59)(cid:66)(cid:59)(cid:57)(cid:69)(cid:67)(cid:73)(cid:222)(cid:2)(cid:75)(cid:73)(cid:63)(cid:68)(cid:59)(cid:73)(cid:73)(cid:222)(cid:180)(cid:175)(cid:222)(cid:9)(cid:68)(cid:68)(cid:69)(cid:76)(cid:55)(cid:74)(cid:69)(cid:72)(cid:73)(cid:222)(cid:74)(cid:69)(cid:222)(cid:23)(cid:55)(cid:74)(cid:57)(cid:62)(cid:222)(cid:12)(cid:63)(cid:73)(cid:74)
Turkcell Senior Vice President Gediz Sezgin was the
sole name from Turkey to make the “50 Innovators to
Watch” list compiled by Global Telecoms Business.
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TURKCELL ANNUAL REPORT 2017
AWARDS
Turkcell, Hello Hope project, received an award in the category
of Diversity & Inclusion at the Ethical Corporation Responsible
Business Awards.
Museum enables people experience what visually
and hearing-impaired people go through in daily life,
fostering greater empathy, by taking one step beyond
mere awareness.
Ethical Corporation Responsible Business Awards
Our Company has received an award for the Hello
Hope project in the Diversity & Inclusion category at
the Ethical Corporation Responsible Business Awards.
Turkcell was the only company from Turkey to receive
an award in the organization which was held for the 8th
time.
The Smarties Awards
Carrying out activities in more than 50 countries
with over 800 members with the primary objective
of developing and expanding mobile marketing, MMA
honored successful projects from around the world
with The Smarties Awards. Our Company received four
awards in total at the event.
Digital Impact Awards
(cid:136)(cid:25)(cid:59)(cid:74)(cid:59)(cid:72)(cid:221)(cid:212)(cid:59)(cid:65)(cid:74)(cid:63)(cid:215)(cid:63)(cid:68)(cid:137)(cid:221)(cid:70)(cid:72)(cid:69)(cid:64)(cid:59)(cid:57)(cid:74)(cid:221)(cid:77)(cid:69)(cid:68)(cid:221)(cid:70)(cid:72)(cid:63)(cid:80)(cid:59)(cid:73)(cid:221)(cid:63)(cid:68)(cid:221)(cid:74)(cid:62)(cid:72)(cid:59)(cid:59)(cid:221)(cid:57)(cid:55)(cid:74)(cid:59)(cid:61)(cid:69)(cid:72)(cid:63)(cid:59)(cid:73)(cid:221)
in the Digital Impact Awards 2017, held in London.
The project was initiated at the Turkcell Starry Nights
concerts to enable users willing to share a post on social
media enjoy the concert, instead of taking photographs
or shooting video.
The Owl Awards
As Turkcell, we have been granted two separate awards
within the scope of the Turkish Researchers’ Association
Owls Awards. Trabzon Discovery Research carried out
for 61Cell has won the Visionary Owl Award, and the
Undergrads Research for GNÇ won the Insightful Owl
Award.
OCTOBER
6 prizes
Turkcell has been honored
with 6 prizes at the Crystal
Apple Awards, taking place
parallel to the Crystal
Apple Festival, which was
organized this year under
the theme of “Creativity is
Contagious”.
Broadband Awards 2017
(cid:20)(cid:22)(cid:188)(cid:221)(cid:77)(cid:69)(cid:68)(cid:221)(cid:206)(cid:72)(cid:73)(cid:74)(cid:221)(cid:70)(cid:66)(cid:55)(cid:57)(cid:59)(cid:221)(cid:63)(cid:68)(cid:221)(cid:74)(cid:62)(cid:59)(cid:221)(cid:2)(cid:59)(cid:73)(cid:74)(cid:221)(cid:3)(cid:69)(cid:68)(cid:73)(cid:75)(cid:67)(cid:59)(cid:72)(cid:221)(cid:6)(cid:55)(cid:57)(cid:63)(cid:68)(cid:61)(cid:221)(cid:15)(cid:20)(cid:20)(cid:221)
Service category at the Broadband Awards 2017, the
prominent award organization in the broadband market.
Crystal Apple Awards
Our Company has been honored with 6 prizes at the
Crystal Apple Awards, taking place parallel to the
Crystal Apple Festival, which was organized this year
under the theme of “Creativity is Contagious”.
Excellence in Automation at SON World Awards 2017
In the Excellence in Automation at SON World Awards
2017 organized by Informa, we have been awarded the
SON Deployment & Technical Innovation award for the
Smart Network Optimization software that we have
brought to the Turkcell network.
Annual Excellence in Education Awards
We have been chosen the “Education Friendly Company
of the Year” at the Excellence in Education of the Year
Awards, the results of which were determined by a
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Education Magazine and egitimtercihi.com.
IPRA Golden World Awards
The Turkcell Dialogue Museum, which has been
supported by Turkcell since 2014, has been honored
with a prize at the IPRA Golden World Awards. The
CIPS Supply Management Awards Europe 2017
We have received the Best Procurement Consultancy
Project of the Year Award at the CIPS Supply
Management Awards Europe 2017, organized by CIPS
and Procurecon Europe, two leading platforms for
supply chain and procurement in the international arena.
TURKCELL ANNUAL REPORT 2017
103
Our brand was crowned
by awards received within
the scope of Brand Week
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the “Turkey’s Most Loved
Brands” survey conducted
in 2017 by MediaCat,
Turkcell was selected the
most loved brand in the
GSM operator category.
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Lovemarks 2017 Turkey Awards
Our brand was crowned by awards received within the
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“Turkey’s Most Loved Brands” survey conducted in
2017 by MediaCat, Turkcell was selected the most loved
brand in the GSM operator category.
Felis Awards
Our Company has been awarded in a total of four
categories at the Felis Awards, which aims to enhance
the production technique of marketing communication,
the cornerstone of brand building, with creativity and
quality in sub-disciplines.
(cid:4)(cid:59)(cid:66)(cid:69)(cid:63)(cid:74)(cid:74)(cid:59)(cid:222)(cid:6)(cid:55)(cid:73)(cid:74)(cid:222)(cid:180)(cid:175)(cid:222)
(cid:20)(cid:75)(cid:72)(cid:65)(cid:57)(cid:59)(cid:66)(cid:66)(cid:221)(cid:47)(cid:58)(cid:59)(cid:67)(cid:59)(cid:221)(cid:76)(cid:59)(cid:221)(cid:5)(cid:66)(cid:59)(cid:65)(cid:74)(cid:72)(cid:69)(cid:68)(cid:63)(cid:65)(cid:221)(cid:16)(cid:55)(cid:72)(cid:55)(cid:221)(cid:8)(cid:63)(cid:80)(cid:67)(cid:59)(cid:74)(cid:66)(cid:59)(cid:72)(cid:63)(cid:221)(cid:148)(cid:20)(cid:47)(cid:8)(cid:1)(cid:217)(cid:221)
– Payment Institution) has made it to the Deloitte Fast
50 list, compiled in Turkey since 2006, and determining
the 50 fastest growing technology companies in our
country.
9th CSR Marketplace - Sustainable Development
Academy Awards
We have been awarded for the Hello Hope at the
Sustainable Development Academy Awards within the
scope of Objective 10: Reduced Inequalities.
21st Logistics & Supply Chain Excellence Awards 2017
Turkcell was awarded in the Procurement
Transformation category at the Logistics & Supply
Chain Excellence Awards 2017, one of the world’s most
(cid:70)(cid:72)(cid:59)(cid:73)(cid:74)(cid:63)(cid:61)(cid:63)(cid:69)(cid:75)(cid:73)(cid:221)(cid:55)(cid:77)(cid:55)(cid:72)(cid:58)(cid:73)(cid:221)(cid:63)(cid:68)(cid:221)(cid:74)(cid:62)(cid:59)(cid:221)(cid:206)(cid:59)(cid:66)(cid:58)(cid:221)(cid:69)(cid:60)(cid:221)(cid:12)(cid:69)(cid:61)(cid:63)(cid:73)(cid:74)(cid:63)(cid:57)(cid:73)(cid:221)(cid:55)(cid:68)(cid:58)(cid:221)(cid:19)(cid:75)(cid:70)(cid:70)(cid:66)(cid:79)(cid:221)
Chain.
(cid:217)(cid:68)(cid:69)(cid:76)(cid:55)(cid:12)(cid:217)(cid:7)(cid:222)(cid:177)(cid:175)(cid:176)(cid:182)
As Turkcell, this year, we were the champion of the
(cid:136)(cid:19)(cid:69)(cid:75)(cid:72)(cid:57)(cid:59)(cid:73)(cid:221)(cid:69)(cid:60)(cid:221)(cid:9)(cid:68)(cid:68)(cid:69)(cid:76)(cid:55)(cid:74)(cid:63)(cid:69)(cid:68)(cid:137)(cid:221)(cid:57)(cid:55)(cid:74)(cid:59)(cid:61)(cid:69)(cid:72)(cid:79)(cid:221)(cid:55)(cid:74)(cid:221)(cid:216)(cid:68)(cid:69)(cid:76)(cid:55)(cid:12)(cid:216)(cid:7)(cid:221)(cid:177)(cid:175)(cid:176)(cid:182)(cid:125)(cid:221)
organized by the Turkish Exporters Assembly (TIM),
in cooperation with IMP3roveAcademy. We also
received the Communication Innovation Special Award
at the award ceremony held during Innovation and
Entrepreneurship Week.
6th Private Sector R&D and Design Centers Summit
Awards
The success of the Turkcell Technology R&D Center
has been awarded. At the 6th Private Sector R&D and
Design Centers Summit, organized by the TR Ministry of
Science, Industry, and Technology, General Directorate
of Science and Technology, and which has awarded the
Best R&D centers, the Turkcell Technology R&D Center
(cid:77)(cid:69)(cid:68)(cid:221)(cid:206)(cid:72)(cid:73)(cid:74)(cid:221)(cid:70)(cid:72)(cid:63)(cid:80)(cid:59)(cid:221)(cid:63)(cid:68)(cid:221)(cid:74)(cid:62)(cid:59)(cid:221)(cid:136)(cid:3)(cid:69)(cid:67)(cid:70)(cid:75)(cid:74)(cid:59)(cid:72)(cid:221)(cid:55)(cid:68)(cid:58)(cid:221)(cid:3)(cid:69)(cid:67)(cid:67)(cid:75)(cid:68)(cid:63)(cid:57)(cid:55)(cid:74)(cid:63)(cid:69)(cid:68)(cid:221)
Sector” category.
(cid:2)(cid:69)(cid:216)(cid:55)(cid:80)(cid:63)(cid:214)(cid:63)(cid:222)(cid:21)(cid:68)(cid:63)(cid:76)(cid:59)(cid:72)(cid:73)(cid:63)(cid:74)(cid:79)(cid:222)(cid:9)(cid:68)(cid:60)(cid:69)(cid:72)(cid:67)(cid:55)(cid:74)(cid:63)(cid:57)(cid:73)(cid:222)(cid:1)(cid:77)(cid:55)(cid:72)(cid:58)(cid:73)
(cid:20)(cid:75)(cid:72)(cid:65)(cid:57)(cid:59)(cid:66)(cid:66)(cid:221)(cid:62)(cid:55)(cid:73)(cid:221)(cid:72)(cid:55)(cid:68)(cid:65)(cid:59)(cid:58)(cid:221)(cid:206)(cid:72)(cid:73)(cid:74)(cid:221)(cid:63)(cid:68)(cid:221)(cid:74)(cid:62)(cid:59)(cid:221)(cid:136)(cid:2)(cid:59)(cid:73)(cid:74)(cid:221)(cid:13)(cid:69)(cid:56)(cid:63)(cid:66)(cid:59)(cid:221)(cid:15)(cid:70)(cid:59)(cid:72)(cid:55)(cid:74)(cid:69)(cid:72)(cid:221)
of the Year” (Turkcell) and “Best Internet Service
Provider of the Year” (Turkcell Superonline) categories,
(cid:55)(cid:73)(cid:221)(cid:55)(cid:221)(cid:72)(cid:59)(cid:73)(cid:75)(cid:66)(cid:74)(cid:221)(cid:69)(cid:60)(cid:221)(cid:74)(cid:62)(cid:59)(cid:221)(cid:70)(cid:75)(cid:56)(cid:66)(cid:63)(cid:57)(cid:221)(cid:55)(cid:68)(cid:58)(cid:221)(cid:64)(cid:75)(cid:72)(cid:79)(cid:221)(cid:76)(cid:69)(cid:74)(cid:59)(cid:221)(cid:55)(cid:74)(cid:221)(cid:74)(cid:62)(cid:59)(cid:221)(cid:2)(cid:69)(cid:215)(cid:55)(cid:80)(cid:63)(cid:213)(cid:63)(cid:221)
(cid:9)(cid:68)(cid:60)(cid:69)(cid:72)(cid:67)(cid:55)(cid:74)(cid:63)(cid:57)(cid:73)(cid:221)(cid:1)(cid:77)(cid:55)(cid:72)(cid:58)(cid:73)(cid:125)(cid:221)(cid:69)(cid:72)(cid:61)(cid:55)(cid:68)(cid:63)(cid:80)(cid:59)(cid:58)(cid:221)(cid:56)(cid:79)(cid:221)(cid:74)(cid:62)(cid:59)(cid:221)(cid:2)(cid:69)(cid:215)(cid:55)(cid:80)(cid:63)(cid:213)(cid:63)(cid:221)
University Informatics Club (Compec).
Purchasing and Supply Chain Management Summit
With our “Supply Chain Transformation Project”, we
were granted “The Best Purchasing 4.0 Project” award
at the 7th Purchasing and Supply Chain Management
Summit organized by the Purchasing Professionals and
Executives Association (TÜSAYDER).
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TURKCELL ANNUAL REPORT 2017
INVESTOR RELATIONS
Having a market capitalization of TRY 34.1 billion (USD 9.0 billion) as
of December 31, 2017; Turkcell, the only Turkish company listed on both
BIST and the NYSE, has become the 5th largest among the companies
trading on the BIST.
SHARE PERFORMANCE
Turkcell shares commenced trading simultaneously at the Borsa Istanbul
(BIST) and the New York Stock Exchange (NYSE) on July 11, 2000. Shares are
traded under the TCELL ticker at the BIST, and as American Depository Shares
(cid:148)(cid:1)(cid:4)(cid:19)(cid:149)(cid:221)(cid:55)(cid:74)(cid:221)(cid:74)(cid:62)(cid:59)(cid:221)(cid:14)(cid:25)(cid:19)(cid:5)(cid:221)(cid:75)(cid:68)(cid:58)(cid:59)(cid:72)(cid:221)(cid:74)(cid:62)(cid:59)(cid:221)(cid:20)(cid:11)(cid:3)(cid:221)(cid:74)(cid:63)(cid:57)(cid:65)(cid:59)(cid:72)(cid:128)(cid:221)(cid:20)(cid:77)(cid:69)(cid:221)(cid:1)(cid:4)(cid:19)(cid:73)(cid:221)(cid:72)(cid:59)(cid:70)(cid:72)(cid:59)(cid:73)(cid:59)(cid:68)(cid:74)(cid:221)(cid:206)(cid:76)(cid:59)(cid:221)(cid:73)(cid:62)(cid:55)(cid:72)(cid:59)(cid:73)(cid:128)
Turkcell’s issued capital has a nominal value of TRY 2.2 billion, including
2.2 billion shares, each with a nominal value of TRY 1. Having a market
capitalization of TRY 34.1 billion (USD 9.0 billion) as of December 31,
2017; Turkcell, the only Turkish company listed on both BIST and the NYSE,
has become the 5th largest among the companies trading on BIST.
The size of Turkcell’s American Depositary Receipts as of year-end 2017 is
48.1 million.
On October 16, 2015, Turkcell issued bonds of an aggregate principal amount
of USD 500 million with a 10 year maturity and coupon rate of 5.75% based
on a 5.95% re-offer yield, to be traded on the Irish Stock Exchange.
Our Company’s Board of Directors has decided to execute share buyback
transactions and purchase our Company’s bonds in an attempt to protect our
investors against any instability perception that may arise in the short and
medium-term; subsequent to the events on, and after July 15, 2016, and due
(cid:74)(cid:69)(cid:221)(cid:74)(cid:62)(cid:59)(cid:221)(cid:70)(cid:69)(cid:74)(cid:59)(cid:68)(cid:74)(cid:63)(cid:55)(cid:66)(cid:66)(cid:79)(cid:221)(cid:68)(cid:59)(cid:61)(cid:55)(cid:74)(cid:63)(cid:76)(cid:59)(cid:221)(cid:72)(cid:59)(cid:207)(cid:59)(cid:57)(cid:74)(cid:63)(cid:69)(cid:68)(cid:221)(cid:69)(cid:60)(cid:221)(cid:61)(cid:66)(cid:69)(cid:56)(cid:55)(cid:66)(cid:221)(cid:67)(cid:55)(cid:57)(cid:72)(cid:69)(cid:59)(cid:57)(cid:69)(cid:68)(cid:69)(cid:67)(cid:63)(cid:57)(cid:221)(cid:76)(cid:69)(cid:66)(cid:55)(cid:74)(cid:63)(cid:66)(cid:63)(cid:74)(cid:79)(cid:221)(cid:69)(cid:68)(cid:221)
Turkey. Accordingly, within the framework of the Capital Markets Board’s
announcements dated July 21, 2016 and July 25, 2016, the Board of Directors
has resolved that the maximum fund amount set aside for share and bond
buyback would be TRY 150 million and the maximum number of shares and
bonds to be bought back should be determined not to exceed this amount.
This amount has been raised to TRY 300 million in 2017. Within this context,
a total of 6,815,563 shares (in exchange for TRY 65.6 million in total), and
bonds of a USD 18,000,000 nominal value, were bought back in 2016. In 2017,
there has been no share buy-back. Bonds, bought back in 2016, were sold back
to the market in 2017.
Turkcell’s institutional investors constitute 77.8% of the shareholder base.
Additionally, 43.5% of Turkcell’s institutional investors are located in North
America, 32.8% in the UK and Ireland, and 18.8% in Europe (including
Turkey). While 57.2% of the institutional investors are “Value” focused
investors, more than 90% of institutional investors have been investing in
Turkcell for more than a year (Source: IPREO, January 2018).
OUR BUSINESS PRINCIPLES
We adopt corporate governance principles.
The basic work policies adopted by the Turkcell Investor Relations
Department include accessibility, rapid feedback to stakeholders and
analysts, and the perpetual informing of stakeholders transparently,
consistently and in a timely fashion.
Share Information*
(cid:20)(cid:3)(cid:5)(cid:12)(cid:12)(cid:222)(cid:148)(cid:20)(cid:18)(cid:25)(cid:149)
Lowest
Highest
Closing
(cid:20)(cid:11)(cid:3)(cid:222)(cid:148)(cid:21)(cid:19)(cid:4)(cid:149)
Lowest
Highest
Closing
Stock Exchange Symbols
Country
Share
ADR
Bond
*Share prices are adjusted for dividend payments. (Source: Bloomberg)
2013
7.98
9.98
8.88
2013
10.14
13.90
10.45
2014
8.44
11.54
11.19
2014
9.44
12.99
11.83
2015
8.92
12.21
8.92
2015
7.55
12.93
7.65
2016
8.01
11.22
8.97
2016
5.74
9.73
6.22
Stock Exchange
Borsa Istanbul
NYSE
2017
8.44
15.48
15.48
2017
6.01
10.20
10.13
Ticker
TCELL
TKC
Irish Stock Exchange
ISIN: XS1298711729
TURKCELL ANNUAL REPORT 2017
105
(cid:19)(cid:8)(cid:1)(cid:18)(cid:5)(cid:222)(cid:16)(cid:5)(cid:18)(cid:6)(cid:15)(cid:18)(cid:13)(cid:1)(cid:14)(cid:3)(cid:5)(cid:222)(cid:148)(cid:18)(cid:5)(cid:12)(cid:1)(cid:20)(cid:9)(cid:22)(cid:5)(cid:149)(cid:222)(cid:148)(cid:177)(cid:175)(cid:176)(cid:182)(cid:149)
ANALYST RECOMMENDATIONS
TURKCELL
BIST100
2,00
1,80
1,60
1,40
1,20
1,00
0,80
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7% UNDER REVIEW
12% HOLD
0% SELL
81% BUY
Source: Bloomberg
Accordingly, we disclose information to all investors through our user-
friendly, up-to-date website, Investor Relations Application (IR App) and
Twitter on a timely basis.
Investor Relations team members have a deep and active understanding
of the Company and sector dynamics, and are able to clearly communicate
the Company’s story. The Turkcell Investor Relations team has an accurate
knowledge and a grasp of its Company’s strategies, while analyzing the
business model and opportunities, and makes a difference by effectively
communicating these strategies to investors. The inquiries and requests of
investors and analysts are met rapidly and accurately within the framework
of related legislation. As the Investor Relations Department, throughout
2017, we:
› Held 374 meetings with analysts and institutional investment funds,
› We have participated in 17 investor conferences and 5 roadshows.
› We have hosted analysts who follow our Company and the executives of
fund management companies located in Turkey, at our headquarters, in two
separate meetings to transparently convey the vision and strategy of the
Company and expand the investor base, with the participation of Company
management and the Chairman of our Board of Directors.
› (cid:23)(cid:59)(cid:221)(cid:73)(cid:62)(cid:55)(cid:72)(cid:59)(cid:58)(cid:221)(cid:69)(cid:75)(cid:72)(cid:221)(cid:206)(cid:68)(cid:55)(cid:68)(cid:57)(cid:63)(cid:55)(cid:66)(cid:221)(cid:72)(cid:59)(cid:73)(cid:75)(cid:66)(cid:74)(cid:73)(cid:221)(cid:63)(cid:68)(cid:221)(cid:179)(cid:221)(cid:74)(cid:59)(cid:66)(cid:59)(cid:57)(cid:69)(cid:68)(cid:60)(cid:59)(cid:72)(cid:59)(cid:68)(cid:57)(cid:59)(cid:73)(cid:221)(cid:58)(cid:75)(cid:72)(cid:63)(cid:68)(cid:61)(cid:221)(cid:74)(cid:62)(cid:59)(cid:221)(cid:79)(cid:59)(cid:55)(cid:72)(cid:125)(cid:221)
› Over 1,000 phone and email requests were received throughout the year,
and we responded to all of them.
The main topics of questions most frequently asked to the Investor Relations
in 2017:
› Digital services and our transformation strategy
› Sources of growth and sustainability
› (cid:13)(cid:59)(cid:58)(cid:63)(cid:75)(cid:67)(cid:130)(cid:74)(cid:59)(cid:72)(cid:67)(cid:221)(cid:206)(cid:68)(cid:55)(cid:68)(cid:57)(cid:63)(cid:55)(cid:66)(cid:221)(cid:59)(cid:78)(cid:70)(cid:59)(cid:57)(cid:74)(cid:55)(cid:74)(cid:63)(cid:69)(cid:68)(cid:73)
› Data usage and growth
› Regulation and tax regulations
› (cid:20)(cid:75)(cid:72)(cid:65)(cid:57)(cid:59)(cid:66)(cid:66)(cid:221)(cid:6)(cid:63)(cid:68)(cid:55)(cid:68)(cid:73)(cid:67)(cid:55)(cid:68)(cid:221)(cid:1)(cid:128)(cid:217)(cid:128)(cid:221)(cid:55)(cid:68)(cid:58)(cid:221)(cid:56)(cid:75)(cid:73)(cid:63)(cid:68)(cid:59)(cid:73)(cid:73)(cid:221)(cid:67)(cid:69)(cid:58)(cid:59)(cid:66)
› Share performance and dividend
› Merger and acquisitions and the IPOs of subsidiaries
› Shareholder structure
Turkcell is actively covered by 26 brokerage houses, approximately half
of which are foreign organizations. As of the end of 2017, there were 21
analysts with a “buy”, 3 analysts with a “hold”, and no analysts with a “sell”
recommendation. Two analysts had their recommendation “under review”.
(cid:23)(cid:59)(cid:222)(cid:77)(cid:69)(cid:72)(cid:65)(cid:222)(cid:74)(cid:69)(cid:222)(cid:70)(cid:72)(cid:69)(cid:76)(cid:63)(cid:58)(cid:59)(cid:222)(cid:74)(cid:62)(cid:59)(cid:222)(cid:67)(cid:55)(cid:78)(cid:63)(cid:67)(cid:75)(cid:67)(cid:222)(cid:56)(cid:59)(cid:68)(cid:59)(cid:206)(cid:74)(cid:222)(cid:74)(cid:69)(cid:222)(cid:20)(cid:75)(cid:72)(cid:65)(cid:57)(cid:59)(cid:66)(cid:66)(cid:222)(cid:55)(cid:68)(cid:58)(cid:222)(cid:69)(cid:75)(cid:72)(cid:222)(cid:73)(cid:74)(cid:55)(cid:65)(cid:59)(cid:62)(cid:69)(cid:66)(cid:58)(cid:59)(cid:72)(cid:73)(cid:128)
As Turkcell Investor Relations, our primary goal is to increase the market
capitalization of our Company and the trading volume of Turkcell’s shares.
Within this context, our target is to develop and deepen Turkcell’s investor
profile, and increase the weight and number of long-term investors in the
institutional investor base.
On the other hand, investor relations standards are shaped by the
constantly developing and intensifying needs of the capital markets. The
implementation of any practice that carries a publicly-traded company
one step further creates a strategically valuable differentiation between
companies and, ultimately, contributes to the Turkish Capital Markets.
Our focus is on creating value for our stakeholders.
Our aim is to transparently share the value created by Turkcell with our
stakeholders, be it through financial and operational performance, strategic
priorities, or via our strong reputation and powerful brand management,
always ensuring that the Company is well understood.
We make a difference with our communication.
Turkcell believes in simultaneous and open communication with its
stakeholders. As Turkcell Investor Relations, we use social media tools such
as Twitter and the Investor Relations application as well as communication
channels such as the website and Public Disclosure Platform to provide
extensive, accurate and timely information to our investors. With the
Turkcell IR App, our investors and analysts can follow the most recent
announcements, quarterly financial results, press releases, operational
results, presentations and annual reports in both Turkish and English on
iOS and Android based smartphones and tablets, at any time and from any
location.
We care about sustainability.
In 2014, Borsa Istanbul launched the Sustainability Index. This index
indicates each company’s approach to significant sustainability-related
issues important for both Turkey and the wider world, including global
warming, the depletion of natural resources, including water, as well as
healthcare, safety, and employment. In total, the index enables companies’
activities and decisions to be assessed from an independent perspective,
and then be confirmed by Borsa Istanbul. In the fourth year of the
Sustainability Index comprising November 2017 - October 2018, Turkcell,
one of the 44 companies in the index, has remained on it since its inception.
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TURKCELL ANNUAL REPORT 2017
CREDIT RATINGS
The clearest sign of the improvement in balance sheet structure and international
markets’ confidence in Turkcell is the “investment grade” ratings Turkcell has
maintained from three leading international credit rating agencies in 2017.
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ratings Turkcell has continued to receive ratings from three leading international credit rating agencies. Turkcell was also the only Turkish company to receive
(cid:136)(cid:63)(cid:68)(cid:76)(cid:59)(cid:73)(cid:74)(cid:67)(cid:59)(cid:68)(cid:74)(cid:221)(cid:61)(cid:72)(cid:55)(cid:58)(cid:59)(cid:137)(cid:221)(cid:60)(cid:72)(cid:69)(cid:67)(cid:221)(cid:178)(cid:221)(cid:63)(cid:68)(cid:73)(cid:74)(cid:63)(cid:74)(cid:75)(cid:74)(cid:63)(cid:69)(cid:68)(cid:73)(cid:128)(cid:221)(cid:1)(cid:73)(cid:221)(cid:55)(cid:221)(cid:72)(cid:59)(cid:207)(cid:59)(cid:57)(cid:74)(cid:63)(cid:69)(cid:68)(cid:221)(cid:69)(cid:60)(cid:221)(cid:74)(cid:62)(cid:59)(cid:221)(cid:57)(cid:69)(cid:67)(cid:70)(cid:55)(cid:68)(cid:79)(cid:135)(cid:73)(cid:221)(cid:72)(cid:55)(cid:74)(cid:63)(cid:68)(cid:61)(cid:125)(cid:221)(cid:20)(cid:75)(cid:72)(cid:65)(cid:57)(cid:59)(cid:66)(cid:66)(cid:221)(cid:2)(cid:69)(cid:68)(cid:58)(cid:73)(cid:221)(cid:55)(cid:72)(cid:59)(cid:221)(cid:55)(cid:66)(cid:73)(cid:69)(cid:221)(cid:59)(cid:76)(cid:55)(cid:66)(cid:75)(cid:55)(cid:74)(cid:59)(cid:58)(cid:221)(cid:55)(cid:74)(cid:221)(cid:74)(cid:62)(cid:59)(cid:221)(cid:136)(cid:63)(cid:68)(cid:76)(cid:59)(cid:73)(cid:74)(cid:67)(cid:59)(cid:68)(cid:74)(cid:221)(cid:61)(cid:72)(cid:55)(cid:58)(cid:59)(cid:137)(cid:221)(cid:66)(cid:59)(cid:76)(cid:59)(cid:66)(cid:221)(cid:56)(cid:79)(cid:221)(cid:55)(cid:66)(cid:66)(cid:221)(cid:74)(cid:62)(cid:72)(cid:59)(cid:59)(cid:221)
rating institutions.
S&P
MOODY’S
FITCH
Outlook
Grade
Outlook
Grade
Outlook
Grade
Last Update
Local Currency
LT Foreign Currency
February 2017
March 2017
August 2016
Negative
Negative
BBB-
BBB-
Negative
Negative
Baa3
Baa3
Negative
Negative
BBB-
BBB-
INVESTOR RELATIONS CONTACT INFORMATION
Tel
E-mail
Web
(cid:1)(cid:58)(cid:58)(cid:72)(cid:59)(cid:73)(cid:73)(cid:221)
: +90 (212) 313 18 88, Fax: +90 (216) 504 40 58,
: investor.relations@turkcell.com.tr
: http://www.turkcell.com.tr/en/aboutus/investor-relations
(cid:127)(cid:221)(cid:20)(cid:75)(cid:72)(cid:65)(cid:57)(cid:59)(cid:66)(cid:66)(cid:221)(cid:11)(cid:109)(cid:213)(cid:109)(cid:65)(cid:79)(cid:55)(cid:66)(cid:96)(cid:221)(cid:16)(cid:66)(cid:55)(cid:80)(cid:55)(cid:125)(cid:221)(cid:1)(cid:79)(cid:58)(cid:96)(cid:68)(cid:59)(cid:76)(cid:66)(cid:59)(cid:72)(cid:221)(cid:13)(cid:55)(cid:62)(cid:55)(cid:66)(cid:66)(cid:59)(cid:73)(cid:63)(cid:221)(cid:216)(cid:68)(cid:102)(cid:68)(cid:109)(cid:221)(cid:3)(cid:55)(cid:58)(cid:58)(cid:59)(cid:73)(cid:63)(cid:221)(cid:14)(cid:69)(cid:127)(cid:221)(cid:177)(cid:175)(cid:221)(cid:2)(cid:221)(cid:2)(cid:66)(cid:69)(cid:65)(cid:221)(cid:11)(cid:109)(cid:213)(cid:109)(cid:65)(cid:79)(cid:55)(cid:66)(cid:96)(cid:221)(cid:15)(cid:60)(cid:63)(cid:73)(cid:70)(cid:55)(cid:72)(cid:65)(cid:125)(cid:221)(cid:178)(cid:179)(cid:183)(cid:180)(cid:179)(cid:221)(cid:130)(cid:221)(cid:13)(cid:55)(cid:66)(cid:74)(cid:59)(cid:70)(cid:59)(cid:221)(cid:142)(cid:221)(cid:9)(cid:19)(cid:20)(cid:1)(cid:14)(cid:2)(cid:21)(cid:12)
TURKCELL ANNUAL REPORT 2017
107
IMPORTANT DEVELOPMENTS AFTER THE
REPORTING PERIOD
02.01.2018
Announcement Regarding the Process of Turkey’s Automobile Project
In accordance with the Joint Initiative Group Cooperation Protocol which we signed on November 2, 2017 with the intention to participate as a potential
contributor in Turkey’s Automobile Project which is implemented through the coordination of The Republic of Turkey Ministry of Science, Industry
and Technology and The Union of Chambers and Commodity Exchanges of Turkey, technological and financial analyses are still being conducted. This
announcement has been made pursuant to CMB’s Public Disclosure Communique’s Article 23/7 for the purpose of providing updated information to
investors.
19.01.2018
Announcement Regarding the Application to Capital Markets Board for the Approval of Issue Documents of Lease Certificates
Pursuant to our announcement dated December 18th, 2017, application for the approval of issue documents of lease certificates has been made to Capital
(cid:13)(cid:55)(cid:72)(cid:65)(cid:59)(cid:74)(cid:73)(cid:221)(cid:2)(cid:69)(cid:55)(cid:72)(cid:58)(cid:221)(cid:148)(cid:136)(cid:3)(cid:13)(cid:2)(cid:137)(cid:149)(cid:128)(cid:221)(cid:20)(cid:62)(cid:59)(cid:221)(cid:66)(cid:59)(cid:55)(cid:73)(cid:59)(cid:221)(cid:57)(cid:59)(cid:72)(cid:74)(cid:63)(cid:60)(cid:63)(cid:57)(cid:55)(cid:74)(cid:59)(cid:73)(cid:221)(cid:77)(cid:63)(cid:66)(cid:66)(cid:221)(cid:56)(cid:59)(cid:221)(cid:63)(cid:73)(cid:73)(cid:75)(cid:59)(cid:58)(cid:221)(cid:74)(cid:62)(cid:72)(cid:69)(cid:75)(cid:61)(cid:62)(cid:221)(cid:11)(cid:20)(cid:221)(cid:19)(cid:75)(cid:65)(cid:75)(cid:65)(cid:221)(cid:22)(cid:55)(cid:72)(cid:66)(cid:96)(cid:65)(cid:221)(cid:11)(cid:63)(cid:72)(cid:55)(cid:66)(cid:55)(cid:67)(cid:55)(cid:221)(cid:1)(cid:128)(cid:217)(cid:128)(cid:221)(cid:63)(cid:68)(cid:221)(cid:55)(cid:221)(cid:73)(cid:74)(cid:72)(cid:75)(cid:57)(cid:74)(cid:75)(cid:72)(cid:59)(cid:221)(cid:77)(cid:62)(cid:59)(cid:72)(cid:59)(cid:221)(cid:69)(cid:75)(cid:72)(cid:221)(cid:77)(cid:62)(cid:69)(cid:66)(cid:66)(cid:79)(cid:221)(cid:69)(cid:77)(cid:68)(cid:59)(cid:58)(cid:221)(cid:73)(cid:75)(cid:56)(cid:73)(cid:63)(cid:58)(cid:63)(cid:55)(cid:72)(cid:79)(cid:221)
(cid:19)(cid:75)(cid:70)(cid:59)(cid:72)(cid:69)(cid:68)(cid:66)(cid:63)(cid:68)(cid:59)(cid:221)(cid:216)(cid:66)(cid:59)(cid:74)(cid:63)(cid:218)(cid:63)(cid:67)(cid:221)(cid:8)(cid:63)(cid:80)(cid:67)(cid:59)(cid:74)(cid:66)(cid:59)(cid:72)(cid:63)(cid:221)(cid:1)(cid:128)(cid:217)(cid:128)(cid:221)(cid:77)(cid:63)(cid:66)(cid:66)(cid:221)(cid:56)(cid:59)(cid:221)(cid:74)(cid:62)(cid:59)(cid:221)(cid:69)(cid:72)(cid:63)(cid:61)(cid:63)(cid:68)(cid:55)(cid:74)(cid:69)(cid:72)(cid:128)(cid:221)
22.01.2018
Announcement Regarding the Licensing Process of Paycell Limited Liability Company
With reference to our announcements dated September 21st, 2017 and November 21st, 2017, the application processes for local currency transfer and
payment infrastructure operator licenses of the financial company titled “Paycell LLC”, established in Ukraine by our wholly owned subsidiary lifecell Limited
Liability Company (“lifecell LLC”) based in Ukraine, are ongoing. This announcement has been made in accordance with Public Disclosure Communique’s
requirement to provide updated information every 60 days.
Board Decision Date for Acquisition
Title of Non-current Financial Asset Acquired
Field of Activity of Non-current Financial Asset whose Shares were being Acquired
Capital of Noncurrent Financial Asset
Acquirement Way
Date on which the Transaction was/will be Completed
Acquisition Conditions
Nominal Value of Shares Acquired
Purchase Price Per Share
Total Purchasing Value
Ratio of New Shares Acquired to Capital of Non-current Financial Asset (%)
Total Ratio of Shares Owned in Capital of Non-current Financial Asset After Transaction (%)
Total Voting Right Ratio Owned in Non-current Financial Asset After Transaction (%)
Ratio of Non-current Financial Asset Acquired to Total Assets in Latest Disclosed
Financial Statements of Company (%)
Effects on Company Operations
Did Takeover Bid Obligation Arise?
Will Exemption Application be Made, if Takeover Bid Obligation Arised?
Title/ Name-Surname of Counter Party
Relation with Counter Party if any
Value Determination Method of Non-current Financial Asset
Did Valuation Report be Prepared?
Reason for not Preparing Valuation Report if it was not Prepared
Value Determined in Valuation Report if Exists
Reasons if Transaction wasn’t/will not be performed in Accordance with Valuation Report
26.05.2017
Paycell Limited Liability Company (“Paycell LLC”)
Financial services (e-money, money transfer, loans, leasing)
USD 2,000,000 (or equivalent in other currencies)
Establishment
Once local currency transfer license is obtained.
-
-
-
-
-
-
-
-
-
No
No
-
-
-
No
Not required by the legislation.
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-
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G
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A
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108
TURKCELL ANNUAL REPORT 2017
IMPORTANT DEVELOPMENTS AFTER THE
REPORTING PERIOD
26.01.2018
Announcement Regarding Fintur Holdings B.V. divesting its interest in Geocell LLC
(cid:15)(cid:75)(cid:72)(cid:221)(cid:73)(cid:75)(cid:56)(cid:73)(cid:63)(cid:58)(cid:63)(cid:55)(cid:72)(cid:79)(cid:221)(cid:6)(cid:63)(cid:68)(cid:74)(cid:75)(cid:72)(cid:221)(cid:8)(cid:69)(cid:66)(cid:58)(cid:63)(cid:68)(cid:61)(cid:73)(cid:221)(cid:2)(cid:128)(cid:22)(cid:128)(cid:154)(cid:221)(cid:148)(cid:136)(cid:6)(cid:63)(cid:68)(cid:74)(cid:75)(cid:72)(cid:137)(cid:149)(cid:125)(cid:221)(cid:63)(cid:68)(cid:221)(cid:77)(cid:62)(cid:63)(cid:57)(cid:62)(cid:221)(cid:77)(cid:59)(cid:221)(cid:62)(cid:69)(cid:66)(cid:58)(cid:221)(cid:179)(cid:176)(cid:128)(cid:179)(cid:180)(cid:186)(cid:221)(cid:73)(cid:74)(cid:55)(cid:65)(cid:59)(cid:125)(cid:221)(cid:74)(cid:62)(cid:72)(cid:69)(cid:75)(cid:61)(cid:62)(cid:221)(cid:63)(cid:74)(cid:73)(cid:221)(cid:184)(cid:184)(cid:128)(cid:184)(cid:184)(cid:186)(cid:221)(cid:73)(cid:75)(cid:56)(cid:73)(cid:63)(cid:58)(cid:63)(cid:55)(cid:72)(cid:79)(cid:221)(cid:7)(cid:109)(cid:72)(cid:74)(cid:59)(cid:66)(cid:221)(cid:20)(cid:59)(cid:66)(cid:59)(cid:65)(cid:69)(cid:67)(cid:109)(cid:68)(cid:63)(cid:65)(cid:55)(cid:73)(cid:79)(cid:69)(cid:68)(cid:221)(cid:25)(cid:55)(cid:74)(cid:96)(cid:72)(cid:96)(cid:67)(cid:221)(cid:76)(cid:59)(cid:221)(cid:4)(cid:96)(cid:218)(cid:221)
(cid:20)(cid:63)(cid:57)(cid:55)(cid:72)(cid:59)(cid:74)(cid:221)(cid:1)(cid:128)(cid:217)(cid:128)(cid:221)(cid:148)(cid:136)(cid:7)(cid:109)(cid:72)(cid:74)(cid:59)(cid:66)(cid:137)(cid:149)(cid:125)(cid:221)(cid:62)(cid:55)(cid:73)(cid:221)(cid:73)(cid:63)(cid:61)(cid:68)(cid:59)(cid:58)(cid:221)(cid:55)(cid:221)(cid:56)(cid:63)(cid:68)(cid:58)(cid:63)(cid:68)(cid:61)(cid:221)(cid:55)(cid:61)(cid:72)(cid:59)(cid:59)(cid:67)(cid:59)(cid:68)(cid:74)(cid:221)(cid:77)(cid:63)(cid:74)(cid:62)(cid:221)(cid:19)(cid:63)(cid:66)(cid:65)(cid:68)(cid:59)(cid:74)(cid:221)(cid:10)(cid:19)(cid:3)(cid:221)(cid:148)(cid:136)(cid:19)(cid:63)(cid:66)(cid:65)(cid:68)(cid:59)(cid:74)(cid:137)(cid:149)(cid:125)(cid:221)(cid:55)(cid:221)(cid:64)(cid:69)(cid:63)(cid:68)(cid:74)(cid:221)(cid:73)(cid:74)(cid:69)(cid:57)(cid:65)(cid:221)(cid:57)(cid:69)(cid:67)(cid:70)(cid:55)(cid:68)(cid:79)(cid:221)(cid:69)(cid:72)(cid:61)(cid:55)(cid:68)(cid:63)(cid:73)(cid:59)(cid:58)(cid:221)(cid:75)(cid:68)(cid:58)(cid:59)(cid:72)(cid:221)(cid:74)(cid:62)(cid:59)(cid:221)(cid:66)(cid:55)(cid:77)(cid:73)(cid:221)(cid:69)(cid:60)(cid:221)(cid:7)(cid:59)(cid:69)(cid:72)(cid:61)(cid:63)(cid:55)(cid:125)(cid:221)(cid:74)(cid:69)(cid:221)(cid:74)(cid:72)(cid:55)(cid:68)(cid:73)(cid:60)(cid:59)(cid:72)(cid:221)
its 100% total shareholding in Geocell LLC, a limited liability company organised under the laws of Georgia for USD 153 million. The transaction is expected
to be completed once the regulatory approvals are received. The transaction has no impact on our financial statements since Fintur is classified as “assets
held for sale” in our financials.
*Fintur Holdings B.V. is currently 41.45% owned by Turkcell and 58.55% by Telia Company.
30.01.2018
Announcement Regarding the Restructuring within the Scope of Law No.7061
Our Company’s Board of Directors has resolved the following within the scope of Provisional Article 13 added to the Telegraph and Telephone Law No.406
dated 4/2/1924 by Article 2 of the Law on the Amendment of Certain Tax Laws and Other Laws No. 7061 published in the Official Gazette dated December
5th, 2017:
• to restructure treasury share, universal service fund, Information and Communication Technologies Authority (ICTA) contribution share, administrative
fees and radio fees which are in dispute and respective penalty, default interest and litigation costs regarding these disputes within the scope of clause 2,
• to choose the method of increasing tax base stipulated in subparagraph (a) from the options stipulated in clause 3 in order to restructure treasury share,
universal service fund, ICTA contribution share and administrative fees for the periods for which examination is ongoing or has not been yet initiated
within the scope of clause 3.
The total amount, including principal and interest, calculated within the scope of clause 2 is TRY 363.0 million and within the scope of clause 3 is TRY 209.1
million. The payment will be made in 6 equal installments in two-month periods, starting from January 31st, 2018. The total payment including interest on
installments is TRY600.8 million. Upon completion of the payments, ongoing disputes in relation to treasury share, universal service fund, ICTA contribution
share, administrative fees and radio fees and respective risks that could potentially arise limited to these issues for the periods prior to and as of December
31st, 2017 will cease.
No provision was recognized in consolidated financial statements as of September 30th, 2017 with respect to these issues. TRY 575.1 million provision
will be booked in consolidated financials as of December 31st, 2017 including the interest on installments and the impact of discount interest income. Our
Company’s Board of Directors resolved that the negative impact of this provision amount will not be factored in the dividend proposal with respect to 2017
financial results.
TURKCELL ANNUAL REPORT 2017
109
31.01.2018
Announcement Regarding the Incorporation of a Company that will Engage in Insurance Agency Activities
(cid:15)(cid:75)(cid:72)(cid:221)(cid:3)(cid:69)(cid:67)(cid:70)(cid:55)(cid:68)(cid:79)(cid:135)(cid:73)(cid:221)(cid:2)(cid:69)(cid:55)(cid:72)(cid:58)(cid:221)(cid:69)(cid:60)(cid:221)(cid:4)(cid:63)(cid:72)(cid:59)(cid:57)(cid:74)(cid:69)(cid:72)(cid:73)(cid:221)(cid:62)(cid:55)(cid:73)(cid:221)(cid:55)(cid:70)(cid:70)(cid:72)(cid:69)(cid:76)(cid:59)(cid:58)(cid:221)(cid:74)(cid:62)(cid:59)(cid:221)(cid:63)(cid:68)(cid:57)(cid:69)(cid:72)(cid:70)(cid:69)(cid:72)(cid:55)(cid:74)(cid:63)(cid:69)(cid:68)(cid:221)(cid:69)(cid:60)(cid:221)(cid:55)(cid:221)(cid:57)(cid:69)(cid:67)(cid:70)(cid:55)(cid:68)(cid:79)(cid:221)(cid:56)(cid:79)(cid:221)(cid:69)(cid:75)(cid:72)(cid:221)(cid:77)(cid:62)(cid:69)(cid:66)(cid:66)(cid:79)(cid:221)(cid:69)(cid:77)(cid:68)(cid:59)(cid:58)(cid:221)(cid:73)(cid:75)(cid:56)(cid:73)(cid:63)(cid:58)(cid:63)(cid:55)(cid:72)(cid:79)(cid:221)(cid:20)(cid:75)(cid:72)(cid:65)(cid:57)(cid:59)(cid:66)(cid:66)(cid:221)(cid:6)(cid:63)(cid:68)(cid:55)(cid:68)(cid:73)(cid:67)(cid:55)(cid:68)(cid:221)(cid:1)(cid:128)(cid:217)(cid:128)(cid:221)(cid:77)(cid:63)(cid:74)(cid:62)(cid:221)(cid:55)(cid:221)(cid:57)(cid:55)(cid:70)(cid:63)(cid:74)(cid:55)(cid:66)(cid:221)(cid:69)(cid:60)(cid:221)
TRY 300,000. This company will engage in insurance agency activities.
Board Decision Date for Acquisition
Title of Non-current Financial Asset Acquired
Field of Activity of Non-current Financial Asset whose Shares were being
Acquired
Capital of Noncurrent Financial Asset
Acquirement Way
Date on which the Transaction was/will be Completed
Acquisition Conditions
Nominal Value of Shares Acquired
Purchase Price Per Share
Total Purchasing Value
Ratio of New Shares Acquired to Capital of Non-current Financial Asset (%)
Total Ratio of Shares Owned in Capital of Non-current Financial Asset After
Transaction (%)
Total Voting Right Ratio Owned in Non-current Financial Asset After
Transaction (%)
Ratio of Non-current Financial Asset Acquired to Total Assets in Latest
Disclosed Financial Statements of Company (%)
Effects on Company Operations
Did Takeover Bid Obligation Arised?
Will Exemption Application be Made, if Takeover Bid Obligation Arised?
Title/ Name-Surname of Counter Party
Relation with Counter Party if any
Value Determination Method of Non-current Financial Asset
Did Valuation Report be Prepared?
Reason for not Preparing Valuation Report if it was not Prepared
Value Determined in Valuation Report if Exists
Reasons if Transaction wasn’t/will not be performed in Accordance with
Valuation Report
31.01.2018
31.01.2018
-
Insurance Agency Activities
TRY 300,000
Incorporation
The company will be operational upon registration as an Insurance Agency
with the approval of Undersecretariat of Treasury - General Directorate
of Insurance and The Union of Chambers and Commodity Exchanges of
Turkey following the registry and announcement of the incorporation.
-
-
-
-
-
-
-
-
-
No
No
-
-
-
No
Not required by the legislation.
-
-
Announcement Regarding the Ukrainian 4G – 2600 MHz Frequency Tender Result
2600 MHz frequency tender as part of the 4G License Tender, which our fully owned subsidiary lifecell LLC (“lifecell”) based in Ukraine had applied to
participate, has been held today.
At the tender, lifecell has been awarded the license for 15 years bidding UAH909,250,551* for 15 MHz frequency band, the total of Lot 1 and Lot 2.
Within the scope of the 4G tender, 1800 MHz frequency tender is expected to be held in the first quarter of 2018.
*The liability is denominated in Hryvnia, and amounts to USD 32.5 million based on National Bank of Ukraine’s USD / UAH rate of 28.01 as of January 31, 2018. The total amount including the
conversion fee is USD 39.1 million.
09.02.2018
Announcement Regarding the Capital Increase in Lifecell Ventures
The capital of our 100% owned subsidiary Lifecell Ventures Coöperatief U.A. (“Lifecell Ventures”) is increased by USD 10,000,000 (EUR 8,161,932) to EUR
1,656,311,423. Our Company’s pre-emption rights with respect to the capital increase is fully paid.
13.02.2018
Announcement Regarding the Amendment of Articles of Association
Our Company’s Board of Directors has decided that necessary actions will be taken to obtain the approval of the Capital Markets Board and the Ministry
of Customs and Trade, for amendment of the Articles of Association as attached, in accordance with the principles of Capital Markets Law, the Turkish
Commercial Code, and related legislation. Amendment of Articles of Association is subject to approval of the General Assembly.
C
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A
T
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G
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N
A
N
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110
TURKCELL ANNUAL REPORT 2017
IMPORTANT DEVELOPMENTS AFTER THE
REPORTING PERIOD
(cid:20)(cid:21)(cid:18)(cid:11)(cid:3)(cid:5)(cid:12)(cid:12)(cid:222)(cid:217)(cid:12)(cid:5)(cid:20)(cid:217)(cid:218)(cid:217)(cid:13)(cid:222)(cid:8)(cid:217)(cid:26)(cid:13)(cid:5)(cid:20)(cid:12)(cid:5)(cid:18)(cid:217)(cid:222)(cid:1)(cid:128)(cid:218)(cid:128)(cid:222)(cid:1)(cid:13)(cid:5)(cid:14)(cid:4)(cid:13)(cid:5)(cid:14)(cid:20)(cid:222)(cid:15)(cid:14)(cid:222)(cid:1)(cid:18)(cid:20)(cid:9)(cid:3)(cid:12)(cid:5)(cid:19)(cid:222)(cid:15)(cid:6)(cid:222)(cid:1)(cid:19)(cid:19)(cid:15)(cid:3)(cid:9)(cid:1)(cid:20)(cid:9)(cid:15)(cid:14)
CURRENT VERSION
AMENDED VERSION
(cid:1)(cid:18)(cid:20)(cid:9)(cid:3)(cid:12)(cid:5)(cid:222)(cid:178)(cid:222)(cid:130)(cid:222)(cid:16)(cid:21)(cid:18)(cid:16)(cid:15)(cid:19)(cid:5)(cid:222)(cid:1)(cid:14)(cid:4)(cid:222)(cid:19)(cid:21)(cid:2)(cid:10)(cid:5)(cid:3)(cid:20)(cid:130)(cid:13)(cid:1)(cid:20)(cid:20)(cid:5)(cid:18)(cid:222)
ARTICLE 3 - SCOPE OF BUSINESS
The Company is incorporated primarily for the provision of any telephone,
telecommunication and similar services in compliance with the Telegraph
and Telephone Law number 406 and services stated in the GSM Pan
Europe Mobile Telephone System bid that was signed with the Ministry of
Transportation and to operate within the authorization regarding the IMT-
2000/UMTS services and the infrastructure.
The Company is incorporated to primarily provide the services
authorized within the context of concession agreements signed with
the Information and Communications Technologies with regard to
“Granting License of Establishing and Operating GSM Pan Europe
Mobile Telephone System”, “Establishing, Operating and Providing
IMT-2000/UMTS Infrastructures and Services” and “Authorization
Certificate for Limited Usage Rights with regard to IMT Services” and
any other services authorized pursuant to relevant legislation and
regulatory decrees.
In order to achieve the above-mentioned subject matter, the Company may:
In order to achieve the above-mentioned scope of business, the Company may:
1) enter into service, proxy, agency, commission agreements, undertakings
and any other agreements within the purpose and the subject-matter of
the Company and within this scope obtain short, middle and long term
credits and loans or issue, accept and endorse bonds, extend credits to
the companies in Turkey and abroad, in which it has direct or indirect
shareholding interest, to its main company and group companies, in Turkish
Lira or other foreign currencies, on condition that such extensions do not
contradict with laws and regulations.
1) enter into service, proxy, agency, commission agreements, undertakings
and any other agreements within the purpose and the subject-matter of
the Company and within this scope obtain short, middle and long term
credits and loans or issue, accept and endorse bonds, extend credits to
the companies in Turkey and abroad, in which it has direct or indirect
shareholding interest, to its main company and group companies, in Turkish
Lira or other foreign currencies, on condition that such extensions do not
contradict with laws and regulations;
2) cooperate, establish new partnerships or companies or enterprises with
existing or future local or foreign individuals or legal entities; completely
or partially acquire local or foreign companies or enterprises, participate in
share capitals of such companies or enterprises, establish representative
offices in Turkey and abroad, participate in foundations constituted for
various purposes, reserve part of the profit for or be authorized to pay
dividends and make donations to this kind of real or legal person and in the
event a donation is made or part of the profits is reserved for foundations
or this kind of real or legal entity, the rules provided by the Capital Markets
Board will be complied with and the notifications required by the Capital
Markets Board will be made,
2) cooperate, establish new partnerships or companies or enterprises
with existing or future local or foreign individuals or legal entities;
completely or partially acquire local or foreign companies or enterprises,
participate in share capitals of such companies or enterprises, establish
representative offices in Turkey and abroad, participate in foundations
constituted for various purposes, establish foundations, reserve assets
to these foundations, reserve part of the profit for or be authorized to
pay dividends and make all kind of donations and aids to this kind of real
or legal person without vitiating its purpose and subject matter and
provided that, those are not contrary to transfer pricing regulations
of Capital Market Law and other related legislation, necessary public
disclosures are made and donations made within a year are submitted
to the shareholder’s information at general assembly;
3) issue, acquire, sell, create security over or to perform any other
legal actions of all kind of securities, commercial papers, profit sharing
instruments, bond and convertible bonds via board resolutions under the
conditions authorized by the relevant legislation provided that such actions
are not qualified as brokerage activities and portfolio management;
3) issue, acquire, sell, create security over or to perform any other
legal actions of all kind of securities, commercial papers, profit sharing
instruments, bond and convertible bonds via board resolutions when
authorized by the relevant legislation and provided that such actions are
not qualified as investment services and activities;
4) enter into licence, concession, trademark, know-how, technical
information and assistance and any other intellectual property right
agreements and acquire and give a license to such rights and register them;
4) enter into license, concession, trademark, know-how, technical
information and assistance and any other intellectual property right
agreements and acquire, lease and register them;
TURKCELL ANNUAL REPORT 2017
111
CURRENT VERSION
AMENDED VERSION
5) acquire, lease, rent and sell of all types of movable and immovable
property; construct plant or any other buildings; enter into financial leasing
agreements; acquire any of the personal or property rights regarding
movable and immovable property, including but not limited to, promise to
sell, pledges, mortgages and commercial business pledges; register them
in title deeds; accept mortgage from third parties; discharge pledges and
mortgages created in favour of the Company; create security over movable
and immovable properties owned by the Company, including creation of
mortgage, pledge and commercial enterprises pledge, on its own or in
favour of the companies which are fully consolidated in financial statements
of the Company or in favour of the third parties’ on condition that the
context of the ordinary business operations of the Company directly
requires, as necessitated by the purpose and subject matter of the Company,
provided that the Company shall comply with the principles regulated in
accordance with the capital markets legislation regarding the transactions
of providing guarantees or pledges including mortgages to third parties and
disclosures necessary in accordance with the Capital Market Board within
the scope of special circumstances, be made in order to inform investors in
transactions to be performed in favour of third parties.
5) acquire, lease, rent and sell of all types of movable and immovable
property; construct plant or any other buildings; enter into financial leasing
agreements; acquire any of the personal or property rights regarding
movable and immovable property, including but not limited to, promise
to sell, pledges, mortgages and commercial business pledges; register
them in title deeds; accept mortgage from third parties; discharge pledges
and mortgages created in favour of the Company; create security over
movable and immovable properties owned by the Company, including
creation of mortgage, pledge and commercial enterprises pledge, on its
own or in favour of the companies which are fully consolidated in financial
statements of the Company or in favour of the third parties’ on condition
that the context of the ordinary business operations of the Company
directly requires, as necessitated by the scope of business of the Company,
provided that the Company shall comply with the principles regulated in
accordance with the capital markets legislation regarding the transactions
of providing guarantees or pledges including mortgages, to third parties
and regarding disclosures necessary in accordance with the Capital Market
Board in case of special circumstances, be made in order to inform investors
in transactions to be performed in favour of third parties;
6) enter into other enterprises, relevant transactions and agreements
necessitated by the purpose and the subject matter of the Company;
6) found other enterprises and enter into relevant transactions and
agreements necessitated by the scope of business of the Company;
7) register SIM card trademark and symbol; sell, lease, re-purchase, re-sell
the same; agree with dealers abroad or in the country for the sale of such
cards; export same; import other SIM cards and perform all related actions;
7) register SIM card trademark and symbol; sell, lease, re-purchase, re-sell
the same; agree with dealers abroad or in the country for the sale of such
cards; export same; import other SIM cards and perform all related actions.
In addition, if it is deemed appropriate and beneficial for the Company to
perform any transactions other than those stated above, upon the proposal
of the Board of Directors, the matter shall be submitted to the approval of
the General Assembly and may be performed pursuant to the resolution
of the General Assembly. In order for such changes to be effective, the
permissions of the Foreign Investment Directorate, the Ministry of Industry
and Commerce and the Capital Market Board shall be obtained, registered
with the Trade Registry and announced in the Trade Registry Gazette as
amendments to the Articles of Association.
The Company, by resolution of General Assembly may perform
activities other than listed herein, by fulfilling related legal
requirements and in condition that these activities are not in
contradiction with legislation, which are related to or to be deemed
expedient for its subject matter.
ARTICLE 4 – HEADQUARTER AND BRANCHES
ARTICLE 4 – HEADQUARTER AND BRANCHES
The Company shall be headquartered in Istanbul, at the address of Turkcell
(cid:16)(cid:66)(cid:55)(cid:80)(cid:55)(cid:125)(cid:221)(cid:13)(cid:59)(cid:218)(cid:72)(cid:75)(cid:74)(cid:63)(cid:79)(cid:59)(cid:74)(cid:221)(cid:3)(cid:55)(cid:58)(cid:58)(cid:59)(cid:73)(cid:63)(cid:125)(cid:221)(cid:14)(cid:69)(cid:127)(cid:176)(cid:180)(cid:178)(cid:125)(cid:221)(cid:20)(cid:59)(cid:70)(cid:59)(cid:56)(cid:55)(cid:218)(cid:96)(cid:125)(cid:221)(cid:2)(cid:59)(cid:79)(cid:69)(cid:215)(cid:66)(cid:75)(cid:142)(cid:216)(cid:73)(cid:74)(cid:55)(cid:68)(cid:56)(cid:75)(cid:66)(cid:128)(cid:221)
The headquarters of the Company shall be in Istanbul, at the address of
(cid:1)(cid:79)(cid:58)(cid:96)(cid:68)(cid:59)(cid:76)(cid:66)(cid:59)(cid:72)(cid:222)(cid:13)(cid:55)(cid:62)(cid:55)(cid:66)(cid:66)(cid:59)(cid:73)(cid:63)(cid:125)(cid:222)(cid:217)(cid:68)(cid:102)(cid:68)(cid:109)(cid:222)(cid:3)(cid:55)(cid:58)(cid:58)(cid:59)(cid:73)(cid:63)(cid:125)(cid:222)(cid:14)(cid:69)(cid:127)(cid:177)(cid:175)(cid:125)(cid:222)(cid:11)(cid:109)(cid:214)(cid:109)(cid:65)(cid:79)(cid:55)(cid:66)(cid:96)(cid:222)(cid:15)(cid:60)(cid:63)(cid:73)(cid:70)(cid:55)(cid:72)(cid:65)(cid:125)(cid:222)(cid:178)(cid:179)(cid:183)(cid:180)(cid:179)(cid:125)(cid:222)
(cid:13)(cid:55)(cid:66)(cid:74)(cid:59)(cid:70)(cid:59)(cid:130)(cid:217)(cid:73)(cid:74)(cid:55)(cid:68)(cid:56)(cid:75)(cid:66)(cid:128)(cid:222)
The new address, whenever changed, shall be registered with the Trade
Registry and published in the Trade Registry Gazette and notified to the
Capital Market Board and the Ministry of Industry and Commerce.
The new address, whenever changed, shall be registered with the Trade
Registry and published in the Turkish Trade Registry Gazette and notified
to the Capital Market Board as well as the Ministry of Customs and
Commerce.
Any notification sent to the address registered and published shall be
deemed as received by the Company. If the Company changes its address
and does not register the new one in due time, the situation will be deemed
as one of the termination causes of the Company.
Any notification sent to the address registered and published shall be
deemed as received by the Company. If the Company changes its address
and does not register the new one in due time, the situation will be deemed
as one of the liquidation causes of the Company.
The Company may open branches and representative offices in or outside
Turkey provided that the Ministry of Industry and Commerce, Foreign
Investment Directorate and the Capital Market Board are informed thereof.
The Company may open branches and representative offices in or outside
Turkey provided that the Ministry of Customs and Commerce, Foreign
Investment Directorate and the Capital Market Board are informed thereof.
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TURKCELL ANNUAL REPORT 2017
IMPORTANT DEVELOPMENTS AFTER THE
REPORTING PERIOD
(cid:20)(cid:21)(cid:18)(cid:11)(cid:3)(cid:5)(cid:12)(cid:12)(cid:221)(cid:216)(cid:12)(cid:5)(cid:20)(cid:216)(cid:217)(cid:216)(cid:13)(cid:221)(cid:8)(cid:216)(cid:26)(cid:13)(cid:5)(cid:20)(cid:12)(cid:5)(cid:18)(cid:216)(cid:221)(cid:1)(cid:128)(cid:217)(cid:128)(cid:221)(cid:1)(cid:13)(cid:5)(cid:14)(cid:4)(cid:13)(cid:5)(cid:14)(cid:20)(cid:221)(cid:15)(cid:14)(cid:221)(cid:1)(cid:18)(cid:20)(cid:9)(cid:3)(cid:12)(cid:5)(cid:19)(cid:221)(cid:15)(cid:6)(cid:221)(cid:1)(cid:19)(cid:19)(cid:15)(cid:3)(cid:9)(cid:1)(cid:20)(cid:9)(cid:15)(cid:14)
CURRENT VERSION
AMENDED VERSION
ARTICLE 6 – SHARE CAPITAL
ARTICLE 6 – SHARE CAPITAL
The registered capital of the Company is 2.200.000.000
(Twobilliontwohundred-million) New Turkish Liras, divided into registered
shares of 2.200.000.000 (Two-billiontwohundredmillion), having a value of
1.- (One) New Turkish Liras each.
The Company adopted the registered capital system according to
the Capital Market Code and carried the said system into practice by
Capital Market Board’s permit dated 13.04.2000 and numbered 40/572.
The Company’s issued share capital, is 1,474,639,361 (Onebillionfourhun-
dred seventyfourmillionsixhundredandthirtyninethousandthreehundredandsixtyone)
New Turkish Liras and fully paid in compliance with the Incentive and
Investment Allowance Certificate of Foreign Capital General Directorate of
the Undersecretariat of Treasury of the Prime Ministry of the Republic of
Turkey dated 23 August 1993 and numbered 1746 and its special conditions
dated 19.12.1994 and Incentive and Investment Allowance Certificate dated
6 November 1997 and 2741 numbered and its special conditions dated
16.07.1999, 16.12.1999 and 30.11.2000 and Incentive and Investment Allow-
ance Certificate dated 26 February 2001 and 3704 numbered and is divided
into 1,474,639,361 (Onebillion fourhundredandseventyfourmillionsixhun-
dredandthirtyninethousandthreehundredandsixtyone) shares.
The ceiling for registered capital of the Company is 2.200.000.000
(cid:148)(cid:74)(cid:77)(cid:69)(cid:56)(cid:63)(cid:66)(cid:66)(cid:63)(cid:69)(cid:68)(cid:74)(cid:77)(cid:69)(cid:62)(cid:75)(cid:68)(cid:58)(cid:72)(cid:59)(cid:58)(cid:67)(cid:63)(cid:66)(cid:66)(cid:63)(cid:69)(cid:68)(cid:149)(cid:222)(cid:20)(cid:12)(cid:222)(cid:55)(cid:68)(cid:58)(cid:222)(cid:58)(cid:63)(cid:76)(cid:63)(cid:58)(cid:59)(cid:58)(cid:222)(cid:63)(cid:68)(cid:74)(cid:69)(cid:222)(cid:72)(cid:59)(cid:61)(cid:63)(cid:73)(cid:74)(cid:59)(cid:72)(cid:59)(cid:58)(cid:222)(cid:73)(cid:62)(cid:55)(cid:72)(cid:59)(cid:222)(cid:69)(cid:60)(cid:222)(cid:222)
(cid:177)(cid:128)(cid:177)(cid:175)(cid:175)(cid:128)(cid:175)(cid:175)(cid:175)(cid:128)(cid:175)(cid:175)(cid:175)(cid:222)(cid:148)(cid:74)(cid:77)(cid:69)(cid:222)(cid:56)(cid:63)(cid:66)(cid:66)(cid:63)(cid:69)(cid:68)(cid:74)(cid:77)(cid:69)(cid:62)(cid:75)(cid:68)(cid:58)(cid:72)(cid:59)(cid:58)(cid:222)(cid:67)(cid:63)(cid:66)(cid:66)(cid:63)(cid:69)(cid:68)(cid:149)(cid:222)(cid:62)(cid:55)(cid:76)(cid:63)(cid:68)(cid:61)(cid:222)(cid:55)(cid:222)(cid:76)(cid:55)(cid:66)(cid:75)(cid:59)(cid:222)(cid:69)(cid:60)(cid:222)(cid:176)(cid:125)(cid:175)(cid:175)(cid:222)
(cid:148)(cid:69)(cid:68)(cid:59)(cid:149)(cid:222)(cid:20)(cid:75)(cid:72)(cid:65)(cid:63)(cid:73)(cid:62)(cid:222)(cid:12)(cid:63)(cid:72)(cid:55)(cid:222)(cid:59)(cid:55)(cid:57)(cid:62)(cid:128)(cid:222)
The Company’s issued share capital is 2.200.000.000
(cid:148)(cid:74)(cid:77)(cid:69)(cid:56)(cid:63)(cid:66)(cid:66)(cid:63)(cid:69)(cid:68)(cid:74)(cid:77)(cid:69)(cid:62)(cid:75)(cid:68)(cid:58)(cid:72)(cid:59)(cid:58)(cid:222)(cid:67)(cid:63)(cid:66)(cid:66)(cid:63)(cid:69)(cid:68)(cid:149)(cid:222)(cid:20)(cid:12)(cid:222)(cid:55)(cid:68)(cid:58)(cid:222)(cid:60)(cid:75)(cid:66)(cid:66)(cid:79)(cid:222)(cid:70)(cid:55)(cid:63)(cid:58)(cid:222)(cid:55)(cid:68)(cid:58)(cid:222)(cid:63)(cid:73)(cid:222)(cid:58)(cid:63)(cid:76)(cid:63)(cid:58)(cid:59)(cid:58)(cid:222)(cid:63)(cid:68)(cid:74)(cid:69)(cid:222)
(cid:72)(cid:59)(cid:61)(cid:63)(cid:73)(cid:74)(cid:59)(cid:72)(cid:59)(cid:58)(cid:222)(cid:73)(cid:62)(cid:55)(cid:72)(cid:59)(cid:222)(cid:69)(cid:60)(cid:222)(cid:177)(cid:128)(cid:177)(cid:175)(cid:175)(cid:128)(cid:175)(cid:175)(cid:175)(cid:128)(cid:175)(cid:175)(cid:175)(cid:222)(cid:148)(cid:74)(cid:77)(cid:69)(cid:56)(cid:63)(cid:66)(cid:66)(cid:63)(cid:69)(cid:68)(cid:74)(cid:77)(cid:69)(cid:62)(cid:75)(cid:68)(cid:58)(cid:72)(cid:59)(cid:58)(cid:222)(cid:67)(cid:63)(cid:66)(cid:66)(cid:63)(cid:69)(cid:68)(cid:222)
(cid:20)(cid:75)(cid:72)(cid:65)(cid:63)(cid:73)(cid:62)(cid:222)(cid:12)(cid:63)(cid:72)(cid:55)(cid:149)(cid:222)(cid:73)(cid:62)(cid:55)(cid:72)(cid:59)(cid:73)(cid:222)(cid:62)(cid:55)(cid:76)(cid:63)(cid:68)(cid:61)(cid:222)(cid:55)(cid:222)(cid:76)(cid:55)(cid:66)(cid:75)(cid:59)(cid:222)(cid:69)(cid:60)(cid:222)(cid:176)(cid:125)(cid:175)(cid:175)(cid:222)(cid:148)(cid:69)(cid:68)(cid:59)(cid:149)(cid:222)(cid:20)(cid:12)(cid:222)(cid:59)(cid:55)(cid:57)(cid:62)(cid:128)
The authorization of the ceiling of registered capital given by the
Capital Market Board, shall be effective for the years between 2018-
(cid:177)(cid:175)(cid:177)(cid:177)(cid:222)(cid:148)(cid:180)(cid:222)(cid:79)(cid:59)(cid:55)(cid:72)(cid:73)(cid:149)(cid:128)(cid:222)(cid:5)(cid:76)(cid:59)(cid:68)(cid:222)(cid:74)(cid:62)(cid:69)(cid:75)(cid:61)(cid:62)(cid:222)(cid:74)(cid:62)(cid:59)(cid:222)(cid:57)(cid:59)(cid:63)(cid:66)(cid:63)(cid:68)(cid:61)(cid:222)(cid:69)(cid:60)(cid:222)(cid:74)(cid:62)(cid:59)(cid:222)(cid:72)(cid:59)(cid:61)(cid:63)(cid:73)(cid:74)(cid:59)(cid:72)(cid:59)(cid:58)(cid:222)(cid:57)(cid:55)(cid:70)(cid:63)(cid:74)(cid:55)(cid:66)(cid:222)(cid:63)(cid:73)(cid:222)(cid:68)(cid:69)(cid:74)(cid:222)
reached, after the year 2022, it is mandatory for the Board of Directors,
to obtain permit of the General Assembly in order to pass a resolution
to increase the capital by way of also having authorization of Capital
Market Boards for the ceiling previously authorized or for a new ceiling
amount which is not more than five years. In case the abovementioned
authorization is not taken, capital increase cannot be made with a
Board of Directors resolution.
The Board of Directors, between the years 2018-2022, in accordance
with the provisions of Capital Market Act, when necessary, is
authorized to increase the issued share capital by issuing registered
shares up to the authorized share capital; and authorized to resolve
on the matters which are relating to limiting the right of obtaining
new shares of the shareholders’ and issuing of premium shares.
Authorization to limit the right of obtaining new shares shall not be
used unequally amongst the shareholders.
Shares representing the issued share capital are tracked in connection
with the dematerialization principles.
ARTICLE 7 - SHARE TRANSFER
ARTICLE 7 - SHARE TRANSFER
Transfer of Shares is subject to the provisions of the Turkish Commercial
Code, Capital Market Legislation and the Regulations on Value Added
Telecommunications Services.
Transfer of shares is subject to the provisions of the Turkish Commercial
Code, Capital Market Legislation and Regulation on the Authorization
on the Electronic Communication Sector, Concession Agreement with
regard to Granting License of Establishing and Operating GSM Pan
Europe Mobile Telephone System, Concession Agreement of Establishing
Operating and Providing IMT-2000/UMTS Infrastructures and Services
and Annex of Authorization Certificate for Limited Usage Rights
with regard to IMT Services-Rights and Obligations with regard to
Establishing, Operating and Providing IMT Infrastructures and Services.
TURKCELL ANNUAL REPORT 2017
113
CURRENT VERSION
AMENDED VERSION
The Board of Directors may restrict the share transfers to the foreigners in
order to comply with the restrictions concerning the shareholders deter-
mined under the Regulations on Value Added Telecommunications Services
and/or other legislation, of which the Company is subject to.
The Board of Directors may restrict the share transfers to the foreigners
in order to comply with the restrictions concerning Regulation on the
authorization on the Electronic Communication Sector and Conces-
sion Agreement with regard to Granting License of Establishing and
Operating GSM Pan Europe Mobile Telephone System, Concession
Agreement of the Establishing Operating and Providing IMT-2000/
UMTS Infrastructure and Services, and Annex of Authorization Cer-
tificate for Limited Usage Rights with regard to IMT Services-Rights
and Obligations with regard to Establishing, Operating and Providing
IMT Infrastructures and Services and/or other restrictions concerning
the shareholders of which the Company is subject to. Article 137/3 of the
Capital Markets Law is reserved.
ARTICLE 8 – CAPITAL INCREASE AND SHARE CERTIFICATES
ARTICLE 8 – CAPITAL INCREASE AND SHARE CERTIFICATES
This Article was removed from the text.
The Board of Directors of the Company is authorised to increase the issued
share capital by issuing new shares up to the authorised share capital, to
resolve to restrict the pre-emption rights of the shareholders and to take
resolutions regarding the issuance of premium shares whenever it is deemed
necessary, in compliance with the Capital Market Law.
During capital increases shares remaining pursuant to the exercise of
pre-emptive rights and in the event pre-emptive rights are restricted, all of
the newly issued shares shall be offered to the public at their market value
but not less than their nominal value.
New shares may not be issued until all the issued shares are fully sold and
paid. The issued share capital has to be indicated on all documents bearing
the trade name of the Company.
The Board of the Directors of the Company may issue share certificates in
different denominations representing more than one share in compliance
with the relevant regulations of the Capital Market Board.
ARTICLE 9 - BOARD OF DIRECTORS
ARTICLE 9 - BOARD OF DIRECTORS
The Company is managed and represented by the Board. The Board is fully authorised
to carry out the affairs of the Company and management of Company assets and the
activities relating to the Company purpose and subject matter other than those that
have to be solely carried out by the General Assembly.
The Company is managed and represented by the Board of Directors. The
Board of Directors is fully authorized for all matters relating to the
Company’s business and to carry out the affairs of the Company and man-
agement of Company assets and the activities relating to the Company’s
scope of business other than those fallen within the competence of the
General Assembly.
The Board is comprised of 7 (seven) members elected by the General Assembly.
The Board of Directors shall be comprised of 7 (seven) members to be elected by the
General Assembly.
In case the Board of Directors is informed that a member of the Board of
Directors no longer has any relation with and is no longer a representative
of the legal entity it represents or that a legal entity having a representative
on the Board of Directors has transferred its shares to a third party, such
member of the Board of Directors and representative of the such legal
entity shall be considered as having resigned from its membership on the
Board of Directors and the Board shall temporarily appoint another member
until the next General Assembly.
The relevant legislation shall be applicable to the formation, rules
of procedures of the committees which the Board of Directors is
responsible to establish within the context of Capital Markets Law,
Turkish Commercial Code and relevant legislation and to relations of
those committees with the Board of Directors.
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IMPORTANT DEVELOPMENTS AFTER THE
REPORTING PERIOD
(cid:20)(cid:21)(cid:18)(cid:11)(cid:3)(cid:5)(cid:12)(cid:12)(cid:221)(cid:216)(cid:12)(cid:5)(cid:20)(cid:216)(cid:217)(cid:216)(cid:13)(cid:221)(cid:8)(cid:216)(cid:26)(cid:13)(cid:5)(cid:20)(cid:12)(cid:5)(cid:18)(cid:216)(cid:221)(cid:1)(cid:128)(cid:217)(cid:128)(cid:221)(cid:1)(cid:13)(cid:5)(cid:14)(cid:4)(cid:13)(cid:5)(cid:14)(cid:20)(cid:221)(cid:15)(cid:14)(cid:221)(cid:1)(cid:18)(cid:20)(cid:9)(cid:3)(cid:12)(cid:5)(cid:19)(cid:221)(cid:15)(cid:6)(cid:221)(cid:1)(cid:19)(cid:19)(cid:15)(cid:3)(cid:9)(cid:1)(cid:20)(cid:9)(cid:15)(cid:14)
CURRENT VERSION
AMENDED VERSION
ARTICLE 10 – DUTY PERIOD
ARTICLE 10 – TERM OF OFFICE
The members of the Board of Directors may be elected for a period of
maximum three years.
The members of the Board of Directors may be elected for a period of
maximum three years.
The members of the Board of Directors whose duty period ends may be
re-elected.
If one of the memberships is left during the duty period, new members may
be elected to replace these in accordance with the related provisions of the
Turkish Commercial Code and Article 11 of this Article Of Association.
The members of the Board of Directors whose term of office expires
may be re-elected. If one of the memberships becomes vacant or an
independent board member ceases to be independent, an appointment
shall be made in accordance with provisions of Turkish Commercial
Code and Capital Markets Board regulations and submitted to approval
of the first general assembly.
ARTICLE 11 – MEETINGS OF THE BOARD OF DIRECTORS
ARTICLE 11 – MEETINGS OF THE BOARD OF DIRECTORS
1) Meetings of the Board of Directors:
The Board of Directors shall meet whenever necessitated by the affairs
of the Company. Meetings of the Board of Directors shall be held at the
headquarters of the Company or at any place agreed upon.
1) Meetings of the Board of Directors:
The Board of Directors shall meet whenever necessitated by the affairs
of the Company. Meetings of the Board of Directors shall be held at the
headquarters of the Company or at any place agreed upon.
Pursuant to article 1527 of the Turkish Commercial Code, members who
have a right to attend the Board meetings, may attend such meeting by
electronical means. Pursuant to the Communiqué on Electronic Meetings
(cid:8)(cid:59)(cid:66)(cid:58)(cid:222)(cid:63)(cid:68)(cid:222)(cid:3)(cid:69)(cid:67)(cid:70)(cid:55)(cid:68)(cid:63)(cid:59)(cid:73)(cid:222)(cid:15)(cid:74)(cid:62)(cid:59)(cid:72)(cid:222)(cid:20)(cid:62)(cid:55)(cid:68)(cid:222)(cid:7)(cid:59)(cid:68)(cid:59)(cid:72)(cid:55)(cid:66)(cid:222)(cid:13)(cid:59)(cid:59)(cid:74)(cid:63)(cid:68)(cid:61)(cid:73)(cid:222)(cid:69)(cid:60)(cid:222)(cid:74)(cid:62)(cid:59)(cid:222)(cid:10)(cid:69)(cid:63)(cid:68)(cid:74)(cid:222)(cid:19)(cid:74)(cid:69)(cid:57)(cid:65)(cid:222)
Companies, the Company may either set up the Electronical Meeting
System, which enables right holders to attend such meetings and vote on
the agenda items; or purchase related services from the systems providers
that are specifically found for such purposes. During these meetings, right
holders shall be provided to enjoy their rights electronically, as stipulated
under the aforementioned Communiqué, either be over a set up system or
a purchased system which are both established subject to this provision
of the articles of association of the Company.
2) Meeting and Decision Making Quorum:
Quorum for Board meetings shall consist of a minimum 5 directors. Ordinary
actions of the Board shall be taken by affirmative votes of 4 of the directors
upon the presence of 5 directors and affirmative votes of 5 directors upon
the presence of more than 5 directors.
2) Meeting and Decision Quorum:
Quorum for Board meetings shall consist of a minimum 5 members.
Decisions regarding ordinary actions of the Board of Directors shall be
taken by affirmative votes of 4 of the members upon the presence of 5
members and affirmative votes of 5 members upon the presence of more
than 5 members.
ARTICLE 12 – BINDING AND REPRESENTATION OF THE COMPANY
ARTICLE 12 – BINDING AND REPRESENTATION OF THE COMPANY
All documents, bonds, powers of attorney, written undertakings, contracts,
offers, demands, acceptances, announcements and all other documents
related with the Company, will be valid and binding the Company, if signed
by person or persons so authorized by the Board of Directors on condition
that they sign under the Company name, in circumstances registered and
published as allowing such signature. The Board of Directors will determine
the conditions on which the person(s) authorized to bind the company will
sign.
The authority to represent and bind the Company is vested with the
Board of Directors. All documents, bonds, powers of attorney, written
undertakings, contracts, offers, demands, acceptances, announcements and
all other documents related with the Company, shall be valid and binding
for the Company, if signed by person or persons so authorized by the
Board of Directors on condition that they sign under the Company name,
in circumstances registered and published as allowing such signature. The
Board of Directors shall determine the conditions on which the person(s)
authorized to bind the company will sign.
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CURRENT VERSION
AMENDED VERSION
ARTICLE 13 – SHARING DUTIES AND ASSIGNING DIRECTORS
ARTICLE 13 – DELEGATION OF AUTHORITIES AND APPOINTMENT OF
MANAGERS
The Board of Directors may assign all of its authorities related to
management and representation or the parts pertaining to the execution
phase of the company business or the parts it finds necessary to delegate
members of the Board of Directors or to General Directors or Directors or
other officers for whom it is not necessary to have a share and the Board
of Directors may give them authority to sign. Minimum one member of
the Board of Directors shall have the authority to represent the Company
even if the authority to manage and represent the Company is left to
the General Directors or Directors or other officers who do not hold any
shares in the Company. The Board of Management may give Third Persons
special authority to represent and bind the Company. The duty period of
other officers who have the authority to put the signatures of the General
Directors and Directors is not limited with the election periods of the Board
of Directors members. The provisions of 11-2 article of these Articles of
Association are preserved.
The Board of Directors shall always be free to cancel such delegated
authority of such members and directors.
The Board of Directors, in accordance with Article 367 of Turkish
Commercial Code, is authorized, in whole or in part to delegate the
management to one or more Board of Directors members or a third
person pursuant to Internal Guidelines prepared by itself excluding
the duties and authorities which are defined under Article 375 of the
Turkish Commercial Code and which cannot be delegated . In addition,
the Board of Directors may delegate its authority to represent the
Company to one or more executive directors or to a third person as a
director.
The General Manager is the head of the execution. He performs his
duties in such capacity in accordance with the instructions given by
the Board of Directors or General Assembly, and within the scope and
authority granted by the Board of Directors or General Assembly. He
reports to the Board in respect of his executive act.
ARTICLE 14 - AUDITORS AND THEIR DUTIES
ARTICLE 14 - AUDITORS AND THEIR DUTIES
The General Assembly shall elect 2 auditors from among either the
shareholders or third parties.
This article was removed from the text.
The auditors shall be elected for a period of maximum three years. The
auditors may be re-elected.
The auditors are responsible for fulfilling the tasks stated in Articles 353 to
357 of the Turkish Commercial Code.
ARTICLE 15 – DIRECTORS AND AUDITORS FEE
ARTICLE 15 – REMUNERATION OF BOARD OF DIRECTORS’
The General Assembly determines the fee to be paid to the members of the
Board of Management and to the Auditors.
The remuneration of the Board of Directors shall be determined by the
General Assembly.
ARTICLE 16 – INDEPENDENT AUDITOR
ARTICLE 16 – AUDIT
In addition to the auditors, the Board of Directors shall elect one of the
international auditing firms incorporated in Turkey and acceptable to the
Capital Market Board as an Independent Auditor for the yearly auditing
of the Company’s commercial book and records. The provisions of Capital
Market Board regarding the approval of independent auditor and principals
of independent auditing shall be applied.
Relevant provisions of the Turkish Commercial Code and capital market
legislation shall be applicable with regard to audit of the Company.
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IMPORTANT DEVELOPMENTS AFTER THE
REPORTING PERIOD
(cid:20)(cid:21)(cid:18)(cid:11)(cid:3)(cid:5)(cid:12)(cid:12)(cid:221)(cid:216)(cid:12)(cid:5)(cid:20)(cid:216)(cid:217)(cid:216)(cid:13)(cid:221)(cid:8)(cid:216)(cid:26)(cid:13)(cid:5)(cid:20)(cid:12)(cid:5)(cid:18)(cid:216)(cid:221)(cid:1)(cid:128)(cid:217)(cid:128)(cid:221)(cid:1)(cid:13)(cid:5)(cid:14)(cid:4)(cid:13)(cid:5)(cid:14)(cid:20)(cid:221)(cid:15)(cid:14)(cid:221)(cid:1)(cid:18)(cid:20)(cid:9)(cid:3)(cid:12)(cid:5)(cid:19)(cid:221)(cid:15)(cid:6)(cid:221)(cid:1)(cid:19)(cid:19)(cid:15)(cid:3)(cid:9)(cid:1)(cid:20)(cid:9)(cid:15)(cid:14)
CURRENT VERSION
AMENDED VERSION
ARTICLE 17 – GENERAL ASSEMBLY
ARTICLE 17 – GENERAL ASSEMBLY
The below issues shall be applied for the General Assembly:
The followings shall be applied to General Assembly meetings:
1. Convening: The meeting of the General Assembly shall convene either for
ordinary or extraordinary meetings. The convening for the meetings shall be
made in accordance with the provisions of the Turkish Commercial Code and
Capital Market Law. The General Assembly may convene without invitation
in accordance with Article 370 of the Turkish Commercial Code.
1. Convening: The meeting of the General Assembly shall convene either as
ordinary or extraordinary meetings. In these meetings the agenda items,
prepared by the Board of Directors, shall be discussed and resolved
within the scope of the relevant provisions of the Turkish Commercial
Code. The extraordinary meetings of the General Assembly shall
convene and resolve as deemed necessary by the Company’s business.
The convening for the meetings shall be made in accordance with the
respective provisions of the Turkish Commercial Code and Capital Market
Law.
The General Assembly meeting procedures are regulated under the
Internal Guidelines. General Assembly meetings shall be conducted in
accordance with the related provisions of the Turkish Commercial Code
and the Internal Guidelines.
2. Attending the General Assembly Meeting by Electronical Means: Right
holders, who have a right to attend the general assembly meetings, can
attend such meetings by electronic means pursuant to article 1527 of
the Turkish Commercial Code. Pursuant to the Communiqué on Electronic
(cid:13)(cid:59)(cid:59)(cid:74)(cid:63)(cid:68)(cid:61)(cid:73)(cid:222)(cid:8)(cid:59)(cid:66)(cid:58)(cid:222)(cid:63)(cid:68)(cid:222)(cid:3)(cid:69)(cid:67)(cid:70)(cid:55)(cid:68)(cid:63)(cid:59)(cid:73)(cid:222)(cid:15)(cid:74)(cid:62)(cid:59)(cid:72)(cid:222)(cid:20)(cid:62)(cid:55)(cid:68)(cid:222)(cid:7)(cid:59)(cid:68)(cid:59)(cid:72)(cid:55)(cid:66)(cid:222)(cid:13)(cid:59)(cid:59)(cid:74)(cid:63)(cid:68)(cid:61)(cid:73)(cid:222)(cid:69)(cid:60)(cid:222)(cid:74)(cid:62)(cid:59)(cid:222)(cid:10)(cid:69)(cid:63)(cid:68)(cid:74)(cid:222)
Stock Companies, the Company shall procure the right holders to attend,
to deliver an opinion and to vote by electronical means, either setting
up the electronic general assembly system; or purchase related services
from the system providers that are spesifically found for such purposes.
Pursuant to this provision of the articles of association of the Company,
right holders and their representatives shall be procured to enjoy their
rights, as stipulated under the aforementioned Communiqué.
2. Date: Ordinary meetings of General Assembly shall convene once a year
and within the three months following the end of Company’s fiscal year, the
Extraordinary meetings of the General Assembly shall convene whenever
necessitated by the affairs of the Company.
3. Date: Ordinary meetings of General Assembly shall convene once a year
and within the three months following the end of Company’s fiscal year; the
extraordinary meetings of the General Assembly shall convene whenever
necessitated by the affairs of the Company.
3. Voting Rights and Appointing Proxy: In Ordinary or Extraordinary
meetings of the General Assembly, shareholders or their proxies shall have
one vote per share. In General Assembly meetings, shareholders may have
themselves represented through a proxy who may be a shareholder or a
non-shareholder. Proxies who are also shareholders of the Company are
authorised to vote both for themselves and on behalf of the shareholders
being represented by such proxies.
4. Voting Rights and Appointing Proxy: Right holders or their
representatives attending the General Assembly meeting shall enjoy
their voting rights pro rata to the sum of their nominal shares. Each
shareholder has one voting right. In General Assembly meetings,
shareholders may have themselves represented through a proxy who may
be a shareholder or a non-shareholder. Proxies who are also shareholders
of the Company are authorized to vote both for themselves and on behalf of
the shareholders being represented by such proxies.
Regulations of the Capital Market Board relating to proxy votes on behalf of
the shareholders shall apply.
Regulations of the Capital Market Board relating to proxy votes on behalf of
the shareholders shall apply.
TURKCELL ANNUAL REPORT 2017
117
CURRENT VERSION
AMENDED VERSION
4. Voting Method: Votes are cast in General Assembly meetings by the
raising of hands. However, votes shall be cast by secret ballot upon
the request of the shareholders representing one tenth of the shares
represented in a meeting. The related provisions of the Capital Market
Board shall apply.
5. Voting Method: Votes are cast in General Assembly meetings by raising of
hands. However, votes shall be cast by secret ballot upon the request of the
shareholders representing one tenth of the shares represented in a meeting.
The related provisions of the Capital Market Board shall apply.
5. Presidency of the General Assembly: President of the General Assembly
meetings shall be the chairman of the Board of Directors, in his absence, the
deputy chairman or in the absence of both, one of the members of the Board
of Directors. The secretary of the General Assembly may be elected from
among the shareholders or non-shareholders.
6. Presiding Committee of the General Assembly: President of the
General Assembly meetings shall be the Chairman of the Board of
Directors, in his absence, the Vice-Chairman; or in the absence of both,
President of the General Assembly shall be elected from among the
shareholders or non-shareholders.
6. Meetings and Decision Making Quorum: At meetings of the General
Assembly, the items specified in Article 369 of the Turkish Commercial Code
shall be discussed and resolved. Save as higher quorums are provided for
in the Turkish Commercial Code, meeting quorum at the General Assembly
requires the presence of at least 51% of shareholders represented by
themselves or proxies and save as higher quorums are provided for in the
Turkish Commercial Code decision making quorum requires the majority of
the affirmative of shareholders present at the meeting.
7. Meetings and Decision Quorum: Save as higher quorums are provided for
in the Turkish Commercial Code and the Capital Markets Law, meeting
quorum at the General Assembly requires the presence of at least 51%
of shareholders represented by themselves or proxies and save as higher
quorums are provided for in the Turkish Commercial Code and the Capital
Markets Law, decision quorum requires the majority of the affirmative
votes of shareholders present at the meeting.
However, the decisions regarding the amendments to the Articles of
Association of the Company excluding the increase in the ceiling of the
authorized share capital requires the presence of shareholders holding the
2/3 of the share capital and affirmative votes of 2/3 of the shareholders
represented in the meeting.
As an exception to the above-mentioned rule, and save as higher
quorums are provided for in the Turkish Commercial Code and the Capital
Markets Law, the decisions regarding the amendments to the Articles of
Association of the Company excluding the increase in the ceiling of the
authorized share capital requires the presence of shareholders holding the
2/3 of the share capital and affirmative votes of 2/3 of the shareholders
represented in the meeting.
7. Place of Meeting: General Assembly meetings shall convene at the
Company’s headquarters or upon the decision Board of Directors at another
suitable place of the city where the headquarters of the Company is
located.
8. Place of Meeting: General Assembly meetings shall convene at the
Company’s headquarters or upon the decision of the Board of Directors at
another suitable place of the city where the headquarters of the Company
is located.
ARTICLE 18 – PRESENCE OF A COMMISSIONER AT THE MEETINGS
ARTICLE 18 – PRESENCE OF A MINISTRY REPRESENTATIVE AT THE
MEETINGS
The presence of T.R. Ministry of Industry and Commerce Commissioner is
necessary at both ordinary and extraordinary General Assembly meetings.
The commissioner has to sign the meeting reports. General Assembly
meeting decisions taken in the absence of the commissioner and reports
which do not bear the commissioner’s signature shall not be valid.
The presence of T.R. Ministry of Customs and Commerce Representative
is necessary at both ordinary and extraordinary General Assembly
meetings. The Ministry Representative shall sign the meeting
minutes. General Assembly meeting decisions taken in the absence of a
Ministry Representative and minutes which do not bear the Ministry
Representative’s signature shall not be valid.
ARTICLE 19 - ANNOUNCEMENTS AND ANNUAL REPORTS OF THE
COMPANY
ARTICLE 19 - ANNOUNCEMENTS AND ANNUAL REPORTS
Announcements concerning the Company shall be made in the newspaper
published at the city where the Headquarters of the Company are located at
least 15 days in advance provided that the provisions of Article 37/4 of the
Turkish Commercial Code are reserved. If there is no newspaper published
at the place where the Headquarters are located, then the announcement
shall be made in the newspaper published at the closest place to the
Headquarters.
Announcements with regard to the Company shall be made in
accordance with provisions of Turkish Commercial Code, Capital
Markets Board regulations and relevant legislation.
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IMPORTANT DEVELOPMENTS AFTER THE
REPORTING PERIOD
(cid:20)(cid:21)(cid:18)(cid:11)(cid:3)(cid:5)(cid:12)(cid:12)(cid:221)(cid:216)(cid:12)(cid:5)(cid:20)(cid:216)(cid:217)(cid:216)(cid:13)(cid:221)(cid:8)(cid:216)(cid:26)(cid:13)(cid:5)(cid:20)(cid:12)(cid:5)(cid:18)(cid:216)(cid:221)(cid:1)(cid:128)(cid:217)(cid:128)(cid:1)(cid:13)(cid:5)(cid:14)(cid:4)(cid:13)(cid:5)(cid:14)(cid:20)(cid:221)(cid:15)(cid:14)(cid:221)(cid:1)(cid:18)(cid:20)(cid:9)(cid:3)(cid:12)(cid:5)(cid:19)(cid:221)(cid:15)(cid:6)(cid:221)(cid:1)(cid:19)(cid:19)(cid:15)(cid:3)(cid:9)(cid:1)(cid:20)(cid:9)(cid:15)(cid:14)
CURRENT VERSION
AMENDED VERSION
However, announcements regarding the invitation of the General Assembly,
in accordance with Article 368 of the Turkish Commercial Code, excluding
the dates of announcement and invitation shall be made two weeks in
advance and the date of the meeting shall be notified to the shareholders
via registered mail.
Provisions of Articles 397 and 438 of the Turkish Commercial Code shall be
applicable to the announcements regarding the share capital decrease and
liquidation of the Company.
The announcement period requirements, with regard to announcements
of the General Assemblies, provided by the applicable Turkish
Commercial Code, capital market legislations and the Capital Markets
Board’s Corporate Governance Principless shall be complied with. The
announcement of the General Assembly meeting shall be notified to
the shareholders minimum three weeks before the date of General
Assembly meeting, in addition to the means provided in the legislation,
via any means of communication including electronic communication
that ensure attendance of maximum number of shareholders.
Any other announcement and information responsibilities pursuant to the
Capital Market legislation and the Turkish Commercial Code are reserved.
The Board of Directors’ activity report and independent audit report
together with annual balance sheets and profit-loss statements, and
copies of each minutes of the general assembly meetings and list of
attendees; shall be provided at least within one month, prior to the
date of the general assembly meeting, with the Ministry of Customs
and Commerce or the attending Ministry Representative.
Financial tables and reports and also independent audit reports required by
the Capital Market Board shall be disclosed to the public and delivered to
the Capital Market Board in accordance with the provisions and principles
of the Board of Directors.
Financial tables and reports required by the Capital Market Board and
independent audit report, shall be disclosed to the public according to rules
and procedures set forth by Turkish Commercial Code and Capital Markets
Board.
ARTICLE 21 - DETERMINATION AND DISTRIBUTION OF THE PROFIT
ARTICLE 21 - DETERMINATION AND DISTRIBUTION OF THE PROFIT
If any, the net profit drawn up in the annual budget after the deduction
of all expenses and depreciation sums, reserves and taxes needed to be
paid by or charged to the Company, from the revenues of the Company as
determined by the end of the accounting term and after the deduction of
the previous years loss, shall be distributed in accordance with the Capital
Market Law and communiqués of the Capital Market Board as follows:
If any, the net profit drawn up in the annual budget after the deduction
of all expenses and depreciation sums, reserves and taxes needed
to be paid by or charged to the Company, from the revenues of the
Company as determined by the end of the accounting term and after
the deduction of the previous years’ loss if any, shall be distributed
respectively as follows:
a) 5% statutory reserve fund shall be set aside as the first statutory
reserve fund.
b) The first dividend shall be set aside from the remaining amount in the
ratio determined by the Capital Market Board.
c) Amount of the net profit remaining after the deduction of the amounts
stated in (a) and (b) may be distributed partially or fully as second dividend
or set aside as extraordinary statutory reserve fund as per the General
Assembly resolutions. The General Assembly may set aside an amount as
profit share for the members of the Board of Directors, officers, employees
and workers and foundations constituted for various purposes and this kind
of real or legal persons.
General Statutory Reserve Fund:
(cid:55)(cid:149)(cid:222)(cid:180)(cid:186)(cid:222)(cid:73)(cid:62)(cid:55)(cid:66)(cid:66)(cid:222)(cid:56)(cid:59)(cid:222)(cid:73)(cid:59)(cid:74)(cid:222)(cid:55)(cid:73)(cid:63)(cid:58)(cid:59)(cid:222)(cid:55)(cid:73)(cid:222)(cid:74)(cid:62)(cid:59)(cid:222)(cid:73)(cid:74)(cid:55)(cid:74)(cid:75)(cid:74)(cid:69)(cid:72)(cid:79)(cid:222)(cid:72)(cid:59)(cid:73)(cid:59)(cid:72)(cid:76)(cid:59)(cid:222)(cid:60)(cid:75)(cid:68)(cid:58)(cid:128)
First Dividend:
(cid:56)(cid:149)(cid:222)(cid:16)(cid:72)(cid:69)(cid:60)(cid:63)(cid:74)(cid:222)(cid:73)(cid:62)(cid:55)(cid:72)(cid:59)(cid:222)(cid:73)(cid:62)(cid:55)(cid:66)(cid:66)(cid:222)(cid:56)(cid:59)(cid:222)(cid:73)(cid:59)(cid:74)(cid:222)(cid:55)(cid:73)(cid:63)(cid:58)(cid:59)(cid:222)(cid:60)(cid:72)(cid:69)(cid:67)(cid:222)(cid:74)(cid:62)(cid:59)(cid:222)(cid:72)(cid:59)(cid:67)(cid:55)(cid:63)(cid:68)(cid:63)(cid:68)(cid:61)(cid:222)(cid:55)(cid:67)(cid:69)(cid:75)(cid:68)(cid:74)(cid:222)(cid:57)(cid:55)(cid:66)(cid:57)(cid:75)(cid:66)(cid:55)(cid:74)(cid:59)(cid:58)(cid:222)
by adding the amount of donation if made within a year, over the ratio
set by General assembly in line with the dividend distribution policy of
the Company according to Turkish Commercial Code and capital market
legislation.
(cid:57)(cid:149)(cid:222)(cid:6)(cid:69)(cid:66)(cid:66)(cid:69)(cid:77)(cid:63)(cid:68)(cid:61)(cid:222)(cid:74)(cid:62)(cid:59)(cid:222)(cid:58)(cid:59)(cid:58)(cid:75)(cid:57)(cid:74)(cid:63)(cid:69)(cid:68)(cid:222)(cid:69)(cid:60)(cid:222)(cid:74)(cid:62)(cid:59)(cid:222)(cid:55)(cid:56)(cid:69)(cid:76)(cid:59)(cid:222)(cid:55)(cid:67)(cid:69)(cid:75)(cid:68)(cid:74)(cid:73)(cid:222)(cid:74)(cid:62)(cid:59)(cid:222)(cid:7)(cid:59)(cid:68)(cid:59)(cid:72)(cid:55)(cid:66)(cid:222)(cid:1)(cid:73)(cid:73)(cid:59)(cid:67)(cid:56)(cid:66)(cid:79)(cid:222)
has the right to distribute dividend to the Board of Directors members,
employees of the Company, foundations and real and legal persons
apart from the shareholders.
CURRENT VERSION
AMENDED VERSION
TURKCELL ANNUAL REPORT 2017
119
d) It may not be resolved that any other reserve funds be set aside or left
for the following year unless reserve funds and first dividend stated in the
Articles of Association for the shareholders are set aside in compliance
with the legislation and it may not be resolved that the profit be distributed
to the members of the Board of Directors, officers and employees and
foundations constituted for various purposes and this kind of real or legal
persons unless first dividend is distributed.
e) The dividend can be distributed to all the shares that exist as of the
accounting period, irregardless of their issue or enforcement dates.
Article 466/2(3) of the Turkish Commercial Code is reserved.
Second Dividend:
(cid:58)(cid:149)(cid:222)(cid:20)(cid:62)(cid:59)(cid:222)(cid:7)(cid:59)(cid:68)(cid:59)(cid:72)(cid:55)(cid:66)(cid:222)(cid:1)(cid:73)(cid:73)(cid:59)(cid:67)(cid:56)(cid:66)(cid:79)(cid:222)(cid:63)(cid:73)(cid:222)(cid:59)(cid:68)(cid:74)(cid:63)(cid:74)(cid:66)(cid:59)(cid:58)(cid:222)(cid:74)(cid:69)(cid:222)(cid:58)(cid:63)(cid:73)(cid:74)(cid:72)(cid:63)(cid:56)(cid:75)(cid:74)(cid:59)(cid:125)(cid:222)(cid:70)(cid:55)(cid:72)(cid:74)(cid:63)(cid:55)(cid:66)(cid:66)(cid:79)(cid:222)(cid:69)(cid:72)(cid:222)(cid:60)(cid:75)(cid:66)(cid:66)(cid:79)(cid:125)(cid:222)(cid:74)(cid:62)(cid:59)(cid:222)
amount of the net profit remaining after the deduction of the amounts
(cid:73)(cid:74)(cid:55)(cid:74)(cid:59)(cid:58)(cid:222)(cid:63)(cid:68)(cid:222)(cid:148)(cid:55)(cid:149)(cid:125)(cid:222)(cid:148)(cid:56)(cid:149)(cid:222)(cid:55)(cid:68)(cid:58)(cid:222)(cid:148)(cid:57)(cid:149)(cid:222)(cid:69)(cid:72)(cid:222)(cid:74)(cid:69)(cid:222)(cid:73)(cid:59)(cid:74)(cid:222)(cid:55)(cid:73)(cid:63)(cid:58)(cid:59)(cid:222)(cid:74)(cid:62)(cid:63)(cid:73)(cid:222)(cid:55)(cid:67)(cid:69)(cid:75)(cid:68)(cid:74)(cid:222)(cid:55)(cid:73)(cid:222)(cid:55)(cid:222)(cid:72)(cid:59)(cid:73)(cid:59)(cid:72)(cid:76)(cid:59)(cid:222)(cid:60)(cid:75)(cid:68)(cid:58)(cid:222)
voluntarily according to Article 521 of Turkish Commercial Code.
(cid:59)(cid:149)(cid:222)(cid:176)(cid:175)(cid:186)(cid:222)(cid:69)(cid:60)(cid:222)(cid:74)(cid:62)(cid:59)(cid:222)(cid:55)(cid:67)(cid:69)(cid:75)(cid:68)(cid:74)(cid:125)(cid:222)(cid:77)(cid:62)(cid:63)(cid:57)(cid:62)(cid:222)(cid:77)(cid:59)(cid:72)(cid:59)(cid:222)(cid:57)(cid:55)(cid:66)(cid:57)(cid:75)(cid:66)(cid:55)(cid:74)(cid:59)(cid:58)(cid:222)(cid:56)(cid:79)(cid:222)(cid:74)(cid:62)(cid:59)(cid:222)(cid:58)(cid:59)(cid:58)(cid:75)(cid:57)(cid:74)(cid:63)(cid:69)(cid:68)(cid:222)(cid:69)(cid:60)(cid:222)
profit share in the amount of %5 of the capital from the portion which
were decided to be distributed to shareholders and other persons who
participate the profit, shall be added to general statutory reserve fund
according to 2 paragraph of Article 519 of Turkish Commercial Code.
Unless statutory legal reserves and dividend portion which is
determined to be distributed to the shareholders by the articles of
association or dividend distribution policy of the company are set
aside the Company shall not decide to reserve any other funds, to carry
out profit to the next year, to distribute dividend for the members of
the Board of Directors, employees of the Company, foundations and
real or legal persons apart from shareholders and unless the dividend
determined to be distributed to the shareholders is paid in cash, any
portion of the dividedn cannot be distributed to these persons.
Dividend shall be distributed equally to all current shares as of the
date of distribution regardless their issuance and acquisition dates.
The procedures and date of dividend distribution shall be decided by
General Assembly upon Board of Directors’ proposal.
Resolution of General Assembly regarding distribution of dividend
which was taken pursuant to this Article of Association cannot not be
revoked.
The Company is entitled to decide to distribute advance dividend in
accordance with the conditions established by the capital market
legislation and other related legislation.
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ARTICLE 24 - LEGAL PROVISIONS
ARTICLE 24 - LEGAL PROVISIONS
The provisions of the Turkish Commercial Code, the Capital Market Law
and related legislations shall be applicable to matters not covered by the
Articles of Association.
This Article was removed from the text.
ARTICLE 25 - BONDS AND OTHER SECURITIES
ARTICLE 25 - BONDS AND OTHER SECURITIES
The Company may issue bonds and any other debt securities bearing the
features of capital market securities which the Board of Directors may be
authorized to issue, in order to sell them to individuals or legal entities,
in Turkey or abroad in accordance with the Turkish Commercial Code, the
Capital Market Law and any other related legislation via resolutions of
Board of Directors.
The Company may also issue convertible bonds as per resolutions of Board
of Directors in compliance with the regulations of the Capital Market Board.
The Company shall be entitled to issue bonds and other capital market
instruments by way of a Board of Directors’ resolution, in accordance
with the provisions of the Turkish Commercial Code and capital market
legislation.
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IMPORTANT DEVELOPMENTS AFTER THE
REPORTING PERIOD
(cid:20)(cid:21)(cid:18)(cid:11)(cid:3)(cid:5)(cid:12)(cid:12)(cid:221)(cid:216)(cid:12)(cid:5)(cid:20)(cid:216)(cid:217)(cid:216)(cid:13)(cid:221)(cid:8)(cid:216)(cid:26)(cid:13)(cid:5)(cid:20)(cid:12)(cid:5)(cid:18)(cid:216)(cid:221)(cid:1)(cid:128)(cid:217)(cid:128)(cid:221)(cid:1)(cid:13)(cid:5)(cid:14)(cid:4)(cid:13)(cid:5)(cid:14)(cid:20)(cid:221)(cid:15)(cid:14)(cid:221)(cid:1)(cid:18)(cid:20)(cid:9)(cid:3)(cid:12)(cid:5)(cid:19)(cid:221)(cid:15)(cid:6)(cid:221)(cid:1)(cid:19)(cid:19)(cid:15)(cid:3)(cid:9)(cid:1)(cid:20)(cid:9)(cid:15)(cid:14)
AMENDED VERSION
ARTICLE 26 - COMPLIANCE WITH CORPORATE GOVERNANCE PRINCIPLES
Compliance with the Capital Market Board’s mandatory Corporate Governance Principles shall be ensured. Transactions and Board of Directors’
decisions in violation of the mandatory Corporate Governance Principles shall be deemed to be in violation of the articles of association, and
invalid.
With regard to the transactions deemed material within the context of implementation of Corporate Governance Principles, and related party
transactions of the Company as well as for the transactions with respect to giving guarantee, pledge and mortgage in favor of the third parties,
Corporate Governance regulations of Capital Market Board shall be complied with.
The number and qualifications of independent board members who will be appointed to the Board of Directors shall be determined in accordance
with the regulations in the Corporate Governance Principles of Capital Market Board.
13.02.2018
Announcement Regarding the Licensing Process of Paycell Limited Liability Company
With reference to our announcements dated September 21st, 2017, November 21st, 2017 and January 22nd, 2018, the application for payment infrastructure
operator license of the financial company titled “Paycell LLC”, established in Ukraine by our wholly owned subsidiary lifecell Limited Liability Company
(“lifecell LLC”) based in Ukraine, has been made and the application preparation process for its local currency transfer license is ongoing.
Board Decision Date for Acquisition
Title of Non-current Financial Asset Acquired
Field of Activity of Non-current Financial Asset whose Shares were being Acquired
Capital of Noncurrent Financial Asset
Acquirement Way
Date on which the Transaction was/will be Completed
Acquisition Conditions
Nominal Value of Shares Acquired
Purchase Price Per Share
Total Purchasing Value
Ratio of New Shares Acquired to Capital of Non-current Financial Asset (%)
Total Ratio of Shares Owned in Capital of Non-current Financial Asset After Transaction (%)
Total Voting Right Ratio Owned in Non-current Financial Asset After Transaction (%)
Ratio of Non-current Financial Asset Acquired to Total Assets in Latest Disclosed Financial
Statements of Company (%)
Effects on Company Operations
Did Takeover Bid Obligation Arise?
Will Exemption Application be Made, if Takeover Bid Obligation Arised?
Title/ Name-Surname of Counter Party
Relation with Counter Party if any
Value Determination Method of Non-current Financial Asset
Did Valuation Report be Prepared?
Reason for not Preparing Valuation Report if it was not Prepared
Value Determined in Valuation Report if Exists
Reasons if Transaction wasn’t/will not be performed in Accordance with Valuation Report
26.05.2017
Paycell Limited Liability Company (“Paycell LLC”)
Financial services (e-money, money transfer, loans, leasing)
USD 2,000,000 (or equivalent in other currencies)
Establishment
Once local currency transfer license is obtained.
-
-
-
-
-
-
-
-
-
No
No
-
-
-
No
Not required by the legislation.
-
-
TURKCELL ANNUAL REPORT 2017
121
13.02.2017
Announcement Regarding the Capital Increase in Lifecell Ventures
The capital of our 100% owned subsidiary Lifecell Ventures Coöperatief U.A. (“Lifecell Ventures”) is increased by USD 30,000,000 (EUR 24,463,834) to
EUR 1,680,675,660. Our Company’s pre-emption rights with respect to the capital increase is fully paid.
15.02.2018
Announcement Regarding Dividend Distribution Proposal
In line with our Company’s dividend policy approved during the Ordinary General Assembly Meeting held on March 26th, 2015 and pursuant the resolution
disclosed on January 30th, 2018, for not factoring in the negative effect of the provision amount recognized with respect to Law No: 7061, Turkcell
Board of Directors has taken the decision to submit the proposal on the distribution of our Company’s dividend in a gross amount of TRY 1,239,500,000
and equivalent of a gross cash dividend of TRY 0.5634091 (net TRY 0.4788977) per ordinary share with a nominal value of TRY 1, in accordance with the
dividend distribution proposal table which have been prepared for the related fiscal year, to the discussion and approval of the Ordinary General Assembly
of Shareholders to be held for fiscal year 2017.
Furthermore, Board of Directors decided to propose distribution of the respective amount to the shareholders in cash and in three equal installments as of
18 June 2018, 17 September 2018 and 17 December 2018, regardless of issuance and acquisition date of these shares while in proportion to shares held.
Herewith enclosed are the details of the dividend distribution proposal decision taken, the dividend distribution table and dividend per share.
(cid:16)(cid:72)(cid:69)(cid:70)(cid:69)(cid:73)(cid:59)(cid:58)(cid:222)(cid:7)(cid:72)(cid:69)(cid:73)(cid:73)(cid:222)(cid:3)(cid:55)(cid:73)(cid:62)(cid:222)(cid:4)(cid:63)(cid:76)(cid:63)(cid:58)(cid:59)(cid:68)(cid:58)(cid:222)(cid:70)(cid:59)(cid:72)(cid:222)(cid:15)(cid:72)(cid:58)(cid:63)(cid:68)(cid:55)(cid:72)(cid:79)(cid:222)(cid:19)(cid:62)(cid:55)(cid:72)(cid:59)(cid:222)(cid:77)(cid:63)(cid:74)(cid:62)(cid:222)(cid:55)(cid:222)(cid:68)(cid:69)(cid:67)(cid:63)(cid:68)(cid:55)(cid:66)(cid:222)(cid:76)(cid:55)(cid:66)(cid:75)(cid:59)(cid:222)(cid:69)(cid:60)(cid:222)(cid:20)(cid:18)(cid:25)(cid:222)(cid:176)(cid:222)(cid:148)(cid:20)(cid:18)(cid:25)(cid:149)
First Installment
0.1878030
Second Installment
0.1878030
Third Installment
0.1878031
(cid:16)(cid:72)(cid:69)(cid:70)(cid:69)(cid:73)(cid:59)(cid:58)(cid:222)(cid:14)(cid:59)(cid:74)(cid:222)(cid:3)(cid:55)(cid:73)(cid:62)(cid:222)(cid:4)(cid:63)(cid:76)(cid:63)(cid:58)(cid:59)(cid:68)(cid:58)(cid:222)(cid:70)(cid:59)(cid:72)(cid:222)(cid:15)(cid:72)(cid:58)(cid:63)(cid:68)(cid:55)(cid:72)(cid:79)(cid:222)(cid:19)(cid:62)(cid:55)(cid:72)(cid:59)(cid:222)(cid:77)(cid:63)(cid:74)(cid:62)(cid:222)(cid:55)(cid:222)(cid:68)(cid:69)(cid:67)(cid:63)(cid:68)(cid:55)(cid:66)(cid:222)(cid:76)(cid:55)(cid:66)(cid:75)(cid:59)(cid:222)(cid:69)(cid:60)(cid:222)(cid:20)(cid:18)(cid:25)(cid:222)(cid:176)(cid:222)(cid:148)(cid:20)(cid:18)(cid:25)(cid:149)
First Installment
0.1596326
Second Installment
0.1596326
Third Installment
0.1596325
Proposed Cash Dividend Date
First Installment
18.06.2018
Second Installment
17.09.2018
Third Installment
17.12.2018
Total
0.5634091
Total
0.4788977
C
O
R
P
O
R
A
T
E
G
O
V
E
R
N
A
N
C
E
Note: The gross cash dividend per ordinary share with a nominal value of TRY 1 in each installment will exactly be TRY 0.1878030 (net TRY 0.1596326).
However, this cannot be stated as such in the above tables which are part of Public Disclosure Platform disclosure due to technical reasons.
Notice: Please note that the payment of the dividend described above is contingent upon our AGM being duly convened and on obtaining a favorable vote
from our shareholders at such meeting.
122
TURKCELL ANNUAL REPORT 2017
IMPORTANT DEVELOPMENTS AFTER THE
REPORTING PERIOD
ANNEX: Board of Directors Dividend Distribution Proposal
The Board of Directors of the Company decided to distribute an aggregate gross cash of TRY 1,239,500,000 which corresponds to approximately 63% of
Turkcell’s net distributable income pertaining to year 2017 to be paid in cash to our shareholders within the below conditions explained hereunder as part
of the resolution:
1. As a result of the activities of our Company, pertaining to the period between January 1, 2017 and December 31, 2017, our Company’s profit, calculated
according to the consolidated financial statements, which were audited independently in accordance with the Capital Markets Board Communiqué
numbered II-14.1, named “Communiqué Regarding the Financial Reporting in Capital Markets” is TRY 2,550,886,631- and the commercial profit calculated
according to the provisions of Turkish Commercial Code is TRY 485,255,736-,
2. TRY 1,979,129,024- after tax profit calculated according to the consolidated financial statements shall be taken as the basis for dividend distribution in
accordance with “Guide of Dividend” which was published on 27 January 2014.
3. As the ceiling designated in the Turkish Commercial Code (TCC) for first legal reserve has been reached by our company; no first legal reserve set aside,
4. TRY 1,979,129,024- is the distributable dividend of the Company, pertaining to year 2017 and TRY 2,092,214,024- calculated by adding TRY
113,085,000- which is the aggregate amount of the donations made during the year, to the above mentioned amount shall be taken as the first dividend
basis,
5. In accordance with the provisions declared in Capital Markets Board (“CMB”) Communiqué Serial: II-19.1 on “Dividends”, clauses set in the article of
association of our company and the dividend distribution policy that was approved during the Ordinary General Assembly Meeting of our Company held
on March 26th, 2015; TRY 418,442,805-, which is 20%, of the first dividend basis, amounting to TRY 2,092,214,024- shall be distributed as the first cash
dividend and the secondary reserve amounting to TRY 112,950,000- shall be separated from the rest of the net distributable current year profit,
a. The total amount of TRY 1,239,500,000-, which shall be distributed in cash, shall be distributed from statutory previous year’s profit.
b. The withholding tax deductions shall be applicable on the amount to be distributed in cash, TRY 1,239,500,000- as mentioned hereinabove,
c. In this respect, gross amount of TRY 0.5634091- shall be paid in cash to our shareholders for each share, having a nominal value of TRY 1.- (One
Turkish Lira),and hence the aggregate gross amount of cash dividend payment shall be TRY 1,239,500,000-,
6. TRY 626,679,024- which is the remaining of the 2017 year’s distributable profit after the cash dividend distribution shall be :
a. Regarded as previous year’s profit and set aside within the Company,
b. The withholding tax deductions shall be applicable on the amount, which is set aside as 2017 fiscal year’s profit, in case such amount shall be subject
to redistribution
(cid:20)(cid:21)(cid:18)(cid:11)(cid:3)(cid:5)(cid:12)(cid:12)(cid:222)(cid:217)(cid:12)(cid:5)(cid:20)(cid:217)(cid:218)(cid:217)(cid:13)(cid:222)(cid:8)(cid:217)(cid:26)(cid:13)(cid:5)(cid:20)(cid:12)(cid:5)(cid:18)(cid:217)(cid:222)(cid:1)(cid:128)(cid:218)(cid:128)(cid:222)(cid:177)(cid:175)(cid:176)(cid:182)(cid:222)(cid:4)(cid:9)(cid:22)(cid:9)(cid:4)(cid:5)(cid:14)(cid:4)(cid:222)(cid:4)(cid:9)(cid:19)(cid:20)(cid:18)(cid:9)(cid:2)(cid:21)(cid:20)(cid:9)(cid:15)(cid:14)(cid:222)(cid:20)(cid:1)(cid:2)(cid:12)(cid:5)(cid:222)(cid:148)(cid:20)(cid:18)(cid:25)(cid:149)(cid:222)
(cid:222)
(cid:222)
(cid:222)
(cid:222)
TURKCELL ANNUAL REPORT 2017
123
1)
2)
3)
4)
5)
6)
7)
8)
9)
10)
Paid / Issued Capital
Total Legal Reserves (in accordance with
statutory records)
If there is information about privilege in
dividend distribution in accordance with the
Articles of Association
DISTRIBUTION OF THE PROFIT FOR THE
PERIOD
Profit for the period
Tax (-)
Net Profit for the period (=)
Prior Years’ Loses (-)
(3-4)
Primary Legal Reserves (-)
((5YK-6YK)*0.05)
NET DISTRIBUTABLE PROFIT (=)
Donations made during the year
Net distributable profit including donations
that is the base of calculation of first legal
reserves
(5-6-7)
(8+9)
11)
First Dividend
a
b
c
-Cash
-Cash
-Share
-Total
12)
Dividend paid to preference shares
13)
14)
15)
16)
17)
18)
19)
20)
Dividends paid to Board Members, employees
and etc.
Dividend paid to Redeemed Share Owners
Secondary Dividend
Secondary Legal Reserves
Status Reserves
Special Reserves
EXTRA ORDINARY RESERVES (*)
Other Distributable Sources
-Prior years' profits (**)
-Extra Ordinary Reserves
-Other Distributable Reserves in accordance
with legislation and Articles of Association
(10*the minimumrate determined by the
CMB)
Amount of the dividend for privileged
shareholders in accordance with the articles
of Association
((11+12+13+14+15)-(H5*0.05))/10
8-(11a+12+13+14+16+17+18)
According to CMB
2,550,886,631
571,757,607
1,979,129,024
-
-
1,979,129,024
113,085,000
2,092,214,024
418,442,805
-
418,442,805
-
418,442,805
-
-
-
821,057,195
112,950,000
-
-
626,679,024
-
-
-
-
2,200,000,000
1,407,842,712
According to
Statutory
(cid:18)(cid:59)(cid:57)(cid:69)(cid:72)(cid:58)(cid:73)(cid:222)(cid:148)(cid:19)(cid:18)(cid:149)(cid:222)
485,255,736
11,557,098
473,698,638
-
-
473,698,638
(3-4)
((5YK-
6YK)*0.05)
(5-6-7)
1,239,500,000
(*)TRY 626.679.024- which is the remaining of the 2017 year’s distributable profit after the cash dividend distribution made, shall be regarded as previous year’s profit in SPK records,
(**) Pertaining to the period between January 1, 2017 and December 31, 2017, our Company’s profit calculated according to the consolidated financial statements, which were audited independently in
accordance with the“Communiqué Regarding the Financial Reporting in Capital Markets” the total amount of TRY 1.239.500.000, which shall be distributed in cash from statutory previous year’s profit
(***) Dividend regarding to buy-back shares will be recorded in free reserves at statutory accounts.
INFORMATION ON DIVIDEND PAY OUT RATIO(cid:148)(cid:176)(cid:149)
INFORMATION ON DIVIDEND PER SHARE
GROUP
TOTAL DIVIDEND AMOUNT
(cid:148)(cid:20)(cid:18)(cid:25)(cid:149)
DIVIDEND FOR A SHARE WITH A NOMINAL VALUE OF 1 TRY
(cid:1)(cid:13)(cid:15)(cid:21)(cid:14)(cid:20)(cid:222)(cid:148)(cid:20)(cid:18)(cid:25)(cid:149)(cid:222)
(cid:18)(cid:1)(cid:20)(cid:9)(cid:15)(cid:222)(cid:148)(cid:186)(cid:149)(cid:222)
C
O
R
P
O
R
A
T
E
G
O
V
E
R
N
A
N
C
E
GROSS
NET
1,239,500,000
A
B
TOTAL
There are no groups of shares in Our Company. Witholding tax will beapplied on distributed gross dividend in accordance with
applicable tax regulations on the distribution date.
A
B
TOTAL
There are no groups of shares in Our Company. Witholding tax will be applied on distributed gross dividend in accordance with
applicable tax regulations on the distribution date.
1,053,575,000
0.4788977
0.5634091
56.34
47.89
RATIO OF DIVIDEND DISTRIBUTION TO THE NET DISTRIBUTABLE PROFIT INCLUDING DONATIONS
DISTRIBUTED DIVIDEND
(cid:1)(cid:13)(cid:15)(cid:21)(cid:14)(cid:20)(cid:222)(cid:148)(cid:20)(cid:18)(cid:25)(cid:149)(cid:222)(cid:20)(cid:15)(cid:222)
SHAREHOLDERS
1,239,500,000
RATIO OF SHAREHOLDERS DIVIDEND DISTRIBUTION TO THE NET DISTRIBUTABLE PROFIT INCLUDING
(cid:4)(cid:15)(cid:14)(cid:1)(cid:20)(cid:9)(cid:15)(cid:14)(cid:19)(cid:222)(cid:148)(cid:186)(cid:149)
59.24
(1) Group shares will be disclosed separately if there exists any privileged shares.
124
TURKCELL ANNUAL REPORT 2017
IMPORTANT DEVELOPMENTS AFTER THE
REPORTING PERIOD
FEBRUARY 16, 2018
(cid:1)(cid:68)(cid:68)(cid:69)(cid:75)(cid:68)(cid:57)(cid:59)(cid:67)(cid:59)(cid:68)(cid:74)(cid:222)(cid:18)(cid:59)(cid:61)(cid:55)(cid:72)(cid:58)(cid:63)(cid:68)(cid:61)(cid:222)(cid:74)(cid:62)(cid:59)(cid:222)(cid:9)(cid:68)(cid:57)(cid:69)(cid:72)(cid:70)(cid:69)(cid:72)(cid:55)(cid:74)(cid:63)(cid:69)(cid:68)(cid:222)(cid:69)(cid:60)(cid:222)(cid:20)(cid:75)(cid:72)(cid:65)(cid:57)(cid:59)(cid:66)(cid:66)(cid:222)(cid:47)(cid:80)(cid:59)(cid:66)(cid:222)(cid:6)(cid:63)(cid:68)(cid:55)(cid:68)(cid:73)(cid:67)(cid:55)(cid:68)(cid:222)(cid:1)(cid:128)(cid:218)(cid:128)
(cid:23)(cid:63)(cid:74)(cid:62)(cid:221)(cid:72)(cid:59)(cid:60)(cid:59)(cid:72)(cid:59)(cid:68)(cid:57)(cid:59)(cid:221)(cid:74)(cid:69)(cid:221)(cid:69)(cid:75)(cid:72)(cid:221)(cid:55)(cid:68)(cid:68)(cid:69)(cid:75)(cid:68)(cid:57)(cid:59)(cid:67)(cid:59)(cid:68)(cid:74)(cid:221)(cid:58)(cid:55)(cid:74)(cid:59)(cid:58)(cid:221)(cid:10)(cid:75)(cid:66)(cid:79)(cid:221)(cid:177)(cid:182)(cid:74)(cid:62)(cid:125)(cid:221)(cid:177)(cid:175)(cid:176)(cid:181)(cid:125)(cid:221)(cid:20)(cid:75)(cid:72)(cid:65)(cid:57)(cid:59)(cid:66)(cid:66)(cid:221)(cid:47)(cid:80)(cid:59)(cid:66)(cid:221)(cid:6)(cid:63)(cid:68)(cid:55)(cid:68)(cid:73)(cid:67)(cid:55)(cid:68)(cid:221)(cid:1)(cid:128)(cid:217)(cid:128)(cid:125)(cid:221)(cid:62)(cid:55)(cid:73)(cid:221)(cid:56)(cid:59)(cid:59)(cid:68)(cid:221)(cid:63)(cid:68)(cid:57)(cid:69)(cid:72)(cid:70)(cid:69)(cid:72)(cid:55)(cid:74)(cid:59)(cid:58)(cid:221)(cid:77)(cid:63)(cid:74)(cid:62)(cid:221)(cid:55)(cid:68)(cid:221)(cid:63)(cid:68)(cid:63)(cid:74)(cid:63)(cid:55)(cid:66)(cid:221)(cid:57)(cid:55)(cid:70)(cid:63)(cid:74)(cid:55)(cid:66)(cid:221)(cid:69)(cid:60)(cid:221)(cid:20)(cid:18)(cid:25)(cid:178)(cid:180)(cid:221)(cid:67)(cid:63)(cid:66)(cid:66)(cid:63)(cid:69)(cid:68)(cid:221)
(cid:60)(cid:69)(cid:66)(cid:66)(cid:69)(cid:77)(cid:63)(cid:68)(cid:61)(cid:221)(cid:72)(cid:59)(cid:61)(cid:63)(cid:73)(cid:74)(cid:72)(cid:79)(cid:221)(cid:55)(cid:68)(cid:58)(cid:221)(cid:55)(cid:68)(cid:68)(cid:69)(cid:75)(cid:68)(cid:57)(cid:59)(cid:67)(cid:59)(cid:68)(cid:74)(cid:128)(cid:221)(cid:20)(cid:75)(cid:72)(cid:65)(cid:57)(cid:59)(cid:66)(cid:66)(cid:221)(cid:47)(cid:80)(cid:59)(cid:66)(cid:221)(cid:6)(cid:63)(cid:68)(cid:55)(cid:68)(cid:73)(cid:67)(cid:55)(cid:68)(cid:221)(cid:1)(cid:128)(cid:217)(cid:128)(cid:125)(cid:221)(cid:77)(cid:63)(cid:66)(cid:66)(cid:221)(cid:61)(cid:72)(cid:55)(cid:68)(cid:74)(cid:221)(cid:66)(cid:69)(cid:55)(cid:68)(cid:73)(cid:221)(cid:77)(cid:63)(cid:74)(cid:62)(cid:63)(cid:68)(cid:221)(cid:74)(cid:62)(cid:59)(cid:221)(cid:60)(cid:72)(cid:55)(cid:67)(cid:59)(cid:77)(cid:69)(cid:72)(cid:65)(cid:221)(cid:69)(cid:60)(cid:221)(cid:9)(cid:73)(cid:66)(cid:55)(cid:67)(cid:63)(cid:57)(cid:221)(cid:60)(cid:63)(cid:68)(cid:55)(cid:68)(cid:57)(cid:63)(cid:68)(cid:61)(cid:221)(cid:70)(cid:72)(cid:63)(cid:68)(cid:57)(cid:63)(cid:70)(cid:66)(cid:59)(cid:73)(cid:221)(cid:60)(cid:69)(cid:72)(cid:221)(cid:70)(cid:75)(cid:72)(cid:57)(cid:62)(cid:55)(cid:73)(cid:59)(cid:73)(cid:221)(cid:69)(cid:60)(cid:221)
goods and services.
Board Decision Date for Acquisition
Were Majority of Independent Board Members’ Approved the Board Decision for Acquisition
Title of Non-current Financial Asset Acquired
Field of Activity of Non-current Financial Asset whose Shares were being Acquired
Capital of Noncurrent Financial Asset
Acquirement Way
27.07.2016
-
(cid:20)(cid:75)(cid:72)(cid:65)(cid:57)(cid:59)(cid:66)(cid:66)(cid:221)(cid:47)(cid:80)(cid:59)(cid:66)(cid:221)(cid:6)(cid:63)(cid:68)(cid:55)(cid:68)(cid:73)(cid:67)(cid:55)(cid:68)(cid:221)(cid:1)(cid:128)(cid:217)(cid:128)
Financing activities through granting loans within the
framework of Islamic financing principles for purchases of
goods and services
TRY 35,000,000
Incorporation
Date on which the Transaction was/will be Completed
Completed following registration and announcement.
Acquisition Conditions
Detailed Conditions if it is a Timed Payment
Nominal Value of Shares Acquired
Purchase Price Per Share
Total Purchasing Value
Ratio of New Shares Acquired to Capital of Non-current Financial Asset (%)
Total Ratio of Shares Owned in Capital of Non-current Financial Asset After Transaction (%)
Total Voting Right Ratio Owned in Non-current Financial Asset After Transaction (%)
Ratio of Non-current Financial Asset Acquired to Total Assets in Latest Disclosed Financial
Statements of Company (%)
Ratio of Transaction Value to Sales in Latest Annual Financial Statements of Company (%)
Effects on Company Operations
Did Takeover Bid Obligation Arised?
Will Exemption Application be Made, if Takeover Bid Obligation Arised?
Title/ Name-Surname of Counter Party
Is the Counter Party Related Party According to CMB regulations?
Relation with Counter Party if any
Agreement Signing Date if Exists
Value Determination Method of Non-current Financial Asset
Did Valuation Report be Prepared?
-
-
-
-
-
-
-
-
-
-
-
No
No
-
No
-
-
-
No
Reason for not Preparing Valuation Report if it was not Prepared
Not required by the legislation.
Date and Number of Valuation Report
Title of Valuation Company Prepared Report
Value Determined in Valuation Report if Exists
Reasons if Transaction wasn’t/will not be performed in Accordance with Valuation Report
-
-
-
-
TURKCELL ANNUAL REPORT 2017
125
FEBRUARY 21, 2018
Announcement Regarding the Board of Directors’ Resolution on Annual General Assembly
Our Company’s Board of Directors has decided:
• to call the Annual General Assembly Meeting of our Company pertaining to the year of 2017 to convene on March 29, 2018 at 10:00 am at the address
(cid:69)(cid:60)(cid:221)(cid:136)(cid:1)(cid:79)(cid:58)(cid:96)(cid:68)(cid:59)(cid:76)(cid:66)(cid:59)(cid:72)(cid:221)(cid:13)(cid:55)(cid:62)(cid:55)(cid:66)(cid:66)(cid:59)(cid:73)(cid:63)(cid:125)(cid:221)(cid:216)(cid:68)(cid:102)(cid:68)(cid:109)(cid:221)(cid:3)(cid:55)(cid:58)(cid:58)(cid:59)(cid:73)(cid:63)(cid:125)(cid:221)(cid:14)(cid:69)(cid:127)(cid:177)(cid:175)(cid:142)(cid:178)(cid:181)(cid:125)(cid:221)(cid:3)(cid:221)(cid:2)(cid:66)(cid:69)(cid:65)(cid:125)(cid:221)(cid:3)(cid:69)(cid:68)(cid:60)(cid:59)(cid:72)(cid:59)(cid:68)(cid:57)(cid:59)(cid:221)(cid:8)(cid:55)(cid:66)(cid:66)(cid:125)(cid:221)(cid:11)(cid:109)(cid:213)(cid:109)(cid:65)(cid:79)(cid:55)(cid:66)(cid:96)(cid:221)(cid:15)(cid:60)(cid:63)(cid:73)(cid:70)(cid:55)(cid:72)(cid:65)(cid:125)(cid:221)(cid:178)(cid:179)(cid:183)(cid:180)(cid:179)(cid:125)(cid:221)(cid:13)(cid:55)(cid:66)(cid:74)(cid:59)(cid:70)(cid:59)(cid:142)(cid:216)(cid:73)(cid:74)(cid:55)(cid:68)(cid:56)(cid:75)(cid:66)(cid:137)(cid:221)(cid:55)(cid:68)(cid:58)(cid:221)(cid:74)(cid:69)(cid:221)(cid:58)(cid:63)(cid:73)(cid:57)(cid:75)(cid:73)(cid:73)(cid:221)(cid:74)(cid:62)(cid:59)(cid:221)(cid:55)(cid:74)(cid:74)(cid:55)(cid:57)(cid:62)(cid:59)(cid:58)(cid:221)
agenda; and
• (cid:74)(cid:69)(cid:221)(cid:55)(cid:70)(cid:70)(cid:69)(cid:63)(cid:68)(cid:74)(cid:221)(cid:16)(cid:77)(cid:3)(cid:221)(cid:2)(cid:55)(cid:215)(cid:96)(cid:67)(cid:73)(cid:96)(cid:80)(cid:221)(cid:4)(cid:59)(cid:68)(cid:59)(cid:74)(cid:63)(cid:67)(cid:221)(cid:76)(cid:59)(cid:221)(cid:19)(cid:59)(cid:72)(cid:56)(cid:59)(cid:73)(cid:74)(cid:221)(cid:13)(cid:75)(cid:62)(cid:55)(cid:73)(cid:59)(cid:56)(cid:59)(cid:57)(cid:63)(cid:221)(cid:13)(cid:55)(cid:66)(cid:63)(cid:221)(cid:13)(cid:109)(cid:218)(cid:55)(cid:76)(cid:63)(cid:72)(cid:66)(cid:63)(cid:65)(cid:221)(cid:1)(cid:128)(cid:217)(cid:221)(cid:55)(cid:73)(cid:221)(cid:74)(cid:62)(cid:59)(cid:221)(cid:63)(cid:68)(cid:58)(cid:59)(cid:70)(cid:59)(cid:68)(cid:58)(cid:59)(cid:68)(cid:74)(cid:221)(cid:55)(cid:75)(cid:58)(cid:63)(cid:74)(cid:221)(cid:60)(cid:63)(cid:72)(cid:67)(cid:221)(cid:74)(cid:69)(cid:221)(cid:55)(cid:75)(cid:58)(cid:63)(cid:74)(cid:221)(cid:69)(cid:75)(cid:72)(cid:221)(cid:3)(cid:69)(cid:67)(cid:70)(cid:55)(cid:68)(cid:79)(cid:135)(cid:73)(cid:221)(cid:55)(cid:57)(cid:57)(cid:69)(cid:75)(cid:68)(cid:74)(cid:73)(cid:221)(cid:55)(cid:68)(cid:58)(cid:221)
operations for the year 2018 in accordance with Capital Markets Law, the Turkish Commercial Code, and related legislations and to submit this decision
to the approval of our shareholders during the upcoming Annual General Assembly Meeting of our Company.
(cid:20)(cid:21)(cid:18)(cid:11)(cid:3)(cid:5)(cid:12)(cid:12)(cid:222)(cid:217)(cid:12)(cid:5)(cid:20)(cid:217)(cid:218)(cid:217)(cid:13)(cid:222)(cid:8)(cid:217)(cid:26)(cid:13)(cid:5)(cid:20)(cid:12)(cid:5)(cid:18)(cid:217)(cid:222)(cid:1)(cid:128)(cid:218)(cid:128)
AGENDA OF THE ANNUAL GENERAL ASSEMBLY MEETING FOR 2017
1- Opening and election of the Presidency Board;
2- Authorizing the Presidency Board to sign the minutes of the meeting;
3- Reading the annual report of the Board of Directors relating to fiscal year 2017;
4- Reading the summary of the Independent Audit Firm’s report relating to fiscal year 2017;
5- Reading, discussion and approval of the Turkish Commercial Code and Capital Markets Board balance sheets and profits/loss statements relating to
fiscal year 2017;
6- Release of the Board Members individually from the activities and operations of the Company pertaining to the year 2017;
7-
Informing the General Assembly on the donation and contributions made in the fiscal year 2017; discussion of and decision on Board of Directors’
proposal concerning determination of donation limit to be made in 2018, starting from the fiscal year 2018;
8- Subject to the approval of the Ministry of Customs and Trade and Capital Markets Board; discussion of and decision on the amendment of Articles 3, 4,
6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 21, 24, 25 and 26 of the Articles of Association of the Company;
9- Election of new Board Members in accordance with related legislation and determination of the newly elected Board Members’ term of office if there
will be any new election;
10- Determination of the remuneration of the Board Members;
11- Discussion of and approval of the election of the independent audit firm appointed by the Board of Directors pursuant to Turkish Commercial Code and
the capital markets legislation for auditing of the accounts and financials of the year 2018;
12- Decision permitting the Board Members to, directly or on behalf of others, be active in areas falling within or outside the scope of the Company’s
operations and to participate in companies operating in the same business and to perform other acts in compliance with Articles 395 and 396 of the
Turkish Commercial Code;
13- Discussion of and decision on the distribution of dividend for the fiscal year 2017 and determination of the dividend distribution date;
14- Informing the shareholders regarding the guarantees, pledges and mortgages provided by the Company to third parties or the derived income thereof,
in accordance with the Capital Markets Board regulations;
15- Closing.
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TURKCELL ANNUAL REPORT 2017
IMPORTANT DEVELOPMENTS AFTER THE
REPORTING PERIOD
FEBRUARY 26, 2018
Announcement Regarding Capital Markets Board Application for Debt Instrument Issuance
Summary Info
Authorized Member Decision Date
Issue Limit and Currency Unit
Issue Limit Security Type
Sale Type
Capital Market Board Application Date
Capital Markets Board Application for Debt Instrument Issuance Abroad
21.02.2018
USD 750,000,000
Debt instrument
Oversea
26.02.2018
Our Company evaluates the use of various long term debt instruments in international markets in accordance with our active and efficient balance sheet
management principles. An application has been made to Capital Markets Board on 26/02/2018 for the approval of issuance certificate to issue debt
instruments with an amount up to USD 750 million or its equivalent in another currency, through private placement and/or sales to qualified investors
abroad, without public offering pursuant to the authority granted to our Board of Directors by article 25 of our Articles of Association and in accordance
with Capital Markets Board’s legislation. The debt instrument will be issued in one or more tranches and in various types and terms with fixed and/or
floating interest rates to be determined as per the market conditions at the date of the issuance.
The announcement with respect to issuance decision has been previously deferred.
TURKCELL ANNUAL REPORT 2017
127
MARCH 5, 2018
Announcement Regarding the Expansion of Scope and Currency of the Long-term Loan Agreement
The scope of the EUR690 million unutilized portion of the EUR750 million loan agreement signed with China Development Bank (CDB), details of which
(cid:77)(cid:59)(cid:72)(cid:59)(cid:221)(cid:58)(cid:63)(cid:73)(cid:57)(cid:66)(cid:69)(cid:73)(cid:59)(cid:58)(cid:221)(cid:63)(cid:68)(cid:221)(cid:69)(cid:75)(cid:72)(cid:221)(cid:55)(cid:68)(cid:68)(cid:69)(cid:75)(cid:68)(cid:57)(cid:59)(cid:67)(cid:59)(cid:68)(cid:74)(cid:221)(cid:58)(cid:55)(cid:74)(cid:59)(cid:58)(cid:221)(cid:177)(cid:184)(cid:128)(cid:175)(cid:184)(cid:128)(cid:177)(cid:175)(cid:176)(cid:180)(cid:125)(cid:221)(cid:62)(cid:55)(cid:73)(cid:221)(cid:56)(cid:59)(cid:59)(cid:68)(cid:221)(cid:59)(cid:78)(cid:70)(cid:55)(cid:68)(cid:58)(cid:59)(cid:58)(cid:128)(cid:221)(cid:9)(cid:68)(cid:221)(cid:74)(cid:62)(cid:63)(cid:73)(cid:221)(cid:72)(cid:59)(cid:73)(cid:70)(cid:59)(cid:57)(cid:74)(cid:125)(cid:221)(cid:63)(cid:68)(cid:221)(cid:55)(cid:58)(cid:58)(cid:63)(cid:74)(cid:63)(cid:69)(cid:68)(cid:221)(cid:74)(cid:69)(cid:221)(cid:20)(cid:75)(cid:72)(cid:65)(cid:57)(cid:59)(cid:66)(cid:66)(cid:221)(cid:216)(cid:66)(cid:59)(cid:74)(cid:63)(cid:218)(cid:63)(cid:67)(cid:221)(cid:8)(cid:63)(cid:80)(cid:67)(cid:59)(cid:74)(cid:66)(cid:59)(cid:72)(cid:63)(cid:221)(cid:1)(cid:128)(cid:217)(cid:128)(cid:125)(cid:221)(cid:69)(cid:75)(cid:72)(cid:221)(cid:73)(cid:75)(cid:56)(cid:73)(cid:63)(cid:58)(cid:63)(cid:55)(cid:72)(cid:63)(cid:59)(cid:73)(cid:221)
(cid:19)(cid:75)(cid:70)(cid:59)(cid:72)(cid:69)(cid:68)(cid:66)(cid:63)(cid:68)(cid:59)(cid:221)(cid:216)(cid:66)(cid:59)(cid:74)(cid:63)(cid:218)(cid:63)(cid:67)(cid:221)(cid:8)(cid:63)(cid:80)(cid:67)(cid:59)(cid:74)(cid:66)(cid:59)(cid:72)(cid:63)(cid:221)(cid:1)(cid:128)(cid:217)(cid:128)(cid:125)(cid:221)(cid:20)(cid:75)(cid:72)(cid:65)(cid:57)(cid:59)(cid:66)(cid:66)(cid:221)(cid:6)(cid:63)(cid:68)(cid:55)(cid:68)(cid:73)(cid:67)(cid:55)(cid:68)(cid:221)(cid:1)(cid:128)(cid:217)(cid:128)(cid:221)(cid:55)(cid:68)(cid:58)(cid:221)(cid:66)(cid:63)(cid:60)(cid:59)(cid:57)(cid:59)(cid:66)(cid:66)(cid:221)(cid:12)(cid:12)(cid:3)(cid:221)(cid:77)(cid:63)(cid:66)(cid:66)(cid:221)(cid:55)(cid:66)(cid:73)(cid:69)(cid:221)(cid:56)(cid:59)(cid:221)(cid:55)(cid:56)(cid:66)(cid:59)(cid:221)(cid:74)(cid:69)(cid:221)(cid:75)(cid:74)(cid:63)(cid:66)(cid:63)(cid:80)(cid:59)(cid:221)(cid:74)(cid:62)(cid:59)(cid:221)(cid:57)(cid:69)(cid:72)(cid:72)(cid:59)(cid:73)(cid:70)(cid:69)(cid:68)(cid:58)(cid:63)(cid:68)(cid:61)(cid:221)(cid:66)(cid:69)(cid:55)(cid:68)(cid:128)(cid:221)(cid:6)(cid:75)(cid:72)(cid:74)(cid:62)(cid:59)(cid:72)(cid:67)(cid:69)(cid:72)(cid:59)(cid:125)(cid:221)(cid:63)(cid:68)(cid:221)(cid:55)(cid:58)(cid:58)(cid:63)(cid:74)(cid:63)(cid:69)(cid:68)(cid:221)(cid:74)(cid:69)(cid:221)
the right to utilize in EUR terms, relevant loan may also be utilized in US Dollars and Renminbi with respective annual interest rates of LIBOR + 2.22% and
5.51%. There have been no changes to maturity and the repayment schedule of the loan.
MARCH 5, 2018
Announcement Regarding the Process of Turkey’s Automobile Project
In accordance with the Joint Initiative Group Cooperation Protocol which we signed on November 2, 2017 with the intention to participate as a potential
contributor in Turkey’s Automobile Project which is implemented through the coordination of The Republic of Turkey Ministry of Science, Industry
and Technology and The Union of Chambers and Commodity Exchanges of Turkey, technological and financial analyses are still being conducted. This
announcement has been made pursuant to CMB’s Public Disclosure Communique’s Article 23/7 for the purpose of providing updated information to
investors.
MARCH 5, 2018
Announcement Regarding Fintur Holdings B.V. divesting its interest in Azertel
Our subsidiary Fintur Holdings B.V.* (“Fintur”), in which we hold 41.45% stake, has transferred its 51.3% total shareholding in Azertel Telekomunikasyon
(cid:25)(cid:55)(cid:74)(cid:63)(cid:72)(cid:63)(cid:67)(cid:221)(cid:4)(cid:63)(cid:218)(cid:221)(cid:20)(cid:63)(cid:57)(cid:55)(cid:72)(cid:59)(cid:74)(cid:221)(cid:1)(cid:128)(cid:217)(cid:221)(cid:148)(cid:136)(cid:1)(cid:80)(cid:59)(cid:72)(cid:74)(cid:59)(cid:66)(cid:137)(cid:149)(cid:221)(cid:74)(cid:69)(cid:221)(cid:1)(cid:80)(cid:59)(cid:72)(cid:56)(cid:55)(cid:63)(cid:64)(cid:55)(cid:68)(cid:221)(cid:9)(cid:68)(cid:74)(cid:59)(cid:72)(cid:68)(cid:55)(cid:74)(cid:63)(cid:69)(cid:68)(cid:55)(cid:66)(cid:221)(cid:20)(cid:59)(cid:66)(cid:59)(cid:57)(cid:69)(cid:67)(cid:221)(cid:12)(cid:12)(cid:3)(cid:221)(cid:148)(cid:136)(cid:1)(cid:80)(cid:63)(cid:68)(cid:74)(cid:59)(cid:66)(cid:59)(cid:57)(cid:69)(cid:67)(cid:137)(cid:149)(cid:125)(cid:221)(cid:55)(cid:221)(cid:60)(cid:75)(cid:66)(cid:66)(cid:79)(cid:221)(cid:73)(cid:74)(cid:55)(cid:74)(cid:59)(cid:221)(cid:69)(cid:77)(cid:68)(cid:59)(cid:58)(cid:221)(cid:57)(cid:69)(cid:67)(cid:70)(cid:55)(cid:68)(cid:79)(cid:221)(cid:56)(cid:79)(cid:221)(cid:74)(cid:62)(cid:59)(cid:221)(cid:18)(cid:59)(cid:70)(cid:75)(cid:56)(cid:66)(cid:63)(cid:57)(cid:221)(cid:69)(cid:60)(cid:221)(cid:1)(cid:80)(cid:59)(cid:72)(cid:56)(cid:55)(cid:63)(cid:64)(cid:55)(cid:68)(cid:125)(cid:221)
at the price of Euro 221.7 million. The signing of definitive agreement, the transfer of shares to Azintelecom and the transfer of proceeds to Fintur were
completed simultaneously. The transaction has no impact on our financial statements since Fintur is classified as “assets held for sale” in our financials.
*Fintur Holdings B.V. is currently 41.45% owned by Turkcell and 58.55% by Telia Company.
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128
TURKCELL ANNUAL REPORT 2017
2017 FINANCIAL YEAR CORPORATE GOVERNANCE
PRINCIPLES COMPLIANCE REPORT
(cid:20)(cid:75)(cid:72)(cid:65)(cid:57)(cid:59)(cid:66)(cid:66)(cid:221)(cid:216)(cid:66)(cid:59)(cid:74)(cid:63)(cid:218)(cid:63)(cid:67)(cid:221)(cid:8)(cid:63)(cid:80)(cid:67)(cid:59)(cid:74)(cid:66)(cid:59)(cid:72)(cid:63)(cid:221)(cid:1)(cid:128)(cid:217)(cid:128)(cid:135)(cid:73)(cid:221)(cid:148)(cid:136)(cid:3)(cid:69)(cid:67)(cid:70)(cid:55)(cid:68)(cid:79)(cid:137)(cid:149)(cid:221)(cid:3)(cid:69)(cid:72)(cid:70)(cid:69)(cid:72)(cid:55)(cid:74)(cid:59)(cid:221)(cid:7)(cid:69)(cid:76)(cid:59)(cid:72)(cid:68)(cid:55)(cid:68)(cid:57)(cid:59)(cid:221)
Principles Compliance Report of the year 2017; has been prepared in
accordance with the format specified with the decision n.2/35 published in
the Capital Markets Board (“CMB”)’s Weekly Bulletin n.2014/2 dated 27th
of January 2014 and outlined in the sections given below.
SECTION 1- STATEMENT OF COMPLIANCE WITH CORPORATE
GOVERNANCE PRINCIPLES
We have begun to implement corporate governance mechanisms in parallel
with the corporate governance efforts that we launched as the Company’s
IPO by establishing an Investor Relations Department and accelerated in
2003; this step was based on the belief that maintaining high standards
of corporate governance is crucial to the perpetuation of successful
business practices and the generation of long-term economic value for the
Company’s shareholders.
Within the activity period that ended on the 31st of December 2017, our
Company has adopted and implemented the corporate governance principles
specified in the annex of the Communiqué on Corporate Governance. On the
other hand, considering the current situation, the principles that are not yet
complied with, so far have not led to any conflicts of interest between the
stakeholders.
In the relevant sections of the report, necessary explanations are given
regarding the principles that are not yet complied and complied with the
corporate governance principles specified in the annex of the Communiqué
on Corporate Governance, during the activity period that ended on the
31st of December 2017. Specific actions taken regarding compliance to the
corporate governance principles within this period are summarized below.
Within 2017, there were no related party transactions or significant
transactions that were not approved by the independent members and thus
had to be presented for the approval of the general assembly.
SECTION 2 – SHAREHOLDERS
(cid:19)(cid:62)(cid:55)(cid:72)(cid:59)(cid:62)(cid:69)(cid:66)(cid:58)(cid:63)(cid:68)(cid:61)(cid:222)(cid:19)(cid:74)(cid:72)(cid:75)(cid:57)(cid:74)(cid:75)(cid:72)(cid:59)(cid:222)(cid:148)(cid:178)(cid:176)st(cid:222)(cid:69)(cid:60)(cid:222)(cid:4)(cid:59)(cid:57)(cid:59)(cid:67)(cid:56)(cid:59)(cid:72)(cid:222)(cid:177)(cid:175)(cid:176)(cid:182)(cid:149)
SHAREHOLDER
(cid:20)(cid:75)(cid:72)(cid:65)(cid:57)(cid:59)(cid:66)(cid:66)(cid:221)(cid:8)(cid:69)(cid:66)(cid:58)(cid:63)(cid:68)(cid:61)(cid:221)(cid:1)(cid:128)(cid:217)(cid:128)
(cid:212)(cid:75)(cid:65)(cid:75)(cid:72)(cid:69)(cid:76)(cid:55)(cid:221)(cid:8)(cid:69)(cid:66)(cid:58)(cid:63)(cid:68)(cid:61)(cid:221)(cid:1)(cid:128)(cid:217)(cid:128)(cid:154)
Free Float
Total
NOMINAL VALUE
(cid:148)(cid:20)(cid:8)(cid:15)(cid:21)(cid:19)(cid:1)(cid:14)(cid:4)(cid:222)(cid:20)(cid:18)(cid:25)(cid:149)
1,122,000
996
1,077,004
2,200,000
SHARE
PERCENTAGE
%51.00
%0.05
%48.95
%100.00
(*) As of 31st of December 2017, the number of Company shares kept as
collateral by various corporations is 995,509.
Within the framework of the announcement made via Public Disclosure
Platform (“KAP”) on 6th and 7th of December 2016; Sonera Holding B.V.
(cid:67)(cid:55)(cid:58)(cid:59)(cid:221)(cid:55)(cid:68)(cid:221)(cid:55)(cid:70)(cid:70)(cid:66)(cid:63)(cid:57)(cid:55)(cid:74)(cid:63)(cid:69)(cid:68)(cid:221)(cid:74)(cid:69)(cid:221)(cid:13)(cid:59)(cid:72)(cid:65)(cid:59)(cid:80)(cid:63)(cid:221)(cid:11)(cid:55)(cid:79)(cid:96)(cid:74)(cid:221)(cid:11)(cid:75)(cid:72)(cid:75)(cid:66)(cid:75)(cid:218)(cid:75)(cid:221)(cid:1)(cid:128)(cid:217)(cid:128)(cid:221)(cid:148)(cid:3)(cid:59)(cid:68)(cid:74)(cid:72)(cid:55)(cid:66)(cid:221)(cid:18)(cid:59)(cid:61)(cid:63)(cid:73)(cid:74)(cid:72)(cid:79)(cid:221)
Agency), for the transformation of its Turkcell shares with a nominal
value of 287,632,179.557 TRY and that were registered in the Board but
not traded at stock exchange to trading shares on the exchange. According
to the information disclosed by Telia Company; the process of selling these
shares at the stock market was completed on the 8th of May 2017 and the 21st
of September 2017. After this process, the value of its nominal shares in the
Company’s publicly traded portion is amount to 1.604 TRY.
2.1. Investor Relations Department
(cid:20)(cid:62)(cid:59)(cid:221)(cid:57)(cid:69)(cid:67)(cid:67)(cid:75)(cid:68)(cid:63)(cid:57)(cid:55)(cid:74)(cid:63)(cid:69)(cid:68)(cid:221)(cid:56)(cid:59)(cid:74)(cid:77)(cid:59)(cid:59)(cid:68)(cid:221)(cid:20)(cid:75)(cid:72)(cid:65)(cid:57)(cid:59)(cid:66)(cid:66)(cid:221)(cid:216)(cid:66)(cid:59)(cid:74)(cid:63)(cid:218)(cid:63)(cid:67)(cid:221)(cid:8)(cid:63)(cid:80)(cid:67)(cid:59)(cid:74)(cid:66)(cid:59)(cid:72)(cid:63)(cid:221)(cid:1)(cid:128)(cid:217)(cid:128)(cid:135)(cid:73)(cid:221)(cid:55)(cid:68)(cid:58)(cid:221)(cid:63)(cid:68)(cid:76)(cid:59)(cid:73)(cid:74)(cid:69)(cid:72)(cid:73)(cid:221)
is maintained, in line with the corporate governance principles, through the
Investor Relations Department which serves under the Investor Relations
and Merger and Acquisition Directorate, reporting to the Deputy General
Directorate of Finance. The duties stipulated in the article 11 of the
Communiqué on Corporate Governance numbered II-17.1 are performed by our
Company’s full-time employees whose contact details are given below.
Investor Relations and Merger and Acquisition Director: Zeynel Korhan Bilek
(cid:1)(cid:58)(cid:58)(cid:72)(cid:59)(cid:73)(cid:73)(cid:127)(cid:221)(cid:20)(cid:75)(cid:72)(cid:65)(cid:57)(cid:59)(cid:66)(cid:66)(cid:221)(cid:11)(cid:109)(cid:213)(cid:109)(cid:65)(cid:79)(cid:55)(cid:66)(cid:96)(cid:221)(cid:16)(cid:66)(cid:55)(cid:80)(cid:55)(cid:125)(cid:221)(cid:1)(cid:79)(cid:58)(cid:96)(cid:68)(cid:59)(cid:76)(cid:66)(cid:59)(cid:72)(cid:221)(cid:13)(cid:55)(cid:62)(cid:55)(cid:66)(cid:66)(cid:59)(cid:73)(cid:63)(cid:221)(cid:216)(cid:68)(cid:102)(cid:68)(cid:109)(cid:221)(cid:3)(cid:55)(cid:58)(cid:58)(cid:59)(cid:73)(cid:63)(cid:221)(cid:14)(cid:69)(cid:127)(cid:177)(cid:175)(cid:221)(cid:2)(cid:221)(cid:2)(cid:66)(cid:69)(cid:65)(cid:221)
(cid:11)(cid:109)(cid:213)(cid:109)(cid:65)(cid:79)(cid:55)(cid:66)(cid:96)(cid:221)(cid:15)(cid:60)(cid:63)(cid:73)(cid:70)(cid:55)(cid:72)(cid:65)(cid:221)(cid:178)(cid:179)(cid:183)(cid:180)(cid:179)(cid:221)(cid:13)(cid:55)(cid:66)(cid:74)(cid:59)(cid:70)(cid:59)(cid:142)(cid:9)(cid:73)(cid:74)(cid:55)(cid:68)(cid:56)(cid:75)(cid:66)
Phone: +90 (212) 313 18 88
E-mail: korhan.bilek@turkcell.com.tr
Capital Markets & Corporate Governance Compliance Principal: Emre Alpman
(cid:1)(cid:58)(cid:58)(cid:72)(cid:59)(cid:73)(cid:73)(cid:127)(cid:221)(cid:20)(cid:75)(cid:72)(cid:65)(cid:57)(cid:59)(cid:66)(cid:66)(cid:221)(cid:11)(cid:109)(cid:213)(cid:109)(cid:65)(cid:79)(cid:55)(cid:66)(cid:96)(cid:221)(cid:16)(cid:66)(cid:55)(cid:80)(cid:55)(cid:125)(cid:221)(cid:1)(cid:79)(cid:58)(cid:96)(cid:68)(cid:59)(cid:76)(cid:66)(cid:59)(cid:72)(cid:221)(cid:13)(cid:55)(cid:62)(cid:55)(cid:66)(cid:66)(cid:59)(cid:73)(cid:63)(cid:221)(cid:216)(cid:68)(cid:102)(cid:68)(cid:109)(cid:221)(cid:3)(cid:55)(cid:58)(cid:58)(cid:59)(cid:73)(cid:63)(cid:221)(cid:14)(cid:69)(cid:127)(cid:177)(cid:175)(cid:221)(cid:2)(cid:221)(cid:2)(cid:66)(cid:69)(cid:65)(cid:221)
(cid:11)(cid:109)(cid:213)(cid:109)(cid:65)(cid:79)(cid:55)(cid:66)(cid:96)(cid:221)(cid:15)(cid:60)(cid:63)(cid:73)(cid:70)(cid:55)(cid:72)(cid:65)(cid:221)(cid:178)(cid:179)(cid:183)(cid:180)(cid:179)(cid:221)(cid:13)(cid:55)(cid:66)(cid:74)(cid:59)(cid:70)(cid:59)(cid:142)(cid:9)(cid:73)(cid:74)(cid:55)(cid:68)(cid:56)(cid:75)(cid:66)
Phone: +90 (212) 313 18 88
E-mail: emre.alpman@turkcell.com.tr
Licenses: Capital Market Activities Level 3 License No: 203743
Corporate Governance Rating License: 700292
The main activities of the Investor Relations Department (IR) in 2017 are
briefly summarized as follows:
• The maintenance of the records with respect to the correspondences
between the investors and the Company as well as other information and
documents have been ensured in a reliable, safe and up-to-date manner and
the transactions at Central Registry Agency have been coordinated with the
Legal Department and Board of Directors Office.
• The questions addressed to IR and the shareholders’ requests for the
information regarding partnership during the reporting period, excluding
those regarding undisclosed information considered as confidential and
trade secret, have been responded in an open and transparent manner either
face-to-face or through various communication means in accordance with
the Disclosure Policy of the Company.
• Ordinary general assembly meeting convened in the respective term was
held in cooperation with the related departments, Legal Department and
Board of Directors Office in accordance with the provisions of the applicable
law, Articles of Association and other internal rules and regulations.
• Methods to facilitate the participation of shareholders in the general
assembly meeting and to strengthen communication during the meeting
have been developed; an “Investor Package” containing documents, of
which shareholders can make use, has been created; and the website is
regularly updated so that shareholders can have access constant and open
information.
• The Company’s shares performance, and domestic and international
•
comparable Company financial and operational benchmark analyses have
been conducted and the outcomes of these studies have also contributed
to the Company’s communication strategies.
In addition to material disclosures made in accordance with the
legislation, the coordination of the communication with the public has
been ensured, meetings with investors and analysts have been made,
additionally conferences, panels, seminars and road shows have been
participated by paying regard to the fulfilment of obligations arising
from the capital markets legislation including any issue related with the
corporate governance and the public disclosure.
TURKCELL ANNUAL REPORT 2017
129
As per article 410 of the TCC, upon the call made by the Board of Directors
of our Company, 2016 ordinary general assembly meeting of our Company
was held on 25th of May 2017 at the Company headquarter located at
(cid:74)(cid:62)(cid:59)(cid:221)(cid:55)(cid:58)(cid:58)(cid:72)(cid:59)(cid:73)(cid:73)(cid:221)(cid:69)(cid:60)(cid:221)(cid:1)(cid:79)(cid:58)(cid:96)(cid:68)(cid:59)(cid:76)(cid:66)(cid:59)(cid:72)(cid:221)(cid:13)(cid:55)(cid:62)(cid:55)(cid:66)(cid:66)(cid:59)(cid:73)(cid:63)(cid:125)(cid:221)(cid:216)(cid:68)(cid:102)(cid:68)(cid:109)(cid:221)(cid:3)(cid:55)(cid:58)(cid:58)(cid:59)(cid:73)(cid:63)(cid:125)(cid:221)(cid:14)(cid:69)(cid:127)(cid:177)(cid:175)(cid:142)(cid:178)(cid:181)(cid:125)(cid:221)(cid:3)(cid:221)(cid:2)(cid:66)(cid:69)(cid:65)(cid:125)(cid:221)
(cid:3)(cid:69)(cid:68)(cid:60)(cid:59)(cid:72)(cid:59)(cid:68)(cid:57)(cid:59)(cid:221)(cid:8)(cid:55)(cid:66)(cid:66)(cid:125)(cid:221)(cid:11)(cid:109)(cid:213)(cid:109)(cid:65)(cid:79)(cid:55)(cid:66)(cid:96)(cid:221)(cid:15)(cid:60)(cid:63)(cid:73)(cid:70)(cid:55)(cid:72)(cid:65)(cid:125)(cid:221)(cid:178)(cid:179)(cid:183)(cid:180)(cid:179)(cid:125)(cid:221)(cid:13)(cid:55)(cid:66)(cid:74)(cid:59)(cid:70)(cid:59)(cid:125)(cid:221)(cid:9)(cid:73)(cid:74)(cid:55)(cid:68)(cid:56)(cid:75)(cid:66)(cid:128)(cid:221)
The call for the general assembly meeting to be held on 25th of May 2017
was made in conformity with the TCC, CMB corporate governance principles
and Articles of Association, and in a way that will cover the agenda items,
via Turkish Trade Registry Gazette n.9316 published on 28th of April 2017
and published on Takvim and Türkiye newspaper published on 28th of April
2017, as well as the Electronic General Assembly System, the Company’s
www.turkcell.com.tr web address, and the Public Disclosure Platform; and
within the stipulated time frame by sending registered letter to registered
shareholders, and informing them about the meeting date and agenda.
Furthermore, within the scope of the corporate governance principle n.1.3.1,
all information such as the annual report, financial statements regarding
the general assembly, was made available for shareholders’ review
electronically on the Company website and physically at the Company
headquarter. No media member was invited to the general assembly
meeting, and the meeting results were immediately shared with the public.
Following items were included on the agenda of the general assembly
meeting; approval of the consolidated financial statements regarding
2016 activities, release of the members of the Board of Directors for the
relevant periods, discussion and approval of dividend distribution for the
relevant period, and determining the dividend distribution date, approval
of the amendments, made as per CMB’s consent and Ministry’s approval,
to the Company’s Articles of Association, in order to comply with the New
Turkish Commercial Code n.6102 and the Capital Markets Law n.6362,
determination of the term of office and election of the new members for the
Board of Directors, determination of the remuneration of the members of
the Board of Directors, appointment of an independent auditor for the year
2017, presentation of information on the aids and donations made in 2016,
determination of the donations limit for 2017, starting from the beginning
of 2017 accounting period; authorization of the members of the Board of
Directors of the Company in accordance with the provisions of article n.395
and n.396 of the TCC, informing the shareholders about the revenue or
benefits obtained by, and collaterals, pledge, mortgage, and sureties given
by the Company for the benefit of third parties within the framework of
CMB regulations.
The members of the Board of Directors, other relevant persons, the
personnel and the independent auditors responsible for preparing the
financial reports are present at the general assembly meeting in order to
provide necessary information and answer any questions about the specific
items on the agenda.
During the general assembly meeting, the chairman of the meeting has paid
utmost attention to cover the agenda items in an objective and detailed
manner with a clear and understandable method, and thus the shareholders
were given opportunity to express their opinions, and ask questions under
equal circumstances. During the general assembly meeting, shareholders’
questions that do not interfere with trade secrets are directly answered.
In case the question is not relevant to the agenda or in case it is too broad
to be answered immediately, a written answer is given by the Investor
Relations Department to such questions as soon as possible, and the answer
is publicly disclosed. During the ordinary general assembly meeting held
regarding the year 2016, no question was asked within this scope.
•
In 2017, Investor Relations Department attended 17 investor
conferences and 5 road shows, and organized 374 meetings in total
with analysts and corporate mutual funds. With the participation of
the Company’s senior management and the Chairman of the Board
of Directors, two separate meetings were organized at the Company
headquarters with the relevant analysts and the executives of the
portfolio management companies located in Turkey, in order to
transparently explain the Company’s vision and strategy and to expand
its investor base. Over 1,000 information requests were received during
the year via phone or e-mail, all of which were responded to.
The Investor Relations Department regularly provides the Board of
Directors with a report regarding the operations which are carried out.
Additionally, the strategy plan regarding the Investor Relations pertaining
to the following year is presented to the CFO at the end of each year.
2.2. The Use of Shareholders’ Rights to Obtain Information
No discrimination is made between the shareholders in using shareholders’
right to receive information and investigate. All shareholders have right to
receive information and investigate. In the Articles of Association, there is
no provision limiting the right to receive information.
The Company’s shareholders and stakeholders made many requests for
obtaining information concerning various subjects throughout the year
2017. These requests, excluding those concerning undisclosed information
considered as confidential and trade secret, were responded in an open and
transparent manner within the shortest time possible in accordance with
the Disclosure Policy of the Company.
The Company launched its website (www.turkcell.com.tr) in 1996 and began
to provide its both local and foreign shareholders the information stipuiated
for the website within the CMB’s corporate governance principles in both
Turkish and English, under the Investor Relations section of the website
allowing them to exercise their right to receive information. Updating
and monitoring information posted on the Company’s Investor Relations
website was carried out under the responsibility of the Investor Relations
Department.
As per the regulations, disclosures made to the Public Disclosure Platform
(KAP) in order to disclose to public were also provided to those stipulated
in the Company’s database by e-mail, social media and smartphone
application, both in Turkish and English.
During the year, no information or disclosures which could influence the
exercising of shareholding rights were published on the website of the
Company.
The appointment of a special auditor has not been separately included in the
Company’s Articles of Association since this is a right vested to the minority
shareholders by the respective laws. During this term, no requests for the
appointment of a special auditor were submitted.
2.3. General Assembly Meetings
Call for the general assembly meeting is made, in a manner that will
make sure the Company reaches the maximum number of shareholders
possible, minimum three weeks prior to the general assembly meeting
date via Public Disclosure Platform (KAP), Electronic General Assembly
System (EGKS), Company’s corporate website and Turkish Trade Registry
Gazette. Furthermore, before the general assembly meeting an “informative
document” regarding the agenda items is prepared and publicly disclosed.
All announcements and disclosures are made in conformity with the Turkish
Commercial Code (TCC), capital markets legislation, CMB regulations and
decisions, and the Articles of Association.
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TURKCELL ANNUAL REPORT 2017
2017 FINANCIAL YEAR CORPORATE GOVERNANCE
PRINCIPLES COMPLIANCE REPORT
At the ordinary general assembly meeting held on 25th of May 2017,
the dividend distribution proposal that had been previously prepared
and announced by the Board of Directors to the shareholders, and the
(cid:70)(cid:72)(cid:69)(cid:70)(cid:69)(cid:73)(cid:55)(cid:66)(cid:221)(cid:70)(cid:72)(cid:59)(cid:70)(cid:55)(cid:72)(cid:59)(cid:58)(cid:221)(cid:56)(cid:79)(cid:221)(cid:69)(cid:75)(cid:72)(cid:221)(cid:3)(cid:69)(cid:67)(cid:70)(cid:55)(cid:68)(cid:79)(cid:135)(cid:73)(cid:221)(cid:73)(cid:62)(cid:55)(cid:72)(cid:59)(cid:62)(cid:69)(cid:66)(cid:58)(cid:59)(cid:72)(cid:221)(cid:20)(cid:75)(cid:72)(cid:65)(cid:57)(cid:59)(cid:66)(cid:66)(cid:221)(cid:8)(cid:69)(cid:66)(cid:58)(cid:63)(cid:68)(cid:61)(cid:221)(cid:1)(cid:128)(cid:217)(cid:128)(cid:221)
were submitted to discussion, and as a result of the voting, a decision was
taken by majority vote of the present participants to approve the written
(cid:70)(cid:72)(cid:69)(cid:70)(cid:69)(cid:73)(cid:55)(cid:66)(cid:221)(cid:69)(cid:60)(cid:221)(cid:20)(cid:75)(cid:72)(cid:65)(cid:57)(cid:59)(cid:66)(cid:66)(cid:221)(cid:8)(cid:69)(cid:66)(cid:58)(cid:63)(cid:68)(cid:61)(cid:221)(cid:1)(cid:128)(cid:217)(cid:128)(cid:125)(cid:221)(cid:55)(cid:68)(cid:58)(cid:221)(cid:74)(cid:62)(cid:59)(cid:221)(cid:70)(cid:72)(cid:69)(cid:70)(cid:69)(cid:73)(cid:55)(cid:66)(cid:221)(cid:73)(cid:75)(cid:56)(cid:67)(cid:63)(cid:74)(cid:74)(cid:59)(cid:58)(cid:221)(cid:56)(cid:79)(cid:221)(cid:20)(cid:75)(cid:72)(cid:65)(cid:57)(cid:59)(cid:66)(cid:66)(cid:221)
(cid:8)(cid:69)(cid:66)(cid:58)(cid:63)(cid:68)(cid:61)(cid:221)(cid:1)(cid:128)(cid:217)(cid:128)(cid:221)(cid:72)(cid:59)(cid:71)(cid:75)(cid:63)(cid:72)(cid:59)(cid:73)(cid:126)(cid:221)(cid:63)(cid:149)(cid:221)(cid:74)(cid:69)(cid:221)(cid:60)(cid:63)(cid:72)(cid:73)(cid:74)(cid:221)(cid:73)(cid:59)(cid:74)(cid:221)(cid:55)(cid:73)(cid:63)(cid:58)(cid:59)(cid:221)(cid:74)(cid:62)(cid:59)(cid:221)(cid:72)(cid:59)(cid:73)(cid:59)(cid:72)(cid:76)(cid:59)(cid:221)(cid:60)(cid:75)(cid:68)(cid:58)(cid:73)(cid:221)(cid:221)(cid:74)(cid:62)(cid:55)(cid:74)(cid:221)(cid:67)(cid:75)(cid:73)(cid:74)(cid:221)(cid:56)(cid:59)(cid:221)
set aside as per the mandatory provisions of the Articles of Association of
the Company, the Turkish Commercial Code n.6102, and the Capital Markets
Law n.6362, and take the previous years’ profits and extraordinary reserves
into consideration, and then to distribute in total TL 3,000,000,000 – which
is the sum of the amounts specified in the proposal for each fiscal years –
of the net distributable profit for the fiscal period between 2010 and 2016
specified in the Company’s financial statements that were issued taking
the Company’s cash status and needs; ii) to make three equal payments to
the shareholders for profit distribution and; iii) to make these payments
respectively on 15th of June 2017, 15th of September 2017, and 15th of
December 2017 at the latest.
Our Company adopts and implements the corporate governance principles.
However, mandatory amendments that must be made in order for the
Articles of Association to comply with the principles and determined by
the resolution of the Board of Directors and in line with CMB’s approval,
submitted to shareholders’ approval at the ordinary general assembly
meeting held on 25th of May 2017 upon receiving Ministry of Customs
and Trade’s permission; sufficient decision quorum was not met and no
resolution was reached within this regard. The aim is to make the necessary
amendments to the Articles of Association at the following general
assembly meeting.
On the other hand, the process for electing independent members was not
launched due to ongoing conflicts between the controlling shareholders
of the Company. The item on the agenda of the ordinary general assembly
meeting held on 25th of May 2017, on the election of other members of the
board of directors and determination of their term of office, could not be
voted due to the fact that no candidates were nominated. In this context,
the aim is to comply with the principle n.4.3.7. at the following general
assembly meeting.
2.4. Voting Rights and Minority Rights
Pursuant to the Articles of Association of the Company, there are no
privileges granted regarding the voting right for any group or shareholder.
The minority shareholders and stakeholders are not represented in the
Board of Directors and the ratio stated in the TCC and CMB provisions
concerning minority rights are applied.
However, three independent board members serve in the BoD to equally
represent all shareholders, particularly minority shareholders, and
stakeholders.
The Company has no reciprocal shareholding relation with its affiliates
and subsidiaries and thus no situation which would require voting rights
stemming from such a relationship to freeze at the general assembly
meeting has taken place as of December 31, 2017.
2.5. Dividend Rights
In the Articles of Association, there are no privileges granted on the
participation to the Company’s profit. All shares have equal right with
respect to the right to receive dividend.
The Company has a specific and consistent Dividend Policy that is
determined considering the provisions of the TCC, Capital Markets Law, tax
codes and other respective legislation and the Articles of Association. This
policy was presented for the shareholders’ approval at the general assembly
meeting, and it was also included in the annual report and publicly disclosed
on the Company’s website.
The minimum information that will enable the investors to foresee the
principles and procedures for distribution of the dividend that will be made
by the Company in the future, is included in the Company’s Dividend Policy
that was set with the Board of Directors resolution taken on the 13th of
May 2013, and revised, in accordance with the capital markets legislation,
with the Board of Directors resolution n.1104 taken on the 18th of February
2014 to present for the approval of the general assembly. A balanced policy
between the shareholders’ and Company’s benefits is pursued in Dividend
Policy, that is given below in full text.
Our Company’s Dividend Policy;
Our Company aims to distribute at least 50% of the distributable net
profit in cash. This policy is subject to our Company’s cash projections,
future expectations regarding its activities, investment plans, and the
circumstances in the capital markets. Regarding the issue of dividends, a
separate resolution is taken by the Board of Directors for each accounting
period and this resolution is subject to the approval of the general assembly.
Dividend distribution shall be initiated on the date that will be determined
by the general assembly, provided that dividend distribution is made until
the end of the year in which the general assembly meeting is held. The
Company, in conformity with the provisions of applicable legislation, may
consider distributing advance dividend or distributing dividend in equal or
varying payments.
Moreover; in order to create more added-value for its shareholders, the
Company may consider buy-back of its own shares within the scope of the
above mentioned circumstances and relevant legislation.
The Board of Directors’ dividend distribution proposal n.1388 dated 26th
of April 2017 has been publicly announced, and as a result of voting made
at relevant general assembly for the proposal submitted by our Company
(cid:73)(cid:62)(cid:55)(cid:72)(cid:59)(cid:62)(cid:69)(cid:66)(cid:58)(cid:59)(cid:72)(cid:221)(cid:20)(cid:75)(cid:72)(cid:65)(cid:57)(cid:59)(cid:66)(cid:66)(cid:221)(cid:8)(cid:69)(cid:66)(cid:58)(cid:63)(cid:68)(cid:61)(cid:221)(cid:1)(cid:128)(cid:217)(cid:128)(cid:126)(cid:221)(cid:55)(cid:221)(cid:58)(cid:59)(cid:57)(cid:63)(cid:73)(cid:63)(cid:69)(cid:68)(cid:221)(cid:77)(cid:55)(cid:73)(cid:221)(cid:74)(cid:55)(cid:65)(cid:59)(cid:68)(cid:221)(cid:56)(cid:79)(cid:221)(cid:67)(cid:55)(cid:64)(cid:69)(cid:72)(cid:63)(cid:74)(cid:79)(cid:221)(cid:76)(cid:69)(cid:74)(cid:59)(cid:221)
of the present participants at the ordinary general assembly meeting
held on 25th of May 2017 to approve the written proposal of Turkcell
(cid:8)(cid:69)(cid:66)(cid:58)(cid:63)(cid:68)(cid:61)(cid:221)(cid:1)(cid:128)(cid:217)(cid:128)(cid:125)(cid:221)(cid:55)(cid:68)(cid:58)(cid:221)(cid:74)(cid:62)(cid:59)(cid:221)(cid:70)(cid:72)(cid:69)(cid:70)(cid:69)(cid:73)(cid:55)(cid:66)(cid:221)(cid:73)(cid:75)(cid:56)(cid:67)(cid:63)(cid:74)(cid:74)(cid:59)(cid:58)(cid:221)(cid:56)(cid:79)(cid:221)(cid:20)(cid:75)(cid:72)(cid:65)(cid:57)(cid:59)(cid:66)(cid:66)(cid:221)(cid:8)(cid:69)(cid:66)(cid:58)(cid:63)(cid:68)(cid:61)(cid:221)(cid:1)(cid:128)(cid:217)(cid:128)(cid:221)(cid:72)(cid:59)(cid:71)(cid:75)(cid:63)(cid:72)(cid:59)(cid:73)(cid:126)(cid:221)
i) to first set aside the reserve funds that must be set aside as per the
mandatory provisions of the Articles of Association of the Company, the
Turkish Commercial Code n.6102, and the Capital Markets Law n.6362,
and take the previous years’ profits and extraordinary reserves into
consideration, and then to distribute in total TL 3,000,000,000 – which is
the sum of the amounts specified in the proposal for each fiscal years – of
the net distributable profit for the fiscal period between 2010 and 2016
specified in the Company’s financial statements that were issued taking
TURKCELL ANNUAL REPORT 2017
131
the Company’s cash status and needs; ii) to make three equal payments to
the shareholders for profit distribution and; iii) to make these payments
respectively on 15th of June 2017, 15th of September 2017, and 15th of
December 2017 at the latest.
government institutions and organizations. Although the Company receives
questions or complaints through various channels, these are directed to
one center which handles and resolves them. The Company has established
the necessary infrastructure for transferring complaints through relative
channels and this infrastructure is continuously updated.
2.6. Transfer of Shares
While there is no limitation in the Articles of Association of our Company
with respect to the transfer of shares, the provisional article 4, clause
1, paragraph c, phrase 3 of the Authorizing Regulation in Electronic
Communications Sector states that Information and Communication
Technologies Authority shall be informed with regard to “all share transfers,
acquisitions and movements”, within one month at the latest, and phrase
4 states that written approval of the Information and Communication
Technologies Authority is required for “share transfers, acquisitions and
movements resulting in change of control”.
SECTION 3 – PUBLIC DISCLOSURE AND TRANSPARENCY
3.1. Corporate Website and Its Content
Turkcell’s corporate website (www.turkcell.com.tr) was launched in 1996
in order to provide shareholders, stakeholders and the general public with
information in an open, clear and timely manner. Turkcell has disclosed
the necessary information required by the Communiqué on corporate
governance principles as well as resolutions and announcements concerning
the implementation of these principles published by the Capital Markets
Board on the Company’s corporate website under the Investor Relations
section (https://www.turkcell.com.tr/tr/hakkimizda/yatirimci-iliskileri).
and regularly provides updates. The website content is also available in
English (http://www.turkcell.com.tr/en/aboutus/investor-relations) The
Company website includes matters specified in the corporate governance
principles.
3.2. Annual Report
The annual report for the 2017 accounting period was prepared – in a
detailed manner that will enable the public to reach full and accurate
information about the Company activities and in accordance with the
third paragraph of Article 516 and Article 518 of the Turkish Commercial
Code and in line with the minimum content stipulated by the provisions of
Ministry of Customs and Trade regulation on “Determining the Minimum
Content of the Companies’ Annual Reports” and Article 8 of the Capital
Markets Board (“CMB”) Communiqué on “Principles Regarding Financial
Reporting in the Capital Markets”; and independently audited.
SECTION 4 – STAKEHOLDERS
4.1. Stakeholder Communication
Turkcell informs its stakeholders by organizing pre-scheduled and regular
meetings such as communication meetings for employees, platforms where
the employees can put across their ideas and provide their suggestions,
supplier events for the members of the supply chain, business partner
events for the partner companies of Turkcell for providing value-added
services and dealership meetings. Information is shared at periodic
meetings, and/or through e-mail and intranet system.
The Company has set policies and procedures to inform its employees and
stakeholders.
It is possible for Turkcell customers to reach the Company for their
questions through various communication channels. Questions can be
communicated in writing or verbally through Turkcell Customer Services
Call Centers and Video Customer Services at 532 or 5325320000,
over Turkcell Service accounts on social media, complaint sites or via
4.2. Participation of Stakeholders to the Management
There is no special arrangement concerning the participation of
stakeholders to the management; however, when required, stakeholders
(themselves)/their senior managers are invited to participate in Board of
Directors meetings in order to provide information. Shareholders and other
stakeholders are represented by independent members of the Board of
Directors.
4.3. Human Resources Policy
The main principles of our Company’s Human Resources Policy are to
provide high ethical standards determined by Turkcell Common Values
and Business Ethic Rules by adopting the responsibilities of the employees
against society, market, Company and each other.
Human Resources (HR) processes within the Company are developed by
the Organizational Development team reporting to the Deputy General
Directorate of Human Resources, and the Turkcell Employee Relations
Management Department executes these processes.
The duty and the authority of conducting employee relations have been
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President. The main tasks of the said individuals are to secure employee
commitment, and to enhance organizational efficiency, to design all HR
strategies, policies and implementations and to ensure their implementation
in accordance with our strategic priorities.
Written procedures and guidelines concerning all human resources
processes (recruitment, career movements, performance and talent
management, human resource planning, compensation and benefits,
organizational development and process improvements, internal
communication) are available and these documents are kept in a portal that
is accessible by all employees. Furthermore, employees are informed about
these subjects on a regular basis via internal postings and e-mail.
In Recruitment, Training & Development, Performance and Talent
Management, Career Management, Compensation and other human
resources processes, all employees are treated equally in accordance with
the equal opportunities policy without any discrimination of ethnicity,
language, religion, race or gender.
In 2017, the Company had not received any complaints of discrimination
from its employees.
Job descriptions, performance and rewarding criteria were determined with
the internal guidelines of the Company and these documents are kept in a
portal that is accessible by all employees.
4.4. Code of Ethics and Social Responsibility
Code of Ethics
The Company’s ethic rules has been regulated by Turkcell’s internal
directives of Common Values and Business Ethics. Turkcell’s Business Ethics
Rules are in unity with Turkcell’s policies, values and principles, and all
employees including the senior management are requested to comply with
them.
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Each employee of Turkcell is obliged to notify the cases and the allegations
which may constitute a contradiction with the rules and the regulations
set forth in Turkcell’s Common Values and Business Ethics Rules Handbook
or which cause reasonable doubt or concern for constituting such a
contradiction to Turkcell’s Ethics Committee through suitable notification
channels. Being a part of the stakeholders, the employees may directly
inform the Audit Committee or indirectly inform them via internal forms
on the intranet, or by telephone, or e-mail the Ethics Committee through
regarding transactions that are contrary to the legislation and are
unethical. On the other hand, the transactions of other stakeholders such
as customers and suppliers which are contrary to the legislation and are
unethical are conveyed to the Ethics Committee or the Audit Committee by
way of notification and complaint.
The Code of Ethics is posted with its general outline on the Company’s
corporate website, under the Investor Relations section under the
Corporate Governance heading. These ethic rules are complementary to
other related policies, codes of conduct, and guides that have already been
published or will be published by the Company. Training programs and
notifications are provided to employees through various channels during
the year in order to increase their awareness and acknowledgement with
respect to the Common Values and Business Ethics Rules.
Dialog Museum
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“Turkcell Dialogue Museum” was turned into a permanent museum
organizing the “Dialogue in the Dark” exhibition, which offered the
opportunity to experience the visually impaired people’s Istanbul, and the
“Dialogue in Silence”. Within the scope of the project; about 40 visually
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support of Turkcell.
My Dream Companion
Our Company provides a free service called My Dream Companion for
the visually impaired to access information content such as current news,
articles, audio books, education programs, magazines; giving them the
opportunity to use audio navigation in shopping malls, and audio decoding
technologies in cinemas.
Furthermore, Turkcell Academy provides visually impaired and hearing
impaired individuals with special education under the “Education without
Boundaries” category. Our Company, in collaboration with the Federation
of the Hearing Impaired, organized “Turkish Sign Language” trainings and
trainings that teach visually impaired individuals to use special smartphones
with iOS and Android.
The main principle is to carry out Company activities in a fair, honest,
legal and ethical manner. Our Company has zero tolerance to bribery and
corruption and within the main framework of the Turkcell Group Anti-
Bribery and Corruption Policy which is adopted by the Board of Directors;
an Anti-Bribery and Corruption (ABC) program was initiated that provides
necesarry trainings and establishes internal communication, and takes
necessary preventive measures to ensure compliance with the rules.
Ongoing and new social responsibility projects of the Company in 2017 are
listed below.
My Sign Language Application
My Sign Language application facilitates the communication between the
hearing impaired individuals and those who don’t know sign language,
and supports the personal development of the hearing impaired people.
Within the scope of the application; a real-time translator translating text
and speech simultaneously to Sign Language, a digital dictionary covering
more than 3500 words’ symbolization in sign language, latest news in sign
language, and personal development, child development, and sign language
training programs are available. Users can also communicate in Sign
Language on the application making a video call via BiP free of charge.
Contributions to Education
Turkcell Scholarship Programs
In 2017, more than 7 thousand students were supported with the
scholarship programs granted by our Company.
People without Boundaries
We invest in the economic and social development of our country through
the project we develop as Turkcell family. “Equality of opportunity”
principle is the essence of our projects where we wish to include individuals
from all parts of society. Within this scope, we offer solutions in many
different areas under the structure of “People without Boundaries” in order
to facilitate the lives of disabled people and involve them more in life.
Education without Boundaries
In order to increase the competency of disabled children who need special
education and to help them join in social life, our Company, in collaboration
with the Turkish Ministry of Education, supports employment and disabled
students’ education with the “Education without Boundaries Program”.
Within the scope of the program, more than 10 thousand disabled students
with special education needs were reached at 84 schools in 45 cities during
two years term.
Turkcell – YGA My Dream Partner Workshop Leadership Training Program
It’s a leadership program continuing since 2015 to discover the talents of
the visually impaired secondary school students while fostering them as
role model disabled people. Since the first day the project was launched,
approximately 200 visually impaired students in 7 cities have taken their
first steps to become the leaders of the future.
Academy without Boundaries
Turkcell Academy online education platform www.turkcellakademi.com
offers special education opportunities to visually impaired and hearing
impaired individuals under the “Education without Boundaries” category.
The platform offers its users several training programs with sign language
option, such as technology, personal development, business world,
leadership programs for the hearing impaired people. In collaboration with
the Federation of Hearing Impaired, the platform offers “Turkish Sign
Language” training programs while it also includes training programs,
specially designed for iOS and Andorid, for visually impaired individuals
to teach them how to use smart phones. Furthermore, training programs
specially designed for families with visually or hearing impaired kids, are
also available to help them with the development process of their children.
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Turkcell Whiz Kids Project
The “Whiz Kids Project” was out into practice under the supervision of the
Ministry of National Education for developing talented students with new
generation technology and education. Within the scope of the project, for
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(Science and Art Centers) through the 7 regions of Turkey, our Company
created specially designed laboratories targeting technological productivity
with “do it yourself” culture.
Women Developers of the Future
5 years ago, in order to activate our country’s potential in the IT sector we
had sown the seeds of “Developers of the Future” project, and we have
taken our project to a new stage in 2017 with the “Women Developers of
the Future”.
The aim of our project launched in collaboration of Turkcell, TOBB (Union
of Chambers and Commodity Exchanges) and TOBB Board of Women
Entrepreneurs is to give software training to our women, help them
develop mobile applications, and increase their employment capacity and
entrepreneurship in this field. We support them so that they can keep up
with the software age, get to know mobile technologies, and take a step
forward in entrepreneurship.
Approximately 1400 women applied for the program at the first stage.
Within the framework of “Women Developers of the Future” training
program, we organized online classes all across Turkey in the weekdays
as we gave in-class mobile application development training in 18 cities
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to develop their projects in the “Project Development” process, and
provided consultancy with Turkcell’s voluntary mentors and business
mentors from TOBB.
203 projects and 319 women in total competed in 18 cities in the Women
Developers of the Future finals that we organized within the scope of our
project, and 48 successful projects qualified for the semifinal. 10 teams
qualifying through the semifinal made presentations to the jury at the
Grand Finale, and the most successful three teams were selected to receive
their awards at the award ceremony.
Winning projects will get support in commercialization phase, and thus they
will be using the advantage of the techno-parks’ internship, employment
and incubation centers in their cities. Moreover; by providing employment
opportunity to 100 tester women who were successfully selected among
the 664 women who had the chance to attend the Women Developers
of the Future in-class training, receive a certificate of achievement, and
qualify for the project development process, our aim is to have final user
tests made for Turkcell products and services. In the tester women project
that will continue for 6 months at the first phase, we will offer employment
within the Turkcell Group and telecommuting opportunity to the 100 tester
women from Turkey’s different regions and cities, who successfully
completed the selection and training process. Moreover, we will share the
successful projects to find means of funding in “Beehive”, Turkcell’s mass
funding platform, and we will offer opportunity for women to realize their
dreams and ideas about entrepreneurship.
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We carried out activities to renovate the historical Gökçeada Greek Middle
School and High School that resumed its academic life after 50 years in
2015. We supported the construction of the Sports & Social Facilities that
has units such as sport and game areas, a tribune for 100 students, a ramp
for disabled students, an amphitheater and stage, botanical garden. We
built a technology classroom for students to have the latest education
opportunities, and designed a special program for them. In the technology
classroom, students will be using a 3D printer, Arduino electronic learning
kits and software equipment, and will be lectured in technology. Thus, they
will be able to create their software using their coding kits, and develop a
domestic software in the future.
We reintegrate Sâmiha Ayverdi Anatolian High School, Fatih Vocational
and Technical Anatolian High School and Vatan Vocational and Technical
Anatolian High School to Education
Turkcell funded the construction of Sâmiha Ayverdi Anatolian High School,
and Fatih and Vatan Vocational and Technical Anatolian High Schools.
Schools were built to meet all needs of the students healthily with indoor-
outdoor gyms, a fully equipped conference hall, lab areas, classrooms.
Schools also have special platforms, ramps and elevators for students with
physical disabilities.
Hello Hope
More than 5 million Syrian refugees had to leave their country after the
Syrian civil war. Hosting more than 3.2 million Syrian refugees, Turkey has
become an example for the world as a country hosting the most crowded
group of Syrians.
As “Turkey’s Turkcell”, aware of our responsibility, have planned all our
steps in line with our country’s and Syrians’ needs. Within the scope of
the “Hello Hope” project planned to contribute to the integration and
adaptation process, which was the most important problem we had to face;
we partnered with AFAD and Turkish Red Crescent which are specialized
in the field. Within the scope of the Hello Hope Project planned in two
phases, we as the Hello Hope Technology Center continue to provide mobile
applications and services. The first year was completed for the “Hello
Hope” mobile application designed to help the Syrian people overcome one
of the most important obstacles that prevent them from participating in
social life. With the Hello Hope application that helps them learn Turkish
and have access to useful information easily, our aim was to facilitate the
daily lives of the Syrian refugees, and to give them a chance to live a more
adapted life. The application designed for the customers of all operators,
was downloaded approximately 700 thousand times so far.
Within the scope of the Hello Hope project, we also built a Technology
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with AFAD and Prodea Systems, and provided fiber speed internet
connection giving the children and their families the opportunity to use
technology correctly and effectively as well as the opportunity to reach
supporting training programs.
Miscellaneous
Once again this year, the UN Global Compact, the sustainability platform
launched by the United Nations to eliminate poverty and ensure that all
people live in peace and prosperity, selected the 10 private sector leaders
in the world who has been most supportive of development goals. One of
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services and support for the Syrian refugees.
Contribution to Sports
For many years, our Company has continued its contribution so that sports
develop in Turkey, and Turkish athletes and national teams are praised
in national and international arenas. In 2017, our Company continued to
support team sports such as basketball, football, sailing and cycling, and
individual sports such as athletics, swimming, running, fishing and golf.
Our Football and Basketball Sponsorships
In 2002, our Company started to be “Official Communication Sponsor” of
National Football Team and since 2005, our Company has been the “Main
Sponsor”. Starting from the last year, our Company continued to be the
“Spor Toto Super League Official Communication Sponsor” in 2017.
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Our Company also continued its support for football with the “Turkcell
Super Cup” title sponsorship that was initiated in 2016.
Contribution to Culture–Art
At the same time, our Company continues to support the Men’s National
Basketball Team for 15 years.
Disability Football
We continued to support our disabled athletes also in 2017. We added
the Hearing Impaired Sports Federation, Turkish Sports Federation for the
Physically Disabled, and Special Athletes Federation sponsorships, and
expanded the scope of our support we had started to give with the Blind
Sports Federation to disabled athletes. Within the framework of these
sponsorships we have been carrying out in coordination with the Turkish
Football Federation, we give support to each federation’s Football National
Teams and football leagues.
Other Branches
Until 2020, as we plan to invest TRY 28 million in our Swimming and
Athletics Performance Projects that we launched in 2013 under the
supervision of the Ministry of Youth and Sports, our Company continues to
provide support in this direction.
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Technology sponsorship which we had started in 2014. We will continue
our support to culture and arts by integrating our life-enhancing, life-
simplifying technology into museums.
This year we also made a cooperation within the framework of Turkey’s
megastar Tarkan’s new album, and we offered privileges to fizy users.
Within the scope of our collaboration, we became the sponsor of Tarkan’s
Album; Tarkan’s fizy concerts which took place between 1st and 10th of July,
and music clips. We had the opportunity to meet thousands of fans in the
concert area within the framework of the collaboration that helped us reach
a record number of viewers and listeners on fizy.
The 20th anniversary of the high school music contest took place under the
sponsorship of fizy. 500 high schools attended the contest, and the contest
was completed with tremendous participation. The knockout stage videos
uploaded to the fizy high school music contest platform, which was visited
by 1.7 million users, received over 220,000 votes in three weeks.
Also in 2017; we became the main sponsor of Turkcell Platinum Istanbul
Night Flights classical music concerts organized in Hagia Irene, and we
became the title sponsor of Turkcell Bodrum Jazz Festival.
Turkcell became the first brand to support the Turkish Olympic team in the
history of our country as a result of the collaboration with the Ministry of
Youth and Sports and General Directorate of Sports.
Sustainability at Turkcell
Since its first year, we have been the title sponsor of Turkcell Gallipoli
Marathon which is the first thematic marathon in Turkey. This year, we
organized the Marathon for the third time, with the participation of
(cid:69)(cid:75)(cid:72)(cid:221)(cid:3)(cid:5)(cid:15)(cid:221)(cid:11)(cid:55)(cid:55)(cid:68)(cid:221)(cid:20)(cid:59)(cid:72)(cid:80)(cid:63)(cid:69)(cid:215)(cid:66)(cid:75)(cid:125)(cid:221)(cid:69)(cid:68)(cid:221)(cid:176)st of October in the unique atmosphere of
the Gallipoli Peninsula. More than 5 thousand athletes competed in the
Marathon.
Furthermore, within the scope of the marathon we planted 10 thousand
(cid:68)(cid:59)(cid:77)(cid:221)(cid:73)(cid:55)(cid:70)(cid:66)(cid:63)(cid:68)(cid:61)(cid:73)(cid:221)(cid:63)(cid:68)(cid:221)(cid:74)(cid:62)(cid:59)(cid:221)(cid:60)(cid:69)(cid:72)(cid:59)(cid:73)(cid:74)(cid:221)(cid:66)(cid:55)(cid:68)(cid:58)(cid:221)(cid:63)(cid:68)(cid:221)(cid:74)(cid:62)(cid:59)(cid:221)(cid:212)(cid:96)(cid:68)(cid:55)(cid:72)(cid:66)(cid:96)(cid:221)(cid:76)(cid:63)(cid:66)(cid:66)(cid:55)(cid:61)(cid:59)(cid:221)(cid:74)(cid:62)(cid:63)(cid:73)(cid:221)(cid:79)(cid:59)(cid:55)(cid:72)(cid:125)(cid:221)(cid:55)(cid:68)(cid:58)(cid:221)(cid:74)(cid:62)(cid:75)(cid:73)(cid:221)
expanded the “Turkcell Peace Forest” that we had created by planting 10
(cid:74)(cid:62)(cid:69)(cid:75)(cid:73)(cid:55)(cid:68)(cid:58)(cid:221)(cid:74)(cid:72)(cid:59)(cid:59)(cid:73)(cid:221)(cid:63)(cid:68)(cid:221)(cid:74)(cid:62)(cid:59)(cid:221)(cid:7)(cid:109)(cid:80)(cid:59)(cid:66)(cid:79)(cid:55)(cid:66)(cid:96)(cid:221)(cid:72)(cid:59)(cid:61)(cid:63)(cid:69)(cid:68)(cid:128)(cid:221)(cid:221)(cid:221)
Also in the coming years, we will continue to support the marathon where
we give the athletes and fans a unique racing experience.
As an integrated communication and technology company in Turkey, we
are aware of our environmental responsibilities, and thus we locate our
environmental impact areas and manage our operations with these areas
in mind. With Sustainability Report we issued in September 2017, we
(cid:70)(cid:75)(cid:56)(cid:66)(cid:63)(cid:57)(cid:66)(cid:79)(cid:221)(cid:73)(cid:62)(cid:55)(cid:72)(cid:59)(cid:58)(cid:221)(cid:74)(cid:62)(cid:59)(cid:221)(cid:73)(cid:75)(cid:73)(cid:74)(cid:55)(cid:63)(cid:68)(cid:55)(cid:56)(cid:63)(cid:66)(cid:63)(cid:74)(cid:79)(cid:221)(cid:67)(cid:55)(cid:68)(cid:55)(cid:61)(cid:59)(cid:67)(cid:59)(cid:68)(cid:74)(cid:221)(cid:55)(cid:70)(cid:70)(cid:72)(cid:69)(cid:55)(cid:57)(cid:62)(cid:221)(cid:69)(cid:60)(cid:221)(cid:20)(cid:75)(cid:72)(cid:65)(cid:57)(cid:59)(cid:66)(cid:66)(cid:221)(cid:216)(cid:66)(cid:59)(cid:74)(cid:63)(cid:218)(cid:63)(cid:67)(cid:221)
(cid:8)(cid:63)(cid:80)(cid:67)(cid:59)(cid:74)(cid:66)(cid:59)(cid:72)(cid:63)(cid:221)(cid:1)(cid:128)(cid:217)(cid:128)(cid:221)(cid:55)(cid:68)(cid:58)(cid:221)(cid:63)(cid:74)(cid:73)(cid:221)(cid:55)(cid:66)(cid:66)(cid:221)(cid:73)(cid:75)(cid:73)(cid:74)(cid:55)(cid:63)(cid:68)(cid:55)(cid:56)(cid:63)(cid:66)(cid:63)(cid:74)(cid:79)(cid:221)(cid:70)(cid:72)(cid:55)(cid:57)(cid:74)(cid:63)(cid:57)(cid:59)(cid:73)(cid:221)(cid:55)(cid:68)(cid:58)(cid:221)(cid:70)(cid:59)(cid:72)(cid:60)(cid:69)(cid:72)(cid:67)(cid:55)(cid:68)(cid:57)(cid:59)(cid:221)(cid:63)(cid:68)(cid:221)(cid:74)(cid:62)(cid:59)(cid:221)
activity period between January 1, 2016 and December 31, 2016. We also
issued a comprehensive report to share our 2016 carbon footprint projects
and outputs including CDP Turkey (Carbon Disclosure Project). Also in
2017, we fulfilled all responsibilities related to greenhouse gas standards
and continued to be the first telecom operator in Turkey receiving the “ISO
14064 - Calculation and Reporting of Corporate Greenhouse Gas Emissions”
certificate in 2015. As a consequence of our comprehensive projects in
progress in BIST Sustainability Index that we have taken part since 2014, we
have been entitled to be listed in the BIST Sustainability Index for 2017-18.
In 2017, Turkcell became the main sponsor of the Turkish Sailing Federation,
and also supported disabled sailing. With our support, our sailing team
ranked 4th in Europe in the competition organized in Poland.
SECTION 5- BOARD OF DIRECTORS
5.1. Structure and Formation of the Board of Directors
Organizing events such as Turkcell Platinum Golf Challenge, Turkcell
(cid:16)(cid:66)(cid:55)(cid:74)(cid:63)(cid:68)(cid:75)(cid:67)(cid:221)(cid:2)(cid:69)(cid:73)(cid:70)(cid:62)(cid:69)(cid:72)(cid:75)(cid:73)(cid:221)(cid:3)(cid:75)(cid:70)(cid:221)(cid:55)(cid:68)(cid:58)(cid:221)(cid:20)(cid:75)(cid:72)(cid:65)(cid:57)(cid:59)(cid:66)(cid:66)(cid:221)(cid:16)(cid:66)(cid:55)(cid:74)(cid:63)(cid:68)(cid:75)(cid:67)(cid:221)(cid:1)(cid:66)(cid:55)(cid:213)(cid:55)(cid:74)(cid:96)(cid:221)(cid:9)(cid:68)(cid:74)(cid:59)(cid:72)(cid:68)(cid:55)(cid:74)(cid:63)(cid:69)(cid:68)(cid:55)(cid:66)(cid:221)(cid:6)(cid:63)(cid:73)(cid:62)(cid:63)(cid:68)(cid:61)(cid:221)
Tournament, our Company also supports many athletes under different
branches.
According to the provisions of the second paragraph of article 17 of the
Capital Markets Law No. 6362, Ahmet Akça, Atilla Koç and Mehmet Hilmi
Güler have been appointed as the independent board members under the
resolution no. 2013/8 of the CMB dated 11th of March 2013 for holding this
office until the election of independent board members in place of them or
until the adoption of a new resolution related thereto by the CMB in order
to ensure the fulfilment of the requirement with respect to the election of
independent board members among the Corporate Governance Principles;
TURKCELL ANNUAL REPORT 2017
135
Mehmet Bostan and Bekir Pakdemirli have been appointed as the board
members under the resolution no. 2013/27 of the CMB dated 15th of
August 2013 pursuant to the provision of the sub-paragraph (k) of the first
paragraph of the article 128 of the Capital Markets Law No. 6362 in place
of the board members who have been elected in general assembly meeting
dated 29th of April 2010 for a duty period of 3 years and whose duty periods
have expired but their successors could not be elected by the shareholders
to hold this office until election of new members by the Company’s general
assembly meeting in accordance with the legislation or appointment of
other members by the CMB in addition to 3 independent board members
appointed pursuant to the resolution no. 8/271 of CMB dated 11.03.2013
and; Erik Jean Christian Antoine Belfrage and Jan Erik Jean Rudberg
presented to the CMB by Sonera Holding BV have been appointed as the
board members under the resolution no.2013/30 of the CMB dated 13th of
September 2013 for 2 board memberships remained vacant as a result of
ex-officio appointments made to the Board of Directors under resolutions
no. 8/271 and 28/921 of the Board dated 11th of March 2013 and 15th of
August 2013 respectively in order to hold this office until the election of
new members by the Company’s general assembly meeting in accordance
with the legislation or appointment of other members by the CMB.
In order to assure proper attendance, Turkcell set the schedule of the Board
meetings to be held in the following year at the end of the current year and
notified the members within this regard. Thus, the members are offered the
opportunity to schedule their activities according to their meetings, and
the date of the next board meeting is also evaluated taking the requests
of the members into account at each board meeting. In urgent matters,
additional meetings can always be convened without waiting for the next
meeting date. Invitations to the meetings are sent via e-mail. In line with
the corporate governance principles, the secretariat which has been set up
within the structure of the Board of Directors informs the board members
by notifying the agenda of the meeting and the documents related to
the agenda, writes and archives the discussions conducted by the Board
members during the meetings and records the reasons of the counter votes
regarding matters for which a different opinion has been expressed.
As per the quorum set by the Articles of Association: it is possible to
convene a board meeting with the participation of at least five members at
the meeting. At board meetings, ordinary resolutions are taken with four
affirmative votes where five members are present and with five affirmative
votes where more than five members are present.
Following the appointment of the board members made by the CMB, the
Board of Directors of Turkcell currently consists of 7 (seven) non-executive
members meeting the independency criteria and in total 3 (three) of them
are independent members.
Neither the Chairman of the Board of Directors nor the Board members hold
any preferential voting rights or the right to veto the resolutions made by
the Board of Directors. All board members, including the Chairman, have
equal voting power.
Résumés of the members of the Board of Directors of our Company are
given under the “Board of Directors” section in 2017 Annual Report and
disclosed on Company’s corporate website publicly; there was no situation
that would breach independence of the independent members in this period.
For the Board of Directors Chairman and members to make business that
interfere with Company activities, on their own account or on behalf of
others, and to become partners in companies that make such business,
general assembly’s approval is obtained within the scope of Articles 395
and 396 of the TCC.
Members of the board of directors can freely communicate and express
their views without any influence. There have been female members in the
Board of Directors in the previous years; nevertheless, no target ratio (not
less than 25%) and time for the presence of female members in the Board
of Directors has been determined, and no policy in order to reach these
targets has been created yet.
Our Company has affiliate companies and a subsidiary with 41.45% share.
There is no restriction for the members of the Board of Directors of the
Company to assume duties in group subsidiaries in these companies’
management due to the fact that such action would be for the benefit of the
group. Duties of the members of the Board of Directors inside/outside the
Company are listed in the table on page 136.
5.2. Principles of Activities of the Board of Directors
The agenda of the meetings of the Board of Directors is prepared by the
Chairman of the Board of Directors, who takes into account requests
made by members of the Board of Directors and executives. The Board
of Directors met 12 times in total during the year 2017 via physical
participation and teleconference. The overall rate of attendance at these
meetings was 96.4%. The resolutions in the meetings were adopted with
unanimity at a rate of 97.7%.
Authorities and responsibilities of the members of the Board of Directors
are clearly specified in the Articles of Association. These powers are used
in conformity with the principles specified in the internal directive that
was issued with our Board of Directors’ resolution n.1269 taken on 17th of
December 2015, registered on 25th of February 2016, and announced on 2nd
of March 2016 – as per articles 367 and 371 of the TCC.
Any damage to the Company which may be caused by the failures of the
Board members during the performance of their duties has been insured and
the insurance limit in the September 2016 – September 2017 period was
accepted as USD 400 million and USD 734,983.19 total gross were paid as
insurance premiums.
5.3. Number, Structure and Independence of the Committees
Established under the Board of Directors
In order for the Board of Directors to properly fulfill its duties and
responsibilities the following committees have been established by the
Board of Directors: Audit Committee, Corporate Governance Committee,
Early Detection of Risks Committee, Compensation Committee, and
Candidate Nomination Committee. Board of Directors determined the
committees’ tasks, their working principles and members, and relevant
information was publicly disclosed as an outline on the Company website.
All members of the Audit Committee are independent members of the
Board of Directors. Chairman of the Corporate Governance, Early Detection
of Risks, Compensation and Candidate Nomination Committees are also
independent members of the Board of Directors. Early Detection of Risks
Committee, Audit Committee and Compensation Committee are composed
of three members; Corporate Governance Committee and the Candidate
Nomination Committee composed of five members.
C
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136
TURKCELL ANNUAL REPORT 2017
2017 FINANCIAL YEAR CORPORATE GOVERNANCE
PRINCIPLES COMPLIANCE REPORT
BOARD MEMBER
NAME-SURNAME
DUTY
DUTIES WITHIN THE GROUP
DUTIES OUTSIDE THE GROUP:
COMPANY NAME
DUTIES OUTSIDE THE
GROUP: TITLE/POSITION
TERM OF OFFICE/
REMAINING TERM OF
OFFICE
Ahmet Akça
Chairman of the
Board of Directors
Mehmet Hilmi Güler
Board Member
Atilla Koç
Board Member
Mehmet Bostan
Board Member
Bekir Pakdemirli
Board Member
- lifecell LLC Chairman of the
Board of Directors
(cid:130)(cid:221)(cid:11)(cid:75)(cid:66)(cid:59)(cid:221)(cid:8)(cid:63)(cid:80)(cid:67)(cid:59)(cid:74)(cid:221)(cid:55)(cid:68)(cid:58)(cid:221)(cid:216)(cid:218)(cid:66)(cid:59)(cid:74)(cid:67)(cid:59)(cid:57)(cid:63)(cid:66)(cid:63)(cid:65)(cid:221)
(cid:1)(cid:128)(cid:217)(cid:128)(cid:221)(cid:3)(cid:62)(cid:55)(cid:63)(cid:72)(cid:67)(cid:55)(cid:68)(cid:221)(cid:69)(cid:60)(cid:221)(cid:74)(cid:62)(cid:59)(cid:221)(cid:2)(cid:69)(cid:55)(cid:72)(cid:58)(cid:221)(cid:69)(cid:60)(cid:221)
Directors
- Turkcell Enerji Çözümleri
(cid:76)(cid:59)(cid:221)(cid:5)(cid:66)(cid:59)(cid:65)(cid:74)(cid:72)(cid:63)(cid:65)(cid:221)(cid:19)(cid:55)(cid:74)(cid:96)(cid:218)(cid:221)(cid:20)(cid:63)(cid:57)(cid:55)(cid:72)(cid:59)(cid:74)(cid:221)(cid:1)(cid:128)(cid:217)(cid:128)(cid:221)
Chairman of the Board of
Directors
(cid:130)(cid:221)(cid:19)(cid:75)(cid:70)(cid:59)(cid:72)(cid:69)(cid:68)(cid:66)(cid:63)(cid:68)(cid:59)(cid:221)(cid:216)(cid:66)(cid:59)(cid:74)(cid:63)(cid:218)(cid:63)(cid:67)(cid:221)(cid:8)(cid:63)(cid:80)(cid:67)(cid:128)(cid:221)
(cid:1)(cid:128)(cid:217)(cid:128)(cid:221)(cid:3)(cid:62)(cid:55)(cid:63)(cid:72)(cid:67)(cid:55)(cid:68)(cid:221)(cid:69)(cid:60)(cid:221)(cid:74)(cid:62)(cid:59)(cid:221)(cid:2)(cid:69)(cid:55)(cid:72)(cid:58)(cid:221)(cid:69)(cid:60)(cid:221)
Directors
- Turkcell Enerji Çözümleri ve
(cid:5)(cid:66)(cid:59)(cid:65)(cid:74)(cid:72)(cid:63)(cid:65)(cid:221)(cid:19)(cid:55)(cid:74)(cid:96)(cid:218)(cid:221)(cid:20)(cid:63)(cid:57)(cid:55)(cid:72)(cid:59)(cid:74)(cid:221)(cid:1)(cid:128)(cid:217)(cid:128)(cid:221)(cid:2)(cid:69)(cid:55)(cid:72)(cid:58)(cid:221)
Member
(cid:130)(cid:221)(cid:11)(cid:75)(cid:80)(cid:59)(cid:79)(cid:221)(cid:11)(cid:96)(cid:56)(cid:72)(cid:96)(cid:73)(cid:221)(cid:20)(cid:75)(cid:72)(cid:65)(cid:57)(cid:59)(cid:66)(cid:66)(cid:221)(cid:3)(cid:62)(cid:55)(cid:63)(cid:72)(cid:67)(cid:55)(cid:68)(cid:221)(cid:69)(cid:60)(cid:221)
the Board of Directors
(cid:130)(cid:221)(cid:11)(cid:75)(cid:66)(cid:59)(cid:221)(cid:8)(cid:63)(cid:80)(cid:67)(cid:59)(cid:74)(cid:221)(cid:76)(cid:59)(cid:221)(cid:216)(cid:218)(cid:66)(cid:59)(cid:74)(cid:67)(cid:59)(cid:57)(cid:63)(cid:66)(cid:63)(cid:65)(cid:221)(cid:1)(cid:128)(cid:217)(cid:128)(cid:221)
Board Member
- Turkcell Enerji Çözümleri ve
(cid:5)(cid:66)(cid:59)(cid:65)(cid:74)(cid:72)(cid:63)(cid:65)(cid:221)(cid:19)(cid:55)(cid:74)(cid:96)(cid:218)(cid:221)(cid:20)(cid:63)(cid:57)(cid:55)(cid:72)(cid:59)(cid:74)(cid:221)(cid:1)(cid:128)(cid:217)(cid:128)(cid:221)(cid:2)(cid:69)(cid:55)(cid:72)(cid:58)(cid:221)
Member
(cid:20)(cid:75)(cid:72)(cid:65)(cid:57)(cid:59)(cid:66)(cid:66)(cid:221)(cid:47)(cid:58)(cid:59)(cid:67)(cid:59)(cid:221)(cid:76)(cid:59)(cid:221)(cid:5)(cid:66)(cid:59)(cid:65)(cid:74)(cid:72)(cid:69)(cid:68)(cid:63)(cid:65)(cid:221)(cid:16)(cid:55)(cid:72)(cid:55)(cid:221)
(cid:8)(cid:63)(cid:80)(cid:67)(cid:59)(cid:74)(cid:66)(cid:59)(cid:72)(cid:63)(cid:221)(cid:1)(cid:128)(cid:217)(cid:128)(cid:221)(cid:3)(cid:62)(cid:55)(cid:63)(cid:72)(cid:67)(cid:55)(cid:68)(cid:221)(cid:69)(cid:60)(cid:221)(cid:74)(cid:62)(cid:59)(cid:221)
Board of Directors
- Fintur Holdings B.V.
Representative of the Board
Member
(cid:130)(cid:221)(cid:11)(cid:75)(cid:80)(cid:59)(cid:79)(cid:221)(cid:11)(cid:96)(cid:56)(cid:72)(cid:96)(cid:73)(cid:221)(cid:20)(cid:75)(cid:72)(cid:65)(cid:57)(cid:59)(cid:66)(cid:66)(cid:221)(cid:2)(cid:69)(cid:55)(cid:72)(cid:58)(cid:221)(cid:69)(cid:60)(cid:221)
Directors Vice Chairman - Turkcell
(cid:6)(cid:63)(cid:68)(cid:55)(cid:68)(cid:73)(cid:67)(cid:55)(cid:68)(cid:221)(cid:1)(cid:128)(cid:217)(cid:128)(cid:221)(cid:3)(cid:62)(cid:55)(cid:63)(cid:72)(cid:67)(cid:55)(cid:68)(cid:221)(cid:69)(cid:60)(cid:221)(cid:74)(cid:62)(cid:59)(cid:221)
Board of Directors
(cid:130)(cid:221)(cid:20)(cid:75)(cid:72)(cid:65)(cid:57)(cid:59)(cid:66)(cid:66)(cid:221)(cid:47)(cid:58)(cid:59)(cid:67)(cid:59)(cid:221)(cid:76)(cid:59)(cid:221)(cid:5)(cid:66)(cid:59)(cid:65)(cid:74)(cid:72)(cid:69)(cid:68)(cid:63)(cid:65)(cid:221)
(cid:16)(cid:55)(cid:72)(cid:55)(cid:221)(cid:8)(cid:63)(cid:80)(cid:67)(cid:59)(cid:74)(cid:66)(cid:59)(cid:72)(cid:63)(cid:221)(cid:1)(cid:128)(cid:217)(cid:128)(cid:221)(cid:2)(cid:69)(cid:55)(cid:72)(cid:58)(cid:221)(cid:13)(cid:59)(cid:67)(cid:56)(cid:59)(cid:72)(cid:221)
- Turkcell Enerji Çözümleri ve
(cid:5)(cid:66)(cid:59)(cid:65)(cid:74)(cid:72)(cid:63)(cid:65)(cid:221)(cid:19)(cid:55)(cid:74)(cid:96)(cid:218)(cid:221)(cid:20)(cid:63)(cid:57)(cid:55)(cid:72)(cid:59)(cid:74)(cid:221)(cid:1)(cid:128)(cid:217)(cid:128)(cid:221)(cid:2)(cid:69)(cid:55)(cid:72)(cid:58)(cid:221)
Member
Jan Erik Rudberg
Board Member
CJSC “Belarusian
Telecommunication Network”
Chairman of the Board of Directors
(1) Hogia AB
(2) Kcell JSC
(3) PJSC Megafon
Erik Jean Christian
Antoine Belfrage
Board Member
- lifecell LLC Board Member - Kule
(cid:8)(cid:63)(cid:80)(cid:67)(cid:59)(cid:74)(cid:221)(cid:76)(cid:59)(cid:221)(cid:216)(cid:218)(cid:66)(cid:59)(cid:74)(cid:67)(cid:59)(cid:57)(cid:63)(cid:66)(cid:63)(cid:65)(cid:221)(cid:1)(cid:128)(cid:217)(cid:128)(cid:221)(cid:2)(cid:69)(cid:55)(cid:72)(cid:58)(cid:221)
Member
(1) KIBI AB
(2) Philippines Republic
(Stokholm)
(3) The International Council of
Swedish Industry
(4) International Chamber
of Commerce - Corporate
Responsibility and Fighting
Corruption Committee
(5) International Chamber of
Commerce - Finance Committee
(6) SEB Marcus Wallenberg
(7) Investor AB Jacob
Wallenberg
(1) Akça Lojistik Hizmetleri ve
(cid:20)(cid:63)(cid:57)(cid:55)(cid:72)(cid:59)(cid:74)(cid:221)(cid:1)(cid:128)(cid:217)(cid:128)(cid:221)
(2) Bezmiâlem Foundation
University
(1) Chairman of the Board
of Directors
(2) Chairman of the Board
of Trustees
Until replacement
(cid:148)(cid:176)(cid:149)(cid:221)(cid:9)(cid:3)(cid:2)(cid:3)(cid:221)(cid:20)(cid:75)(cid:72)(cid:65)(cid:59)(cid:79)(cid:221)(cid:2)(cid:55)(cid:68)(cid:65)(cid:221)(cid:1)(cid:128)(cid:217)(cid:128)(cid:221)
(1) Board Member
(Independent)
Until replacement
-
-
Until replacement
(1) Petkim Petro Kimya Holding
(cid:1)(cid:128)(cid:217)(cid:128)(cid:221)
(2) Türkiye Tennis Federation
(cid:148)(cid:176)(cid:149)(cid:221)(cid:1)(cid:58)(cid:72)(cid:59)(cid:73)(cid:221)(cid:4)(cid:55)(cid:68)(cid:96)(cid:218)(cid:67)(cid:55)(cid:68)(cid:66)(cid:96)(cid:65)(cid:221)(cid:12)(cid:74)(cid:58)(cid:128)(cid:221)(cid:217)(cid:74)(cid:63)(cid:128)(cid:221)
(2) McCain Foods Limited
(cid:148)(cid:178)(cid:149)(cid:221)(cid:20)(cid:55)(cid:72)(cid:65)(cid:59)(cid:67)(cid:221)(cid:20)(cid:55)(cid:72)(cid:63)(cid:62)(cid:63)(cid:221)(cid:11)(cid:59)(cid:67)(cid:59)(cid:72)(cid:55)(cid:66)(cid:74)(cid:96)(cid:221)(cid:1)(cid:128)(cid:217)(cid:128)(cid:221)
(4) Anatolia Autism Foundation
(5) Capital Markets Investors
Association
(cid:148)(cid:181)(cid:149)(cid:221)(cid:1)(cid:66)(cid:56)(cid:55)(cid:72)(cid:55)(cid:65)(cid:55)(cid:221)(cid:20)(cid:109)(cid:72)(cid:65)(cid:221)(cid:11)(cid:55)(cid:74)(cid:96)(cid:66)(cid:96)(cid:67)(cid:221)
(cid:2)(cid:55)(cid:68)(cid:65)(cid:55)(cid:73)(cid:96)(cid:221)(cid:1)(cid:128)(cid:217)(cid:128)(cid:221)
(7) Turkey Foundation for
Mental Health Treatment
(1) Board Member
(2) Board Member
Until replacement
(1) Chief Consultant
(2) Manager
(3) Board Member
(4) Member of Board of
Trustees
(5) Association Member
(6) Board Member
(7) Board Member
(1) Chairman of the Board
of Directors (Independent)
(2) Chairman of the Board
of Directors (Independent)
(3) Board Member
(Independent)
(1) Board Member
(2) Honorary Consul
General
(3) Chairman of the Board
of Directors
(4) Board Member
(5) Vice Chairman
(6) Advisor to Chairman
(7) Advisor to Chairman
Until replacement
Until replacement
Until replacement
TURKCELL ANNUAL REPORT 2017
137
Throughout the financial year of 2017, the Audit Committee, Corporate
Governance Committee, Compensation Committee and Early Detection of
Risks Committee carried out their operations. The following resolutions
were taken during the meeting of our Company’s Board of Directors dated
19th of August 2013 regarding the distribution of work in the committees:
• the Audit Committee to be constituted of Ahmet Akça, Mehmet Hilmi
Güler and Atilla Koç, our independent Board members; Ahmet Akça to be
appointed as the chairman of the Committee;
• the Early Detection of Risks Committee to be constituted of Mehmet
Hilmi Güler, Mehmet Bostan and Bekir Pakdemirli; Mehmet Hilmi Güler to
be appointed as the chairman of the Committee;
• the Corporate Governance Committee(1) to be constituted of Mehmet
Hilmi Güler, Mehmet Bostan and Bekir Pakdemirli; Mehmet Hilmi Güler to
be appointed as the chairman of the Committee;
• the Compensation Committee to be constituted of Atilla Koç, Mehmet
Hilmi Güler and Mehmet Bostan; Atilla Koç to be appointed as the
chairman of the Committee;
• the Candidate Nomination Committee to be constituted of Ahmet Akça,
Mehmet Hilmi Güler, Atilla Koç, Mehmet Bostan and Bekir Pakdemirli;
Ahmet Akça to be appointed as the chairman of the Committee.
Due to the fact that the Chairman of the Board of Directors is an
independent member, he also assumes position in the Audit Committee and
the Candidate Nomination Committee while the Company’s Chief Executive
Officer does not assume any position in any of the committees.
As per the corporate governance principles, there are no executive members
in the committees, except the Corporate Governance and Capital Markets
Compliance Principal and Investor Relations and Mergers and Acquisition
Director in the Corporate Governance Committee. Due to the structure of
the Board of Directors, members of the Board of Directors may assume
duties in more than one committee.
Necessary resources and support is provided by the Board of Directors
for the committees to fulfill their tasks and duties. Committees may invite
necessary managers/directors to their meetings, and take their opinions.
Committees convene frequently enough, and they prepare all work in
writing, and keep record of all their activities. Reports covering the
information about the activities of the committees and meeting results are
presented to the Board of Directors.
Information about the committees established under the Board of Directors
is available under the Corporate Governance heading of the Investor
Relations Section on the Company’s website (www.turkcell.com.tr).
5.4. Risk Management and Internal Control Mechanism
During the process of selecting the independent external auditor; the Audit
Committee considers the competencies and independence status of the
independent audit firms, and advises the Board of Directors presenting a
report about the most suitable audit firm.
(1)Investor Relations and Mergers & Acquisitions Department Director Zeynel Korhan Bilek
(cid:55)(cid:68)(cid:58)(cid:221)(cid:221)(cid:9)(cid:68)(cid:76)(cid:59)(cid:73)(cid:74)(cid:69)(cid:72)(cid:221)(cid:18)(cid:59)(cid:66)(cid:55)(cid:74)(cid:63)(cid:69)(cid:68)(cid:73)(cid:221)(cid:55)(cid:68)(cid:58)(cid:221)(cid:221)(cid:13)(cid:59)(cid:72)(cid:61)(cid:59)(cid:72)(cid:73)(cid:221)(cid:111)(cid:221)(cid:1)(cid:57)(cid:71)(cid:75)(cid:63)(cid:73)(cid:63)(cid:74)(cid:63)(cid:69)(cid:68)(cid:73)(cid:221)(cid:4)(cid:59)(cid:70)(cid:55)(cid:72)(cid:74)(cid:67)(cid:59)(cid:68)(cid:74)(cid:221)(cid:13)(cid:55)(cid:68)(cid:55)(cid:61)(cid:59)(cid:72)(cid:221)(cid:25)(cid:59)(cid:218)(cid:63)(cid:67)(cid:221)(cid:20)(cid:69)(cid:62)(cid:67)(cid:55)(cid:221)(cid:64)(cid:69)(cid:63)(cid:68)(cid:59)(cid:58)(cid:221)
the committee on 1st of November 2016. As of 23rd of January 2017, Corporate Governance and
Capital Markets Compliance Principal Emre Alpman was appointed to this role due to the fact that
(cid:25)(cid:59)(cid:218)(cid:63)(cid:67)(cid:221)(cid:20)(cid:69)(cid:62)(cid:67)(cid:55)(cid:221)(cid:71)(cid:75)(cid:63)(cid:74)(cid:221)(cid:62)(cid:59)(cid:72)(cid:221)(cid:70)(cid:69)(cid:73)(cid:63)(cid:74)(cid:63)(cid:69)(cid:68)(cid:128)
(2)(cid:2)(cid:55)(cid:218)(cid:55)(cid:72)(cid:55)(cid:68)(cid:221)(cid:14)(cid:55)(cid:73)(cid:221)(cid:2)(cid:55)(cid:215)(cid:96)(cid:67)(cid:73)(cid:96)(cid:80)(cid:221)(cid:4)(cid:59)(cid:68)(cid:59)(cid:74)(cid:63)(cid:67)(cid:221)(cid:76)(cid:59)(cid:221)(cid:19)(cid:59)(cid:72)(cid:56)(cid:59)(cid:73)(cid:74)(cid:221)(cid:13)(cid:75)(cid:62)(cid:55)(cid:73)(cid:59)(cid:56)(cid:59)(cid:57)(cid:63)(cid:221)(cid:13)(cid:55)(cid:66)(cid:63)(cid:221)(cid:13)(cid:109)(cid:218)(cid:55)(cid:76)(cid:63)(cid:72)(cid:66)(cid:63)(cid:65)(cid:221)(cid:1)(cid:128)(cid:217)(cid:128)(cid:135)(cid:73)(cid:221)(cid:148)(cid:2)(cid:55)(cid:218)(cid:55)(cid:72)(cid:55)(cid:68)(cid:221)
Independent Audit & Financial Consultancy Inc.) commercial name was changed as of the 12th
(cid:69)(cid:60)(cid:221)(cid:4)(cid:59)(cid:57)(cid:59)(cid:67)(cid:56)(cid:59)(cid:72)(cid:221)(cid:177)(cid:175)(cid:176)(cid:181)(cid:221)(cid:74)(cid:69)(cid:221)(cid:16)(cid:77)(cid:3)(cid:221)(cid:2)(cid:55)(cid:215)(cid:96)(cid:67)(cid:73)(cid:96)(cid:80)(cid:221)(cid:4)(cid:59)(cid:68)(cid:59)(cid:74)(cid:63)(cid:67)(cid:221)(cid:76)(cid:59)(cid:221)(cid:19)(cid:59)(cid:72)(cid:56)(cid:59)(cid:73)(cid:74)(cid:221)(cid:13)(cid:75)(cid:62)(cid:55)(cid:73)(cid:59)(cid:56)(cid:59)(cid:57)(cid:63)(cid:221)(cid:13)(cid:55)(cid:66)(cid:63)(cid:221)(cid:13)(cid:109)(cid:218)(cid:55)(cid:76)(cid:63)(cid:72)(cid:66)(cid:63)(cid:65)(cid:221)(cid:1)(cid:128)(cid:217)(cid:128)(cid:221)(cid:148)(cid:16)(cid:77)(cid:3)(cid:221)
Independent Audit & Financial Consultancy Inc.).
During our Company’s Ordinary general assembly meeting held on 25th of
(cid:13)(cid:55)(cid:79)(cid:221)(cid:177)(cid:175)(cid:176)(cid:182)(cid:125)(cid:221)(cid:16)(cid:77)(cid:3)(cid:221)(cid:2)(cid:55)(cid:215)(cid:96)(cid:67)(cid:73)(cid:96)(cid:80)(cid:221)(cid:4)(cid:59)(cid:68)(cid:59)(cid:74)(cid:63)(cid:67)(cid:221)(cid:76)(cid:59)(cid:221)(cid:19)(cid:59)(cid:72)(cid:56)(cid:59)(cid:73)(cid:74)(cid:221)(cid:13)(cid:75)(cid:62)(cid:55)(cid:73)(cid:59)(cid:56)(cid:59)(cid:57)(cid:63)(cid:221)(cid:13)(cid:55)(cid:66)(cid:63)(cid:221)(cid:13)(cid:109)(cid:218)(cid:55)(cid:76)(cid:63)(cid:72)(cid:66)(cid:63)(cid:65)(cid:221)
(cid:1)(cid:128)(cid:217)(cid:128)(cid:221)(cid:77)(cid:55)(cid:73)(cid:221)(cid:55)(cid:70)(cid:70)(cid:69)(cid:63)(cid:68)(cid:74)(cid:59)(cid:58)(cid:221)(cid:55)(cid:73)(cid:221)(cid:74)(cid:62)(cid:59)(cid:221)(cid:3)(cid:69)(cid:67)(cid:70)(cid:55)(cid:68)(cid:79)(cid:221)(cid:55)(cid:75)(cid:58)(cid:63)(cid:74)(cid:69)(cid:72)(cid:221)(cid:60)(cid:69)(cid:72)(cid:221)(cid:55)(cid:75)(cid:58)(cid:63)(cid:74)(cid:63)(cid:68)(cid:61)(cid:221)(cid:69)(cid:75)(cid:72)(cid:221)(cid:3)(cid:69)(cid:67)(cid:70)(cid:55)(cid:68)(cid:79)(cid:135)(cid:73)(cid:221)
financial statements of 2017 as per the TCC(2).
Moreover, the Internal Audit Function operates with the Board of Directors
(cid:55)(cid:68)(cid:58)(cid:221)(cid:63)(cid:73)(cid:221)(cid:72)(cid:59)(cid:73)(cid:70)(cid:69)(cid:68)(cid:73)(cid:63)(cid:56)(cid:66)(cid:59)(cid:221)(cid:60)(cid:69)(cid:72)(cid:221)(cid:74)(cid:62)(cid:59)(cid:221)(cid:55)(cid:75)(cid:58)(cid:63)(cid:74)(cid:63)(cid:68)(cid:61)(cid:221)(cid:69)(cid:60)(cid:221)(cid:20)(cid:75)(cid:72)(cid:65)(cid:57)(cid:59)(cid:66)(cid:66)(cid:221)(cid:216)(cid:66)(cid:59)(cid:74)(cid:63)(cid:218)(cid:63)(cid:67)(cid:221)(cid:8)(cid:63)(cid:80)(cid:67)(cid:59)(cid:74)(cid:66)(cid:59)(cid:72)(cid:63)(cid:221)(cid:1)(cid:128)(cid:217)(cid:128)(cid:221)
and all of the group companies which are subsidiaries, and reports the
results of the audit carried out in line with the International Standards
for the Professional Practice of Internal Auditing to the Audit Committee.
The auditing activities of the Internal Audit function mainly comprise of
operational audits conducted pursuant to annual audit plans and audits in
accordance with Article 404 of the Sarbanes-Oxley Act.
Operational audit activities are carried out according to annual audit plans
prepared with respect to a risk based audit approach. Through conducting
operational audits, Internal Audit function evaluates and improves
effectiveness of risk management, control, and governance processes and
provides assurance to help Turkcell accomplish its objectives.
On the other hand, as we are listed on the New York Stock Exchange in the
United States, audits are conducted within the framework of the annual
plan to provide assurance in terms of the adequacy and effectiveness of
internal control system across Turkcell and Turkcell Group companies, of
which financial statements are consolidated, and whether this structure
operates effectively, in compliance with the provisions of Article 404 of
the Sarbanes-Oxley Act, which all publicly traded companies are required
to comply with. All stages from the planning stage to the specified internal
control insufficiencies and following and concluding actions of the audit
activities carried out in accordance with said Article are reported to the
Audit Committee, CEO and CFO at regular intervals.
The Internal Audit Unit also provides consultancy in current matters and
matters requested by the management.
The Internal Audit Unit reports the compliance practices as per Sarbanes
Oxley Rule Act Section 404 to the Audit Committee while Corporate Risk
Management Unit reports to the Early Detection of Risks Committee. The
Internal Audit mechanism operates with a risk based audit approach. Within
this scope, functionally and institutionally probable risks are continuously
monitored, where the risk analyses resulting from these conducted
operations constitute the main input of audit activities.
Furthermore, there is an Enterprise Risk Management (ERM) process which
comprises identifying the risks that may affect Turkcell’s performance
in achieving its targets on department basis, coordinating risk analysis
activities, planning necessary actions, sharing, reporting and following
the outcomes with the Company management. The Enterprise Risk
Management Unit is responsible for coordinating the ERM process
under the supervision of the Group Internal Audit Directorate. Turkcell
Enterprise Risk Management Unit aims to develop an approach, where
risk management process is conducted in an integrated manner with the
fundamental management processes. While enabling this, a framework
associated with the process was identified in accordance with an Enterprise
Risk Management procedure as per the COSO ERM framework and ISO
31000 standard. During the risk identification and evaluation period,
different methods such as workshops, brainstorming sessions, reports from
risk contacts, thorough interviews, research reports, etc. are used. Thus, the
aim is to extensively identify, evaluate and effectively manage risks causing
uncertainties.
As of the end of the financial year of 2012, the “Early Detection of Risks
Committee” has been in operation in order to perform activities in a manner
affiliated with the Board of Directors within the scope of article 378 of
the TCC and the Communiqué on Corporate Governance of the CMB. The
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TURKCELL ANNUAL REPORT 2017
2017 FINANCIAL YEAR CORPORATE GOVERNANCE
PRINCIPLES COMPLIANCE REPORT
Early Detection of Risks Committee supports the Board of Directors by
performing studies for the purpose of early diagnosis of the risks which
may jeopardize the existence, development and continuity of the Company,
implementing the necessary measures related with the identified risks and
managing the risks. The Committee reports to the Board of Directors once
every 2 months and these reports are shared with the independent audit
company. Board of Directors regularly provides an evaluation regarding
the risks affecting the Company through the Early Detection of Risks
Committee.
Enterprise Risk Management Unit is responsible for coordinating the
risk assessment and risk avoidance activities at departments as well as
reporting the results to the Early Detection of Risks Committee within the
scope of Enterprise Risk Management methodology. During this process,
the ownership of the risks and the responsibility of risk avoidance activities
belong to the business and not transferred to the responsibility of the
Enterprise Risk Management Unit.
In 2000, Turkcell formulated its business continuity plans in a manner
also encompassing its technical operations and repositioned its business
continuity plan as Business Continuity Management by broadening the
extent thereof in 2004.
With the restructuring in 2011, the scope of the program expanded so as to
comprise Turkcell Group companies and suppliers. Turkcell Group Business
Continuity Management System has been structured and certified in a
manner ensuring the continuity of our call, messaging, Internet, server
services, data centers and societal security services as per the “ISO 22301,
Societal Security - Business Continuity Management systems” standard.
Regular drills are conducted for our business continuity plans formed
by considering the customers’ expectations, corporate policies and legal
obligations in order to guarantee their operation in case of emergency and
disaster.
Thanks to our geographically dispersed technical infrastructure, extensive
coverage, solution partner network, mobile exchanges, mobile base
stations, additional capacity, emergency centers and extensive experience
in handling emergencies enable us to minimize the impact of risks as much
as possible and additionally, the experience of our Group companies in
customer services, our high speed fiber-optic infrastructure, data storage
services and our experienced software development teams allow us to
effectively manage any disasters from another center, thereby ensuring the
continuity of our activities.
5.5. Strategic Goals of the Company
Having a vision of a Digital Operator, we Turkcell Group, aim to be a global
leader with our digital services. To achieve this goal, we have become a
service-oriented experience provider in our journey that we started as a
network infrastructure provider. With the products and services we offer,
we focus on accompanying our customers’ daily lives while adding value to
their lives.
We adopt a culture that creates difference through giving value, working
together to create value, being the technology leader, focusing on creating
solution and a unique digital customer experience.
5.6. Financial Rights
The shareholders were informed with a separate agenda topic at the
ordinary general assembly meeting held on 26th of March 2015 with respect
to the Remuneration Policy approved with the decision of the Company’s
Board of Directors and made public on the Company’s website. During the
financial year 2012 a Compensation Committee, which is responsible for
determining the recommendation for remuneration principles that apply
to the Board members and senior management taking into account the
long-term strategic goals of the Company, for setting out the remuneration
criteria for the Board members and senior management’s performance and
makes compensation recommendations to the Board, had been established.
All rights, benefits and remuneration provided to board members and
senior management on a cumulative basis and the criteria along with
remuneration principles used in the determination of these are being
shared with the public through the Company’s Remuneration Policy and
annual reports. Within this scope, the sum of the payments made to the
members of the Board of Directors and executives within the framework of
the Remuneration Policy is also publicly announced in the footnotes of our
financial statements. Not presenting the benefits on a per-person basis did
not lead to any conflict of interest.
The total benefit paid and provided to the key management personnel
amounts to TRY 75,847,555 for the financial year which ended on December
31, 2017. In addition to their salaries, the Company provides fringe benefits
to the directors and the executive officers as well as contributes to their
pension plans. The Company is obliged to contribute to such pension plans
at a certain percentage of the employee’s salary.
With the scope of the resolution adopted at general assembly meeting
dated 29th of April 2010 for the payment of net EUR 250,000 per year to the
Chairman of the Board of Directors and net EUR 100,000 per year to each
member of the Board of Directors during the period of their service, said
payments are continued.
No loans, credits or assurances such as the surety for benefit are granted to
board members and senior executives of the Company.
TURKCELL ANNUAL REPORT 2017
139
CONCLUSION OF THE SUBSIDIARY REPORT
01.01.2017-31.12.2017 FISCAL YEAR
Conclusion of the Report on the relationship among the Parent Company and the subsidiaries as per Article 199 of the Turkish Commercial Code:
(cid:136)(cid:4)(cid:59)(cid:74)(cid:55)(cid:63)(cid:66)(cid:73)(cid:221)(cid:69)(cid:60)(cid:221)(cid:74)(cid:62)(cid:59)(cid:221)(cid:66)(cid:59)(cid:61)(cid:55)(cid:66)(cid:221)(cid:74)(cid:72)(cid:55)(cid:68)(cid:73)(cid:55)(cid:57)(cid:74)(cid:63)(cid:69)(cid:68)(cid:73)(cid:221)(cid:69)(cid:60)(cid:221)(cid:69)(cid:75)(cid:72)(cid:221)(cid:3)(cid:69)(cid:67)(cid:70)(cid:55)(cid:68)(cid:79)(cid:221)(cid:77)(cid:63)(cid:74)(cid:62)(cid:221)(cid:20)(cid:75)(cid:72)(cid:65)(cid:57)(cid:59)(cid:66)(cid:66)(cid:221)(cid:8)(cid:69)(cid:66)(cid:58)(cid:63)(cid:68)(cid:61)(cid:221)(cid:1)(cid:128)(cid:217)(cid:128)(cid:221)(cid:55)(cid:68)(cid:58)(cid:221)(cid:63)(cid:74)(cid:73)(cid:221)(cid:73)(cid:75)(cid:56)(cid:73)(cid:63)(cid:58)(cid:63)(cid:55)(cid:72)(cid:63)(cid:59)(cid:73)(cid:221)(cid:58)(cid:75)(cid:72)(cid:63)(cid:68)(cid:61)(cid:221)(cid:74)(cid:62)(cid:59)(cid:221)(cid:60)(cid:63)(cid:73)(cid:57)(cid:55)(cid:66)(cid:221)(cid:79)(cid:59)(cid:55)(cid:72)(cid:221)(cid:177)(cid:175)(cid:176)(cid:182)(cid:221)(cid:55)(cid:72)(cid:59)(cid:221)(cid:61)(cid:63)(cid:76)(cid:59)(cid:68)(cid:221)(cid:63)(cid:68)(cid:221)(cid:74)(cid:62)(cid:59)(cid:221)(cid:55)(cid:56)(cid:69)(cid:76)(cid:59)(cid:221)(cid:74)(cid:55)(cid:56)(cid:66)(cid:59)(cid:73)(cid:128)(cid:221)
(cid:20)(cid:62)(cid:59)(cid:72)(cid:59)(cid:221)(cid:63)(cid:73)(cid:221)(cid:68)(cid:59)(cid:63)(cid:74)(cid:62)(cid:59)(cid:72)(cid:221)(cid:55)(cid:68)(cid:79)(cid:221)(cid:66)(cid:59)(cid:61)(cid:55)(cid:66)(cid:221)(cid:74)(cid:72)(cid:55)(cid:68)(cid:73)(cid:55)(cid:57)(cid:74)(cid:63)(cid:69)(cid:68)(cid:221)(cid:67)(cid:55)(cid:58)(cid:59)(cid:221)(cid:63)(cid:68)(cid:221)(cid:60)(cid:55)(cid:76)(cid:69)(cid:72)(cid:221)(cid:69)(cid:60)(cid:221)(cid:20)(cid:75)(cid:72)(cid:65)(cid:57)(cid:59)(cid:66)(cid:66)(cid:221)(cid:8)(cid:69)(cid:66)(cid:58)(cid:63)(cid:68)(cid:61)(cid:221)(cid:1)(cid:128)(cid:217)(cid:125)(cid:221)(cid:68)(cid:69)(cid:72)(cid:221)(cid:69)(cid:68)(cid:59)(cid:221)(cid:69)(cid:60)(cid:221)(cid:63)(cid:74)(cid:73)(cid:221)(cid:73)(cid:75)(cid:56)(cid:73)(cid:63)(cid:58)(cid:63)(cid:55)(cid:72)(cid:63)(cid:59)(cid:73)(cid:125)(cid:221)(cid:68)(cid:69)(cid:72)(cid:221)(cid:55)(cid:68)(cid:79)(cid:221)(cid:55)(cid:57)(cid:74)(cid:63)(cid:69)(cid:68)(cid:221)(cid:74)(cid:55)(cid:65)(cid:59)(cid:68)(cid:125)(cid:221)(cid:69)(cid:72)(cid:221)(cid:55)(cid:76)(cid:69)(cid:63)(cid:58)(cid:59)(cid:58)(cid:221)(cid:63)(cid:68)(cid:221)(cid:60)(cid:55)(cid:76)(cid:69)(cid:72)(cid:221)(cid:69)(cid:60)(cid:221)(cid:20)(cid:75)(cid:72)(cid:65)(cid:57)(cid:59)(cid:66)(cid:66)(cid:221)
(cid:8)(cid:69)(cid:66)(cid:58)(cid:63)(cid:68)(cid:61)(cid:221)(cid:1)(cid:128)(cid:217)(cid:128)(cid:221)(cid:69)(cid:72)(cid:221)(cid:69)(cid:68)(cid:59)(cid:221)(cid:69)(cid:60)(cid:221)(cid:63)(cid:74)(cid:73)(cid:221)(cid:73)(cid:75)(cid:56)(cid:73)(cid:63)(cid:58)(cid:63)(cid:55)(cid:72)(cid:63)(cid:59)(cid:73)(cid:221)(cid:75)(cid:70)(cid:69)(cid:68)(cid:221)(cid:58)(cid:63)(cid:72)(cid:59)(cid:57)(cid:74)(cid:63)(cid:76)(cid:59)(cid:221)(cid:60)(cid:72)(cid:69)(cid:67)(cid:221)(cid:20)(cid:75)(cid:72)(cid:65)(cid:57)(cid:59)(cid:66)(cid:66)(cid:221)(cid:8)(cid:69)(cid:66)(cid:58)(cid:63)(cid:68)(cid:61)(cid:221)(cid:1)(cid:128)(cid:217)(cid:128)
Details of services provided and/or fixed asset purchases/sales performed under operational activities carried out between our Company and Turkcell
(cid:8)(cid:69)(cid:66)(cid:58)(cid:63)(cid:68)(cid:61)(cid:221)(cid:1)(cid:128)(cid:217)(cid:128)(cid:221)(cid:55)(cid:68)(cid:58)(cid:142)(cid:69)(cid:72)(cid:221)(cid:63)(cid:74)(cid:73)(cid:221)(cid:73)(cid:75)(cid:56)(cid:73)(cid:63)(cid:58)(cid:63)(cid:55)(cid:72)(cid:63)(cid:59)(cid:73)(cid:221)(cid:74)(cid:62)(cid:55)(cid:74)(cid:221)(cid:55)(cid:72)(cid:59)(cid:221)(cid:63)(cid:68)(cid:221)(cid:60)(cid:75)(cid:66)(cid:66)(cid:221)(cid:57)(cid:69)(cid:68)(cid:60)(cid:69)(cid:72)(cid:67)(cid:63)(cid:74)(cid:79)(cid:221)(cid:77)(cid:63)(cid:74)(cid:62)(cid:221)(cid:74)(cid:62)(cid:59)(cid:221)(cid:67)(cid:55)(cid:72)(cid:65)(cid:59)(cid:74)(cid:221)(cid:58)(cid:75)(cid:72)(cid:63)(cid:68)(cid:61)(cid:221)(cid:74)(cid:62)(cid:59)(cid:221)(cid:60)(cid:63)(cid:73)(cid:57)(cid:55)(cid:66)(cid:221)(cid:79)(cid:59)(cid:55)(cid:72)(cid:221)(cid:177)(cid:175)(cid:176)(cid:182)(cid:221)(cid:55)(cid:72)(cid:59)(cid:221)(cid:63)(cid:68)(cid:57)(cid:66)(cid:75)(cid:58)(cid:59)(cid:58)(cid:221)(cid:63)(cid:68)(cid:221)(cid:74)(cid:62)(cid:63)(cid:73)(cid:221)(cid:72)(cid:59)(cid:70)(cid:69)(cid:72)(cid:74)(cid:128)(cid:137)
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140
TURKCELL ANNUAL REPORT 2017
TELECOMMUNICATIONS SECTOR IN TURKEY
BROADBAND INTERNET MARKET
The number of broadband internet subscribers, which was around 6 million in
2008, had exceeded 67.9 million (11.4 million fixed broadband,
56.5 million mobile broadband subscribers) as of the end of the third quarter
of 2017. Meanwhile, the annual rate of increase in the total number of
internet subscribers was 14.9%. The number of xDSL subscribers exceeded
(cid:183)(cid:128)(cid:178)(cid:221)(cid:67)(cid:63)(cid:66)(cid:66)(cid:63)(cid:69)(cid:68)(cid:221)(cid:55)(cid:68)(cid:58)(cid:221)(cid:206)(cid:56)(cid:59)(cid:72)(cid:221)(cid:73)(cid:75)(cid:56)(cid:73)(cid:57)(cid:72)(cid:63)(cid:56)(cid:59)(cid:72)(cid:73)(cid:221)(cid:55)(cid:70)(cid:70)(cid:72)(cid:69)(cid:55)(cid:57)(cid:62)(cid:59)(cid:58)(cid:221)(cid:74)(cid:69)(cid:221)(cid:177)(cid:128)(cid:177)(cid:221)(cid:67)(cid:63)(cid:66)(cid:66)(cid:63)(cid:69)(cid:68)(cid:128)(cid:221)(cid:20)(cid:62)(cid:59)(cid:221)(cid:74)(cid:69)(cid:74)(cid:55)(cid:66)(cid:221)(cid:66)(cid:59)(cid:68)(cid:61)(cid:74)(cid:62)(cid:221)(cid:69)(cid:60)(cid:221)
(cid:74)(cid:62)(cid:59)(cid:221)(cid:206)(cid:56)(cid:59)(cid:72)(cid:221)(cid:63)(cid:68)(cid:60)(cid:72)(cid:55)(cid:73)(cid:74)(cid:72)(cid:75)(cid:57)(cid:74)(cid:75)(cid:72)(cid:59)(cid:221)(cid:69)(cid:60)(cid:221)(cid:55)(cid:66)(cid:74)(cid:59)(cid:72)(cid:68)(cid:55)(cid:74)(cid:63)(cid:76)(cid:59)(cid:221)(cid:69)(cid:70)(cid:59)(cid:72)(cid:55)(cid:74)(cid:69)(cid:72)(cid:73)(cid:221)(cid:62)(cid:55)(cid:58)(cid:221)(cid:72)(cid:59)(cid:55)(cid:57)(cid:62)(cid:59)(cid:58)(cid:221)(cid:181)(cid:180)(cid:125)(cid:178)(cid:184)(cid:179)(cid:221)(cid:65)(cid:67)(cid:128)(cid:221)
The total amount of revenue in relation to internet service providers in
the third quarter of 2017 was approximately TRY 5.1 billion. The average
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(cid:1)(cid:70)(cid:70)(cid:72)(cid:69)(cid:78)(cid:63)(cid:67)(cid:55)(cid:74)(cid:59)(cid:66)(cid:79)(cid:221)(cid:182)(cid:175)(cid:186)(cid:221)(cid:69)(cid:60)(cid:221)(cid:206)(cid:78)(cid:59)(cid:58)(cid:221)(cid:56)(cid:72)(cid:69)(cid:55)(cid:58)(cid:56)(cid:55)(cid:68)(cid:58)(cid:221)(cid:73)(cid:75)(cid:56)(cid:73)(cid:57)(cid:72)(cid:63)(cid:56)(cid:59)(cid:72)(cid:73)(cid:221)(cid:63)(cid:68)(cid:221)(cid:20)(cid:75)(cid:72)(cid:65)(cid:59)(cid:79)(cid:221)(cid:77)(cid:59)(cid:72)(cid:59)(cid:221)(cid:73)(cid:59)(cid:59)(cid:68)(cid:221)(cid:74)(cid:69)(cid:221)
prefer packages offering connection of 10-30 Mbit/sec.
The share of service provided with xDSL technology by alternative operators
in the broadband industry was at 18.7% as of the third quarter of 2017.
TV MARKET
As of the third quarter of 2017, there are 16 operators, which have the Cable
Broadcast Service (CBS) authorization. While the number of Türksat’s cable
TV subscribers is 1,206,083; among the operators providing IPTV services,
Superonline has 505,876 (as of the end of 2017) and TTNet has 567,798
(2017 3Q) subscribers.
Among those operators authorized to provide satellite platform services,
(cid:4)(cid:63)(cid:61)(cid:63)(cid:74)(cid:55)(cid:66)(cid:221)(cid:16)(cid:66)(cid:55)(cid:74)(cid:60)(cid:69)(cid:72)(cid:67)(cid:221)(cid:20)(cid:59)(cid:65)(cid:68)(cid:69)(cid:66)(cid:69)(cid:64)(cid:63)(cid:221)(cid:8)(cid:63)(cid:80)(cid:67)(cid:59)(cid:74)(cid:66)(cid:59)(cid:72)(cid:63)(cid:221)(cid:1)(cid:128)(cid:217)(cid:128)(cid:221)(cid:148)(cid:4)(cid:63)(cid:61)(cid:63)(cid:74)(cid:109)(cid:72)(cid:65)(cid:149)(cid:125)(cid:221)(cid:4)(cid:69)(cid:215)(cid:55)(cid:68)(cid:221)(cid:20)(cid:22)(cid:221)(cid:4)(cid:63)(cid:61)(cid:63)(cid:74)(cid:55)(cid:66)(cid:221)
(cid:16)(cid:66)(cid:55)(cid:74)(cid:60)(cid:69)(cid:72)(cid:67)(cid:221)(cid:216)(cid:218)(cid:66)(cid:59)(cid:74)(cid:67)(cid:59)(cid:57)(cid:63)(cid:66)(cid:63)(cid:215)(cid:63)(cid:221)(cid:1)(cid:128)(cid:217)(cid:128)(cid:221)(cid:148)(cid:4)(cid:19)(cid:67)(cid:55)(cid:72)(cid:74)(cid:149)(cid:125)(cid:221)(cid:16)(cid:66)(cid:55)(cid:74)(cid:60)(cid:69)(cid:72)(cid:67)(cid:74)(cid:75)(cid:72)(cid:65)(cid:221)(cid:4)(cid:63)(cid:64)(cid:63)(cid:74)(cid:55)(cid:66)(cid:221)(cid:16)(cid:66)(cid:55)(cid:74)(cid:60)(cid:69)(cid:72)(cid:67)(cid:221)(cid:8)(cid:63)(cid:80)(cid:67)(cid:59)(cid:74)(cid:66)(cid:59)(cid:72)(cid:63)(cid:221)
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FIXED VOICE MARKET
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telephone subscribers in our country, while the penetration ratio of the
population is approximately 13.8%.
The Information and Communication Technologies Authority (ICTA),
established for the regulation and supervision of the telecommunications
sector as an independent management authority, has been in operation since
January 2000.
According to the ICTA Market Data report, the number of players in the
Turkish electronic communications sector was 460 as of the third quarter of
2017 and the number of authorizations given to these players is 812.
(cid:9)(cid:68)(cid:221)(cid:74)(cid:62)(cid:59)(cid:221)(cid:206)(cid:72)(cid:73)(cid:74)(cid:221)(cid:74)(cid:62)(cid:72)(cid:59)(cid:59)(cid:221)(cid:71)(cid:75)(cid:55)(cid:72)(cid:74)(cid:59)(cid:72)(cid:73)(cid:221)(cid:69)(cid:60)(cid:221)(cid:177)(cid:175)(cid:176)(cid:182)(cid:125)(cid:221)(cid:74)(cid:62)(cid:59)(cid:221)(cid:74)(cid:69)(cid:74)(cid:55)(cid:66)(cid:221)(cid:68)(cid:59)(cid:74)(cid:221)(cid:73)(cid:55)(cid:66)(cid:59)(cid:73)(cid:221)(cid:72)(cid:59)(cid:76)(cid:59)(cid:68)(cid:75)(cid:59)(cid:73)(cid:221)(cid:69)(cid:60)(cid:221)(cid:67)(cid:69)(cid:56)(cid:63)(cid:66)(cid:59)(cid:221)
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(cid:20)(cid:59)(cid:66)(cid:59)(cid:65)(cid:69)(cid:67)(cid:109)(cid:68)(cid:63)(cid:65)(cid:55)(cid:73)(cid:79)(cid:69)(cid:68)(cid:221)(cid:1)(cid:128)(cid:217)(cid:128)(cid:221)(cid:148)(cid:136)(cid:22)(cid:69)(cid:58)(cid:55)(cid:60)(cid:69)(cid:68)(cid:59)(cid:137)(cid:149)(cid:125)(cid:221)(cid:1)(cid:76)(cid:59)(cid:55)(cid:221)(cid:216)(cid:66)(cid:59)(cid:74)(cid:63)(cid:218)(cid:63)(cid:67)(cid:221)(cid:8)(cid:63)(cid:80)(cid:67)(cid:59)(cid:74)(cid:66)(cid:59)(cid:72)(cid:63)(cid:221)(cid:1)(cid:128)(cid:217)(cid:128)(cid:221)(cid:148)(cid:136)(cid:1)(cid:76)(cid:59)(cid:55)(cid:137)(cid:149)(cid:151)(cid:221)
(cid:55)(cid:68)(cid:58)(cid:221)(cid:20)(cid:109)(cid:72)(cid:65)(cid:221)(cid:20)(cid:59)(cid:66)(cid:59)(cid:65)(cid:69)(cid:67)(cid:109)(cid:68)(cid:63)(cid:65)(cid:55)(cid:73)(cid:79)(cid:69)(cid:68)(cid:221)(cid:1)(cid:128)(cid:217)(cid:128)(cid:221)(cid:148)(cid:136)(cid:20)(cid:109)(cid:72)(cid:65)(cid:221)(cid:20)(cid:59)(cid:66)(cid:59)(cid:65)(cid:69)(cid:67)(cid:137)(cid:149)(cid:221)(cid:77)(cid:59)(cid:72)(cid:59)(cid:221)(cid:55)(cid:70)(cid:70)(cid:72)(cid:69)(cid:78)(cid:63)(cid:67)(cid:55)(cid:74)(cid:59)(cid:66)(cid:79)(cid:221)(cid:20)(cid:18)(cid:25)(cid:221)
29 billion, while the net sales revenues of other operators were realized at
TRY 8.5 billion. The total amount of investments made in the same period was
close to TRY 4.2 billion.
MOBILE MARKET
There are 77.9 million mobile subscribers in total in our country,
corresponding to a penetration rate of approximately 97.6% as of the end of
September 2017. (Mobile penetration rate excluding the population aged 0-9
years: 109.9%).
In the third quarter of 2017, the number of 4.5G subscribers stood at 62.9
million, while the number of 3G subscribers decreased to 11.6 million. With
3G and 4.5G services, the number of mobile broadband subscribers who get
Internet service from mobile computer and phone increased to 56.5 million.
As of the third quarter of 2017, 53% of mobile subscribers were in postpaid
tariffs while 47% were in prepaid tariffs. The number of prepaid mobile
broadband subscribers was 25.6 million and the number of postpaid
mobile broadband subscribers was 30.8 million, while the number of M2M
subscribers reached 4.3 million.
In the third quarter of 2017, the number of mobile numbers ported decreased
by 4.34% compared to the previous quarter and stood at 2.6 million. As of
November 8, 2017, 109 million mobile number portability transactions were
realized in total.
In terms of market share distribution based on the number of subscribers,
Turkcell has a 44.5%, Vodafone a 30.9% and Avea a 24.6% market share.
Approximately 89% of mobile subscribers are consumer and 11% are
corporate subscribers.
Average monthly data usage of mobile broadband was at 3.2 GB levels, while
data usage of subscribers whose devices and SIM cards were compatible with
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quarter of 2017 increased by 8.1% compared to the same period of last year,
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increase was 9% for Turkcell, 3.8% for Vodafone and 1.8% for Avea.
In terms of the revenues from subscribers, Turkcell’s market share stood at
45.6%, Vodafone’s 30.9% and Avea’s 23.5%.
TURKCELL ANNUAL REPORT 2017
141
NEW DEVELOPMENTS IN OUR COMPANIES
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Regulation and Supervision Agency (“BRSA”) dated 21.01.2016, numbered 6686
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been granted within the framework of Article 7 of Financial Leasing, Factoring and
Financing Companies Law No. 6361, as well as Article 5, Clause 2 of the Legislation
regarding the Establishment and Operational Principles of Financial Leasing,
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and related legislation of Law No. 5549 on the Prevention of the Laundering of
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in insurance agency activities related to existing consumer loans, and is subject to
insurance agency provisions in this context.
TURKCELL ENERGY SUPPLY LICENSE (cid:148)(cid:20)(cid:75)(cid:72)(cid:65)(cid:57)(cid:59)(cid:66)(cid:66)(cid:222)(cid:5)(cid:68)(cid:59)(cid:72)(cid:64)(cid:63)(cid:222)(cid:213)(cid:102)(cid:80)(cid:109)(cid:67)(cid:66)(cid:59)(cid:72)(cid:63)(cid:222)(cid:76)(cid:59)(cid:222)(cid:5)(cid:66)(cid:59)(cid:65)(cid:74)(cid:72)(cid:63)(cid:65)(cid:222)
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supply license with the Energy Market Regulatory Board (EMRB) decision dated
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Gazette dated June 9, 2017, number 30091. “Participatory Agreement and Market
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(cid:55)(cid:68)(cid:58)(cid:221)(cid:20)(cid:55)(cid:65)(cid:55)(cid:73)(cid:56)(cid:55)(cid:68)(cid:65)(cid:221)(cid:1)(cid:128)(cid:217)(cid:128)(cid:221)(cid:60)(cid:69)(cid:72)(cid:221)(cid:20)(cid:75)(cid:72)(cid:65)(cid:57)(cid:59)(cid:66)(cid:66)(cid:221)(cid:5)(cid:68)(cid:59)(cid:72)(cid:64)(cid:63)(cid:221)(cid:212)(cid:102)(cid:80)(cid:109)(cid:67)(cid:66)(cid:59)(cid:72)(cid:63)(cid:221)(cid:76)(cid:59)(cid:221)(cid:5)(cid:66)(cid:59)(cid:65)(cid:74)(cid:72)(cid:63)(cid:65)(cid:221)(cid:19)(cid:55)(cid:74)(cid:96)(cid:218)(cid:221)(cid:76)(cid:59)(cid:221)(cid:20)(cid:63)(cid:57)(cid:55)(cid:72)(cid:59)(cid:74)(cid:221)(cid:1)(cid:128)(cid:217)(cid:128)(cid:221)(cid:74)(cid:69)(cid:221)
initiate its studies.
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dated 20.08.2016. The operational permit has been granted pursuant to Article
14, Clause 1 and Article 15, Clause 1 of Law No. 6493 on Payment and Security
Settlement Systems, Payment Services and Electronic Money Institutions. Thus, it
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permit in the mobile payment area. It has been authorized to act as an “electronic
money institution” with the BRSA decision dated 20.07.2017, number 7433, and
(cid:70)(cid:75)(cid:56)(cid:66)(cid:63)(cid:73)(cid:62)(cid:59)(cid:58)(cid:221)(cid:63)(cid:68)(cid:221)(cid:74)(cid:62)(cid:59)(cid:221)(cid:15)(cid:60)(cid:206)(cid:57)(cid:63)(cid:55)(cid:66)(cid:221)(cid:7)(cid:55)(cid:80)(cid:59)(cid:74)(cid:74)(cid:59)(cid:221)(cid:58)(cid:55)(cid:74)(cid:59)(cid:58)(cid:221)(cid:10)(cid:75)(cid:66)(cid:79)(cid:221)(cid:177)(cid:177)(cid:125)(cid:221)(cid:177)(cid:175)(cid:176)(cid:182)(cid:128)(cid:221)(cid:20)(cid:62)(cid:59)(cid:221)(cid:55)(cid:75)(cid:74)(cid:62)(cid:69)(cid:72)(cid:63)(cid:80)(cid:55)(cid:74)(cid:63)(cid:69)(cid:68)(cid:221)(cid:62)(cid:55)(cid:73)(cid:221)(cid:56)(cid:59)(cid:59)(cid:68)(cid:221)
granted pursuant to Article 15, Clause 1; Article 18, Clause 2; and Article 19 of Law
(cid:14)(cid:69)(cid:128)(cid:221)(cid:181)(cid:179)(cid:184)(cid:178)(cid:128)(cid:221)(cid:23)(cid:63)(cid:74)(cid:62)(cid:63)(cid:68)(cid:221)(cid:74)(cid:62)(cid:59)(cid:221)(cid:60)(cid:72)(cid:55)(cid:67)(cid:59)(cid:77)(cid:69)(cid:72)(cid:65)(cid:221)(cid:69)(cid:60)(cid:221)(cid:74)(cid:62)(cid:59)(cid:221)(cid:55)(cid:60)(cid:69)(cid:72)(cid:59)(cid:67)(cid:59)(cid:68)(cid:74)(cid:63)(cid:69)(cid:68)(cid:59)(cid:58)(cid:221)(cid:55)(cid:75)(cid:74)(cid:62)(cid:69)(cid:72)(cid:63)(cid:80)(cid:55)(cid:74)(cid:63)(cid:69)(cid:68)(cid:125)(cid:221)(cid:20)(cid:47)(cid:8)(cid:1)(cid:217)(cid:221)
can issue electronic money, while acting as an intermediary in the payment of
(cid:63)(cid:68)(cid:73)(cid:74)(cid:63)(cid:74)(cid:75)(cid:74)(cid:63)(cid:69)(cid:68)(cid:55)(cid:66)(cid:221)(cid:56)(cid:63)(cid:66)(cid:66)(cid:73)(cid:128)(cid:221)(cid:9)(cid:68)(cid:221)(cid:74)(cid:62)(cid:63)(cid:73)(cid:221)(cid:57)(cid:69)(cid:68)(cid:74)(cid:59)(cid:78)(cid:74)(cid:125)(cid:221)(cid:20)(cid:47)(cid:8)(cid:1)(cid:217)(cid:221)(cid:69)(cid:70)(cid:59)(cid:72)(cid:55)(cid:74)(cid:59)(cid:73)(cid:221)(cid:75)(cid:68)(cid:58)(cid:59)(cid:72)(cid:221)(cid:74)(cid:62)(cid:59)(cid:221)(cid:70)(cid:72)(cid:69)(cid:76)(cid:63)(cid:73)(cid:63)(cid:69)(cid:68)(cid:73)(cid:221)(cid:69)(cid:60)(cid:221)(cid:74)(cid:62)(cid:59)(cid:221)
Law No. 6493 and Law No. 5549 and other related legislation as a payment and
electronic money institution.
(cid:1)(cid:222)(cid:14)(cid:5)(cid:23)(cid:222)(cid:1)(cid:21)(cid:20)(cid:8)(cid:15)(cid:18)(cid:9)(cid:26)(cid:1)(cid:20)(cid:9)(cid:15)(cid:14)(cid:222)(cid:6)(cid:15)(cid:18)(cid:222)(cid:11)(cid:21)(cid:12)(cid:5)(cid:222)(cid:8)(cid:217)(cid:26)(cid:13)(cid:5)(cid:20)(cid:222)(cid:22)(cid:5)(cid:222)(cid:217)(cid:218)(cid:12)(cid:5)(cid:20)(cid:13)(cid:5)(cid:3)(cid:217)(cid:12)(cid:217)(cid:11)(cid:222)(cid:1)(cid:128)(cid:218)(cid:128)(cid:222)(cid:148)(cid:7)(cid:66)(cid:69)(cid:56)(cid:55)(cid:66)(cid:222)
(cid:20)(cid:69)(cid:77)(cid:59)(cid:72)(cid:222)(cid:55)(cid:57)(cid:74)(cid:63)(cid:68)(cid:61)(cid:222)(cid:55)(cid:73)(cid:222)(cid:74)(cid:62)(cid:59)(cid:222)(cid:74)(cid:69)(cid:77)(cid:59)(cid:72)(cid:222)(cid:57)(cid:69)(cid:67)(cid:70)(cid:55)(cid:68)(cid:79)(cid:149)(cid:127)(cid:222)Upon an application to ICTA, Global Tower
has been authorized to provide a Satellite Communications Services with this new
authorization, the aim is to transfer some of the satellite communication services
carried out by Superonline to Global Tower, and thus, to focus on and prioritize
satellite communication services with this new focus, Global Tower will be able to
offer different services, such as Satellite TV that Superonline does not offer in the
market.
(cid:20)(cid:21)(cid:18)(cid:11)(cid:3)(cid:5)(cid:12)(cid:12)(cid:222)(cid:47)(cid:26)(cid:5)(cid:12)(cid:222)(cid:6)(cid:217)(cid:14)(cid:1)(cid:14)(cid:19)(cid:13)(cid:1)(cid:14)(cid:222)(cid:1)(cid:128)(cid:218)(cid:128)(cid:222)(cid:148)(cid:20)(cid:47)(cid:6)(cid:1)(cid:218)(cid:222)(cid:55)(cid:57)(cid:74)(cid:63)(cid:68)(cid:61)(cid:222)(cid:55)(cid:73)(cid:222)(cid:55)(cid:222)(cid:70)(cid:72)(cid:63)(cid:76)(cid:55)(cid:74)(cid:59)(cid:222)(cid:206)(cid:68)(cid:55)(cid:68)(cid:57)(cid:59)(cid:222)
(cid:57)(cid:69)(cid:67)(cid:70)(cid:55)(cid:68)(cid:79)(cid:149)(cid:127)(cid:222)(cid:20)(cid:47)(cid:6)(cid:1)(cid:217)(cid:221)(cid:62)(cid:55)(cid:73)(cid:221)(cid:56)(cid:59)(cid:59)(cid:68)(cid:221)(cid:61)(cid:72)(cid:55)(cid:68)(cid:74)(cid:59)(cid:58)(cid:221)(cid:55)(cid:68)(cid:221)(cid:59)(cid:73)(cid:74)(cid:55)(cid:56)(cid:66)(cid:63)(cid:73)(cid:62)(cid:67)(cid:59)(cid:68)(cid:74)(cid:221)(cid:66)(cid:63)(cid:57)(cid:59)(cid:68)(cid:73)(cid:59)(cid:221)(cid:77)(cid:63)(cid:74)(cid:62)(cid:221)(cid:74)(cid:62)(cid:59)(cid:221)(cid:2)(cid:18)(cid:19)(cid:1)(cid:221)
decision dated 06.10.2017, numbered 7552, within the provisions of the Law
No. 6361 on Financial Leasing, Factoring and Financing Companies; and the
Regulation regarding the Establishment and Operational Principles of Financial
(cid:12)(cid:59)(cid:55)(cid:73)(cid:63)(cid:68)(cid:61)(cid:125)(cid:221)(cid:6)(cid:55)(cid:57)(cid:74)(cid:69)(cid:72)(cid:63)(cid:68)(cid:61)(cid:221)(cid:55)(cid:68)(cid:58)(cid:221)(cid:6)(cid:63)(cid:68)(cid:55)(cid:68)(cid:57)(cid:63)(cid:68)(cid:61)(cid:221)(cid:3)(cid:69)(cid:67)(cid:70)(cid:55)(cid:68)(cid:63)(cid:59)(cid:73)(cid:128)(cid:221)(cid:20)(cid:62)(cid:59)(cid:221)(cid:59)(cid:73)(cid:74)(cid:55)(cid:56)(cid:66)(cid:63)(cid:73)(cid:62)(cid:67)(cid:59)(cid:68)(cid:74)(cid:221)(cid:69)(cid:60)(cid:221)(cid:20)(cid:47)(cid:6)(cid:1)(cid:217)(cid:221)(cid:62)(cid:55)(cid:73)(cid:221)(cid:56)(cid:59)(cid:59)(cid:68)(cid:221)
authorized by Ministry of Customs and Trade decision dated 19.01.2018, number
50035491-431.99.
REGULATORY DEVELOPMENTS - SECTOR REGULATIONS
THE MOBILE MARKET ANALYSIS OF ICTA HAS BEEN FINALIZED:
› The ICTA’s latest market analysis on Access to Mobile Networks and Call
Origination has been approved by the Board decision dated April 12, 2017,
numbered 2017/DK-SRD/124. The ICTA decided to remove the mobile access and
call origination market from the scope of the regulation, and lift our Company’s
Significant Market Power (EPG)* status within a transition period of 1 year.
Accordingly, unless otherwise determined by the Board, our Company’s liabilities
such as providing access and interconnection in the call origination market,
non-discrimination, transparency, preparation and issuance of reference access
tariffs, being subject to tariff control, account separation and cost accounting,
and co-location obligations shall be abolished as of April 12, 2018.
› The ICTA’s market analysis on Mobile Call Termination has been approved by
the Board decision dated April 19, 2017, numbered 2017/DK-SRD/131. ICTA
decided to remove the SMS and MMS termination market within the scope of
the regulation at the end of the one year transition period, as of April 19, 2018,
(cid:75)(cid:68)(cid:66)(cid:59)(cid:73)(cid:73)(cid:221)(cid:69)(cid:74)(cid:62)(cid:59)(cid:72)(cid:77)(cid:63)(cid:73)(cid:59)(cid:221)(cid:58)(cid:59)(cid:74)(cid:59)(cid:72)(cid:67)(cid:63)(cid:68)(cid:59)(cid:58)(cid:221)(cid:56)(cid:79)(cid:221)(cid:74)(cid:62)(cid:59)(cid:221)(cid:2)(cid:69)(cid:55)(cid:72)(cid:58)(cid:128)(cid:221)(cid:8)(cid:69)(cid:77)(cid:59)(cid:76)(cid:59)(cid:72)(cid:125)(cid:221)(cid:74)(cid:62)(cid:59)(cid:221)(cid:19)(cid:63)(cid:61)(cid:68)(cid:63)(cid:206)(cid:57)(cid:55)(cid:68)(cid:74)(cid:221)(cid:13)(cid:55)(cid:72)(cid:65)(cid:59)(cid:74)(cid:221)
Power status will continue in the call termination market for mobile operators,
operators that offer satellite communications services, and Virtual Mobile
(cid:14)(cid:59)(cid:74)(cid:77)(cid:69)(cid:72)(cid:65)(cid:221)(cid:19)(cid:59)(cid:72)(cid:76)(cid:63)(cid:57)(cid:59)(cid:221)(cid:148)(cid:19)(cid:13)(cid:217)(cid:8)(cid:149)(cid:221)(cid:69)(cid:70)(cid:59)(cid:72)(cid:55)(cid:74)(cid:69)(cid:72)(cid:73)(cid:125)(cid:221)(cid:77)(cid:62)(cid:63)(cid:57)(cid:62)(cid:221)(cid:57)(cid:55)(cid:68)(cid:221)(cid:69)(cid:60)(cid:60)(cid:59)(cid:72)(cid:221)(cid:57)(cid:55)(cid:66)(cid:66)(cid:221)(cid:74)(cid:59)(cid:72)(cid:67)(cid:63)(cid:68)(cid:55)(cid:74)(cid:63)(cid:69)(cid:68)(cid:221)(cid:73)(cid:59)(cid:72)(cid:76)(cid:63)(cid:57)(cid:59)(cid:73)(cid:221)(cid:60)(cid:69)(cid:72)(cid:221)
the incoming calls of their subscribers.
* Significant Market Power
REGULATION OF CONSUMER RIGHTS IN THE ELECTRONIC
COMMUNICATIONS SECTOR: Consumer Rights Regulation regarding the
(cid:5)(cid:66)(cid:59)(cid:57)(cid:74)(cid:72)(cid:69)(cid:68)(cid:63)(cid:57)(cid:221)(cid:3)(cid:69)(cid:67)(cid:67)(cid:75)(cid:68)(cid:63)(cid:57)(cid:55)(cid:74)(cid:63)(cid:69)(cid:68)(cid:73)(cid:221)(cid:19)(cid:59)(cid:57)(cid:74)(cid:69)(cid:72)(cid:221)(cid:62)(cid:55)(cid:73)(cid:221)(cid:56)(cid:59)(cid:59)(cid:68)(cid:221)(cid:70)(cid:75)(cid:56)(cid:66)(cid:63)(cid:73)(cid:62)(cid:59)(cid:58)(cid:221)(cid:63)(cid:68)(cid:221)(cid:74)(cid:62)(cid:59)(cid:221)(cid:15)(cid:60)(cid:206)(cid:57)(cid:63)(cid:55)(cid:66)(cid:221)(cid:7)(cid:55)(cid:80)(cid:59)(cid:74)(cid:74)(cid:59)(cid:221)
dated October 28, 2017, number 30224. The Regulation enables the subscription
agreement to be placed in the electronic environment based on procedures to be
determined by the Authority. Furthermore, it stipulates that the subscriber not
(cid:56)(cid:59)(cid:221)(cid:57)(cid:62)(cid:55)(cid:72)(cid:61)(cid:59)(cid:58)(cid:221)(cid:60)(cid:69)(cid:72)(cid:221)(cid:74)(cid:62)(cid:59)(cid:221)(cid:206)(cid:72)(cid:73)(cid:74)(cid:221)(cid:69)(cid:70)(cid:59)(cid:68)(cid:63)(cid:68)(cid:61)(cid:221)(cid:55)(cid:68)(cid:58)(cid:221)(cid:57)(cid:66)(cid:69)(cid:73)(cid:63)(cid:68)(cid:61)(cid:221)(cid:74)(cid:72)(cid:55)(cid:68)(cid:73)(cid:55)(cid:57)(cid:74)(cid:63)(cid:69)(cid:68)(cid:73)(cid:221)(cid:74)(cid:69)(cid:221)(cid:56)(cid:59)(cid:221)(cid:67)(cid:55)(cid:58)(cid:59)(cid:221)(cid:77)(cid:63)(cid:74)(cid:62)(cid:63)(cid:68)(cid:221)(cid:74)(cid:62)(cid:59)(cid:221)
calendar year. Article 7, Clauses 1 and 9 of the Regulation, which concern how to
position a subscription agreement in the electronic environment, has entered into
force on the date of publication of the Regulation, whereas the other provisions
shall enter into force on 28.04.2018.
(cid:6)(cid:1)(cid:9)(cid:18)(cid:222)(cid:21)(cid:19)(cid:1)(cid:7)(cid:5)(cid:222)(cid:16)(cid:15)(cid:9)(cid:14)(cid:20)(cid:222)(cid:148)(cid:6)(cid:21)(cid:16)(cid:148)(cid:1)(cid:11)(cid:14)(cid:149)(cid:149)(cid:222)(cid:18)(cid:5)(cid:7)(cid:21)(cid:12)(cid:1)(cid:20)(cid:9)(cid:15)(cid:14)(cid:127)(cid:222)With the regulation entered into
force on March 1, 2017, certain transparency obligations were introduced, such as
explicitly stating the existence of FUP implementation in the introduction of FUP
(cid:74)(cid:55)(cid:72)(cid:63)(cid:60)(cid:60)(cid:73)(cid:126)(cid:221)(cid:63)(cid:68)(cid:60)(cid:69)(cid:72)(cid:67)(cid:63)(cid:68)(cid:61)(cid:221)(cid:69)(cid:68)(cid:221)(cid:74)(cid:62)(cid:59)(cid:221)(cid:6)(cid:21)(cid:16)(cid:221)(cid:66)(cid:59)(cid:76)(cid:59)(cid:66)(cid:221)(cid:55)(cid:68)(cid:58)(cid:221)(cid:70)(cid:69)(cid:73)(cid:74)(cid:130)(cid:6)(cid:21)(cid:16)(cid:221)(cid:55)(cid:57)(cid:57)(cid:59)(cid:73)(cid:73)(cid:221)(cid:73)(cid:70)(cid:59)(cid:59)(cid:58)(cid:221)(cid:63)(cid:68)(cid:221)(cid:55)(cid:66)(cid:66)(cid:221)(cid:68)(cid:69)(cid:74)(cid:63)(cid:206)(cid:57)(cid:55)(cid:74)(cid:63)(cid:69)(cid:68)(cid:221)
made on every medium; sending free SMSs to the subscriber when 80% and 100%
of the FUP is achieved, and in cases when SMS communication is not possible,
informing the subscriber through methods such as warning visual, e-mail, and audio
response system, etc. As of the same date, the post-FUP data download speed was
(cid:73)(cid:74)(cid:63)(cid:70)(cid:75)(cid:66)(cid:55)(cid:74)(cid:59)(cid:58)(cid:221)(cid:55)(cid:73)(cid:221)(cid:55)(cid:221)(cid:67)(cid:63)(cid:68)(cid:63)(cid:67)(cid:75)(cid:67)(cid:221)(cid:69)(cid:60)(cid:221)(cid:176)(cid:177)(cid:183)(cid:221)(cid:65)(cid:56)(cid:70)(cid:73)(cid:221)(cid:60)(cid:69)(cid:72)(cid:221)(cid:67)(cid:69)(cid:56)(cid:63)(cid:66)(cid:59)(cid:221)(cid:74)(cid:55)(cid:72)(cid:63)(cid:60)(cid:60)(cid:73)(cid:125)(cid:221)(cid:77)(cid:62)(cid:59)(cid:72)(cid:59)(cid:55)(cid:73)(cid:221)(cid:60)(cid:69)(cid:72)(cid:221)(cid:206)(cid:78)(cid:59)(cid:58)(cid:221)(cid:74)(cid:55)(cid:72)(cid:63)(cid:60)(cid:60)(cid:73)(cid:125)(cid:221)
it was decided to apply a speed determined by the pre-FUP data download speed.
Effective as of May 1, 2017, the regulation also introduced the obligation not to
count internet usage between 02:00-08:00 based on FUP, and not to impose post-
FUP pro-rata speed between these hours, even where the FUP quota is reached.
The decision was made for FUP implementation to be terminated as of 31.12.2018.
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142
TURKCELL ANNUAL REPORT 2017
NEW DEVELOPMENTS IN OUR COMPANIES
(cid:9)(cid:16)(cid:222)(cid:2)(cid:9)(cid:20)(cid:222)(cid:19)(cid:20)(cid:18)(cid:5)(cid:1)(cid:13)(cid:222)(cid:1)(cid:3)(cid:3)(cid:5)(cid:19)(cid:19)(cid:222)(cid:148)(cid:22)(cid:1)(cid:5)(cid:149)(cid:222)(cid:16)(cid:18)(cid:9)(cid:3)(cid:9)(cid:14)(cid:7)(cid:222)(cid:13)(cid:5)(cid:20)(cid:8)(cid:15)(cid:4)(cid:222)(cid:148)(cid:16)(cid:15)(cid:18)(cid:20)(cid:222)(cid:20)(cid:18)(cid:1)(cid:14)(cid:19)(cid:13)(cid:9)(cid:19)(cid:19)(cid:9)(cid:15)(cid:14)(cid:149)(cid:222)
REVISION: The Port and Transmission Pricing Model rates have been revised
with the Board Decision dated April 28, 2017, number 2017/DK-ETD/139. The
invoicing by Turk Telekom based on the new model has begun starting from
May 1, 2017. The new model predicts a staggered increase in price depending on
usage. The cost predictability of the sector has increased with the new model
due to the decrease impact of the variable part on transmission fees.
REFERENCE LEASED LINE PROPOSAL DRAFT PUBLIC OPINION: Our
(cid:3)(cid:69)(cid:67)(cid:70)(cid:55)(cid:68)(cid:79)(cid:221)(cid:58)(cid:59)(cid:66)(cid:63)(cid:76)(cid:59)(cid:72)(cid:59)(cid:58)(cid:221)(cid:63)(cid:74)(cid:73)(cid:221)(cid:69)(cid:70)(cid:63)(cid:68)(cid:63)(cid:69)(cid:68)(cid:73)(cid:221)(cid:74)(cid:69)(cid:221)(cid:74)(cid:62)(cid:59)(cid:221)(cid:20)(cid:109)(cid:72)(cid:65)(cid:221)(cid:20)(cid:59)(cid:66)(cid:59)(cid:65)(cid:69)(cid:67)(cid:109)(cid:68)(cid:63)(cid:65)(cid:55)(cid:73)(cid:79)(cid:69)(cid:68)(cid:221)(cid:1)(cid:128)(cid:217)(cid:128)(cid:221)(cid:12)(cid:59)(cid:55)(cid:73)(cid:59)(cid:58)(cid:221)(cid:12)(cid:63)(cid:68)(cid:59)(cid:221)
Proposal Draft, which was opened to public opinion by the ICTA within the
framework of the change made to market analysis.
DEVELOPMENTS CONCERNING INSTALLATION AND OPERATION OF
INFRASTRUCTURE FACILITIES:
LOCAL PRODUCT OBLIGATION: Operators that have been granted 4.5G
authorization, have submitted their first reports in regards to their obligation
to source local products in their network related investments. Accordingly,
following the 4.5G authorization, operators shall provide their network
related investments (hardware and software products related to network and
communication services, including, but not limited to, base station, switches,
router, etc.) from products determined to be of local content within the scope
of Law No. 4734 and related legislation. The local product purchase obligation
is defined in three periods: at least 30% for the first year, at least 40% for
the second year and at least 45% for the third and subsequent years just after
stated in October 27th 2015.
PROCEDURES AND PRINCIPLES RELATED TO REFUNDS TO BE MADE BY
OPERATORS TO SUBSCRIBERS: The Regulation, which includes ICTA Board
Decisions regarding refunds to subscribers will be effective as of June 30,
2018. The regulation introduces rules on the methods of refunds to be made
by operators to both real persons and legal entities, as well as the methods of
informing subscribers, and the duration for completion of the refunds.
PROCEDURES AND PRINCIPLES RELATED TO THE USE OF CALLING
(cid:12)(cid:9)(cid:14)(cid:5)(cid:222)(cid:9)(cid:14)(cid:6)(cid:15)(cid:18)(cid:13)(cid:1)(cid:20)(cid:9)(cid:15)(cid:14)(cid:222)(cid:148)(cid:3)(cid:12)(cid:9)(cid:149)(cid:127)(cid:222)The ICTA regulation, which became effective on
11.06.2016, regulates the procedures and principles related to the CLI usage of
operators providing electronic communication services, except for the use of
CLI in calls originating and terminating abroad.
WHOLESALE AND RETAIL LEASED LINE MARKET ANALYSIS: Turknet filed
a lawsuit claiming that the Wholesale and Retail Leased Line Market published
in 2013 had not covered services regarding the “Backbone and Partial Metro
Ethernet Lines”. As a result of the need for revision after Turknet won the case,
the following changes were made with the document published on April 14.
› The determination that Türk Telekom is an operator with significant
Market Power (EPG) at the Wholesale and Retail level, in the Leased Line
termination and carrier market nationwide, continues.
› Partial Metro Ethernet (ME) Line Service is included in the market.
› Backbone Metro Ethernet (ME) Line Service is included in the market.
› Other access methods and obligations are to continue.
› Services in their entirety are subject to access, non-discrimination,
›
transparency, preparation and issuance of reference access tariffs, subject to
tariff control (cost-based tariff determination), account separation and cost
accounting, as well as co-location and facility sharing obligations.
In the document of 2013; an analysis has been made in 20 provinces, in
which the infrastructure of the alternative operators exists, despite the fact
that access obligation has been valid for the entire country’s boundaries
in the Wholesale and Retail Leased Line market analysis. While no such
segregation has been made in this document, analyses were again made
according to capacity, revenue and number of lines, for the entire country.
NOTIFICATION OF BOARD DECISION ON INFRASTRUCTURE
INSTALLATION:
As an assurance for our country’s electronic communication infrastructure
information to be displayed on a geographical information system based map,
as well as procedures regarding the right of way and facility sharing to be
done effectively and in a timely manner; the ICTA announced its decision dated
13.09.2017, number 2017/DK-ETD/265. Accordingly;
› As of the date of the notification, projects related to electronic
communication infrastructure installation shall primarily be presented to the
Authority, in order for them to be evaluated in terms of facility sharing.
› Where the Authority determines that facility sharing is possible, the site
investigation and subsequent works are to be carried out among operators
within the scope of secondary legislation.
› Where the Authority determines that facility sharing is not possible,
procedures for the right of way shall continue to be carried out by the
Ministry of Transport, Maritime Affairs and Communications (UDHB).
› Provisions for the application procedures of the secondary legislation
›
currently in force concerning facility sharing shall be handled within the
scope of the procedures and principles to be determined by the Authority.
It is stated that the work and procedures related to ongoing processes,
starting from site investigation, will continue to be maintained by the parties,
according to the provisions of the relevant documents.
DEVELOPMENTS REGARDING FIXED AND MOBILE INFRASTRUCTURE
INSTALLATION PROCESSES: We submitted a request to The Ministry of
Transportation and the Ministry of Environment and Urbanization claiming that
existing legislation was not compatible with our infrastructure facilities, was
not practically and technically capable of implementation, and that solutions
were needed for the installation and operation problems resulting from the
arrangements related to duplicate processes. In this context, a provision in
regards to the Electronic Communications Stations was added to the Planned
(cid:1)(cid:72)(cid:59)(cid:55)(cid:73)(cid:221)(cid:26)(cid:69)(cid:68)(cid:63)(cid:68)(cid:61)(cid:221)(cid:12)(cid:59)(cid:61)(cid:63)(cid:73)(cid:66)(cid:55)(cid:74)(cid:63)(cid:69)(cid:68)(cid:221)(cid:148)(cid:16)(cid:1)(cid:216)(cid:25)(cid:149)(cid:125)(cid:221)(cid:70)(cid:75)(cid:56)(cid:66)(cid:63)(cid:73)(cid:62)(cid:59)(cid:58)(cid:221)(cid:56)(cid:79)(cid:221)(cid:74)(cid:62)(cid:59)(cid:221)(cid:13)(cid:63)(cid:68)(cid:63)(cid:73)(cid:74)(cid:72)(cid:79)(cid:221)(cid:69)(cid:60)(cid:221)(cid:5)(cid:68)(cid:76)(cid:63)(cid:72)(cid:69)(cid:68)(cid:67)(cid:59)(cid:68)(cid:74)(cid:221)(cid:55)(cid:68)(cid:58)(cid:221)
Urbanization, and which entered into force on October 1, 2017. This provision
stipulated that no construction license and occupancy permit would be obtained
for these stations, whereby the duplicate permit process was reduced to one,
paving the way for the installation of the station facility simply upon receipt
of a Site Selection Document. In contrast to the processes followed in the
past, a simpler process has been established that is more compatible with the
communication infrastructure.
(cid:1)(cid:61)(cid:55)(cid:63)(cid:68)(cid:125)(cid:221)(cid:77)(cid:63)(cid:74)(cid:62)(cid:221)(cid:55)(cid:221)(cid:70)(cid:72)(cid:69)(cid:76)(cid:63)(cid:73)(cid:63)(cid:69)(cid:68)(cid:221)(cid:55)(cid:58)(cid:58)(cid:59)(cid:58)(cid:221)(cid:74)(cid:69)(cid:221)(cid:16)(cid:1)(cid:216)(cid:25)(cid:125)(cid:221)(cid:63)(cid:74)(cid:221)(cid:62)(cid:55)(cid:73)(cid:221)(cid:56)(cid:59)(cid:59)(cid:68)(cid:221)(cid:72)(cid:59)(cid:61)(cid:75)(cid:66)(cid:55)(cid:74)(cid:59)(cid:58)(cid:221)(cid:74)(cid:62)(cid:55)(cid:74)(cid:221)(cid:63)(cid:68)(cid:60)(cid:72)(cid:55)(cid:73)(cid:74)(cid:72)(cid:75)(cid:57)(cid:74)(cid:75)(cid:72)(cid:59)(cid:221)
components related to fixed infrastructure would not be subject to a
construction license and occupancy permit, clearing the way for the installation
of antennas on the facades of buildings with the stipulation that antenna length
should not exceed 1.55 meters.
TURKCELL ANNUAL REPORT 2017
143
LAW NO. 5490 ON POPULATION SERVICES:
Some amendments in regards to the use of the Identity Sharing System have
been made in Article 45, Clause 1 of Law No. 5490 on Population Services,
pursuant to Law No. 7039 on Amendment in Population Services and Certain
Laws published in the Official Gazette dated 03.11.2017, number 30229. In
this context, it is regulated that the identity data and information regarding
the settlement and address held in the central database could be shared with
financing companies within the scope of Law No. 6361.
(cid:14)(cid:1)(cid:20)(cid:9)(cid:15)(cid:14)(cid:1)(cid:12)(cid:222)(cid:2)(cid:18)(cid:15)(cid:1)(cid:4)(cid:2)(cid:1)(cid:14)(cid:4)(cid:222)(cid:19)(cid:20)(cid:18)(cid:1)(cid:20)(cid:5)(cid:7)(cid:25)(cid:222)(cid:1)(cid:14)(cid:4)(cid:222)(cid:1)(cid:3)(cid:20)(cid:9)(cid:15)(cid:14)(cid:222)(cid:16)(cid:12)(cid:1)(cid:14)(cid:222)(cid:148)(cid:177)(cid:175)(cid:176)(cid:182)(cid:130)(cid:177)(cid:175)(cid:177)(cid:175)(cid:149)(cid:127)
The “National Broadband Strategy and Action Plan (2017-2020)” prepared
by the Ministry of Transport, Maritime Affairs and Communications (UDHB)
was published on December 21, 2017. The plan includes regulatory advice for
easier installation of the fixed and mobile telecommunication infrastructure,
the establishment of competition, the use of scarce resources, and new
technologies and products.
DRAFT STUDIES
DRAFT REGULATION ON THE PROCESSING AND PROTECTION OF
PERSONAL DATA IN THE ELECTRONIC COMMUNICATIONS SECTOR: The
draft Regulation, which was opened to public opinion by the ICTA, regulates
the procedures and principles to be followed by operators in the electronic
communications sector, regarding the processing, storage, and protection of
personal data.
OTHER DEVELOPMENTS
UNIVERSAL CONTINUITY AGREEMENT: A Universal Continuity Agreement
has been signed on 16.02.2017 in order to operate the existing GSM network
with 4.5G technology by adding it to the existing GSM-based universal network
valid between 03.03.2016-31.12.2018. Those articles preventing issues that
constitute risk in terms of Treasury share and similar financial liabilities, stated
in the first Agreement, have been added to the Agreement.
(cid:16)(cid:1)(cid:18)(cid:20)(cid:9)(cid:3)(cid:9)(cid:16)(cid:1)(cid:20)(cid:9)(cid:15)(cid:14)(cid:222)(cid:9)(cid:14)(cid:222)(cid:20)(cid:21)(cid:18)(cid:11)(cid:5)(cid:25)(cid:135)(cid:19)(cid:222)(cid:1)(cid:21)(cid:20)(cid:15)(cid:13)(cid:15)(cid:2)(cid:9)(cid:12)(cid:5)(cid:222)(cid:16)(cid:18)(cid:15)(cid:10)(cid:5)(cid:3)(cid:20)(cid:222)(cid:10)(cid:15)(cid:9)(cid:14)(cid:20)(cid:222)(cid:22)(cid:5)(cid:14)(cid:20)(cid:21)(cid:18)(cid:5)(cid:222)
GROUP: Our company signed a Joint Venture Group Cooperation Protocol
(“Protocol”) on 02.11.2017 with the intention to participate as a potential
investor in Turkey’s Automobile Project, conducted under the coordination
of the T.R. Ministry of Science, Industry and Technology and the Union of
Chambers and Commodity Exchanges of Turkey. The purpose of the Protocol
is to determine the framework for the activities required by the project
to establish a system for the design, development, production, sales and
distribution of a car, in the process of becoming an incorporation. With
intellectual and industrial property rights belonging to a domestic company to
be established, the Protocol is aimed at contributing to the Republic of Turkey’s
target of ranking among the world’s top 10 economies.
(cid:1)(cid:57)(cid:57)(cid:69)(cid:72)(cid:58)(cid:63)(cid:68)(cid:61)(cid:221)(cid:74)(cid:69)(cid:221)(cid:55)(cid:68)(cid:69)(cid:74)(cid:62)(cid:59)(cid:72)(cid:221)(cid:70)(cid:72)(cid:69)(cid:76)(cid:63)(cid:73)(cid:63)(cid:69)(cid:68)(cid:221)(cid:55)(cid:58)(cid:58)(cid:59)(cid:58)(cid:221)(cid:74)(cid:69)(cid:221)(cid:16)(cid:1)(cid:216)(cid:25)(cid:125)(cid:221)(cid:74)(cid:62)(cid:59)(cid:221)(cid:60)(cid:63)(cid:56)(cid:59)(cid:72)(cid:221)(cid:63)(cid:68)(cid:60)(cid:72)(cid:55)(cid:73)(cid:74)(cid:72)(cid:75)(cid:57)(cid:74)(cid:75)(cid:72)(cid:59)(cid:221)(cid:60)(cid:55)(cid:57)(cid:63)(cid:66)(cid:63)(cid:74)(cid:79)(cid:221)
suitable for multi-use has been a prerequisite of occupancy permits being
granted to new buildings by the municipalities. Thus, fiber infrastructure has
become a basic utility that must be found in new buildings.
PROCEDURES AND PRINCIPLES RELATED TO THE PROTECTION OF
CONSUMER RIGHTS IN THE DELIVERY OF THE VALUE ADDED ELECTRONIC
COMMUNICATION SERVICES: As an assurance primarily for the prevention
of the receipt of services without consumer consent, alleviation of consumer
complaints, protection of consumer rights and interests, and preclusion of
unjust consumer treatment, the ICTA announced its decision dated 21.12.2016,
number 2016/DK-THD/496 regarding the delivery of Value-Added Services.
With the regulation entered into force on 30.06.2017, new arrangements were
introduced for operators, in particular concerning the approval and notification
obligations to be applied in value added service sales.
REGULATION ON THE DELETION, DESTRUCTION, OR ANONYMIZATION
OF PERSONAL DATA: The Personal Data Protection Institution has prepared
a regulation within the scope of Article 7 of the Law on the Protection of
Personal Data. The regulation arranges the procedures and principles regarding
the deletion, destruction or anonymization of personal data, and introduces
obligations for preparing a policy in regards to the storage and destruction of
personal data, carrying out periodic destruction process, and keeping records
of destruction processes. The effective date for the regulation is determined as
January 1, 2018.
DRAFT REGULATION ON DATA RESPONSIBLE RECORD: The regulation,
prepared within the scope of Article 16 of the Law on the Protection of Personal
Data, which regulates the procedures and principles regarding the records to
be registered in the data responsible records under the Law on the Protection
of Personal Data, published in the Official Gazette dated 30.12.2017, numbered
30286.
CHANGES IN LEGISLATION AND SETTLEMENT OF DISPUTES
LAW NO. 7061 ON AMENDMENT TO CERTAIN TAX LAWS AND OTHER
LAWS: Major amendments have been made with Law No. 7061 on the
“Amendment in Certain Tax Laws and Other Laws” published in the Official
Gazette dated 05.12.2017, and numbered 30261, in (Law No. 406 and Law No.
5809) concerning the financial obligations of operators such as Treasury Share
(HP), Contribution Share to the Authority’s Expenses (KMKP), Administrative
Fees, Contribution Share to the Universal Service Fund (EHKP) and radio fees.
Exemptions were granted to certain tax and financial liabilities within the scope
of the Fatih Project. The Law also regulates a single Special Communication
(cid:20)(cid:55)(cid:78)(cid:221)(cid:148)(cid:47)(cid:216)(cid:22)(cid:149)(cid:221)(cid:72)(cid:55)(cid:74)(cid:59)(cid:221)(cid:69)(cid:60)(cid:221)(cid:182)(cid:128)(cid:180)(cid:186)(cid:221)(cid:60)(cid:69)(cid:72)(cid:221)(cid:55)(cid:66)(cid:66)(cid:221)(cid:67)(cid:69)(cid:56)(cid:63)(cid:66)(cid:59)(cid:221)(cid:59)(cid:66)(cid:59)(cid:57)(cid:74)(cid:72)(cid:69)(cid:68)(cid:63)(cid:57)(cid:221)(cid:57)(cid:69)(cid:67)(cid:67)(cid:75)(cid:68)(cid:63)(cid:57)(cid:55)(cid:74)(cid:63)(cid:69)(cid:68)(cid:221)(cid:73)(cid:59)(cid:72)(cid:76)(cid:63)(cid:57)(cid:59)(cid:73)(cid:221)
regardless of a data and voice differentiation; brings a radio fee exemption on
M2M devices; removes the infrastructure radio license and usage fees paid
based on the TRx numbers at the base stations, but instead charges a 5% radio
fee on operators’ monthly net sales. On the other hand, the aforementioned
Law allows for the structuring of ongoing disputes related to HP, KMKP,
Administrative Fees, EHKP and radio fees, and the relevant penalty, late
payment interest, default interest and trial expenses. Within the scope of the
Law, the structuring with respect to HP, KMKP, Administrative Fees and EHKP
is also made possible for periods in which investigations are ongoing, or else
where they have yet to commence.
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TURKCELL ANNUAL REPORT 2017
TURKCELL GROUP: 2017 FINANCIAL &
OPERATIONAL REVIEW
Our unaudited annual consolidated financial statements including our consolidated statements of financial position as of December 31, 2017 and 2016 and
our consolidated statements of profit and loss, comprehensive income, changes in equity and cash flows for the two years in the period ended December 31,
2017 and the related notes included in this annual report have been prepared in accordance with International Financial Reporting Standards as issued by
the International Accounting Standards Board (“IFRS Report”). The following financial and operational overview focuses principally on the developments
and trends in our business in the full year 2017 and should be read in conjunction with the IFRS report. The figures are expressed in Turkish liras (TRY)
unless otherwise stated. A year on year comparison of key indicators is provided and figures in parentheses following the operational and financial results
for the year end 2017 refer to the same item for the year end of 2016 unless otherwise stated.
TURKCELL GROUP: FINANCIAL SUMMARY
(cid:3)(cid:69)(cid:68)(cid:73)(cid:69)(cid:66)(cid:63)(cid:58)(cid:55)(cid:74)(cid:59)(cid:58)(cid:222)(cid:16)(cid:72)(cid:69)(cid:60)(cid:63)(cid:74)(cid:222)(cid:111)(cid:222)(cid:12)(cid:69)(cid:73)(cid:73)(cid:222)(cid:19)(cid:74)(cid:55)(cid:74)(cid:59)(cid:67)(cid:59)(cid:68)(cid:74)(cid:222)(cid:148)(cid:67)(cid:63)(cid:66)(cid:66)(cid:63)(cid:69)(cid:68)(cid:222)(cid:20)(cid:18)(cid:25)(cid:149)
Total Revenue
Direct cost of revenues1
Depreciation and amortization
Gross Profit Margin
Administrative expenses
Selling and marketing expenses
EBITDA2
EBITDA Margin
Net finance income / (expense)
Finance income
Finance expense
Other income / (expense)
Non-controlling interests
Income tax expense
Discontinued operations
Net Income
Net Income excluding tax settlement3
(1) Including depreciation and amortization expenses.
(2) EBITDA is a non-GAAP financial measure.
2016
14,285.6
(9,236.6)
(2,203.2)
35.3%
(721.8)
(1,910.9)
4,619.5
32.3%
(172.8)
1,064.8
(1,237.6)
(234.3)
(51.7)
(423.2)
(42.2)
1,492.1
1,627.6
(3) Excluding the TRY500 million net income impact of the tax settlement in Q417 and TRY136 million net income impact of the tax amnesty in Q316
(cid:3)(cid:69)(cid:68)(cid:73)(cid:69)(cid:66)(cid:63)(cid:58)(cid:55)(cid:74)(cid:59)(cid:58)(cid:222)(cid:2)(cid:55)(cid:66)(cid:55)(cid:68)(cid:57)(cid:59)(cid:222)(cid:19)(cid:62)(cid:59)(cid:59)(cid:74)(cid:222)(cid:4)(cid:55)(cid:74)(cid:55)(cid:222)(cid:148)(cid:25)(cid:59)(cid:55)(cid:72)(cid:222)(cid:5)(cid:68)(cid:58)(cid:149)(cid:222)(cid:148)(cid:67)(cid:63)(cid:66)(cid:66)(cid:63)(cid:69)(cid:68)(cid:222)(cid:20)(cid:18)(cid:25)(cid:149)
Cash and cash equivalents
Total assets
Long-term debt
Total debt
Total liabilities
Total equity
2016
6,052.4
31,600.2
6,935.1
9,781.2
15,531.8
16,068.4
2017
17,632.1
(11,350.2)
(2,597.0)
35.6%
(645.2)
(2,005.4)
6,228.3
35.3%
(322.9)
1,090.4
(1,413.3)
(698.9)
(58.6)
(571.8)
-
1,979.2
2,479.3
2017
4,712.3
33,982.5
8,258.0
12,536.1
18,937.4
15,045.1
Change %
23.4%
22.9%
17.9%
0.3pp
(10.6%)
4.9%
34.8%
3.0pp
86.9%
2.4%
14.2%
198.3%
13.3%
35.1%
n.m
32.6%
52.3%
Change %
(22.1%)
7.5%
19.1%
28.2%
21.9%
(cid:148)(cid:181)(cid:128)(cid:179)(cid:186)(cid:149)
(cid:3)(cid:69)(cid:68)(cid:73)(cid:69)(cid:66)(cid:63)(cid:58)(cid:55)(cid:74)(cid:59)(cid:58)(cid:222)(cid:3)(cid:55)(cid:73)(cid:62)(cid:222)(cid:6)(cid:66)(cid:69)(cid:77)(cid:222)(cid:148)(cid:67)(cid:63)(cid:66)(cid:66)(cid:63)(cid:69)(cid:68)(cid:222)(cid:20)(cid:18)(cid:25)(cid:149)
EBITDA*
LESS:
Capex and License
Net interest Income/ (expense)
Other
Net Change in Debt
(cid:3)(cid:55)(cid:73)(cid:62)(cid:222)(cid:61)(cid:59)(cid:68)(cid:59)(cid:72)(cid:55)(cid:74)(cid:59)(cid:58)(cid:222)(cid:142)(cid:222)(cid:148)(cid:75)(cid:73)(cid:59)(cid:58)(cid:149)
Cash balance before dividend payment
Dividend paid
Cash balance after dividend payment
(*) EBITDA is a non-GAAP financial measure.
(cid:16)(cid:72)(cid:69)(cid:60)(cid:63)(cid:74)(cid:55)(cid:56)(cid:63)(cid:66)(cid:63)(cid:74)(cid:79)(cid:222)(cid:55)(cid:68)(cid:58)(cid:222)(cid:19)(cid:69)(cid:66)(cid:76)(cid:59)(cid:68)(cid:57)(cid:79)(cid:222)(cid:18)(cid:55)(cid:74)(cid:63)(cid:69)(cid:73)(cid:222)(cid:148)(cid:186)(cid:149)
Gross Profit Margin
EBITDA Margin
Net Profit Margin
Total Liability / Equity Ratio
Net Debt / EBITDA Ratio
EXPLANATIONS:
Revenue1: Turkcell Group revenues rose by 23.4%.
• Turkcell Turkey revenues grew by 20.8% to TRY15,450 million
(TRY12,788 million).
- Data and digital services revenues, at 67% of Turkcell Turkey revenues,
grew by 51.2% to TRY10,304 million (TRY6,814 million).
- Wholesale revenues grew by 29.5% to TRY587 million (TRY453
TURKCELL ANNUAL REPORT 2017
145
2017
6,228.3
(4,090.4)
395.6
(2,366.3)
1,492.9
1,660.0
7,712.3
(cid:148)(cid:178)(cid:125)(cid:175)(cid:175)(cid:175)(cid:128)(cid:175)(cid:149)
4,712.3
2017
35.6%
35.3%
11.2%
125.9%
125.6%
Change%
34.8%
17.0%
(35.9%)
(21.6%)
(66.2%)
(cid:148)(cid:179)(cid:182)(cid:128)(cid:175)(cid:186)(cid:149)
27.4%
n.m.
(cid:148)(cid:177)(cid:177)(cid:128)(cid:176)(cid:186)(cid:149)
Change%
0.3pp
3.0pp
0.8pp
29.2pp
44.9pp
2016
4,619.5
(3,494.7)
616.9
(3,020.0)
4,411.9
3,133.6
6,052.4
-
6,052.4
2016
35.3%
32.3%
10.4%
96.7%
80.7%
Selling and Marketing Expenses: Selling and marketing expenses as a
percentage of revenues declined to 11.4% (13.4%) on the back of the fall
in prepaid subscriber frequency usage fees (0.8pp), marketing expenses
(0.6pp), selling expenses (0.2pp) and other cost items (0.4pp).
EBITDA3: EBITDA grew by 34.8% with an EBITDA margin of 35.3%
(32.3%) on 3.0pp rise. Direct cost of revenues (excluding depreciation and
amortization) rose by 0.4pp, while administrative expenses and selling and
marketing expenses fell by 1.4pp and 2.0pp, respectively.
million).
• Turkcell Turkey’s EBITDA rose by 34.4% to TRY5,594 million (TRY4,161
- We reported revenues of TRY258 million originating from our Universal
million), while the EBITDA margin rose 3.7pp to 36.2% (32.5%).
Service Project.
• Turkcell International EBITDA grew by 12.1% to TRY264 million (TRY235
million), while the EBITDA margin was at 24.7% (26.9%).
• Turkcell International revenues rose by 22.0% to TRY1,067 million
• The EBITDA of other subsidiaries rose by 65.9% to TRY370 million
(TRY875 million).
(TRY223 million).
• Other subsidiaries2 revenues grew by 78.9% to TRY1,115 million (TRY623
million).
In Q417, we changed our doubtful receivable provision assumptions based
on improvement in collection performance, which had a positive impact of
TYR133 million on EBITDA.
Direct cost of Revenues: Cost of revenue decreased to 64.4% (64.7%)
as a percentage of revenues. This was mainly due to the decrease in
treasury share (1.0pp), radio costs (1.0pp), interconnect costs (0.8pp) and
depreciation and amortization (0.7pp), despite the rise in consumer finance
company funding costs (1.1pp), GSM related equipment expenses (0.8pp)
and other cost items (1.3pp).
Administrative Expenses: Administrative expenses declined to 3.7%
(5.1%) mainly due to the change we made in our doubtful receivable
provision assumptions based on improvement in collection performance
which had a positive impact of TRY133 million.
Net finance expense: Net finance expense rose to TRY323 million (TRY173
million). This was mainly due to the decline in interest income from
contracted receivables and the increased interest expense of loans despite
lower translation losses and positive impact from the fair market value
changes of the swap contracts.
Asset held for sale and discontinued operations: In accordance with our
strategic approach and IFRS requirements, Fintur is classified as ‘held for
sale’ and reported as discontinued operations as of October 2016.
(1)Please refer to the notes to the consolidated financial statements for the definition of Turkcell
Turkey, Turkcell International and other subsidiaries.
(2) “Other subsidiaries” is mainly comprised of our information and entertainment services, call
center business revenues, financial services revenues and inter-business eliminations.
(3) EBITDA is a non-GAAP financial measure.
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TURKCELL ANNUAL REPORT 2017
TURKCELL GROUP: 2017 FINANCIAL &
OPERATIONAL REVIEW
TRY8,392 million of our consolidated debt is set at a floating rate, while
TRY4,278 million will mature within less than a year.
Net debt as of December 31, 2017 was at TRY7,824 million with a net
debt to EBITDA ratio of 1.26 times. Excluding consumer finance company
consumer loans, our telco only net debt was at TRY3,576 million with a
leverage of 0.59 times.
Turkcell Group’s short position was at USD 144 million as at the end of
Q417, thus within our comfort zone, which is below USD 500 million as
advised by our Board considering the size of our operations and balance
sheet. (Please note that this figure takes into account advance payments,
hedging and excluding FX swap transactions for TRY borrowing).
Cash Flow Analysis: Capital expenditures, including non-operational items
were at TRY4,090.4 million. The cash flow item noted as “other” included
the payment of the final instalment of the 4.5G license fee (TRY1,535
million) and mainly the negative impact of the change in working capital
(TRY831 million).
In FY17, operational capital expenditures (excluding license fees) at the
Group level were at 21.0% of total revenues.
Donations: Turkcell Group has donated TRY 113 million to various
associations, foundations and charitable organizations in 2017.
Income Tax Expense: The income tax expense increased by 35.1% to
TRY572 million (TRY423 million), of which TRY438 million comprised
current tax charges and TRY134 million was the deferred tax expense
recorded.
Net Income: Group net income increased to TRY1,979 million (TRY1,492
million), mainly due to solid operational performance and better FX results,
despite the provision booked for tax settlement in Q417 within the scope of
Law No.7061, which had a TRY500 million impact on net income after tax,
and higher depreciation and amortization expenses. In FY16 we also booked
provisions for tax amnesty within the scope of Article 6736, which had a
TRY136 million impact on net income after tax. Excluding the respective
provision amounts booked for each year, net income rose by 52.3% to
TRY2,479 million.
Total Cash & Debt: Consolidated cash as of December 31, 2017 declined
to TRY4,712 million from TRY4,906 million as of September 30, 2017.
TRY2,598 million (USD 689 million) of consolidated cash was denominated
in USD, TRY1,073 million (EUR238 million) in EUR and TRY1,041 million in
TRY and other local currencies.
Consolidated debt as of December 31, 2017 rose to TRY12,536 million
from TRY11,867 million as of September 30, 2017. This was mainly due
to the increased debt portfolio of our consumer finance company and
the translation increase in the FX denominated debt portfolio of Turkcell
Turkey, due to TRY depreciation against the USD and EUR.
• Turkcell Turkey’s debt was TRY8,475 million, of which TRY3,768 million
(USD 999 million) was denominated in USD, TRY4,656 million (EUR1,031
million) in EUR and the remaining TRY51 million in TRY.
• The debt balance of lifecell was TRY521 million, denominated in UAH.
• Our consumer finance company had a debt balance of TRY3,536 million,
of which TRY988 million (USD 262 million) was denominated in USD, and
TRY973 million (EUR215 million) in EUR with the remaining TRY1,575
million in TRY (please note that the figures in parentheses refer to USD
or EUR equivalents).
TURKCELL ANNUAL REPORT 2017
147
2016
35.3
17.4
2.1
15.7
1,043.9
818.0
359.7
24.6%
18.9%
26.8
28.3
39.2
44.0
13.9
51.1
2.4
323.9
2017
36.7
18.5
2.3
15.6
1,204.3
921.4
505.9
20.5%
19.6%
29.8
31.6
43.0
48.5
14.9
53.6
3.9
347.1
Change%
4.0%
6.3%
9.5%
(0.6%)
15.4%
12.6%
40.6%
(4.1pp)
0.7pp
11.2%
11.7%
9.7%
10.2%
7.2%
4.9%
62.5%
7.2%
(cid:15)(cid:16)(cid:5)(cid:18)(cid:1)(cid:20)(cid:9)(cid:15)(cid:14)(cid:1)(cid:12)(cid:222)(cid:18)(cid:5)(cid:22)(cid:9)(cid:5)(cid:23)(cid:222)(cid:148)(cid:20)(cid:21)(cid:18)(cid:11)(cid:5)(cid:25)(cid:149)(cid:127)
Summary of Operational Data
(cid:14)(cid:75)(cid:67)(cid:56)(cid:59)(cid:72)(cid:222)(cid:69)(cid:60)(cid:222)(cid:73)(cid:75)(cid:56)(cid:73)(cid:57)(cid:72)(cid:63)(cid:56)(cid:59)(cid:72)(cid:73)(cid:222)(cid:148)(cid:67)(cid:63)(cid:66)(cid:66)(cid:63)(cid:69)(cid:68)(cid:149)
Mobile Postpaid (million)
Mobile M2M (million)
Mobile Prepaid (million)
Fiber (thousand)
ADSL (thousand)
IPTV (thousand)
(cid:3)(cid:62)(cid:75)(cid:72)(cid:68)(cid:222)(cid:148)(cid:186)(cid:149)
Mobile Churn (%)*
Fixed Churn (%)
(cid:1)(cid:18)(cid:16)(cid:21)(cid:222)(cid:148)(cid:1)(cid:76)(cid:59)(cid:72)(cid:55)(cid:61)(cid:59)(cid:222)(cid:13)(cid:69)(cid:68)(cid:74)(cid:62)(cid:66)(cid:79)(cid:222)(cid:18)(cid:59)(cid:76)(cid:59)(cid:68)(cid:75)(cid:59)(cid:222)(cid:70)(cid:59)(cid:72)(cid:222)(cid:21)(cid:73)(cid:59)(cid:72)(cid:149)(cid:222)(cid:148)(cid:20)(cid:18)(cid:25)(cid:149)
Mobile ARPU, blended
Mobile ARPU, blended (excluding M2M)
Postpaid
Postpaid (excluding M2M)
Prepaid
Fixed Residential ARPU, blended
(cid:1)(cid:76)(cid:59)(cid:72)(cid:55)(cid:61)(cid:59)(cid:222)(cid:67)(cid:69)(cid:56)(cid:63)(cid:66)(cid:59)(cid:222)(cid:58)(cid:55)(cid:74)(cid:55)(cid:222)(cid:75)(cid:73)(cid:55)(cid:61)(cid:59)(cid:222)(cid:70)(cid:59)(cid:72)(cid:222)(cid:75)(cid:73)(cid:59)(cid:72)(cid:222)(cid:148)(cid:7)(cid:2)(cid:142)(cid:75)(cid:73)(cid:59)(cid:72)(cid:149)
(cid:13)(cid:69)(cid:56)(cid:63)(cid:66)(cid:59)(cid:222)(cid:13)(cid:15)(cid:21)(cid:222)(cid:148)(cid:1)(cid:76)(cid:61)(cid:128)(cid:222)(cid:13)(cid:69)(cid:68)(cid:74)(cid:62)(cid:66)(cid:79)(cid:222)(cid:13)(cid:63)(cid:68)(cid:75)(cid:74)(cid:59)(cid:73)(cid:222)(cid:69)(cid:60)(cid:222)(cid:75)(cid:73)(cid:55)(cid:61)(cid:59)(cid:222)(cid:70)(cid:59)(cid:72)(cid:222)(cid:73)(cid:75)(cid:56)(cid:73)(cid:149)(cid:222)(cid:56)(cid:66)(cid:59)(cid:68)(cid:58)(cid:59)(cid:58)
(*) In Q117, our churn policy was revised to extend from 9 months to 12 months (the period at the end of which we disconnect prepaid subscribers who have not topped up above TRY10.) Additionally,
under our revised policy, prepaid customers who last topped up before March will be disconnected at the latest by year-end. Please note that figures for prior periods have not been restated to reflect
this change in churn policy.
Our mobile subscriber base continued to expand and reached 34.1 million in FY17. We registered 1.0 million net subscriber additions during the year,
marking the highest net additions of the past 6 years. This was driven by 1.1 million net additions to postpaid subscribers, comprising 54.2% (52.5%) of our
total mobile subscriber base.
Our fixed subscriber base exceeded 2.1 million in FY17. We registered 264 thousand net additions during the year, of which 160 thousand were fiber and
103 thousand were ADSL subscribers. IPTV subscribers reached 506 thousand with 146 thousand annual net additions. Total TV users, including OTT TV
only subscribers, reached 2.2 million.
Mobile churn declined 4.1pp for the full year, marking the lowest churn rate of the past 10 years. This was driven by our value focused customer strategy,
service quality, an attractive digital services portfolio and targeted retention campaigns in 2017. Our fixed churn rate was 19.6% for the full year.
Mobile ARPU (excluding M2M) rose by 11.7%. Mobile ARPU growth was mainly driven by increased data and digital services usage, our upsell efforts, price
adjustment and larger postpaid subscriber base. ARPU growth was also supported by the increased share of triple play subscribers, who use voice, data and
digital services combined, to 55.8%(1).
Fixed Residential ARPU rose 4.9% for the full year, positively impacted by the increase in multiplay subscribers with TV(2) to 44.4% of total residential fiber
subscribers, along with upsell efforts.
Average mobile data usage per user rose by 62.5% for the full year driven by increased usage of data and digital services offerings. Average mobile data
usage of 4.5G users was at 6.0GB in December. Our smartphone penetration reached 72% in FY17, while 4.5G enabled smartphones reached 68% of total
smartphones.
(1) Share among mobile voice users excluding subscribers who have not used their lines in the last 3 months
(2) Multiplay subscribers with TV: Internet + TV users & internet + TV + voice users
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148
TURKCELL ANNUAL REPORT 2017
FORWARD LOOKING STATEMENTS
In 2018, we target increasing our Group revenues by 13-15%, an
EBITDA margin of 33-35%, and an operational capex to sales ratio(1)
of 18-19%.
2018 GUIDANCE
Revenue Growth
13%-15%
EBITDA Margin
33%-35%
Op. Capex/
Revenue*
(1)Excluding license fee
18%-19%
Please note that this paragraph contains forward looking statements based on our current estimates and expectations regarding market conditions for
each of our different businesses. No assurance can be given that actual results will be consistent with such estimates and expectations. For a discussion of
factors that may affect our results, see our Annual Report on Form 20-F for 2016 filed with U.S. Securities and Exchange Commission, and in particular, the
risk factor section therein.
TURKCELL ANNUAL REPORT 2017
149
REVIEW OF RISK ASSESSMENT
The headlines below with regards to financial, operational, strategic,
information security, legal and regulatory, reputational and business
continuity risks are monitored within the context of our corporate risk
governance practice:
• Competition in the Turkish telecommunications market may adversely
affect the growth of our business and our financial condition.
• Our growth strategy is partly dependent on new investment
opportunities which could affect our business and financial condition,
and the return on our investments cannot be guaranteed.
• Regulatory decisions and changes in the regulatory environment could
adversely affect our business and financial condition.
• Any downturn in the economy and instability in the political environment
in Turkey and internationally may have an adverse effect on our business
and financial condition.
• We hold interests in several companies that may expose us to various
economic, business, political, social, financial, liquidity, regulatory and
legal risks and may not provide the benefits that we expect, and our
pursuit of acquisition opportunities may increase these risks.
• We are exposed to foreign exchange rate risks that could significantly
affect our results of operation and financial position.
• Reduction in cash generated from operations and increased capital
needs may increase our borrowing requirements, which may increase our
financing costs and our exposure to the risks associated with borrowing.
• We are subject to a variety of risks with respect to our Base Transceiver
Stations (“BTSs”) excellence.
• Turkcell’s complex ownership structure and ongoing disagreements
among our main shareholders have adversely impacted and may continue
to impact decision making on important matters. These ongoing disputes
may lead to further regulatory or legal actions, and affect the ownership
and control of our company.
• We face risks related to our dependence on network and IT systems and
the products and services we provide through third party suppliers as
well as our exposure to technological changes in the communications
market, including industries where we traditionally do not compete.
• Our business, consolidated financial results and/or operational
performance could be adversely affected unless we retain our key
personnel, our partners and their employees.
• We are involved in various claims and legal actions arising in connection
with our business, which could have a material effect on our financial
condition.
• Although we maintain and regularly review our internal control over
financial reporting, there are inherent limitations on the effectiveness
of our controls, particularly as our Company grows and enters into new
businesses.
• Despite regular internal controls, there is misconduct risk in processes
involving our employees and suppliers.
•
Implementation of new accounting standards may have a significant
impact on the presentation of certain elements of our financial
statements, making year on year comparisons more difficult.
• Stealing, loosing, leaking, intentionally or unintentionally dismissing/
ruining of all kinds of company, employees and customers information
kept in physical and/or electronical medium, may negatively affect our
reputation and may face us with regulatory enforcements.
RISK MANAGEMENT AND INTERNAL CONTROL MECHANISM
During the process of selecting the independent external auditor; the Audit
Committee considers the competencies and independence status of the
independent audit firms, and advises the Board of Directors presenting a
report about the most suitable audit firm.
During our Company’s Ordinary general assembly meeting held on 25th of
(cid:13)(cid:55)(cid:79)(cid:221)(cid:177)(cid:175)(cid:176)(cid:182)(cid:125)(cid:221)(cid:16)(cid:77)(cid:3)(cid:221)(cid:2)(cid:55)(cid:215)(cid:96)(cid:67)(cid:73)(cid:96)(cid:80)(cid:221)(cid:4)(cid:59)(cid:68)(cid:59)(cid:74)(cid:63)(cid:67)(cid:221)(cid:76)(cid:59)(cid:221)(cid:19)(cid:59)(cid:72)(cid:56)(cid:59)(cid:73)(cid:74)(cid:221)(cid:13)(cid:75)(cid:62)(cid:55)(cid:73)(cid:59)(cid:56)(cid:59)(cid:57)(cid:63)(cid:221)(cid:13)(cid:55)(cid:66)(cid:63)(cid:221)(cid:13)(cid:109)(cid:218)(cid:55)(cid:76)(cid:63)(cid:72)(cid:66)(cid:63)(cid:65)(cid:221)
(cid:1)(cid:128)(cid:217)(cid:128)(cid:221)(cid:77)(cid:55)(cid:73)(cid:221)(cid:55)(cid:70)(cid:70)(cid:69)(cid:63)(cid:68)(cid:74)(cid:59)(cid:58)(cid:221)(cid:55)(cid:73)(cid:221)(cid:74)(cid:62)(cid:59)(cid:221)(cid:3)(cid:69)(cid:67)(cid:70)(cid:55)(cid:68)(cid:79)(cid:221)(cid:55)(cid:75)(cid:58)(cid:63)(cid:74)(cid:69)(cid:72)(cid:221)(cid:60)(cid:69)(cid:72)(cid:221)(cid:55)(cid:75)(cid:58)(cid:63)(cid:74)(cid:63)(cid:68)(cid:61)(cid:221)(cid:69)(cid:75)(cid:72)(cid:221)(cid:3)(cid:69)(cid:67)(cid:70)(cid:55)(cid:68)(cid:79)(cid:135)(cid:73)(cid:221)
financial statements of 2017 as per the Turkish Commercial Code (TCC).(1)
Moreover, the Internal Audit Function operates with the Board of Directors
(cid:55)(cid:68)(cid:58)(cid:221)(cid:63)(cid:73)(cid:221)(cid:72)(cid:59)(cid:73)(cid:70)(cid:69)(cid:68)(cid:73)(cid:63)(cid:56)(cid:66)(cid:59)(cid:221)(cid:60)(cid:69)(cid:72)(cid:221)(cid:74)(cid:62)(cid:59)(cid:221)(cid:55)(cid:75)(cid:58)(cid:63)(cid:74)(cid:63)(cid:68)(cid:61)(cid:221)(cid:69)(cid:60)(cid:221)(cid:20)(cid:75)(cid:72)(cid:65)(cid:57)(cid:59)(cid:66)(cid:66)(cid:221)(cid:216)(cid:66)(cid:59)(cid:74)(cid:63)(cid:218)(cid:63)(cid:67)(cid:221)(cid:8)(cid:63)(cid:80)(cid:67)(cid:59)(cid:74)(cid:66)(cid:59)(cid:72)(cid:63)(cid:221)(cid:1)(cid:128)(cid:217)(cid:128)(cid:221)
and all of the group companies which are subsidiaries, and reports the
results of the audit carried out in line with the International Standards
for the Professional Practice of Internal Auditing to the Audit Committee.
The auditing activities of the Internal Audit function mainly comprise of
operational audits conducted pursuant to annual risk based audit plans and
audits in accordance with Article 404 of the Sarbanes-Oxley Act.
Operational audit activities are carried out according to annual audit plans
prepared with respect to a risk based audit approach. Through conducting
operational audits, Internal Audit function evaluates and improves
effectiveness of risk management, control, and governance processes and
provides assurance to help Turkcell accomplish its objectives.
On the other hand, as we are listed on the New York Stock Exchange in the
United States, audits are conducted within the framework of the annual
plan to provide assurance in terms of the adequacy and effectiveness of
internal control system across Turkcell and Turkcell group companies, of
which financial statements are consolidated, and whether this structure
operates effectively, in compliance with the provisions of Article 404 of the
Sarbanes-Oxley Act, which all publicly traded companies are required to
comply with. All stages from the planning stage to the indentified internal
control insufficiencies and following and concluding actions of the audit
activities carried out in accordance with said Article are reported to the
Audit Committee, CEO and CFO at regular intervals.
(1) (cid:2)(cid:55)(cid:218)(cid:55)(cid:72)(cid:55)(cid:68)(cid:221)(cid:14)(cid:55)(cid:73)(cid:221)(cid:2)(cid:55)(cid:215)(cid:96)(cid:67)(cid:73)(cid:96)(cid:80)(cid:221)(cid:4)(cid:59)(cid:68)(cid:59)(cid:74)(cid:63)(cid:67)(cid:221)(cid:76)(cid:59)(cid:221)(cid:19)(cid:59)(cid:72)(cid:56)(cid:59)(cid:73)(cid:74)(cid:221)(cid:13)(cid:75)(cid:62)(cid:55)(cid:73)(cid:59)(cid:56)(cid:59)(cid:57)(cid:63)(cid:221)(cid:13)(cid:55)(cid:66)(cid:63)(cid:221)(cid:13)(cid:109)(cid:218)(cid:55)(cid:76)(cid:63)(cid:72)(cid:66)(cid:63)(cid:65)(cid:221)(cid:1)(cid:128)(cid:217)(cid:128)(cid:135)(cid:73)(cid:221)(cid:148)(cid:2)(cid:55)(cid:218)(cid:55)(cid:72)(cid:55)(cid:68)(cid:221)
Independent Audit & Financial Consultancy Inc.) commercial name was changed as of the 12th
(cid:69)(cid:60)(cid:221)(cid:4)(cid:59)(cid:57)(cid:59)(cid:67)(cid:56)(cid:59)(cid:72)(cid:221)(cid:177)(cid:175)(cid:176)(cid:181)(cid:221)(cid:74)(cid:69)(cid:221)(cid:16)(cid:77)(cid:3)(cid:221)(cid:2)(cid:55)(cid:215)(cid:96)(cid:67)(cid:73)(cid:96)(cid:80)(cid:221)(cid:4)(cid:59)(cid:68)(cid:59)(cid:74)(cid:63)(cid:67)(cid:221)(cid:76)(cid:59)(cid:221)(cid:19)(cid:59)(cid:72)(cid:56)(cid:59)(cid:73)(cid:74)(cid:221)(cid:13)(cid:75)(cid:62)(cid:55)(cid:73)(cid:59)(cid:56)(cid:59)(cid:57)(cid:63)(cid:221)(cid:13)(cid:55)(cid:66)(cid:63)(cid:221)(cid:13)(cid:109)(cid:218)(cid:55)(cid:76)(cid:63)(cid:72)(cid:66)(cid:63)(cid:65)(cid:221)(cid:1)(cid:128)(cid:217)(cid:128)(cid:221)(cid:148)(cid:16)(cid:77)(cid:3)(cid:221)
Independent Audit & Financial Consultancy Inc.).
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150
TURKCELL ANNUAL REPORT 2017
REVIEW OF RISK ASSESSMENT
Enterprise Risk Management Unit is responsible for coordinating the
risk assessment and risk avoidance activities at departments as well as
reporting the results to the Early Detection of Risks Committee within the
scope of Enterprise Risk Management methodology. During this process,
the ownership of the risks and the responsibility of risk avoidance activities
belong to the business unit and not transferred to the responsibility of the
Enterprise Risk Management Unit.
In 2000, Turkcell formulated its business continuity plans in a manner
also encompassing its technical operations and repositioned its business
continuity plan as Business Continuity Management by broadening the
extent thereof in 2004.
With the restructuring in 2011, the scope of the program expanded so as to
comprise Turkcell Group companies and suppliers. Turkcell Group Business
Continuity Management System has been structured and certified in a
manner ensuring the continuity of our call, messaging, Internet, server
services, data centers and societal security services as per the international
“ISO 22301, Societal security - Business continuity management systems”
standard. Regular drills are conducted for our business continuity plans
formed by considering the customers’ expectations, corporate policies and
legal obligations in order to guarantee their operation in case of emergency
and disaster.
Thanks to our geographically dispersed technical infrastructure, extensive
coverage, solution partner network, mobile exchanges, mobile base
stations, additional capacity, emergency centers and extensive experience
in handling emergencies enable us to minimize the impact of risks as much
as possible and additionally, the experience of our Group companies in
customer services, our high speed fiber-optic infrastructure, data storage
services and our experienced software development teams allow us to
effectively manage any disasters from another center, thereby ensuring the
continuity of our activities.
The Internal Audit Unit also provides consultancy in current matters and
matters requested by the management.
The Internal Audit Unit reports the compliance practices as per Sarbanes
Oxley Rule Act Section 404 to the Audit Committee and CEO while
Corporate Risk Management Unit reports to the Early Detection of Risks
Committee. The Internal Audit mechanism operates with a risk based audit
approach. Within this scope, functionally and institutionally probable risks
are continuously monitored, where the risk analyses resulting from these
conducted operations constitute the main input of audit activities.
Furthermore, there is an Enterprise Risk Management (ERM) process
which comprises identifying the risks on a department basis that may
affect Turkcell’s performance in achieving its targets, coordinating risk
analysis activities, planning necessary actions, sharing, reporting and
following the outcomes with the Company management. The Enterprise
Risk Management Unit is responsible for coordinating the ERM process
under the supervision of the Group Internal Audit Directorate. Turkcell
Enterprise Risk Management Unit aims to develop an approach, where
risk management process is conducted in an integrated manner with the
fundamental management processes. While enabling this, a framework
associated with the process was identified in accordance with an Enterprise
Risk Management procedure as per the COSO ERM framework and ISO
31000 standard. During the risk identification and evaluation period,
different methods such as workshops, brainstorming sessions, reports from
risk contacts, thorough interviews, research reports, etc. are used. Thus, the
aim is to extensively identify, evaluate and effectively manage risks causing
uncertainties.
As of the end of the financial year of 2012, the “Early Detection of Risks
Committee” has been in operation in order to perform activities in a manner
affiliated with the Board of Directors within the scope of article 378 of
the TCC and the Communiqué on Corporate Governance of the CMB. The
Early Detection of Risks Committee supports the Board of Directors by
performing studies for the purpose of early diagnosis of the risks which
may jeopardize the existence, development and continuity of the Company,
implementing the necessary measures related with the identified risks and
managing the risks. The Committee reports to the Board of Directors once
every 2 months and these reports are shared with an independent audit
company. Board of Directors regularly provides an evaluation regarding
the risks affecting the Company through the Early Detection of Risks
Committee.
151
TURKCELL İLETİŞİM HİZMETLERİ A.Ş.
CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
AND INDEPENDENT AUDITOR’S REPORT
SECTORAL AND FINANCIAL INFORMATIONTURKCELL ANNUAL REPORT 2017TURKCELL İLETİŞİM HİZMETLERİ A.Ş.Notes to the Consolidated Financial Statementsas at and for the Year Ended 31 December 2017(All amounts disclosed in the consolidated financial statements and notes have been rounded off to the nearest thousand currency units and are expressed in Turkish Liras unless otherwise stated.) 152
Report of Independent Registered Public Accounting Firm
To the Shareholders and Boards of Directors of Turkcell İletişim Hizmetleri A.Ş.
Opinions on the Financial Statements and Internal Control over Financial Reporting
We have audited the accompanying consolidated statements of financial position of Turkcell İletişim Hizmetleri A.Ş. (the “Company”) and its subsidiaries
as of December 31, 2017 and December 31, 2016, and the related consolidated statements of profit or loss, other comprehensive income, cash flows, and
changes in equity for each of the two years in the period ended December 31, 2017, including the related notes (collectively referred to as the “consolidated
financial statements”). We also have audited the Company’s internal control over financial reporting as of December 31, 2017, based on criteria established
in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of
December 31, 2017, and December 31 2016, and the results of its operations and its cash flows for each of the two years in the period ended December 31,
2107 in conformity with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board. Also in our opinion,
the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2017, based on criteria established
in Internal Control - Integrated Framework (2013) issued by the COSO.
Basis for Opinions
The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting
and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Annual Report on Internal Control
Over Financial Reporting appearing on Item 15b of the 2017 Annual Report to Shareholders. Our responsibility is to express opinions on the Company’s
consolidated financial statements and on the Company’s internal control over financial reporting based on our audits. We are a public accounting firm
registered with the Public Company Accounting Oversight Board (United States) (‘‘PCAOB’’) and are required to be independent with respect to the
Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the
PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable
assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective
internal control over financial reporting was maintained in all material respects.
Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated
financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a
test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting
principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our
audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a
material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also
included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our
opinions.
We also have audited the adjustments to reflect the discontinued operations to the 2015 financial statements, as described in Note 16. In our opinion,
such adjustments are appropriate and have been properly applied. We were not engaged to audit, review, or apply any procedures to the 2015 financial
statements of the Company other than with respect to the adjustments and, accordingly, we do not express an opinion or any other form of assurance on
the 2015 financial statements taken as a whole.
TURKCELL ANNUAL REPORT 2017
153
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control
over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly
reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to
permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company
are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding
prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial
statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation
of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of
compliance with the policies or procedures may deteriorate.
SECTORAL AND FINANCIAL INFORMATIONTURKCELL ANNUAL REPORT 2017
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Shareholders of
Turkcell İletişim Hizmetleri A.Ş.
Istanbul, Turkey
We have audited, before the effects of the retrospective adjustments for the discontinued operations as discussed in Note 16 to the consolidated financial
statements, the consolidated statements of financial position Turkcell İletişim Hizmetleri A.Ş. (the “Company”) and its subsidiaries (together the “Group”)
as at December 31, 2015, and the related consolidated statements of profit or loss, profit and loss and other comprehensive income, and cash flows for
the year ended December 31, 2015 (the 2015 consolidated financial statements before the effects of the retrospective adjustments discussed in Note 16
to the consolidated financial statements are not presented herein). These financial statements are the responsibility of the Group’s management. Our
responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.
In our opinion, such 2015 consolidated financial statements, before the effects of the retrospective adjustments for the discontinued operations as
discussed in Note 16 to the consolidated financial statements, present fairly, in all material respects, the financial position of the Group as at December 31,
2015, and the results of their operations and their cash flows for the year ended December 31, 2015, in conformity with International Financial Reporting
Standards as issued by the International Accounting Standards Board.
We were not engaged to audit, review, or apply any procedures to the retrospective adjustments for the discontinued operations as discussed in Note 16
to the consolidated financial statements and, accordingly, we do not express an opinion or any other form of assurance about whether such retrospective
adjustments are appropriate and have been properly applied. Those retrospective adjustments were audited by other auditors.
TURKCELL İLETİŞİM HİZMETLERİ A.Ş.
Consolidated Statement of Financial Position
as at 31 December 2017
(All amounts disclosed in the consolidated financial statements and notes have been rounded off to the nearest thousand currency units and are expressed
in Turkish Liras unless otherwise stated.)
Note
31 December 2017
31 December 2016
155
Assets
Property, plant and equipment
Intangible assets
Telecommunication licenses
Computer software
Other intangible assets
Investment properties
Trade receivables
Receivables from financial services
Deferred tax assets
Held to maturity investments
Other non-current assets
Total non-current assets
Inventories
Trade receivables and accrued revenue
Due from related parties
Receivables from financial services
Derivative financial instruments
Held to maturity investments
Cash and cash equivalents
Other current assets
Subtotal
Assets classified as held for sale
Total current assets
Total assets
Equity
Share capital
Share premium
Treasury shares
Additional paid-in capital
Reserves
Remeasurements of employee termination benefit
Retained earnings
Total equity attributable to equity holders of
Turkcell Iletisim Hizmetleri AS (“the Company”)
Non-controlling interests
Total equity
Liabilities
Borrowings
Employee benefit obligations
Provisions
Deferred tax liabilities
Other non-current liabilities
Total non-current liabilities
Borrowings
Current tax liabilities
Trade and other payables
Due to related parties
Deferred revenue
Provisions
Derivative financial instruments
Total current liabilities
Total liabilities
Total equity and liabilities
11
12
14
20
18
17
21
19
37
20
32
23
22
16
24
27
28
30
18
26
27
31
37
29
30
32
9,665,408
8,340,410
5,720,398
2,346,236
273,776
980
155,634
1,297,597
96,060
654
356,620
19,913,363
104,102
2,848,572
5,299
2,950,523
981,396
11,338
4,712,333
1,160,605
12,774,168
1,294,938
14,069,106
33,982,469
2,200,000
269
(56,313)
35,026
1,542,679
(44,776)
11,312,276
14,989,161
55,927
15,045,088
8,257,995
197,666
197,418
651,122
409,337
9,713,538
4,278,154
103,105
3,696,466
6,980
193,831
835,199
110,108
9,223,843
18,937,381
33,982,469
8,195,705
8,235,989
6,160,536
1,838,409
237,044
46,270
235,393
909,466
51,255
575,234
18,249,312
131,973
3,289,904
5,861
1,486,906
390,958
-
6,052,352
770,135
12,128,089
1,222,757
13,350,846
31,600,158
2,200,000
269
(65,607)
35,026
1,102,896
(41,786)
12,780,967
16,011,765
56,632
16,068,397
6,935,102
164,553
187,541
458,160
427,547
8,172,903
2,846,060
71,638
4,101,991
11,201
93,800
192,442
41,726
7,358,858
15,531,761
31,600,158
The above consolidated statement of financial position should be read in conjunction with the accompanying notes.
F1
SECTORAL AND FINANCIAL INFORMATIONTURKCELL ANNUAL REPORT 2017 156
TURKCELL İLETİŞİM HİZMETLERİ A.Ş.
Consolidated Statement of Profit or Loss
for the Year Ended 31 December 2017
(All amounts disclosed in the consolidated financial statements and notes have been rounded off to the nearest thousand currency units and are expressed
in Turkish Liras unless otherwise stated.)
Revenue
Revenue from financial services
Total revenue
Cost of revenue
Cost of revenue from financial services
Total cost of revenue
Gross profit
Gross profit from financial services
Total gross profit
Other income
Selling and marketing expenses
Administrative expenses
Other expenses
Operating profit
Finance income
Finance costs
Net finance costs
Profit before income tax
Income tax expense
Profit from continuing operations
(Loss)/profit from discontinued operations (attributable to owners of
the Company)
Profit for the year
Profit for the year is attributable to:
Owners of the Company
Non-controlling interests
Total
Basic and diluted earnings per share for profit attributable to owners of the
Company (in full TL)
Basic and diluted earnings per share for profit from continuing operations
attributable to owners of the Company (in full TL)
Basic and diluted earnings/(losses) per share for profit /(loss) from
discontinued operations attributable to owners of the Company
(in full TL)
Note
5
5
10
10
6
10
10
6
8
8
9
25
25
25
2017
17,026,401
605,663
17,632,064
(11,073,465)
(276,709)
(11,350,174)
5,952,936
328,954
6,281,890
74,438
(2,005,420)
(645,196)
(773,329)
2,932,383
1,090,449
(1,413,315)
(322,866)
2,609,517
(571,758)
2,037,759
-
2,037,759
1,979,129
58,630
2,037,759
0.90
0.90
-
2016
14,100,863
184,698
14,285,561
(9,166,384)
(70,223)
(9,236,607)
4,934,479
114,475
5,048,954
78,569
(1,910,947)
(721,849)
(312,801)
2,181,926
1,064,794
(1,237,593)
(172,799)
2,009,127
(423,160)
1,585,967
(42,164)
1,543,803
1,492,088
51,715
1,543,803
0.68
0.70
(0.02)
2015
12,769,415
-
12,769,415
(7,769,483)
-
(7,769,483)
4,999,932
-
4,999,932
44,454
(1,901,859)
(625,279)
(270,446)
2,246,802
756,039
(799,514)
(43,475)
2,203,327
(667,112)
1,536,215
367,336
1,903,551
2,067,654
(164,103)
1,903,551
0.94
0.77
0.17
The above consolidated statement of financial position should be read in conjunction with the accompanying notes.
F2
TURKCELL ANNUAL REPORT 2017 TURKCELL İLETİŞİM HİZMETLERİ A.Ş.
Consolidated Statement Of Other Comprehensive Income
for the year ended 31 December 2017
(All amounts disclosed in the consolidated financial statements and notes have been rounded off to the nearest thousand currency units and are expressed
in Turkish Liras unless otherwise stated.)
157
Profit for the year
Other comprehensive (expense):
Items that will not be reclassified to profit or loss:
Remeasurements of employee termination benefits
Income tax relating to this item
Items that may be reclassified to profit or loss:
Changes in cash flow hedge reserve
Exchange differences on translation of foreign operations
Exchange differences arising from discontinued operations
Income tax relating to these items
Other comprehensive (loss)/income for the year, net of income tax
Total comprehensive income for the year
Total comprehensive income for the year is attributable to:
Owners of the Company
Non-controlling interests
Total
Total comprehensive income for the year attributable to owners of the
Company arises from:
Continuing operations
Discontinued operations
Total
2017
2,037,759
(3,738)
748
(2,990)
-
27,959
72,190
(107,299)
(7,150)
(10,140)
2,027,619
1,968,102
59,517
2,027,619
1,903,109
64,993
1,968,102
2016
1,543,803
(34,532)
7,066
(27,466)
-
63,920
154,552
(87,381)
131,091
103,625
1,647,428
1,594,465
52,963
1,647,428
1,496,209
98,256
1,594,465
2015
1,903,551
(13,466)
2,563
(10,903)
719
166,730
(551,196)
(5,749)
(389,496)
(400,399)
1,503,152
1,616,867
(113,715)
1,503,152
1,798,094
(181,227)
1,616,867
The above consolidated statement of financial position should be read in conjunction with the accompanying notes.
F3
SECTORAL AND FINANCIAL INFORMATIONTURKCELL ANNUAL REPORT 2017
158
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T
TURKCELL ANNUAL REPORT 2017
TURKCELL İLETİŞİM HİZMETLERİ A.Ş.
Consolidated Statement of Cash Flows
for the Year Ended 31 December 2017
(All amounts disclosed in the consolidated financial statements and notes have been rounded off to the nearest thousand currency units and are expressed
in Turkish Liras unless otherwise stated.)
Note
2017
2016
2015
159
Cash flows from operating activities:
Profit for the year
Continuing operations
Discontinued operations
Profit for the year including discontinued operations
Adjustments for:
Depreciation and impairment of property, plant and equipment and investment properties
Amortization of intangible assets
Net finance income
Fair value adjustments to derivatives
Income tax expense
Gain on sale of property, plant and equipment
Unrealized foreign exchange losses on operating assets
Provisions
Share of losses/(profits) of discontinued operations
Deferred revenue
Change in operating assets/liabilities
Change in trade receivables
Change in due from related parties
Change in receivables from financial services
Change in inventories
Change in other current assets
Change in other non-current assets
Change in due to related parties
Change in trade and other payables
Change in other non-current liabilities
Change in employee benefit obligations
Changes in other working capital
Cash generated from operations
Interest paid
Income tax paid
Net cash inflow from operating activities
Cash flows from investing activities:
Acquisition of property, plant and equipment
Acquisition of intangible assets
Proceeds from sale of property, plant and equipment
Proceeds from currency option contracts
Proceeds from advances given for acquisition of property, plant and equipment
Proceeds from financial assets
Payments for held to maturity investment
Interest received
Net cash outflow from investing activities
Cash flows from financing activities:
Acquisition of non-controlling interest
Capital decrease in subsidiaries
Proceeds from issues of loans and borrowings
Proceeds from issues of bonds
Repayment of borrowings
Repayment of bonds
Dividends paid to shareholders
Dividends paid to non-controlling interest in subsidiaries
Acquisition of treasury shares
(Increase)/decrease in cash collateral related to loans
Net cash (outflow)/inflow from financing activities
Net (decrease)/increase in cash and cash equivalents
11-14
12
9
29
19
37
20
21
22
17
37
31
26
28
11
12
2,037,759
-
2,037,759
1,501,579
1,095,401
165,387
(562,562)
571,758
(33,837)
966,340
980,040
-
131,486
6,853,351
613,404
1,107
(1,931,538)
27,871
(198,268)
15,012
(4,099)
(507,043)
(82,018)
(18,627)
(265,518)
4,503,634
(909,881)
(492,487)
3,101,266
(2,937,195)
(1,172,847)
58,740
-
205,580
-
(11,992)
553,066
(3,304,648)
-
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24,102,643
209,808
(22,265,088)
(379,660)
(2,990,706)
(60,222)
-
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(1,566,743)
(1,770,125)
1,585,967
(42,164)
1,543,803
1,281,539
921,812
(117,598)
(383,452)
423,160
(25,010)
545,287
197,543
42,164
(20,350)
4,408,898
1,197,053
7,514
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(62,090)
643,444
78,770
4,302
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(14,477)
15,151
29,286
1,177,578
(434,521)
(135,920)
607,137
(2,572,401)
(855,097)
49,639
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-
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610,837
(2,976,708)
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9,381,318
167,500
(4,932,768)
-
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(65,607)
349,004
4,839,031
2,469,460
1,536,215
367,336
1,903,551
1,118,499
549,251
(515,040)
-
667,112
(13,141)
579,372
196,588
(367,336)
8,095
4,126,951
(821,208)
3,907
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(771,583)
(70,030)
(20,530)
348,472
(14,088)
5,125
23,423
2,805,913
(153,529)
(751,078)
1,901,306
(2,135,358)
(2,461,612)
24,192
1,070
228,070
19,350
-
761,328
(3,562,960)
(267,920)
-
4,866,381
1,439,862
(6,551,001)
-
(3,925,000)
(100,515)
-
(349,243)
(4,887,436)
(6,549,090)
Cash and cash equivalents at 1 January
6,052,352
2,918,796
9,031,881
Effects of exchange rate changes on cash and cash equivalents
430,106
664,096
436,005
Cash and cash equivalents at 31 December
23
4,712,333
6,052,352
2,918,796
The above consolidated statement of financial position should be read in conjunction with the accompanying notes.
F5
SECTORAL AND FINANCIAL INFORMATIONTURKCELL ANNUAL REPORT 2017 160
Notes to the consolidated financial statements
1. Reporting entity
2. Basis of preparation and summary of significant accounting policies
3. Financial risk management
4. Segment information
5. Revenue
6. Other income and expenses
7. Employee benefit expenses
8. Finance income and costs
9. Income tax expense
10. Expenses by nature
11. Property, plant and equipment
12. Intangible assets
13. Impairment of assets
14. Investment property
15. Investments accounted for using the equity method
16. Asset held for sale discontinued operation
17. Other non-current assets
18. Deferred tax assets and liabilities
19. Trade receivables and accrued revenue
20. Receivables from financial services
21. Inventory
22. Other current assets
23. Cash and cash equivalents
24. Equity
25. Earnings per share
26. Other non-current liabilities
27. Loans and borrowings
28. Employee benefit
29. Deferred revenue
30. Provisions
31. Trade and other payables
32. Derivative financial instruments
33. Financial instruments
34. Operating leases
35. Guarantees and purchase obligations
36. Commitments and contingencies
37. Related parties
38. Subsidiaries
39. Cash flow information
40. Subsequent events
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TURKCELL İLETİŞİM HİZMETLERİ A.Ş.Notes to the Consolidated Financial Statementsas at and for the Year Ended 31 December 2017(All amounts disclosed in the consolidated financial statements and notes have been rounded off to the nearest thousand currency units and are expressed in Turkish Liras unless otherwise stated.) TURKCELL ANNUAL REPORT 2017 161
1. REPORTING ENTITY
Turkcell Iletisim Hizmetleri Anonim Sirketi (the “Company”) was incorporated in Turkey on 5 October 1993 and commenced its operations in 1994. The
address of the Company’s registered office is Maltepe Aydinevler Mahallesi Inonu Caddesi No: 20, Kucukyali Ofispark/Istanbul. It is engaged in establishing
and operating a Global System for Mobile Communications (“GSM”) network in Turkey and regional states.
In April 1998, the Company signed a license agreement (the “2G License”) with the Ministry of Transport, Maritime Affairs and Communications of Turkey
(the “Turkish Ministry”), under which it was granted a 25 year GSM license in exchange for a license fee of $500,000. The License permits the Company to
operate as a stand-alone GSM operator and releases it from some of the operating constraints in the Revenue Sharing Agreement, which was in effect prior
to the 2G License. Under 2G licence, the Company pays in cash the Undersecretariat of the Treasury (the “Turkish Treasury”) a monthly tax levy namely
‘treasury share’ equal to 15% of the Company’s gross revenue from Turkish GSM operations. The Company continues to build and operate its GSM network
and is authorized to, among other things, set its own tariffs within certain limits, charge peak and off-peak rates, offer a variety of service and pricing
packages, issue invoices directly to subscribers, collect payments and deal directly with subscribers. Following the 3G tender held by the Information
Technologies and Communications Authority (“ICTA”) regarding the authorization for providing IMT-2000/UMTS services and infrastructure, the Company
has been granted the A-Type license (the “3G License”) providing the widest frequency band, at a consideration of EUR 358,000 (excluding Value Added Tax
(“VAT”)). Payment of the 3G license was made in cash, following the necessary approvals, on 30 April 2009.
On 26 August 2015, “Authorization Tender on IMT Services and Infrastructure” publicly known as 4.5G license tender, was held by the ICTA and the
Company was awarded with a total frequency band of 172.4 MHz for 13 years. The tender price is EUR 1,623,460 (excluding VAT of 18%). IMT authorization
period expires on 30 April 2029 and operators were able to commence service delivery for 4.5G starting from 1 April 2016. 2x1.4 MHz frequency band in
900MHz spectrum and 2 units of 2x5 MHz frequency bands in 2100 MHz spectrum were commenced on 1 December 2015, while remaining packages were
commenced on 1 April 2016. For details please refer to Note 12.
On 25 June 2005, the Turkish Government declared that GSM operators are required to pay 10% of their existing monthly treasury share to the Turkish
Ministry as a universal service fund contribution in accordance with Law No: 5369. As a result, starting from 30 June 2005, the Company started to pay
90% of the treasury share to the Turkish Treasury and 10% to the Turkish Ministry as universal service fund.
In July 2000, the Company completed an initial public offering with the listing of its ordinary shares on the Istanbul Stock Exchange and American
Depositary Shares, or ADSs, on the New York Stock Exchange.
The Company’s parent is Turkcell Holding A.S., which holds 51% of the Company’s shares as of 31 December 2017. The main shareholders of Turkcell
Holding A.S. are TeliaSonera Finland Oyj (Sonera), Cukurova Group and Alfa Telecom Turkey Limited (“Alfa”) according to the information obtained from
public sources.
After failure to comply with corporate governance principles for election of independent board members, the CMB appointed 3 independent board
members and 4 members, of which 2 members were chosen from the independent nominees list submitted by Sonera, as board members who satisfy the
independence criteria in 2013. All members shall serve as members until new members are elected by the general assembly or until the CMB announces
a new resolution. After appointment of board members by the CMB, Turkcell board is comprised of 7 non-executive board members who satisfy the
independence criteria and of which 3 are independent board members.
F7
SECTORAL AND FINANCIAL INFORMATIONTURKCELL ANNUAL REPORT 2017TURKCELL İLETİŞİM HİZMETLERİ A.Ş.Notes to the Consolidated Financial Statementsas at and for the Year Ended 31 December 2017(All amounts disclosed in the consolidated financial statements and notes have been rounded off to the nearest thousand currency units and are expressed in Turkish Liras unless otherwise stated.)
162
1. REPORTING ENTITY (CONTINUED)
The consolidated financial statements of the Company as at and for the year ended 31 December 2017 comprise the Company and its subsidiaries (together
referred to as the “Group”) and the Group’s interest in an associate. Subsidiaries of the Company, their locations and their nature of operations are disclosed
in Note 38. The Company’s and each of its subsidiaries’ and associate’s financial statements are prepared as at and for the year ended 31 December 2017.
2. BASIS OF PREPARATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
This note provides a list of the significant accounting policies adopted in the preparation of these consolidated financial statements to the extent they
have not already been disclosed in the other notes below. These policies have been consistently applied to all the years presented, unless otherwise stated.
The consolidated financial statements are for the Group consisting of Turkcell İetişim Hizmetleri A.Ş. and its subsidiaries and the Group’s interest in an
associate.
(a) Compliance with IFRS
The consolidated financial statements of the Group have been prepared in accordance with International Financial Reporting Standards (“IFRS”) and
interpretations issued by the IFRS Interpretations Committee (“IFRS IC”) applicable to companies reporting under IFRS. The financial statements comply
with IFRS as issued by the International Accounting Standards Board (“IASB”).
The General Assembly has the power to amend and reissue the financial statements. The consolidated financial statements as at and for the year ended
31 December 2016 were authorized for issue by the Board of Directors on 15 February 2017.
The consolidated financial statements as at and for the year ended 31 December 2017 were authorized for issue by the Board of Directors on
15 February 2018.
(b) Historical cost convention
The accompanying consolidated financial statements are based on the statutory records, with adjustments and reclassifications for the purpose of fair
presentation in accordance with IFRS as issued by the IASB. The financial statements have been prepared on a historical cost basis, except for the following
measured at fair value:
- Derivative financial instruments
- Consideration payable in relation to the acquisition of Belarusian Telecom
F8
TURKCELL İLETİŞİM HİZMETLERİ A.Ş.Notes to the Consolidated Financial Statementsas at and for the Year Ended 31 December 2017(All amounts disclosed in the consolidated financial statements and notes have been rounded off to the nearest thousand currency units and are expressed in Turkish Liras unless otherwise stated.) TURKCELL ANNUAL REPORT 2017
163
2. BASIS OF PREPARATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(c) Functional and presentation currency
(i) Transactions and balances
Transactions denominated in foreign currencies are translated into the functional currency using the exchange rates at the dates of the transactions.
Monetary assets and liabilities denominated in foreign currencies at the reporting date are translated into the functional currency using the exchange rates
at that date.
Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are translated to the functional currency using the
exchange rates at the date when the fair value was determined. Translation differences are recognized in profit or loss, except for translation differences on
available-for-sale financial assets, which are recognized in other comprehensive income.
Foreign exchange gains and losses are recognized in profit or loss, except:
• For capitalized foreign exchange differences relating to borrowings to the extent that they are regarded as an adjustment to interest costs eligible for
capitalization.
Foreign exchange differences that are deferred in equity if they relate to qualifying cash flow hedges and qualifying net investment hedges or are
attributable to part of the net investment in a foreign operation. Foreign exchange gains and losses are presented in the statement of profit or loss on a net
basis within finance income or finance costs.
(ii) Foreign operations
The results and financial position of foreign operations (none of which has the currency of a hyperinflationary economy) that have a functional currency
different from the presentation currency are translated into the presentation currency as follows:
• assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that balance sheet
•
income and expenses for each statement of profit or loss and statement of comprehensive income are translated at average monthly exchange rates
(unless this is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and
expenses are translated at the dates of the transactions), and
• all resulting exchange differences are recognized in other comprehensive income and accumulated in the foreign currency translation reserve, in equity.
On consolidation, exchange differences arising from the translation of any net investment in foreign entities, and of borrowings and other financial
instruments designated as hedges of such investments, are recognized in other comprehensive income. When a foreign operation is sold or any borrowings
forming part of the net investment are repaid, the associated exchange differences are reclassified to profit or loss, as part of the gain or loss on sale.
Goodwill and fair value adjustments arising on the acquisition of a foreign operation are treated as assets and liabilities of the foreign operation and
translated at the closing rate.
F9
SECTORAL AND FINANCIAL INFORMATIONTURKCELL ANNUAL REPORT 2017TURKCELL İLETİŞİM HİZMETLERİ A.Ş.Notes to the Consolidated Financial Statementsas at and for the Year Ended 31 December 2017(All amounts disclosed in the consolidated financial statements and notes have been rounded off to the nearest thousand currency units and are expressed in Turkish Liras unless otherwise stated.)
164
2. BASIS OF PREPARATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(d) Use of estimates and judgments
The preparation of the consolidated financial statements requires the use of accounting estimates. Management also needs to exercise judgement in
applying the Group’s accounting policies. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the
estimates are revised and in any future periods affected.
Information about significant areas of estimation, uncertainty and critical judgments in applying accounting policies that have the most significant effect on
the amounts recognized in the consolidated financial statements are described below:
Allowance for doubtful receivables
The Group maintains an allowance for doubtful receivables for estimated losses resulting from the inability of the Group’s subscribers and customers
to make required payments. The Group bases the allowance on the likelihood of recoverability of trade and other receivables based on the aging of the
balances, historical collection trends and general economic conditions. The allowance is periodically reviewed. The allowance charged to expenses is
determined in respect of receivable balances, calculated as a specified percentage of the outstanding balance in each aging group, with the percentage of
the allowance increasing as the aging of the receivable becomes older.
Capitalization and useful lives of assets
The useful lives and residual values of the Group’s assets are estimated by management at the time the asset is acquired and regularly reviewed for
appropriateness. The Group defines useful life of its assets in terms of the assets’ expected utility to the Group. This judgment is based on the experience
of the Group with similar assets. In determining the useful life of an asset, the Group also follows technical and/or commercial obsolescence arising
on changes or improvements from a change in the market. The useful lives of the telecommunication licenses are based on the duration of the license
agreements.
Belarusian Telecom has 10 years of special GSM and UMTS services licenses acquired on 26 August 2008. In addition, the license period has been committed
and signed for an additional 10 years for an insignificant fee. The amortization on the consolidated financial statements has been recognized on the
assumption that the duration of the license would be extended.
Gross versus net presentation of revenue
When the Group acts as principal in sale of goods or rendering of services, revenue from customers and costs with suppliers are reported on a gross basis.
When the Group acts as agent in sale of goods or rendering of services, revenue from customer and costs with suppliers are reported on a net basis,
representing the net margin earned. Whether the Group is acting as principal or agent depends on management’s analysis of both legal form and substance
of the agreement between the Group and its business partners; such judgements impact the amount of reported revenue and costs but do not impact
reported assets, liabilities or cash flows.
F10
TURKCELL İLETİŞİM HİZMETLERİ A.Ş.Notes to the Consolidated Financial Statementsas at and for the Year Ended 31 December 2017(All amounts disclosed in the consolidated financial statements and notes have been rounded off to the nearest thousand currency units and are expressed in Turkish Liras unless otherwise stated.) TURKCELL ANNUAL REPORT 2017 165
2. BASIS OF PREPARATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(d) Use of estimates and judgments (continued)
Multiple element arrangements
In arrangements which include multiple elements where the Group acts as principal, the Group considers the elements to be separate units of accounting in
the arrangement. Total arrangement consideration relating to the bundled contracts is allocated among the different units according the following criteria:
• the component has standalone value to the customer; and
• the fair value of the component can be measured reliably.
The arrangement consideration is allocated to each deliverable in proportion to the fair value of the individual deliverables. If a delivered element of a
transaction is not a separately identifiable component, then it is accounted for as an integrated part of the remaining components of the transaction.
Income taxes
The calculation of income taxes involves a degree of estimation and judgment in respect of certain items whose tax treatment cannot be finally determined
until resolution has been reached with the relevant tax authority or, as appropriate, through formal legal process.
As part of the process of preparing the consolidated financial statements, the Group is required to estimate the income taxes in each of the jurisdictions and
countries in which they operate. This process involves estimating the actual current tax exposure together with assessing temporary differences resulting
from differing treatment of items, such as deferred revenue and reserves for tax and accounting purposes. The Group management assesses the likelihood
that the deferred tax assets will be recovered from future taxable income and to the extent the recovery is not considered probable the deferred asset is
adjusted accordingly.
The recognition of deferred tax assets is based upon whether it is probable that future taxable profits will be available, against which the temporary
differences can be utilized. Recognition, therefore, involves judgment regarding the future financial performance of the particular legal entity in which the
deferred tax asset has been recognized.
Provisions, contingent liabilities and contingent assets
As detailed and disclosed in Note 36, the Group is involved in a number of investigations and legal proceedings (both as a plaintiff and as a defendant)
during the year arising in the ordinary course of business. All of these investigations and litigations are evaluated by the Group Management in accordance
with IAS 37 “Provisions, Contingent Liabilities and Contingent Assets” and disclosed or accounted in the consolidated financial statements. Future results
or outcome of these investigations and litigations might differ from Group Management’s expectations. As at the reporting date, the Group Management
believes that appropriate recognition criteria and measurement basis are applied to provisions, contingent liabilities and contingent assets and that
sufficient information is disclosed in the notes to enable users to understand their nature, timing and amount by considering current conditions and
circumstances.
F11
SECTORAL AND FINANCIAL INFORMATIONTURKCELL ANNUAL REPORT 2017TURKCELL İLETİŞİM HİZMETLERİ A.Ş.Notes to the Consolidated Financial Statementsas at and for the Year Ended 31 December 2017(All amounts disclosed in the consolidated financial statements and notes have been rounded off to the nearest thousand currency units and are expressed in Turkish Liras unless otherwise stated.)
166
2. BASIS OF PREPARATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(d) Use of estimates and judgments (continued)
Annual impairment review
The Group tests annually whether goodwill and intangible asset not yet available for use have suffered any impairment in accordance with IAS 36
“Impairment of Assets”. Additionally, the carrying amounts of Group’s nonfinancial assets are reviewed at each reporting date to determine whether there
is an indication of impairment. If any indication exists the assets recoverable amount is estimated based on fair value less cost of disposal calculations.
These calculations require the use of estimates as discussed in Note 13.
As at 31 December 2014, the Group has impaired its assets in Crimea region amounting to TL 19,897. As at 31 December 2017, the Group has impaired its
assets in Luhansk and Donetsk regions amounting to TL 10,872.
Current and potential future political and economic changes in Belarus and Ukraine could have an adverse effect on the subsidiaries operating in these
countries. The economic stability of Belarus and Ukraine depends on the economic measures that will be taken by the governments and the outcomes of the
legal, administrative and political processes in these countries. These processes are beyond the control of the subsidiaries established in these countries.
Consequently, the subsidiaries operating within Belarus and Ukraine may subject to foreign currency and interest rate risks related to borrowings, the
subscriber’s purchasing power, liquidity and increase in corporate and personal insolvencies, that may not necessarily be observable in other markets. The
accompanying consolidated financial statements contain the Group management’s estimations on the economic and financial positions of its subsidiaries
operating in Belarus and Ukraine. The future economic situation of Belarus and Ukraine might differ from the Group’s expectations. As at 31 December 2017,
the Group’s management believes that their approach is appropriate in taking all the necessary measures to support the sustainability of these subsidiaries’
businesses in the current circumstances and the achievability of the financials projections used in the impairment assessments.
Fair value measurements and valuation processes
Some of the Group’s assets and liabilities are measured at fair value for financial reporting purposes. In estimating the fair value of an asset or a liability,
the Group uses market-observable data to the extent it is available. Where Level 1 and 2 inputs are not available, the Group can engage third party
qualified valuers to perform the valuation, if necessary. The management works closely with the qualified external valuers to establish the appropriate
valuation techniques and inputs to the model. Information about the valuation techniques and inputs used in determining the fair value of various assets
and liabilities are disclosed in Note 33.
F12
TURKCELL İLETİŞİM HİZMETLERİ A.Ş.Notes to the Consolidated Financial Statementsas at and for the Year Ended 31 December 2017(All amounts disclosed in the consolidated financial statements and notes have been rounded off to the nearest thousand currency units and are expressed in Turkish Liras unless otherwise stated.) TURKCELL ANNUAL REPORT 2017
167
2. BASIS OF PREPARATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(d) Use of estimates and judgments (continued)
Contracted handset sales
The Company, the distributors and dealers offer joint campaigns to the subscribers which may include the sale of device by the dealer and/or distributor
and a communication service to be provided by the Company. The Company does not recognize any revenue for the device in these transactions by
considering the below factors:
- the Company is not primary obligor for the sale of handset,
- the Company does not have control over the sale prices of handsets,
- the Company has no inventory risk,
- the Company has no responsibility on technical compability of equipment delivered to customers
- the responsibility after sale belongs to the distributor and
- the Company does not make any modification on the equipment.
(e) Changes in accounting policies
Other than the adoption of the new and revised standards as explained in Note 2(af), the Group did not make any significant changes to its accounting
policies during the current year.
(f) Changes in accounting estimates
If the application of changes in the accounting estimates affects the financial results of a specific period, the changes in the accounting estimates are
applied in that specific period, if they affect the financial results of current and following periods; the accounting estimate is applied prospectively in the
period in which such change is made. A change in the measurement basis applied is a change in an accounting policy, and is not a change in an accounting
estimate.
The Company does not have significant changes in accounting estimates during the year.
(g) Comparative information and revision of prior period financial statements
The consolidated financial statements of the Group have been prepared consistent with prior periods.
F13
SECTORAL AND FINANCIAL INFORMATIONTURKCELL ANNUAL REPORT 2017TURKCELL İLETİŞİM HİZMETLERİ A.Ş.Notes to the Consolidated Financial Statementsas at and for the Year Ended 31 December 2017(All amounts disclosed in the consolidated financial statements and notes have been rounded off to the nearest thousand currency units and are expressed in Turkish Liras unless otherwise stated.)
168
2. BASIS OF PREPARATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(h) Principles of consolidation and equity accounting
(i) Business combinations
Business combinations are accounted for using the acquisition method. The consideration transferred in a business combination comprises:
liabilities incurred to the former owners of the acquired business
• the fair value of the assets transferred
•
• equity interests issued by the Group
• the fair value of any asset or liability resulting from a contingent consideration arrangement, and
• the fair value of any pre-existing equity interest in the subsidiary.
Acquisition-related costs are expensed as incurred.
Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are, with limited exceptions, measured initially at
their fair values at the acquisition date.
Goodwill is measured as the excess of the consideration transferred, amount of any non-controlling interest in the acquired entity, and acquisition-date fair
value of any previously held equity interest in the acquired entity over the fair value of the net identifiable assets acquired. If those amounts are less than
the fair value of the net identifiable assets of the business acquired, the difference is recognized directly in profit or loss as a bargain purchase. The Group
recognizes any non-controlling interest in the acquired entity on an acquisition-by-acquisition basis either at fair value or at the non-controlling interest’s
proportionate share of the acquired entity’s net identifiable assets.
Where settlement of any part of cash consideration is deferred, the amounts payable in the future are discounted to their present value as at the date
of exchange. The discount rate used is the entity’s incremental borrowing rate, being the rate at which a similar borrowing could be obtained from an
independent financier under comparable terms and conditions.
Contingent consideration is classified either as equity or a financial liability. Amounts classified as a financial liability are subsequently remeasured to fair
value with changes in fair value recognized in profit or loss.canc Contingent consideration classified as equity is not subject to remeasurement. Instead,
any gain or loss at settlement is recorded as an adjustment to equity through other comprehensive income.
If the business combination is achieved in stages, the acquisition date carrying value of the acquirer’s previously held equity interest in the acquire is
remeasured to fair value at the acquisition date. Any gains or losses arising from such remeasurement are recognized in profit or loss.
F14
TURKCELL İLETİŞİM HİZMETLERİ A.Ş.Notes to the Consolidated Financial Statementsas at and for the Year Ended 31 December 2017(All amounts disclosed in the consolidated financial statements and notes have been rounded off to the nearest thousand currency units and are expressed in Turkish Liras unless otherwise stated.) TURKCELL ANNUAL REPORT 2017
169
2. BASIS OF PREPARATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(h) Principles of consolidation and equity accounting (continued)
(ii) Subsidiaries
Subsidiaries are all entities over which the Group has control. The Group controls an entity when the group is exposed to, or has rights to, variable returns
from its involvement with the entity and has the ability to affect those returns through its power to direct the activities of the entity. Subsidiaries are fully
consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases.
The Company reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three
elements of control listed above.
Intercompany transactions, balances and unrealized gains on transactions between group companies are eliminated. Unrealized losses are also eliminated
unless the transaction provides evidence of an impairment of the transferred asset.
Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group.
Non-controlling interests in the results and equity of subsidiaries are shown separately in the consolidated statement of profit or loss, statement of
comprehensive income, statement of changes in equity and statement of financial position respectively.
Non -controlling interest has not been attributed to Belarus Telekom on the grounds that net assets of Belarus Telekom is negative, Belarus Telekom is
financed solely by the Company and management’s assessment of relevant articles of the share purchase agreement with the non-controlling shareholder.
Turkcell Finansman A.Ş. (“Turkcell Finansman”) sold financial loans amounting to TL 87,589 to Aktif Yatırım Bankası A.Ş. Turkcell Varlık Finansmanı Fund
(“Fund”) founded by Aktif Yatırım Bankası A.Ş. on 14 April 2017 in order to create funds for issuance of Asset Backed Securities (“ABS”) which will be issued
by the Fund in a structure where Turkcell Finansman will act as the source organization. Turkcell Finansman sold second financial loans amounting to TL
89,607 to Aktif Yatırım Bankası A.Ş. Turkcell Varlık Finansmanı Fund (“Fund”) founded by Aktif Yatırım Bankası A.Ş. on 22 August 2017. Turkcell Finansman
transferred its contractual rights to receive cash flows from the financial loans that have been sold to the Fund resulting in de-recognition of the related
assets from its consolidated financial statements. Moreover, the Company did not consolidate the Fund since the activities of the Fund are not controlled by
the Company and the Fund has been defined as a structured entity.
F15
SECTORAL AND FINANCIAL INFORMATIONTURKCELL ANNUAL REPORT 2017TURKCELL İLETİŞİM HİZMETLERİ A.Ş.Notes to the Consolidated Financial Statementsas at and for the Year Ended 31 December 2017(All amounts disclosed in the consolidated financial statements and notes have been rounded off to the nearest thousand currency units and are expressed in Turkish Liras unless otherwise stated.)
170
2. BASIS OF PREPARATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(h) Principles of consolidation and equity accounting (continued)
(iii) Changes in ownership interests
The Group treats transactions with non-controlling interests that do not result in a loss of control as transactions with equity owners of the Group. A
change in ownership interest results in an adjustment between the carrying amounts of the controlling and non-controlling interests to reflect their
relative interests in the subsidiary. Any difference between the amount of the adjustment to the non-controlling and any consideration paid or received is
recognized in a separate reserve within equity attributable to owners of the Company. The Group’s ownership interest in lifecell was increased to 100%
in 2015 and the difference between the non-controlling interests derecognized and the consideration paid for the acquisition of shares amounting to TL
929,013 was recognized in equity under retained earnings.
When the Group ceases to consolidate or equity account for an investment because of a loss of control, joint control or significant influence, any retained
interest in the entity is remeasured to its fair value with the change in carrying amount recognized in profit or loss. This fair value becomes the initial
carrying amount for the purposes of subsequently accounting for the retained interest as an associate, joint venture or financial asset. In addition, any
amounts previously recognized in other comprehensive income in respect of that entity are accounted for as if the Group had directly disposed of the
related assets or liabilities. This may mean that amounts previously recognized in other comprehensive income are reclassified to profit or loss.
If the ownership interest in a joint venture or an associate is reduced but joint control or significant influence is retained, only a proportionate share of the
amounts previously recognized in other comprehensive income are reclassified to profit or loss where appropriate.
(iv) Business combinations under common control
Business combinations between entities or businesses under common control are excluded from the scope of IFRS 3. In a business combination under
common control, assets and liabilities of the acquired entity are stated at predecessor carrying values. Any difference between the consideration given
and the aggregate book value of the assets and liabilities of the acquired entity at the date of the transaction is recognized in equity. The acquired entity’s
results and financial position are incorporated as if both entities (acquirer and acquiree) had always been combined, or using the results from the date when
either entity joined the Group, where such a date is later.
(vi) Put option over shares relating to non-controlling interests
Where a put option is written by the Group on shares in an existing subsidiary held by non-controlling interests, the Group recognizes a financial liability
at the present value of the redemption amount to reflect the put option. If the ownership risks and rewards of the shares relating to the put option is
attributable to Group, the non-controlling interest is derecognized. The difference between the put option liability and the non-controlling interests
derecognized is recognized in equity. For business combinations after 1 January 2009, subsequent changes in the fair value of the put option liability are
recognized in profit or loss.
Reserve for put option over shares relating to non-controlling interests included in equity arises from the difference between the fair value of the put
option written by Fintur Holdings B.V. (“Fintur”) on non-controlling shares in one of its subsidiaries and the derecognized non-controlling interests relating
to that put option.
F16
TURKCELL İLETİŞİM HİZMETLERİ A.Ş.Notes to the Consolidated Financial Statementsas at and for the Year Ended 31 December 2017(All amounts disclosed in the consolidated financial statements and notes have been rounded off to the nearest thousand currency units and are expressed in Turkish Liras unless otherwise stated.) TURKCELL ANNUAL REPORT 2017
171
2. BASIS OF PREPARATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(h) Principles of consolidation and equity accounting (continued)
(vii) Investments in associates
An associate is an entity over which the Group has significant influence, but not control or joint control. This is generally the case where the Group holds
between 20% and 50% of the voting rights. Investments in associates are accounted for using the equity method of accounting after initially being
recognized at cost.
Under the equity method of accounting, an investment in an associate is initially recognized at cost and adjusted thereafter to recognize the Group’s share
of the post-acquisition profits or losses of the investee in profit or loss, and the Group’s share of movements in other comprehensive income of the investee
in other comprehensive income. Dividends received or receivable from associates are recognized as a reduction in the carrying amount of the investment.
When the Group’s share of losses in an equity-accounted investment equals or exceeds its interest in that entity, including any other unsecured long-term
receivables, the Group does not recognise further losses, unless it has incurred obligations or made payments on behalf of the other entity.
Unrealized gains on transactions between the Group and its associates are eliminated to the extent of the Group’s interest in these entities. Unrealized
losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of equity accounted
investees have been changed where necessary to ensure consistency with the policies adopted by the Group.
On acquisition of an associate, any excess of the cost of the investment over the Group’s share of the net fair values of the associate’s identifiable assets
and liabilities is recognized as goodwill, which is included in the carrying amount of the investment. Any excess of the Group’s share of the net fair value of
the associate’s identifiable assets and liabilities over the cost of the investment is included as part of the Group’s share of the associate profit or loss in the
period in which the investment is acquired.
The carrying amount of equity-accounted investments is tested for impairment in accordance with the policy described in (Note 15). The Group measures
an associate that is classified as held for sale at the lower of its carrying amount at the date of classification as held for sale and fair value less costs of
disposal. Equity accounting ceases once an associate is classified as held for sale.
(i) Financial instruments
(i) Classification
The Group classifies its financial assets in the following categories:
loans and receivables,
• financial assets at fair value through profit or loss,
•
• held-to-maturity investments, and
• available-for-sale financial assets.
The classification depends on the purpose for which the investments were acquired. Management determines the classification of its investments at initial
recognition and, in the case of assets classified as held-to-maturity, re-evaluates this designation at the end of each reporting period. See Note 33 for
details about each type of financial asset.
F17
SECTORAL AND FINANCIAL INFORMATIONTURKCELL ANNUAL REPORT 2017TURKCELL İLETİŞİM HİZMETLERİ A.Ş.Notes to the Consolidated Financial Statementsas at and for the Year Ended 31 December 2017(All amounts disclosed in the consolidated financial statements and notes have been rounded off to the nearest thousand currency units and are expressed in Turkish Liras unless otherwise stated.)
172
2. BASIS OF PREPARATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(i) Financial instruments (continued)
(ii) Reclassification
The Group may choose to reclassify a non-derivative trading financial asset out of the held for trading category if the financial asset is no longer held
for the purpose of selling it in the near term. Financial assets other than loans and receivables are permitted to be reclassified out of the held for trading
category only in rare circumstances arising from a single event that is unusual and highly unlikely to recur in the near term. In addition, the Group may
choose to reclassify financial assets that would meet the definition of loans and receivables out of the held for trading or available-for-sale categories if
the Group has the intention and ability to hold these financial assets for the foreseeable future or until maturity at the date of reclassification.
Reclassifications are made at fair value as of the reclassification date. Fair value becomes the new cost or amortized cost as applicable, and no reversals
of fair value gains or losses recorded before reclassification date are subsequently made. Effective interest rates for financial assets reclassified to loans
and receivables and held-to-maturity categories are determined at the reclassification date. Further increases in estimates of cash flows adjust effective
interest rates prospectively.
(iii) Recognition and derecognition
Regular way purchases and sales of financial assets are recognized on trade date, the date on which the Group commits to purchase or sell the asset.
Financial assets are derecognized when the rights to receive cash flows from the financial assets have expired or have been transferred and the Group has
transferred substantially all the risks and rewards of ownership.
When securities classified as available-for-sale are sold, the accumulated fair value adjustments recognized in other comprehensive income are reclassified
to profit or loss as gains and losses from investment securities.
(iv) Measurement
At initial recognition, the Group measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss,
transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at fair value through
profit or loss are expensed in profit or loss.
Loans and receivables and held-to-maturity investments are subsequently carried at amortized cost using the effective interest method.
Available-for-sale financial assets and financial assets at fair value through profit or loss are subsequently carried at fair value. Gains or losses arising from
changes in the fair value are recognized as follows:
• for ‘financial assets at fair value through profit or loss’ – in profit or loss
•
for available-for-sale financial assets that are monetary securities denominated in a foreign currency – translation differences related to changes in the
amortized cost of the security are recognized in profit or loss and other changes in the carrying amount are recognized in other comprehensive income
• for other monetary and non-monetary securities classified as available-for-sale – in other comprehensive income
Dividends on financial assets at fair value through profit or loss and available-for-sale equity instruments are recognized in profit or loss when the Group’s
right to receive payments is established.
Details on how the fair value of financial instruments is determined are disclosed in Note 33.
F18
TURKCELL İLETİŞİM HİZMETLERİ A.Ş.Notes to the Consolidated Financial Statementsas at and for the Year Ended 31 December 2017(All amounts disclosed in the consolidated financial statements and notes have been rounded off to the nearest thousand currency units and are expressed in Turkish Liras unless otherwise stated.) TURKCELL ANNUAL REPORT 2017 173
2. BASIS OF PREPARATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(i) Financial instruments (continued)
(iv) Impairment
The Group assesses at the end of each reporting period whether there is objective evidence that a financial asset or group of financial assets is impaired. A
financial asset or a group of financial assets is impaired and impairment losses are incurred only if there is objective evidence of impairment as a result of
one or more events that occurred after the initial recognition of the asset (a ‘loss event’) and that loss event has an impact on the estimated future cash
flows of the financial asset or group of financial assets that can be reliably estimated. In the case of equity investments classified as available-for-sale, a
significant or prolonged decline in the fair value of the security below its cost is considered an indicator that the assets are impaired.
For loans and receivables, the amount of the loss is measured as the difference between the asset’s carrying amount and the present value of estimated
future cash flows (excluding future credit losses that have not been incurred) discounted at the financial asset’s original effective interest rate. The
carrying amount of the asset is reduced and the amount of the loss is recognised in profit or loss. If a loan or held-to-maturity investment has a variable
interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract. As a practical
expedient, the Group may measure impairment on the basis of an instrument’s fair value using an observable market price.
If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the
impairment was recognized (such as an improvement in the debtor’s credit rating), the reversal of the previously recognized impairment loss is recognized
in profit or loss.
Impairment testing of trade receivables is described in Note 33.
If there is objective evidence of impairment for available-for-sale financial assets, the cumulative loss – measured as the difference between the acquisition
cost and the current fair value, less any impairment loss on that financial asset previously recognized in profit or loss – is removed from equity and
recognized in profit or loss.
Impairment losses on equity instruments that were recognised in profit or loss are not reversed through profit or loss in a subsequent period.
If the fair value of a debt instrument classified as available-for-sale increases in a subsequent period and the increase can be objectively related to an event
occurring after the impairment loss was recognised in profit or loss, the impairment loss is reversed through profit or loss.
(v) Derecognition of financial assets
The Group derecognizes a financial asset only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset
and substantially all the risks and rewards of ownership of the asset to another party. If the Group neither transfers nor retains substantially all the
risks and rewards of ownership and continues to control the transferred asset, the Group recognizes its retained interest in the asset and an associated
liability for amounts it may have to pay. If the Group retains substantially all the risks and rewards of ownership of a transferred financial asset, the Group
continues to recognize the financial asset and also recognizes a collateralized borrowing for the proceeds received.
F19
SECTORAL AND FINANCIAL INFORMATIONTURKCELL ANNUAL REPORT 2017TURKCELL İLETİŞİM HİZMETLERİ A.Ş.Notes to the Consolidated Financial Statementsas at and for the Year Ended 31 December 2017(All amounts disclosed in the consolidated financial statements and notes have been rounded off to the nearest thousand currency units and are expressed in Turkish Liras unless otherwise stated.)
174
2. BASIS OF PREPARATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(i) Financial instruments (continued)
(vi) Income recognition
Interest income is recognised using the effective interest method. When a receivable is impaired, the Group reduces the carrying amount to its recoverable
amount, being the estimated future cash flow discounted at the original effective interest rate of the instrument, and continues unwinding the discount as
interest income. Interest income on impaired loans is recognised using the original effective interest rate.
Dividends are recognised as revenue when the right to receive payment is established. This applies even if they are paid out of pre-acquisition profits.
However, the investment may need to be tested for impairment as a consequence.
(vii) Derivative financial instruments
Forward foreign exchange, interest rate and foreign exchange swaps (IRS, Cross Currency Swaps etc.) and option transaction fair values are calculated
with market levels of interest rates and Central Bank of Republic of Turkey (CBRT) exchange rates via Bloomberg financial terminal. If market levels are not
available for valuation date, fair value for forward contracts will be value of discounted future value of difference between contract price level and forward
value of CBRT exchange rate with risk fee rates for the period. Interest rate and currency swaps will be valued with the difference of discounted cash flows
of each leg of the swaps using risk free rates and CBRT exchange rates. Option transactions will be valued with option pricing models using risk free rates
and CBRT exchange rates.
(viii) Offsetting financial assets and financial liabilities
Financial assets and liabilities are offset and the net amount presented in the statement of financial position where the Group has a legally enforcable right
to offset the recognized amounts, and there is an intention to settle on a net basis or to realize the asset and settle the liability simultaneously.
( j) Cash and cash equivalents
For the purpose of presentation in the statement of cash flows, cash and cash equivalents includes cash on hand, deposits held at call with financial
institutions, other short-term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of
cash and which are subject to an insignificant risk of changes in value.
(k) Trade receivables
Trade receivables are amounts due from customers for goods sold or services performed in the ordinary course of business. If collection of the amounts is
expected in one year or less they are classified as current assets. If not, they are presented as non-current assets.
Trade receivables are recognized initially at fair value and subsequently measured at amortized cost using the effective interest method, less provision for
impairment. See Note 33 for a description of the Group’s impairment policies.
F20
TURKCELL İLETİŞİM HİZMETLERİ A.Ş.Notes to the Consolidated Financial Statementsas at and for the Year Ended 31 December 2017(All amounts disclosed in the consolidated financial statements and notes have been rounded off to the nearest thousand currency units and are expressed in Turkish Liras unless otherwise stated.) TURKCELL ANNUAL REPORT 2017
175
2. BASIS OF PREPARATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(l) Property, plant and equipment
(i) Recognition and measurement
Items of property, plant and equipment are stated at historical cost less depreciation and impairment losses. Property, plant and equipment related to the
Company and its subsidiaries operating in Turkey are adjusted for the effects of inflation during the hyperinflationary period ended on 31 December 2005.
Since the inflation accounting commenced on 1 January 2011, property, plant and equipment related to the subsidiaries operating in Belarus are adjusted
for the effects of inflation. However, decrease in inflation rate in subsequent years led the three-year cumulative rate as of the end of 2014 to decrease
to 65%. Accordingly, the economy of Belarus was considered to transit out of hyperinflationary status and 2015 is determined to be appropriate to cease
applying IAS 29. Therefore, subsidiaries operating in Belarus ceased applying IAS 29 in 2015.
Historical cost includes expenditure that is directly attributable to the acquisition of the asset. The cost of self-constructed assets includes cost of
materials and direct labor, any other costs directly attributable to bringing the asset to a working condition for its intended use and the costs of dismantling
and removing the items and restoring the site on which they are located, if any.
Purchased software that is integral to the functionality of the related equipment is capitalized as part of that equipment. When parts of an item of
property, plant and equipment have different useful lives, they are accounted for as separate items of property, plant and equipment.
Gains and losses on disposals are determined by comparing proceeds with the carrying amount. There are recognized included in profit or loss.
Changes in the obligation to dismantle, remove assets on sites and to restore sites on which they are located, other than changes deriving from the passing
of time, are added or deducted from the cost of the assets in the period in which they occur. The amount deducted from the cost of the asset shall not
exceed the balance of the carrying amount on the date of change, and any excess balance is recognized immediately in profit or loss.
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable
amount.
(ii) Subsequent costs
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future
economic benefits associated with the item will flow to the group and the cost of the item can be measured reliably. The carrying amount of any component
accounted for as a separate asset is derecognised when replaced. All other repairs and maintenance are charged to profit or loss during the reporting period
in which they are incurred.
F21
SECTORAL AND FINANCIAL INFORMATIONTURKCELL ANNUAL REPORT 2017TURKCELL İLETİŞİM HİZMETLERİ A.Ş.Notes to the Consolidated Financial Statementsas at and for the Year Ended 31 December 2017(All amounts disclosed in the consolidated financial statements and notes have been rounded off to the nearest thousand currency units and are expressed in Turkish Liras unless otherwise stated.)
176
2. BASIS OF PREPARATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(l) Property, plant and equipment (continued)
(iii) Depreciation
Depreciation is calculated using the straight-line method to allocate their cost, net of their residual values, over their estimated useful lives. The property,
plant and equipment acquired under finance leases is depreciated over the asset’s useful life or over the shorter of the asset’s useful life and the lease term
if there is no reasonable certainty that the group will obtain ownership at the end of the lease term.
Land is not depreciated.
The estimated useful lives are as follows:
Buildings
Mobile network infrastructure
Fixed network infrastructure
Call center equipment
Equipment, fixtures and fittings
Motor vehicles
Central betting terminals
Leasehold improvements
21 – 25 years
4 – 20 years
3 – 25 years
4 – 8 years
2 – 10 years
4 – 6 years
5 – 10 years
3 – 5 years
Depreciation methods, useful lives and residual values are reviewed, and adjusted if appropriate, at the end of each reporting period.
(iv) Borrowing costs
General and specific borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalized
during the period of time that is required to complete and prepare the asset for its intended use or sale. Qualifying assets are assets that necessarily take a
substantial period of time to get ready for their intended use or sale.
Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the
borrowing costs eligible for capitalization.
Other borrowing costs are expensed in the period in which they are incurred.
(m) Intangible assets
(i) Telecommunication licenses
Separately acquired telecommunication licenses are stated at historical cost adjusted for the effects of inflation during the hyperinflationary period, where
applicable, less amortization and impairment losses.
Amortization
Amortization is recognized in the statement of profit or loss on a straight-line basis by reference to the license period. The useful lives for
telecommunication licenses are as follows:
Telecommunications licenses
3 – 25 years
F22
TURKCELL İLETİŞİM HİZMETLERİ A.Ş.Notes to the Consolidated Financial Statementsas at and for the Year Ended 31 December 2017(All amounts disclosed in the consolidated financial statements and notes have been rounded off to the nearest thousand currency units and are expressed in Turkish Liras unless otherwise stated.) TURKCELL ANNUAL REPORT 2017
177
2. BASIS OF PREPARATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(m) Intangible assets (continued)
(ii) Computer software
Acquired computer software licenses are capitalized on the basis of the costs incurred to acquire and bring to use the specific software.
Costs associated with maintaining computer software programmes are recognized as an expense as incurred.
Development costs that are directly attributable to the design and testing of identifiable and unique software products controlled by the group are
recognised as intangible assets when the following criteria are met:
it is technically feasible to complete the software so that it will be available for use
•
• management intends to complete the software and use or sell it
• there is an ability to use or sell the software
•
• adequate technical, financial and other resources to complete the development and to use or sell the software are available, and
• the expenditure attributable to the software during its development can be reliably measured.
it can be demonstrated how the software will generate probable future economic benefits
Directly attributable costs that are capitalized as part of the software include employee costs and an appropriate portion of relevant overheads.
Research expenditure and development expenditure that do not meet the criteria above are recognized as an expense as incurred. Development costs
previously recognized as an expense are not recognized as an asset in a subsequent period.
Capitalized development costs are recorded as intangible assets and amortized from the point at which the asset is ready for use.
Amortization
Amortization is recognized in the statement of profit or loss on a straight-line basis over the estimated useful lives. The useful lives for computer software
are as follows:
Computer software
(iii) Other intangible assets
3 – 8 years
Other intangible assets that are acquired by the Group which have finite useful lives are stated at historical cost adjusted for the effects of inflation during
the hyperinflationary period, where applicable, less amortization and impairment losses. Indefeasible Rights of Use (“IRU”) are rights to use a portion of
an asset’s capacity granted for a fixed period of time. IRUs are recognized as intangible asset when the Group has specific indefeasible rights to use an
identified portion of an underlying asset and the duration of the right is for the major part of the underlying asset’s useful economic life. IRUs are amortized
over the shorter of the underlying asset’s useful economic life and the contract term.
F23
SECTORAL AND FINANCIAL INFORMATIONTURKCELL ANNUAL REPORT 2017TURKCELL İLETİŞİM HİZMETLERİ A.Ş.Notes to the Consolidated Financial Statementsas at and for the Year Ended 31 December 2017(All amounts disclosed in the consolidated financial statements and notes have been rounded off to the nearest thousand currency units and are expressed in Turkish Liras unless otherwise stated.)
178
2. BASIS OF PREPARATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(m) Intangible assets (continued)
(iii) Other intangible assets (continued)
Amortization
The Group amortizes intangible assets with a limited useful life using the straight-line method over the following periods:
Transmission line software
Central betting system operating right
Customer base
Brand name
Indefeasible right of use
5 – 10 years
7 – 10 years
2 – 15 years
9 – 10 years
15 years
Amortization methods, useful lives and residual values are reviewed, and adjusted if appropriate, at the end of each reporting period.
Goodwill
Goodwill on acquisitions of subsidiaries is included in intangible assets. Goodwill is not amortized but it is tested for impairment annually, or more
frequently if events or changes in circumstances indicate that it might be impaired, and is carried at cost less accumulated impairment losses. Gains and
losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold.
Goodwill is allocated to cash-generating units for the purpose of impairment testing. The allocation is made to those cash-generating units or groups of
cash-generating units that are expected to benefit from the business combination in which the goodwill arose. The units or groups of units are identified at
the lowest level at which goodwill is monitored for internal management purposes, being the operating segments.
(n) Investment properties
Recognition and measurement
Investment properties are properties held for rental yields and/or for capital appreciation (including property under construction for such purposes).
Investment properties are stated at historical cost less depreciation and impairment losses.
An investment property is derecognized upon disposal or when the investment property is permanently withdrawn from use and no future economic
benefits are expected from the disposal. Any gain or loss arising on derecognition of the property (calculated as the difference between the net disposal
proceeds and the carrying amount of the asset) is included in profit or loss in the period in which the property is derecognized.
F24
TURKCELL İLETİŞİM HİZMETLERİ A.Ş.Notes to the Consolidated Financial Statementsas at and for the Year Ended 31 December 2017(All amounts disclosed in the consolidated financial statements and notes have been rounded off to the nearest thousand currency units and are expressed in Turkish Liras unless otherwise stated.) TURKCELL ANNUAL REPORT 2017 179
2. BASIS OF PREPARATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(n)Investment properties (continued)
Depreciation
Depreciation is calculated using the straight-line method to allocate their cost, net of their residual values, over their estimated useful lives. The estimated
useful lives are as follows:
Investment Property
25 - 45 years
Depreciation methods, useful lives and residual values are reviewed, and adjusted if appropriate, at the end of each reporting period.
(o) Inventories
Inventories are stated at the lower of cost and net realizable value. Net realizable value is the estimated selling price in the ordinary course of business,
less the estimated costs necessary to make the sale. Cost of inventory is determined using the weighted average method and comprises all costs of
purchase and other costs incurred in bringing the inventories to their present location and condition. Costs of purchased inventory are determined after
deducting rebates and discounts. At 31 December 2017 and 2016, inventories mainly consisted of mobile phones, sim-cards, and other devices.
(p) Impairment of assets
Goodwill and intangible assets that have an indefinite useful life are not subject to amortization which are tested annually for impairment and reviewed
at each reporting date and if triggering events occur, or more frequently if events or changes in circumstances indicate that they might be impaired. An
impairment loss is recognized for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of
an asset’s fair value less costs of disposal. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately
identifiable cash inflows which are largely independent of the cash inflows from other assets or groups of assets (cash-generating units). Non-financial
assets other than goodwill that suffered an impairment are reviewed for possible reversal of the impairment at the end of each reporting period.
(r) Employee benefits
(i) Short-term obligations
Liabilities for salaries including non-monetary benefits that are expected to be settled wholly within 12 months after the end of the period in which the
employees render the related service are recognized in respect of employees’ services up to the end of the reporting period and are measured at the
amounts expected to be paid when the liabilities are settled. The liabilities are presented as trade and other payables in the statement of financial position.
(ii) Termination benefits
In accordance with the labor law in Turkey, the Company and its subsidiaries in Turkey are required to make lump-sum payments to employees who have
completed one year of service and whose employment is terminated without cause or who retire, are called up for military service or die. Such payments
are calculated on the basis of 30 days’ pay up to a of maximum full TL 6,000 as at 31 December 2017, per year of employment at the rate of pay applicable
at the date of retirement or termination. Termination benefits paid to key executive officers are presented as other expenses. Reserve for employee
termination benefits is computed and reflected in the consolidated financial statements on a current basis. The reserve is calculated by estimating the
present value of future probable obligation of the Company and its subsidiaries in Turkey arising from retirement of employees. Reserve for employee
termination benefits is calculated annually by independent actuaries using the projected unit credit method.
F25
SECTORAL AND FINANCIAL INFORMATIONTURKCELL ANNUAL REPORT 2017TURKCELL İLETİŞİM HİZMETLERİ A.Ş.Notes to the Consolidated Financial Statementsas at and for the Year Ended 31 December 2017(All amounts disclosed in the consolidated financial statements and notes have been rounded off to the nearest thousand currency units and are expressed in Turkish Liras unless otherwise stated.)
180
2. BASIS OF PREPARATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(r) Employee benefits (continued)
(iii) Defined contribution plans
For defined contribution plans, the Group pays contributions to publicly or privately administered pension insurance plans on a mandatory, contractual
or voluntary basis. The Group has no further payment obligations once the contributions have been paid. The contributions are recognized as employee
benefit expense when they are due. Prepaid contributions are recognized as an asset to the extent that a cash refund or a reduction in the future payments
is available.
(iv) Share-based payments
The Group provides a cash-settled share-based payment plan for selected employees in return for their services. For cash-settled share-based payment
transactions, the Group measures services acquired and the liability incurred at the fair value of the liability. Liabilities for cash-settled share-based
payment plan are recognized as employee benefit expense over the relevant service period. The fair value of the liability is re-measured at each reporting
date and at the settlement date. Any changes in fair value are recognized in profit or loss for the period.
(v) Personnel bonus
Provision for bonus is provided when the bonus is a legal obligation, or past practice would make the bonus a constructive obligation and the Group is able
to make a reliable estimate of the obligation.
(s) Provisions
A provision is recognized if, as a result of a past event, the Group has a present legal or constructive obligation that can be estimated reliably, and it is
probable that an outflow of resources will be required to settle the obligation.
Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the class of
obligations as a whole. A provision is recognized even if the likelihood of an outflow with respect to any one item included in the same class of obligations
may be small.
Provisions are measured at the present value of management’s best estimate of the expenditure required to settle the present obligation at the end of the
reporting period. The discount rate used to determine the present value is a pre-tax rate that reflects current market assessments of the time value of
money and the risks specific to the liability. The increase in the provision due to the passage of time is recognized as interest expense.
Onerous contracts
Present obligation arising under an onerous contract is recognized and measured as a provision. An onerous contract is considered to exist where the Group
has a contract under which the unavoidable costs of meeting the obligations under the contract exceed the economic benefits expected to be received
under it.
F26
TURKCELL İLETİŞİM HİZMETLERİ A.Ş.Notes to the Consolidated Financial Statementsas at and for the Year Ended 31 December 2017(All amounts disclosed in the consolidated financial statements and notes have been rounded off to the nearest thousand currency units and are expressed in Turkish Liras unless otherwise stated.) TURKCELL ANNUAL REPORT 2017
181
2. BASIS OF PREPARATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(s) Provisions (continued)
Dismantling, removal and restoring sites obligation
The Group is required to incur certain costs in respect of a liability to dismantle and remove assets and to restore sites on which the assets were located.
The dismantling costs are calculated according to best estimate of future expected payments discounted at a pre-tax discount rate that reflects current
market assessments of the time value of money and the risks specific to the liability.
(t) Revenue
Revenue is recognized at the fair value of the consideration received or receivable, net of returns, trade allowances and rebates. The Group recognizes
revenue when the amount of revenue can be reliably measured, it is probable that future economic benefits will flow to the entity and specific criteria have
been met for each of the Group’s activities as described below. The Group bases its estimates on historical results, taking into consideration the type of
customer, the type of transaction and the specifics of each arrangement.
Revenue from telecommunication services includes postpaid and prepaid revenue from voice, data, messaging and value added services, interconnect
revenue, monthly fixed fees, SIM card sales and roaming revenue. Revenue from telecommunication services are recognized at the time services are
rendered.
With respect to prepaid revenue, the Group generally collects cash in advance by selling prepaid top up to distributors. In such cases, the Group does not
recognize revenue until subscribers use the telecommunication services. Deferred revenue is recorded under current liabilities.
Services may be bundled with other products and services and these bundled elements involve consideration in the form of a fixed fee or a fixed fee coupled
with a continuing payment stream. Total arrangement consideration relating to a bundled contract is allocated to different units of accounting if:
• each element in the arrangement has standalone value to the customer; and
• fair value of each element can be measured reliably.
The arrangement consideration is allocated to each element based upon their relative fair values. If an element of a transaction is not a separately
identifiable component, then it is accounted for as an integral part of the remaining elements of the transaction.
Revenue allocated to products where the Group acts as principal is recognized when significant risks and rewards of ownership are transferred to the buyer,
collection is probable, associated costs and possible return of goods can be estimated reliably, there is no continuing management involvement with the
products and the amount of revenue can be measured reliably.
Revenue from device sales is recognized when the device is delivered to the end customer and significant risks and rewards of ownership are transferred.
For device sales made to intermediaries, revenue is recognized if significant risks and rewards of ownership associated with the device are transferred to
the intermediary and the intermediary has no general right to return the device to receive a refund. If significant risks and rewards of ownership are not
transferred, revenue is deferred until sale of the device to an end customer by the intermediary or expiry of any right of return.
The Company, the distributors and dealers offer joint campaigns to the subscribers which may include the sale of device by the dealer and/or the distributor
and the sale of communication service by the Company. In certain campaigns, dealers make the handset sale to the subscribers instalments of which will be
collected by the Company based on the letters of undertaking signed by the subscribers. With the letter of undertaking, the dealer assigns its receivables
from handset sale to the distributor and the distributor assigns its receivables to the Company.
F27
SECTORAL AND FINANCIAL INFORMATIONTURKCELL ANNUAL REPORT 2017TURKCELL İLETİŞİM HİZMETLERİ A.Ş.Notes to the Consolidated Financial Statementsas at and for the Year Ended 31 December 2017(All amounts disclosed in the consolidated financial statements and notes have been rounded off to the nearest thousand currency units and are expressed in Turkish Liras unless otherwise stated.)
182
2. BASIS OF PREPARATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(t) Revenue (continued)
The Company pays the distributor net present value of the instalments to be collected from the subscribers and recognizes contracted receivables in its
statement of financial position. The undue portion of assigned receivables from the distributors which were paid upfront by the Company is classified
as “undue assigned contracted receivables” in trade receivables (Note 19). When monthly installment is invoiced to the subscriber, related portion is
presented as “receivables from subscribers”. The Company collects the contracted receivables in installments during the contract period and does not
recognize any revenue for the handset in these transactions as the Company does not act as principal for the sale of handset.
Starting from 2014, the subscribers has an option to buy handsets using bank loans instalments of which are collected by the Company on behalf of the
bank. The Company does not bear any credit risk in these transactions. Since the Company collects receivables during the contract period and acts as agent
for the sale of handset, the Company does not recognize any revenue for the handset in these transactions.
Starting from 2016 the Company and distributors started to offer the option to buy a device through Turkcell Financing loan, which will be collected by
the Company. The Group carries a risk of collection in these transactions. Turkcell Finansman collects the purchased credit from the subscriber during the
contract period, and does not record revenue related to the device since it is not the main contractor in the device sale. Revenue from financial services
comprise of interest income generated from consumer financing activities. Interest income is recognized as it accrues, using the effective interest method.
Monthly fixed fees represent a fixed amount charged to postpaid subscribers on a monthly basis without regard to the level of usage. Fixed fees are
recognized on a monthly basis when billed. Monthly fixed fees are included telecommunication services revenues.
Revenues from betting business mainly comprise of net takings earned to a maximum of 1.4% of gross takings as the head agent of fixed odds betting
games and mobile agent revenues of 7.25% of mobile agency turnover after deducting VAT and gaming tax as the head agent. Revenues from betting
business are recognized at the time all services related to the games are fully rendered. Under the agreement signed with Spor Toto Teşkilat Müdürlüğü A.Ş.
(“Spor Toto”), Inteltek Internet Teknoloji Yatırım ve Danışmanlık A.Ş. (“Inteltek”) is obliged to undertake any excess payout, which is presented on a net
basis.
Azerinteltek received authorization from Azeridmanservis Limited Liability Company set under the Ministry of Youth and Sport of the Republic of
Azerbaijan to organize, operate, manage and develop the fixed odds and paramutual sports betting business. Since Azerinteltek acts as principal, total
consideration received from the player less payout (distribution to players) and amounts collected from players on behalf of Ministry of Sports is
recognized at the time all services related to the games are fully rendered.
Azerinteltek has been authorized for the Lottery games by Azerlotereya. Azerinteltek has been generating commission revenue over Lottery games
turnover through its own agencies by applying 15% commission rate according to agreement between Azerinteltek and Azerlotereya. Commission revenues
are recognized at the time all services related to the games are fully rendered.
SIM card sales are recognized upon delivery to distributors, net of returns, discounts and rebates. SIM card costs are also recognized upon sale of the SIM
card to the distributors. SIM card sales are included telecommunication services revenues.
Call center revenues are recognized at the time services are rendered.
F28
TURKCELL İLETİŞİM HİZMETLERİ A.Ş.Notes to the Consolidated Financial Statementsas at and for the Year Ended 31 December 2017(All amounts disclosed in the consolidated financial statements and notes have been rounded off to the nearest thousand currency units and are expressed in Turkish Liras unless otherwise stated.) TURKCELL ANNUAL REPORT 2017
183
2. BASIS OF PREPARATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(t) Revenue (continued)
When the Group sells goods or services as a principal, revenue and operating costs are recorded on a gross basis. When the Group sells goods or services
as an agent, revenue and operating costs are recorded on a net basis, representing the net margin earned. Whether the Group is considered to be acting as
principal or agent in the transaction depends on management’s analysis of both the legal form and substance of the agreement between the Group and its
business partners; such judgements impact the amount of reported revenue and operating costs but do not impact reported assets, liabilities or cash flows.
The Company and the Ministry of Transport, Maritime Affairs and Communications, Directorate General of Communications signed a contract to continue
the contract to establish and operate mobile communication infrastructure and operation in uncovered areas, (Phase 1) until 31 December 2018 and to add
mobile broadband services to the existing infrastructure providing GSM services under Universal Service Law and to operate the new and existing networks
together. Mobile broadband services will be added to the existing infrastructure established in accordance with Phase 1 in 1,799 rural locations. The new
and the existing infrastructure will be operated together. As of 31 December 2017, the Company has recognized TL 257,866 revenue from its operations
related to this contract. Since the Company acts as principal, revenue and operating costs are reported on a gross basis in these consolidated financial
statements.
The revenue recognition policy for other revenues is to recognize revenue as services are provided.
Volume rebates or discounts and other contractual changes in the prices of roaming and other services are anticipated, as both the payer and the recipient,
if it is probable that they have been earned or will take effect. Thus, contractual rebates and discounts are anticipated, but discretionary rebates and
discounts are not anticipated because the definitions of asset and liability would not be met.
(u) Leases
At inception of an arrangement, the Group determines whether such an arrangement is or contains a lease. A specific asset is the subject of a lease if
fulfillment of the arrangement is dependent on the use of that specified asset. An arrangement conveys the right to use the asset if the arrangement
conveys to the Group the right to control the use of the underlying asset. At inception or upon reassessment of the arrangement, the Group separates
payments and other consideration required by such an arrangement into those for the lease and those for other elements on the basis of their relative fair
values.
Leases of property, plant and equipment where the Group, as lessee, has substantially all the risks and rewards of ownership are classified as finance
leases. Finance leases are capitalized at the lease’s inception at the fair value of the leased property or, if lower, the present value of the minimum lease
payments. The corresponding rental obligations, net of finance charges, are included in payables. Each lease payment is allocated between the liability and
finance cost. The finance cost is charged to the profit or loss over the lease period so as to produce a constant periodic rate of interest on the remaining
balance of the liability for each period. The property, plant and equipment acquired under finance leases is depreciated over the asset’s useful life or over
the shorter of the asset’s useful life and the lease term if there is no reasonable certainty that the group will obtain ownership at the end of the lease term.
Leases in which a significant portion of the risks and rewards of ownership are not transferred to the Group as lessee are classified as operating leases.
Payments made under operating leases (net of any incentives received from the lessor) are charged to profit or loss on a straight-line basis over the period
of the lease.
Lease income from operating leases where the Group is a lessor is recognized as income on a straight-line basis over the lease term. The respective leased
assets are included in the statement of financial position based on their nature.
F29
SECTORAL AND FINANCIAL INFORMATIONTURKCELL ANNUAL REPORT 2017TURKCELL İLETİŞİM HİZMETLERİ A.Ş.Notes to the Consolidated Financial Statementsas at and for the Year Ended 31 December 2017(All amounts disclosed in the consolidated financial statements and notes have been rounded off to the nearest thousand currency units and are expressed in Turkish Liras unless otherwise stated.)
184
2. BASIS OF PREPARATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(v) Trade and other payables
These amounts represent liabilities for goods and services provided to the Group prior to the end of financial year which are unpaid. Trade and other
payables are presented as current liabilities unless payment is not due within 12 months after the reporting period. They are recognized initially at their fair
value and subsequently measured at amortized cost using the effective interest method.
(w) Borrowings
Borrowings are initially recognized at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortized cost. Any difference
between the proceeds (net of transaction costs) and the redemption amount is recognized in profit or loss over the period of the borrowings using the
effective interest method. Fees paid on the establishment of loan facilities are recognized as transaction costs of the loan to the extent that it is probable
that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw down occurs. To the extent there is no evidence that it is
probable that some or all of the facility will be drawn down, the fee is capitalized as a prepayment for liquidity services and amortized over the period of
the facility to which it relates.
Borrowings are removed from the statement of financial position when the obligation specified in the contract is discharged, cancelled or expired. The
difference between the carrying amount of a financial liability that has been extinguished or transferred to another party and the consideration paid,
including any non-cash assets transferred or liabilities assumed, is recognized in profit or loss.
(x) Income taxes
The income tax expense or credit for the period is the tax payable on the current period’s taxable income based on the applicable income tax rate for each
jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary differences and to unused tax losses.
Income tax expense is recognized in the statement of profit or loss, except to the extent that it relates to items recognized in other comprehensive income
or directly in equity. In this case, the tax is also recognized in other comprehensive income or directly in equity, respectively.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end of the reporting period in the countries
where the Company’s subsidiaries and associates operate and generate taxable income. Management periodically evaluates positions taken in tax returns
with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts
expected to be paid to the tax authorities. Deferred income tax is provided in full, using the liability method, on temporary differences arising between the
tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. However, deferred tax liabilities are not recognised
if they arise from the initial recognition of goodwill. Deferred income tax is also not accounted for if it arises from initial recognition of an asset or liability
in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred income
tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the end of the reporting period and are expected to apply
when the related deferred income tax asset is realized or the deferred income tax liability is settled. Deferred tax assets are recognized only if it is probable
that future taxable amounts will be available to utilize those temporary differences and losses.
F30
TURKCELL İLETİŞİM HİZMETLERİ A.Ş.Notes to the Consolidated Financial Statementsas at and for the Year Ended 31 December 2017(All amounts disclosed in the consolidated financial statements and notes have been rounded off to the nearest thousand currency units and are expressed in Turkish Liras unless otherwise stated.) TURKCELL ANNUAL REPORT 2017 185
2. BASIS OF PREPARATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(x) Income taxes (continued)
Deferred tax liabilities and assets are not recognized for temporary differences between the carrying amount and tax bases of investments in foreign
operations where the company is able to control the timing of the reversal of the temporary differences and it is probable that the differences will not
reverse in the foreseeable future.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and when the deferred tax
balances relate to the same taxation authority. Current tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset and
intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously.
Companies within the Group may be entitled to claim special tax deductions for investments in qualifying assets or in relation to qualifying expenditure
(e.g., the Research and Development Tax Incentive regime in Turkey or other investment allowances). The Group accounts for such allowances as tax
credits, which means that the allowance reduces income tax payable and current tax expense. A deferred tax asset is recognized for unclaimed tax credits
that are carried forward as deferred tax assets.
(y) Earnings per share
The Group does not have any potential ordinary shares in issue, therefore basic and diluted earnings per share (“EPS”) are equal. Since basic and diluted
EPS are equal, the Group presents both basic and diluted EPS on one line described as “Basic and diluted EPS”.
Basic EPS is calculated by dividing the profit attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares
outstanding during the financial year, excluding treasury shares. In Turkey, entities can increase their share capital by distributing “Bonus share” to
shareholders from retained earnings. In computing earnings per share, such “Bonus share” distributions are treated as issued shares. Accordingly, the
retrospective effect for such share distributions is taken into consideration when determining the weighted-average number of shares outstanding.
(z) Subscriber acquisition costs
The Group capitalizes directly attributable subscriber acquisition costs when the following conditions are met:
• the capitalized costs can be measured reliably;
• there is a contract binding the customer for a specific period of time; and
•
it is probable that the amount of the capitalized costs will be recovered through revenue generated by the service contract, or, where the customer
withdraws from the contract in advance, through the collection of the penalty.
Capitalized subscriber acquisition costs are amortized on a straight-line basis over the minimum period of the underlying contract. In all other cases,
subscriber acquisition costs are expensed when incurred.
F31
SECTORAL AND FINANCIAL INFORMATIONTURKCELL ANNUAL REPORT 2017TURKCELL İLETİŞİM HİZMETLERİ A.Ş.Notes to the Consolidated Financial Statementsas at and for the Year Ended 31 December 2017(All amounts disclosed in the consolidated financial statements and notes have been rounded off to the nearest thousand currency units and are expressed in Turkish Liras unless otherwise stated.) 186
2. BASIS OF PREPARATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(aa) Government grants
Grants from the government are recognized at their fair value where there is a reasonable assurance that the grant will be received and the Group will
comply with all attached conditions.
Government grants relating to costs are deferred and recognized in profit or loss over the period necessary to match them with the costs that they are
intended to compensate.
Government grants relating to property, plant and equipment are included in non-current liabilities as deferred government grants and are credited to profit
or loss on a straight-line basis over the expected useful lives of the related assets.
(ab) Non-current asset held for sale and discontinued operations
Non-current assets are classified as held for sale if their carrying amount will be recovered principally through a sale transaction rather than through
continuing use and a sale is considered highly probable. They are measured at the lower of their carrying amount and fair value less costs of disposal.
An impairment loss is recognized for any initial or subsequent write-down of the asset to fair value less costs of disposal. A gain is recognized for any
subsequent increases in fair value less costs of disposal of an asset, but not in excess of any cumulative impairment loss previously recognized. A gain or
loss not previously recognized by the date of the sale of the non-current asset is recognized at the date of derecognition.
An associate must meet the conditions to be classified as held for sale. It is first measured in accordance with applicable standards. Such standard is IAS 28,
and so the share of profits and remeasurement of carrying amounts are done in accordance with normal associate rules up to the point of classification as
held for sale. The associate or joint venture is then measured in accordance with IFRS 5. It is measured at the lower of carrying amount and fair value less
costs of disposal. Equity accounting is ceased from the date the held for sale criteria are met.
Non-current assets classified as held for sale are presented separately from the other assets in the statement of financial position.
A discontinued operation is a component of the entity that has been disposed of or is classified as held for sale and that represents a separate major line of
business or geographical area of operations, is part of a single co-ordinated plan to dispose of such a line of business or area of operations, or is a subsidiary
acquired exclusively with a view to resale. The results of discontinued operations are presented separately in the statement of profit or loss.
(ac) Equity
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares are shown in equity as a deduction, net of tax,
from the proceeds.
Where any Group company purchases the Company’s equity instruments, for example as the result of a share buy-back plan, the consideration paid,
including any directly attributable incremental costs (net of income taxes) is deducted from equity attributable to the owners of the Company as treasury
shares until the shares are cancelled or reissued. Where such ordinary shares are subsequently reissued, any consideration received, net of any directly
attributable incremental transaction costs and the related income tax effects, is included in equity attributable to the owners of the Company.
(ad) Dividends
Provision is made for the amount of any dividend declared, being appropriately authorised and no longer at the discretion of the Company, on or before the
end of the reporting period but not distributed at the end of the reporting period.
F32
TURKCELL İLETİŞİM HİZMETLERİ A.Ş.Notes to the Consolidated Financial Statementsas at and for the Year Ended 31 December 2017(All amounts disclosed in the consolidated financial statements and notes have been rounded off to the nearest thousand currency units and are expressed in Turkish Liras unless otherwise stated.) TURKCELL ANNUAL REPORT 2017 187
2. BASIS OF PREPARATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(ae) Subsequent events
Events after the reporting date; Includes all events between the reporting date and the date on which the financial statements are authorized for issue,
even if any announcement of profit or other selected financial information has been made publicly disclosed.
In case of events requiring correction after the reporting date, corrects this new situation accordingly. Events that are not required to be adjusted
subsequent to the reporting date are disclosed in the notes to the financial statements in the consolidated financial statements.
(af) New standards and interpretations
i) Amendments to IFRSs affecting amounts reported and/or disclosures in the consolidated financial statements
None.
ii) Standards, amendments and interpretations applicable as at 31 December 2017
- Amendments to IAS 7, ‘Statement of cash flows’; on disclosure initiative effective from annual periods beginning on or after 1 January 2017. These
amendments introduce an additional disclosure that will enable users of financial statements to evaluate changes in liabilities arising from financing
activities. The amendment is part of the IASB’s Disclosure Initiative, which continues to explore how financial statement disclosure can be improved.
- Amendments IAS 12, ‘Income Taxes’; effective from annual periods beginning on or after 1 January 2017. The amendments clarify the accounting for
deferred tax where an asset is measured at fair value and that fair value is below the asset’s tax base. It also clarify certain other aspects of accounting
for deferred tax assets.
- Annual improvements 2014-2016, effective from annual periods beginning on or after 1 January 2017:
•
IFRS 12, ‘Disclosure of interests in other entities’; regarding clarification of the scope of the standard. These amendments should be applied
retrospectively for annual periods beginning on or after 1 January 2017. This amendment clarifies that the disclosures requirement of IFRS 12 are
applicable to interest in entities classified as held for sale except for summarized financial information.
iii) Standards, amendments and interpretations effective on or after 1 January 2018
-
-
IFRS 9, ‘Financial instruments’; effective from annual periods beginning on or after 1 January 2018. This standard replaces the guidance in IAS 39. It
includes requirements on the classification and measurement of financial assets and liabilities; it also includes an expected credit losses model that
replaces the current incurred loss impairment model.
IFRS 15, ‘Revenue from contracts with customers’; effective from annual periods beginning on or after 1 January 2018. IFRS 15, ‘Revenue from contracts
with customers’ is a converged standard from the IASB and FASB on revenue recognition. The standard will improve the financial reporting of revenue
and improve comparability of the top line in financial statements globally.
- Amendment to IFRS 15, ‘Revenue from contracts with customers’, effective from annual periods beginning on or after 1 January 2018. These amendments
comprise clarifications of the guidance on identifying performance obligations, accounting for licences of intellectual property and the principal versus
agent assessment (gross versus net revenue presentation). New and amended illustrative examples have been added for each of those areas of guidance.
The IASB has also included additional practical expedients related to transition to the new revenue standard.
F33
SECTORAL AND FINANCIAL INFORMATIONTURKCELL ANNUAL REPORT 2017TURKCELL İLETİŞİM HİZMETLERİ A.Ş.Notes to the Consolidated Financial Statementsas at and for the Year Ended 31 December 2017(All amounts disclosed in the consolidated financial statements and notes have been rounded off to the nearest thousand currency units and are expressed in Turkish Liras unless otherwise stated.) 188
2. BASIS OF PREPARATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(af) New standards and interpretations (continued)
iii) Standards, amendments and interpretations effective on or after 1 January 2018 (continued)
- Amendments to IFRS 4, ‘Insurance contracts’ regarding the implementation of IFRS 9, ‘Financial Instruments’; effective from annual periods beginning on
or after 1 January 2018. These amendments introduce two approaches: an overlay approach and a deferral approach. The Group does not expect material
impact on its financial statements.
The amended standard will:
- give all companies that issue insurance contracts the option to recognize in other comprehensive income, rather than profit or loss, the volatility that
could arise when IFRS 9 is applied before the new insurance contracts standard is issued; and
- give companies whose activities are predominantly connected with insurance an optional temporary exemption from applying IFRS 9 until 2021. The
entities that defer the application of IFRS 9 will continue to apply the existing financial instruments standard IAS 39.
- Amendment to IAS 40, ‘Investment property’ relating to transfers of investment property; effective from annual periods beginning on or after 1 January
2018. These amendments clarify that to transfer to, or from, investment properties there must be a change in use. To conclude if a property has changed
use there should be an assessment of whether the property meets the definition. This change must be supported by evidence. The Group does not expect
material impact on its financial statements.
- Amendments to IFRS 2, ‘Share based payments’ on clarifying how to account for certain types of share-based payment transactions; effective from
annual periods beginning on or after 1 January 2018. This amendment clarifies the measurement basis for cash-settled, share-based payments and
the accounting for modifications that change an award from cash-settled to equity-settled. It also introduces an exception to the principles in IFRS 2
that will require an award to be treated as if it was wholly equity-settled, where an employer is obliged to withhold an amount for the employee’s tax
obligation associated with a share-based payment and pay that amount to the tax authority. The Group does not expect material impact on its financial
statements.
- Annual improvements 2014-2016; effective from annual periods beginning on or after 1 January 2018. These amendments impact 2 standards:
•
•
IFRS 1, ‘First time adoption of IFRS’, regarding the deletion of short-term exemptions for first-time adopters regarding IFRS 7, IAS 19 and IFRS 10,
IAS 28, ‘Investments in associates and joint venture’ regarding measuring an associate or joint venture at fair value.
-
IFRIC 22, ‘Foreign currency transactions and advance consideration’; effective from annual periods beginning on or after 1 January 2018. This IFRIC
addresses foreign currency transactions or parts of transactions where there is consideration that is denominated or priced in a foreign currency. The
interpretation provides guidance for when a single payment/receipt is made as well as for situations where multiple payments/receipts are made. The
guidance aims to reduce diversity in practice. The Group does not expect material impact on its financial statements.
F34
TURKCELL İLETİŞİM HİZMETLERİ A.Ş.Notes to the Consolidated Financial Statementsas at and for the Year Ended 31 December 2017(All amounts disclosed in the consolidated financial statements and notes have been rounded off to the nearest thousand currency units and are expressed in Turkish Liras unless otherwise stated.) TURKCELL ANNUAL REPORT 2017 189
2. BASIS OF PREPARATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(af) New standards and interpretations (continued)
iii) Standards, amendments and interpretations effective on or after 1 January 2019
- Amendment to IFRS 9, ‘Financial instruments’; effective from annual periods beginning on or after 1 January 2019. This amendment confirm that when
a financial liability measured at amortised cost is modified without this resulting in de-recognition, a gain or loss should be recognised immediately in
profit or loss. The gain or loss is calculated as the difference between the original contractual cash flows and the modified cash flows discounted at
the original effective interest rate. This means that the difference cannot be spread over the remaining life of the instrument which may be a change in
practice from IAS 39.
- Amendment to IAS 28, ‘Investments in associates and joint venture’; effective from annual periods beginning on or after 1 January 2019. These
amendments clarify that companies account for long-term interests in associate or joint venture to which the equity method is not applied using IFRS 9.
-
-
IFRS 16, ‘Leases’; effective from annual periods beginning on or after 1 January 2019, this standard replaces the current guidance in IAS 17 and is a far
reaching change in accounting by lessees in particular. Under IAS 17, lessees were required to make a distinction between a finance lease (on balance
sheet) and an operating lease (off balance sheet). IFRS 16 now requires lessees to recognise a lease liability reflecting future lease payments and a
‘right of use asset’ for virtually all lease contracts. The IASB has included an optional exemption for certain short-term leases and leases of low-value
assets; however, this exemption can only be applied by lessees. For lessors, the accounting stays almost the same. However, as the IASB has updated
the guidance on the definition of a lease (as well as the guidance on the combination and separation of contracts), lessors will also be affected by the
new standard. At the very least, the new accounting model for lessees is expected to impact negotiations between lessors and lessees. Under IFRS
16, a contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for
consideration. The Group evaluates impacts of the new standard on consolidated financial statements.
IFRIC 23, ‘Uncertainty over income tax treatments’; effective from annual periods beginning on or after 1 January 2019. This IFRIC clarifies how the
recognition and measurement requirements of IAS 12 ‘Income taxes’, are applied where there is uncertainty over income tax treatments. The IFRS IC
had clarified previously that IAS 12, not IAS 37 ‘Provisions, contingent liabilities and contingent assets’, applies to accounting for uncertain income tax
treatments. IFRIC 23 explains how to recognise and measure deferred and current income tax assets and liabilities where there is uncertainty over a tax
treatment. An uncertain tax treatment is any tax treatment applied by an entity where there is uncertainty over whether that treatment will be accepted
by the tax authority. For example, a decision to claim a deduction for a specific expense or not to include a specific item of income in a tax return is
an uncertain tax treatment if its acceptability is uncertain under tax law. IFRIC 23 applies to all aspects of income tax accounting where there is an
uncertainty regarding the treatment of an item, including taxable profit or loss, the tax bases of assets and liabilities, tax losses and credits and tax rates.
The Group assesses of impact on an ongoing basis.
iv) Status of adoption of significant new or amended IFRS standards or interpretations
The adoption of new or amended standards and interpretations that are effective for the financial year beginning on January 1, 2018, did not have a
material impact on the Group’s consolidated financial statements. The following new IFRS standards will, based on the Company analysis, be of significance
to the Group, but have not yet been early adopted:
F35
SECTORAL AND FINANCIAL INFORMATIONTURKCELL ANNUAL REPORT 2017TURKCELL İLETİŞİM HİZMETLERİ A.Ş.Notes to the Consolidated Financial Statementsas at and for the Year Ended 31 December 2017(All amounts disclosed in the consolidated financial statements and notes have been rounded off to the nearest thousand currency units and are expressed in Turkish Liras unless otherwise stated.) 190
2. BASIS OF PREPARATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(af) New standards and interpretations (continued)
iv) Status of adoption of significant new or amended IFRS standards or interpretations (continued)
IFRS 15 Revenue from Contracts with Customers
IFRS 15 was issued in May 2014, and amended in April 2016, and establishes a five-step model to account for revenue arising from contracts with
customers. Under IFRS 15, revenue is recognised at an amount that reflects the consideration to which an entity expects to be entitled in exchange for
transferring goods or services to a customer.
The new revenue standard will supersede all current revenue recognition requirements under IFRS. Either a full retrospective application or a modified
retrospective application is required for annual periods beginning on or after 1 January 2018. Early adoption is permitted. The Group plans to adopt the new
standard on the required effective date using the modified retrospective method which requires the recognition of the cumulative effect of initially applying
IFRS 15, as at January 1, 2018, to retained earnings and not restate prior years. During 2017, the Group performed a detailed assessment of IFRS 15.
The Group is mainly in the business of providing telecommunication services. The goods and services are sold both on their own in separate identified
contracts with customers and together as a bundled package of goods and/or services.
Sale of goods
For contracts with customers and intermediaries in which the sale of device or equipment is generally expected to be a performance obligation, adoption
of IFRS 15 is not expected to have significant impact on the Group’s revenue and profit or loss because sale of goods were already recognised as a distinct
performance obligation at fair value under current accounting treatment.
The Group expects the revenue recognition to occur at a point in time when control of the asset is transferred to the customer, generally on delivery of the
goods.
Rendering of services
The Group mainly provides telecommunication services. Services are generally bundled with other products/services and these bundled services and
products involve consideration in the form of fixed fee or a fixed fee coupled with a continuing payment stream or discount. The Company’s current
accounting treatment in allocating total consideration to the performance obligations is inline with the requirements of IFRS 15. The Group do not expect
IFRS 15 to significantly change the timing or amount of revenue recognized under these arrangements.
Contract costs
Under IFRS 15, certain incremental costs incurred in acquiring a contract with a customer will be deferred on the consolidated statement of financial
position and amortised as revenue is recognised under the related contract; this will generally lead to the later recognition of charges for some commissions
payable to third party dealers and employees. The Group expect IFRS 15 to significantly change the timing of costs recognized under these arrangements
resulting in a significant cumulative adjustment to increase retained earnings will be made.
Presentation and disclosure requirements
The presentation and disclosure requirements in IFRS 15 are more detailed than under current IFRS. The presentation requirements represent a significant
change from current practice and significantly increases the volume of disclosures required in the Group’s financial statements. Many of the disclosure
requirements in IFRS 15 are new and the Group has assessed that the impact of some of these disclosures requirements will be significant.
F36
TURKCELL İLETİŞİM HİZMETLERİ A.Ş.Notes to the Consolidated Financial Statementsas at and for the Year Ended 31 December 2017(All amounts disclosed in the consolidated financial statements and notes have been rounded off to the nearest thousand currency units and are expressed in Turkish Liras unless otherwise stated.) TURKCELL ANNUAL REPORT 2017
191
2. BASIS OF PREPARATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(af) New standards and interpretations (continued)
iv) Status of adoption of significant new or amended IFRS standards or interpretations (continued)
IFRS 9 Financial instruments
The last version of IFRS 9, issued in July 2014, replaces the existing guidance in IAS 39 “Financial Instruments: Recognition and Measurement”. It also
carries forward the guidance on recognition, classification, measurement and derecognition of financial instruments from IAS 39 to IFRS 9. The last version
of IFRS 9 includes a new expected credit loss model for calculating impairment on financial assets, and new general hedge accounting requirements and
also includes guidance issued in previous versions of IFRS 9. IFRS 9 is effective for annual reporting periods beginning on or after 1 January 2018.
Classification and measurement – Financial assets
IFRS 9 contains a new classification and measurement approach for financial assets that reflects the business model in which assets are managed and their
cash flow characteristics.
IFRS 9 contains three principal classification categories for financial assets: measured at amortised cost, FVOCI and FVTPL. The standard eliminates the
existing IAS 39 categories of held to maturity, loans and receivables and available for sale.
The new classification requirements would have had a impact on its accounting for consumer financing loans, trade receivables, investments in debt
securities, cash and cash equivalents and other financial assets. Since Turkcell Finansman A.S. may sale and derecognizes some portion of its loans
depending on the management assessment, the related portion may be assessed in “hold and sell” business model and may require fair value measurement.
Impairment – Financial assets and contract assets
IFRS 9 replaces the ‘incurred loss’ model in IAS 39 with a forward looking ‘expected credit loss’ (ECL) model. This will require considerable judgement about
how changes in economic factors affect ECLs, which will be determined on a probability-weighted basis.
The new impairment model will apply to financial assets measured at amortised cost or FVOCI, except for investments in equity instruments, and to
contract assets.
Under IFRS 9, loss allowances will be measured on either the following bases.
• 12 month ECLs: these are ECLs that result from possible default events within the 12 months after the reporting date; and
lifetime ECLs: these are ECLs that result from all possible default events over the expected life of a financial instrument.
•
Lifetime ECL measurement applies if the credit risk of a financial asset at the reporting date has increased significantly since initial recognition and 12
month ECL measurement applies if it has not.
An entity may determine that a financial asset’s credit risk has not increased significantly if the asset has low credit risk at the reporting date. However
lifetime ECL measurement (simplified approach) always apply for trade receivables and contract assets without a significant financing component. The
Group will apply lifetime ECL measurement for all group companies except Turkcell Finansman A.S. which will apply both 12 month and lifetime ECL
(general approach) since it is a financing company.
F37
SECTORAL AND FINANCIAL INFORMATIONTURKCELL ANNUAL REPORT 2017TURKCELL İLETİŞİM HİZMETLERİ A.Ş.Notes to the Consolidated Financial Statementsas at and for the Year Ended 31 December 2017(All amounts disclosed in the consolidated financial statements and notes have been rounded off to the nearest thousand currency units and are expressed in Turkish Liras unless otherwise stated.)
192
2. BASIS OF PREPARATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(af) New standards and interpretations (continued)
iv) Status of adoption of significant new or amended IFRS standards or interpretations (continued)
IFRS 9 Financial instruments (continued)
Transition
The Group will take advantage of the exemption allowing it not to restate comparative information for prior periods with respect to classification and
measurement (including impairment) changes. Differences in the carrying amounts of financial assets and financial liabilities resulting from the adoption of
IFRS 9 will generally be recognized in retained earnings and reserves as at 1 January 2018.
Based on its assessment, The Group does not expect material impact on its financial statements.
3. FINANCIAL RISK MANAGEMENT
This note explains the Group’s exposure to financial risks and how these risks could affect the Group’s future financial performance. Current year profit and
loss information has been included where relevant to add further context.
The Group’s risk management is carried out by a central treasury department (“Group Treasury) under policies approved by the Audit Committee. Group
Treasury identifies, evaluates and manages financial risks in close co-operation with the Group’s operating units. The Audit Committee provides written
principles for overall risk management, as well as policies covering specific areas, such as foreign exchange risk, interest rate risk, credit risk, use of
derivative financial instruments and non-derivative financial instruments, and investment of excess liquidity. In addition, Risk Early Detection Committee
was established in accordance with the New Turkish Commercial Code effective from 1 July 2012.
Credit risk
At the reporting date, there were no significant concentrations of credit risk. The maximum exposure to credit risk is represented by the carrying amount of
cash and cash equivalents, held-to-maturity investments, derivative financial instruments, trade receivables, receivables from financial services, due from
related parties and other assets (Note 33).
Management has a credit policy in place and the exposure to credit risk is monitored on an ongoing basis. The Group may require collateral in respect of
financial assets. Also, the Group may demand letters of guarantee from third parties related to certain projects or contracts. The Group may also demand
certain pledges from counterparties if necessary in return for the credit support it gives related to certain financings (Note 19).
In monitoring customer credit risk, customers are grouped according to whether they are subscribers, financial services customers, other corporate
customers, aging profile, maturity and existence of previous financial difficulties. Trade receivables and accrued income are mainly related to the Group’s
subscribers. The Group’s exposure to credit risk on trade receivables is influenced mainly by the individual payment characteristics of postpaid subscribers.
The Group establishes an allowance for impairment that represents its estimate of incurred losses in respect of trade and other receivables.
This allowance comprise of the general provision which is determined based on the age of the balances and historical collection trends.
Investments are preferred to be in liquid securities. The counterparty limits are set monthly depending on their ratings from the most credible rating
agencies and the amount of their paid-in capital and/or shareholders equity. Policies are in place to review the paid-in capital and rating of counterparties
periodically to ensure credit worthiness.
F38
TURKCELL İLETİŞİM HİZMETLERİ A.Ş.Notes to the Consolidated Financial Statementsas at and for the Year Ended 31 December 2017(All amounts disclosed in the consolidated financial statements and notes have been rounded off to the nearest thousand currency units and are expressed in Turkish Liras unless otherwise stated.) TURKCELL ANNUAL REPORT 2017 193
3. FINANCIAL RISK MANAGEMENT (CONTINUED)
Credit risk (continued)
Transactions involving derivatives are executed with local and international counterparties with whom the Group has signed international agreements and
which have sound credit ratings.
The Group’s policy is to provide financial guarantees only to subsidiaries and distributors. At 31 December 2017, guarantees of TL 3,720,954 were
outstanding (31 December 2016: TL 1,409,749).
Liquidity risk
Prudent liquidity risk management implies maintaining sufficient cash and the availability of funding through an adequate amount of committed credit
facilities to meet obligations when due and to close out market positions. At the end of the reporting period the Group held deposits at call of TL 603,553
(2016: TL 569,826) that are expected to readily generate cash inflows for managing liquidity risk. Due to the dynamic nature of the underlying businesses,
Group Treasury maintains flexibility in funding by maintaining availability under committed credit lines.
Management monitors rolling forecasts of the Group’s liquidity reserve (Note 33) and cash and cash equivalents (Note 23) on the basis of expected cash
flows. In addition, the Group’s liquidity management policy involves projecting cash flows in major currencies and considering the level of liquid assets
necessary to meet these, monitoring balance sheet liquidity ratios against internal and external regulatory requirements and maintaining debt financing
plans.
Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will affect the Group’s income or the
value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable
parameters, while optimizing the return on risk.
The Group uses derivatives in order to manage market risks. All such transactions are carried at within the guidelines set by the Group Treasury.
(i) Foreign exchange risk
The Group operates internationally and is exposed to foreign exchange risk arising from foreign currency transactions, primarily with respect to the USD
and EUR. Foreign exchange risk arises from recognized assets and liabilities denominated in a currency that is not the functional currency of the relevant
Group entity. The Group holds a significant portion of its cash and cash equivalent in foreign currency in order to manage foreign exchange risk. In
additional, derivative financial instruments are used to manage exposure to fluctuations in foreign exchange rates.
(ii) Interest rate risk
The Group’s exposure to interest rate risk is related to its financial assets and liabilities. The Group manage its financial liabilities by providing an
appropriate distribution between fixed and floating rate loans. Floating rate exposures can be changed to fixed rate exposures based on short term and
long term market expectations via financial derivatives. The use of financial derivatives is governed by the Group Treasury’s policies approved by the Audit
Committee, which provide written principles on the use of derivatives.
The Group’s borrowings and receivables are carried at amortized cost. The borrowings are periodically contractually repriced (Note 33) and to that extent
are also exposed to the risk of future changes in market interest rates.
F39
SECTORAL AND FINANCIAL INFORMATIONTURKCELL ANNUAL REPORT 2017TURKCELL İLETİŞİM HİZMETLERİ A.Ş.Notes to the Consolidated Financial Statementsas at and for the Year Ended 31 December 2017(All amounts disclosed in the consolidated financial statements and notes have been rounded off to the nearest thousand currency units and are expressed in Turkish Liras unless otherwise stated.)
194
4. SEGMENT INFORMATION
The Group has two reportable segments in accordance with its integrated communication and technology services strategy - Turkcell Turkey and Turkcell
International. While some of these strategic segments offer the same types of services, they are managed separately because they operate in different
geographical locations and are affected by different economic conditions.
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The chief operating
decision maker function is carried out by the Board of Directors, however Board of Directors may transfer the authorities, other than recognized by the law,
to the General Manager and other directors.
Turkcell Turkey reportable segment includes the operations of Turkcell, Turkcell Superonline Iletisim Hizmetleri A.S. (“Turkcell Superonline”), Turkcell Satis
ve Dagitim Hizmetleri A.S. (“Turkcell Satis”), group call center operations of Global Bilgi Pazarlama Danisma ve Cagri Servisi Hizmetleri A.S. (“Turkcell
Global Bilgi”), Turktell Bilisim Servisleri A.S. (“Turktell”), Turkcell Teknoloji Arastirma ve Gelistirme A.S. (“Turkcell Teknoloji”), Kule Hizmet ve Isletmecilik
A.S. (“Global Tower”), Rehberlik Hizmetleri Servisi A.S. (“Rehberlik”), Turkcell Odeme Hizmetleri A.S. (“Turkcell Odeme”) and Turkcell Gayrimenkul
Hizmetleri A.S. (“Turkcell Gayrimenkul”). Turkcell International reportable segment includes the operations of Kibris Mobile Telekomunikasyon Limited
Sirketi (“Kibris Telekom”), East Asian Consortium B.V. (“Eastasia”), LLC lifecell (“lifecell”), Lifecell Ventures Coöperatief U.A (“Lifecell Ventures”), Beltel
Telekomunikasyon Hizmetleri A.S. (“Beltel”), CJSC Belarusian Telecommunications Network (“Belarusian Telecom”), LLC UkrTower (“UkrTower”), LLC
Global Bilgi (“Global LLC”), Turkcell Europe GmbH (“Turkcell Europe”), Lifetech LLC (“Lifetech”), Beltower LLC (“Beltower”), Lifecell Digital Limited and
Fintur. The operations of these legal entities aggregated into one reportable segment as the nature of services are similar and most of them share similar
economic characteristics. Other reportable segment mainly comprises the information and entertainment services in Turkey and Azerbaijan, non-group call
center operations of Turkcell Global Bilgi, Turkcell Finansman, Turkcell Enerji Cozumleri ve Elektrik Satıs Ticaret A.S (“Turkcell Enerji”) and Paycell LLC
(“Paycell”).
The Board primarily uses adjusted EBITDA to assess the performance of the operating segments. Adjusted EBITDA definition includes revenue, cost of
revenue excluding depreciation and amortization, selling and marketing expenses and administrative expenses.
Adjusted EBITDA is not a financial measure defined by IFRS as a measurement of financial performance and may not be comparable to other similarly-titled
indicators used by other companies. Reconciliation of Adjusted EBITDA to the consolidated profit for the year is included in the accompanying notes.
F40
TURKCELL İLETİŞİM HİZMETLERİ A.Ş.Notes to the Consolidated Financial Statementsas at and for the Year Ended 31 December 2017(All amounts disclosed in the consolidated financial statements and notes have been rounded off to the nearest thousand currency units and are expressed in Turkish Liras unless otherwise stated.) TURKCELL ANNUAL REPORT 2017
195
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F41
SECTORAL AND FINANCIAL INFORMATIONTURKCELL ANNUAL REPORT 2017TURKCELL İLETİŞİM HİZMETLERİ A.Ş.Notes to the Consolidated Financial Statementsas at and for the Year Ended 31 December 2017(All amounts disclosed in the consolidated financial statements and notes have been rounded off to the nearest thousand currency units and are expressed in Turkish Liras unless otherwise stated.)
196
4.SEGMENT INFORMATION (CONTINUED)
Profit for the period
Add(Substract):
Profit/(loss) from discontinued operations
Profit from continuing operations
Income tax expense
Finance income
Finance costs
Other income
Other expenses
Depreciation and amortization
Consolidated adjusted EBITDA
Geographical information
2017
2,037,759
-
2,037,759
571,758
(1,090,449)
1,413,315
(74,438)
773,329
2,596,980
6,228,254
2016
1,543,803
42,164
1,585,967
423,160
(1,064,794)
1,237,593
(78,569)
312,801
2,203,351
4,619,509
2015
1,903,551
(367,336)
1,536,215
667,112
(756,039)
799,514
(44,454)
270,446
1,667,750
4,140,544
In presenting the information on the basis of geographical segments, segment revenue is based on the geographical location of operations and segment
assets are based on the geographical location of the assets.
2017
2016
2015
16,431,863
664,643
209,884
174,021
148,637
3,016
17,632,064
13,321,503
573,951
149,005
108,329
129,785
2,988
14,285,561
11,779,345
571,630
141,219
145,654
125,668
5,899
12,769,415
31 December 2017
18,098,228
1,408,783
141,802
138,371
13,663
112,516
19,913,363
31 December 2016
16,548,162
1,211,789
117,243
291,498
13,563
67,057
18,249,312
Revenues
Turkey
Ukraine
Belarus
Azerbaijan
Turkish Republic of Northern Cyprus
Germany
Non-current assets
Turkey
Ukraine
Turkish Republic of Northern Cyprus
Belarus
Azerbaijan
Unallocated non-current assets
F42
TURKCELL İLETİŞİM HİZMETLERİ A.Ş.Notes to the Consolidated Financial Statementsas at and for the Year Ended 31 December 2017(All amounts disclosed in the consolidated financial statements and notes have been rounded off to the nearest thousand currency units and are expressed in Turkish Liras unless otherwise stated.) TURKCELL ANNUAL REPORT 2017 197
5. REVENUE
Telecommunication services
Equipment revenues
Revenue from financial services
Revenue and commission fees on betting business
Call center revenues
Other
6. OTHER INCOME AND EXPENSE
2017
15,115,816
1,159,500
605,663
355,907
232,679
162,499
17,632,064
2016
12,883,974
624,352
184,698
284,496
198,564
109,477
14,285,561
2015
11,972,443
254,582
-
277,525
187,840
77,025
12,769,415
Other income amounted to TL 74,438, TL 78,569 and TL 44,454 for the years ended 31 December 2017, 2016 and 2015, respectively.
Other expenses amounted to TL 773,329, TL 312,801 and TL 270,446 for years ended 31 December 2017, 2016 and 2015, respectively.
Other income for the years ended 31 December 2017, 2016 and 2015 mainly consist of gain on sale of fixed assets and reversal of legal provisions (Note 36).
Other expenses for the year ended 31 December 2017 and 2016 mainly consist of donations and litigation expenses (Note 36).
Other expenses for the year ended 31 December 2015 mainly consist of expenses for termination of commercial agreements and litigation expenses.
7. EMPLOYEE BENEFIT EXPENSES
Wages and salaries (*)
Employee termination benefits (**)
Defined contribution plans
2017
1,746,147
32,862
8,107
1,787,116
2016
1,450,262
32,977
7,722
1,490,961
2015
1,317,655
30,593
8,364
1,356,612
(*) Wages and salaries include compulsory social security contributions and bonuses.
(**) Remeasurements of employee termination benefits for the years ended 31 December 2017, 2016 and 2015 amounting to TL 3,738, TL 34,532 and TL 13,466 respectively are reflected in other
comprehensive income.
F43
SECTORAL AND FINANCIAL INFORMATIONTURKCELL ANNUAL REPORT 2017TURKCELL İLETİŞİM HİZMETLERİ A.Ş.Notes to the Consolidated Financial Statementsas at and for the Year Ended 31 December 2017(All amounts disclosed in the consolidated financial statements and notes have been rounded off to the nearest thousand currency units and are expressed in Turkish Liras unless otherwise stated.)
198
8. FINANCE INCOME AND COSTS
Recognized in the statement of profit or loss:
Fair value gains on derivative financial instruments
Interest income on bank deposits
Interest income on financial assets measured at amortized cost
Credit finance income
Other
Finance income
Net foreign exchange losses
Interest expenses for financial liabilities measured at amortized cost
Interest expenses for derivative financial instruments
Late payment interest expense
Option premium charges
Other
Finance costs
Net finance costs
2017
589,555
278,599
185,004
36,186
1,105
1,090,449
(718,501)
(385,386)
(244,841)
(29,115)
(27,172)
(8,300)
(1,413,315)
(322,866)
2016
385,560
158,206
445,943
74,522
563
1,064,794
(782,463)
(343,290)
(93,038)
-
(10,114)
(8,688)
(1,237,593)
(172,799)
2015
1,070
303,221
436,024
13,865
1,859
756,039
(489,320)
(224,724)
-
(68,083)
(2,290)
(15,097)
(799,514)
(43,475)
Finance incomes for the years ended 31 December 2017, 2016 and 2015 are mainly attributable to interest income on contracted handset sales, changes in
fair value of derivative financial instruments and interest income on bank deposits.
Foreign exchange losses mainly include foreign exchange losses on borrowings and bonds issued amounting to TL 920,862 and TL 113,081 as of 31
December 2017.
Finance costs for year ended 31 December 2016 and 2015 is mainly attributable to the financing costs of borrowings, 4.5G license fees payable, foreign
exchange losses of Belarusian Telecom operating in Belarus and foreign exchange losses of lifecell operating in Ukraine. Foreign exchange losses from
Belarusian Telecom and lifecell exclude foreign exchange losses incurred in the foreign operations’ individual financial statements which have been
recognized directly in equity under foreign currency translation reserve in the consolidated financial statements in accordance with the accounting policy
for net investment in foreign operations as disclosed in Note 2c.
F44
TURKCELL İLETİŞİM HİZMETLERİ A.Ş.Notes to the Consolidated Financial Statementsas at and for the Year Ended 31 December 2017(All amounts disclosed in the consolidated financial statements and notes have been rounded off to the nearest thousand currency units and are expressed in Turkish Liras unless otherwise stated.) TURKCELL ANNUAL REPORT 2017
9. INCOME TAX EXPENSE
Current income tax expense
Deferred income tax expense
Total income tax expense
Income tax expense is attributable to profit from continuing operations.
Income tax relating to each component of other comprehensive income
2017
Foreign currency translation differences
Remeasurements of employee termination benefits
2016
Foreign currency translation differences
Remeasurements of employee termination benefits
2015
Foreign currency translation differences
Changes in cash flow hedge reserve
Remeasurements of employee termination benefits
2017
(437,967)
(133,791)
(571,758)
2016
(200,663)
(222,497)
(423,160)
Before tax
100,149
(3,738)
96,411
Tax (expense)/credit
(107,299)
748
(106,551)
218,472
(34,532)
183,940
(384,466)
719
(13,466)
(397,213)
(87,381)
7,066
(80,315)
(5,749)
-
2,563
(3,186)
199
2015
(591,297)
(75,815)
(667,112)
Net of tax
(7,150)
(2,990)
(10,140)
131,091
(27,466)
103,625
(390,215)
719
(10,903)
(400,399)
F45
SECTORAL AND FINANCIAL INFORMATIONTURKCELL ANNUAL REPORT 2017TURKCELL İLETİŞİM HİZMETLERİ A.Ş.Notes to the Consolidated Financial Statementsas at and for the Year Ended 31 December 2017(All amounts disclosed in the consolidated financial statements and notes have been rounded off to the nearest thousand currency units and are expressed in Turkish Liras unless otherwise stated.)
200
9. INCOME TAX EXPENSE (CONTINUED)
Reconciliation of income tax expense
Profit from continuing operations before income tax expense
Profit from discontinued operations before income tax expense
Profit before income tax expense
Tax at the Turkey’s tax rate
Difference in overseas tax rates
Effect of exemptions (*)
Effect of amounts which are not deductible
Utilization of previously unrecognized tax losses
Change in unrecognized deferred tax assets (**)
Adjustments for current tax of prior years
Tax effect of investment in associate
Other
Total income tax expense
(*) Mainly comprises of research and development tax credit.
(**) Mainly comprises of tax losses for which no deferred tax asset has been recognized.
2017
2,609,517
-
2,609,517
(521,903)
4,133
73,916
(102,102)
-
(41,340)
11,280
-
4,258
(571,758)
2016
2,009,127
(42,164)
1,966,963
(393,393)
(15,935)
104,244
(78,571)
1,253
(30,616)
(8,176)
-
(1,966)
(423,160)
2015
2,203,327
367,336
2,570,663
(514,133)
(52,688)
62,163
(16,104)
22,863
(198,364)
-
32,926
(3,775)
(667,112)
As of 31 December 2017, the Turkish entities within the Group are subject to corporate tax at the Turkey’s tax rate of 20%. On December 5, 2017, Turkey’s
Law No. 7061 on the Amendment of Some Tax Laws and Some Other Laws, which was adopted on November 28, 2017, was published in the Official
Gazette. The Law increases the corporate tax rate under the Corporate Tax Law, No. 5520, from the current 20% rate to 22% for tax years 2018, 2019, and
2020; the change took effect on the Law’s date of publication. It is expected to continue with 20% afterwards.
In Turkey, there is no procedure for a final and definitive agreement on tax assessments. Companies file their tax returns at the end of until the 25th day of
the forth month following the close of the accounting year to which they relate. Corporate tax payment is made until the end of the month in which the
tax return is filed. Tax authorities may, however, examine such returns and the underlying accounting records and may revise assessments within five years.
Advance tax returns are filed on a quarterly basis.
Corporate tax is applied on taxable corporate income, which is calculated from the statutory accounting profit by adding back non-deductible expenses, and
by deducting tax exempt income.
In Turkey, the transfer pricing provisions have been stated under the Article 13 of Corporate Tax Law with the heading of “disguised profit distribution via
transfer pricing”. The General Communiqué on disguised profit distribution via Transfer Pricing, dated 18 November 2007 sets details about implementation.
If a taxpayer enters into transactions regarding sale or purchase of goods and services with related parties, where the prices are not set in accordance
with arm’s length principle, then related profits are considered to be distributed in a disguised manner through transfer pricing. Such disguised profit
distributions through transfer pricing are not accepted as tax deductible for corporate income tax purposes.
F46
TURKCELL İLETİŞİM HİZMETLERİ A.Ş.Notes to the Consolidated Financial Statementsas at and for the Year Ended 31 December 2017(All amounts disclosed in the consolidated financial statements and notes have been rounded off to the nearest thousand currency units and are expressed in Turkish Liras unless otherwise stated.) TURKCELL ANNUAL REPORT 2017 201
9. INCOME TAX EXPENSE (CONTINUED)
The deduction of 100% of the research and development expenses is allowed when the taxpayers are made these expenditures exclusively for new
technology and information researches.
Dividend payments of Turkish resident corporations against Turkish real persons, foreign corporations and foreign real persons are subject to 15%
withholding tax. It is possible to apply reduced withholding tax rate for dividend payments made to abroad, in case it is stated in a double tax treaty. On the
other hand, dividend payments made to Turkish resident companies are not subject to withholding tax.
Dividend income of Turkish taxpayers received from other Turkish taxpayers is exempted from corporate tax. However, dividends received from
participation shares and stocks of fund and investment partnerships cannot utilize from this exemption.
75% of the profits arising from sale of affiliate shares, founders’ shares, redeemed shares and preemptive rights that are held by the corporations for
at least two years are exempted from corporate tax. However, as of 5 December 2017, the date of the publication of the Law No. 7061, 50% part of the
profits arising from the sale of the immovable properties that are included in assets of the corporations for two years are exempted from corporate tax. The
exemption rate is 75% before this date. In order to benefit from these exemptions, profits must be recorded under a passive fund account in balance sheet
and not withdrawn for 5 years. Also, the sale amounts must be received until the end of the second calendar year following the sale.
10. EXPENSES BY NATURE
Breakdown of expenses by nature for the years ended 31 December 2017, 2016 and 2015 is as follows:
Cost of revenue:
Depreciation and amortization(*)
Treasury share
Interconnection and termination expenses
Radio expenses
Employee benefit expenses
Cost of goods sold
Cost of revenue from financial services
Universal service fund
Transmission expenses
Roaming expenses
Billing and archiving expenses
Others
2017
(2,596,980)
(1,669,807)
(1,607,079)
(1,123,668)
(1,046,544)
(870,226)
(270,366)
(221,431)
(218,221)
(177,258)
(55,185)
(1,493,409)
(11,350,174)
2016
(2,203,351)
(1,491,503)
(1,420,233)
(1,057,618)
(859,143)
(551,656)
(68,546)
(192,045)
(139,185)
(128,429)
(61,647)
(1,063,251)
(9,236,607)
2015
(1,667,750)
(1,418,683)
(1,326,990)
(911,454)
(734,725)
(250,779)
-
(182,508)
(113,574)
(108,102)
(55,056)
(999,862)
(7,769,483)
(*)As at 31 December 2017, depreciation and amortization expenses includes depreciation and amortization expenses related to the financial services amounting to TL 6,343 (31 December 2016: 1.677 TL).
F47
SECTORAL AND FINANCIAL INFORMATIONTURKCELL ANNUAL REPORT 2017TURKCELL İLETİŞİM HİZMETLERİ A.Ş.Notes to the Consolidated Financial Statementsas at and for the Year Ended 31 December 2017(All amounts disclosed in the consolidated financial statements and notes have been rounded off to the nearest thousand currency units and are expressed in Turkish Liras unless otherwise stated.) 2017
(898,936)
(532,989)
(394,421)
(82,994)
(96,080)
(2,005,420)
2017
(346,151)
(50,247)
(36,280)
(36,278)
(30,957)
(24,342)
(20,415)
(100,526)
(645,196)
2016
(757,869)
(518,382)
(354,380)
(186,530)
(93,786)
(1,910,947)
2016
(277,438)
(54,315)
(30,314)
(211,384)
(18,913)
(20,315)
(20,827)
(88,343)
(721,849)
2015
(783,234)
(428,596)
(381,582)
(191,408)
(117,039)
(1,901,859)
2015
(240,305)
(43,995)
(23,924)
(196,588)
(13,484)
(23,424)
(17,533)
(66,026)
(625,279)
202
10. EXPENSES BY NATURE (CONTINUED)
Selling and marketing expenses:
Selling expenses
Marketing expenses
Employee benefit expenses
Frequency usage fees related to prepaid subscribers
Others
Administrative expenses:
Employee benefit expenses
Consultancy expenses
Rent expenses
Net impairment expense recognized on receivables
Travel and entertainment expenses
Maintenance and repair expenses
Collection expenses
Other
F48
TURKCELL İLETİŞİM HİZMETLERİ A.Ş.Notes to the Consolidated Financial Statementsas at and for the Year Ended 31 December 2017(All amounts disclosed in the consolidated financial statements and notes have been rounded off to the nearest thousand currency units and are expressed in Turkish Liras unless otherwise stated.) TURKCELL ANNUAL REPORT 2017
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F49
SECTORAL AND FINANCIAL INFORMATIONTURKCELL ANNUAL REPORT 2017TURKCELL İLETİŞİM HİZMETLERİ A.Ş.Notes to the Consolidated Financial Statementsas at and for the Year Ended 31 December 2017(All amounts disclosed in the consolidated financial statements and notes have been rounded off to the nearest thousand currency units and are expressed in Turkish Liras unless otherwise stated.)
204
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TURKCELL ANNUAL REPORT 2017TURKCELL İLETİŞİM HİZMETLERİ A.Ş.Notes to the Consolidated Financial Statementsas at and for the Year Ended 31 December 2017(All amounts disclosed in the consolidated financial statements and notes have been rounded off to the nearest thousand currency units and are expressed in Turkish Liras unless otherwise stated.)
205
11. PROPERTY, PLANT AND EQUIPMENT (CONTINUED)
Leased assets
The Group leases equipment and intangible assets under a number of finance lease agreements. As of 31 December 2017, The Group did not acquire any
property, plant and equipment and intangibles assets without cash outflows through beneficial price option to purchase the equipment and intangible
assets (31 December 2016: 36,322 TL).
As at 31 December 2017, net book amount of fixed assets acquired under finance leases amounted to TL 170,249 (31 December 2016: TL 89,425).
12. INTANGIBLE ASSETS
Turkcell - 2G License
On 27 April 1998, the Company was granted a 25-year GSM license (the “2G License”) for a consideration of USD 500,000, the carrying amount of the 2G
license is TL 241,407 at 31 December 2017 (31 December 2016: TL 287,390) and it is amortized over 25 years.
Turkcell - 3G License
On 30 April 2009, the Company signed a license agreement (the “3G License”) with the ICTA which provides authorization for providing IMT 2000/UMTS
services and infrastructure. The Company acquired the A-type license providing the widest frequency band for a consideration of EUR 358,000 (excluding
VAT). The license is effective for 20 years starting from 30 April 2009. The carrying amount of the 3G License is TL 436,014 at 31 December 2017 (31
December 2016: TL 474,486) and it is amortized over 25 years.
Turkcell - 4.5G License
On 26 August 2015, “Authorization Tender on IMT Services and Infrastructure” publicly known as 4.5G license tender, was held by the Information
Technologies and Communication Authority and the Company was granted a total frequency band of 172.4M Hz for 13 years for a consideration of EUR
1,623,460 (excluding VAT).
IMT authorization period expires on 30 April 2029 and operators commenced service delivery for 4.5G from 1 April 2016. 2x1.4 MHz frequency band in
900MHz spectrum and 2 units of 2x5 MHz frequency band in 2100 MHz spectrum were commenced on 1 December 2015, while remaining packages were
commenced on 1 April 2016.
Tender price amounting to EUR 1,623,460 (excluding VAT) was paid semi-annually by four equal installments total of which amounted to EUR 1,655,290
including interest and excluding VAT of 18%.
As at 31 December 2017, there is no payable related to the 4.5G license (31 December 2016: TL 1,522,615 in current liabilities).
F51
SECTORAL AND FINANCIAL INFORMATIONTURKCELL ANNUAL REPORT 2017TURKCELL İLETİŞİM HİZMETLERİ A.Ş.Notes to the Consolidated Financial Statementsas at and for the Year Ended 31 December 2017(All amounts disclosed in the consolidated financial statements and notes have been rounded off to the nearest thousand currency units and are expressed in Turkish Liras unless otherwise stated.)
206
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TURKCELL ANNUAL REPORT 2017TURKCELL İLETİŞİM HİZMETLERİ A.Ş.Notes to the Consolidated Financial Statementsas at and for the Year Ended 31 December 2017(All amounts disclosed in the consolidated financial statements and notes have been rounded off to the nearest thousand currency units and are expressed in Turkish Liras unless otherwise stated.)
207
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F53
SECTORAL AND FINANCIAL INFORMATIONTURKCELL ANNUAL REPORT 2017TURKCELL İLETİŞİM HİZMETLERİ A.Ş.Notes to the Consolidated Financial Statementsas at and for the Year Ended 31 December 2017(All amounts disclosed in the consolidated financial statements and notes have been rounded off to the nearest thousand currency units and are expressed in Turkish Liras unless otherwise stated.)
208
13. IMPAIRMENT OF ASSETS
The Group’s cash-generating units (CGUs) are reviewed at each reporting date to determine whether there is any indication of impairment. If any such
indication exists, then the recoverable amount of the CGU is estimated. The recoverable amount of the CGU is its fair value less cost of disposal. Ukraine
and Belarus CGUs were tested for impairment at 31 December 2017. None of these CGUs contains goodwill or an intangible asset with an indefinite useful
life.
lifecell
At 31 December 2017, impairment of Ukraine CGU was tested using the assumption that lifecell was the CGU.
The recoverable amount of lifecell is determined based on fair value less cost of disposal calculations which require the use of assumptions. The
calculations use cash flow projections based on financial budgets approved by management covering a six-year period. Cash flows beyond the six-year
period are extrapolated using the estimated growth rate.
Sensitivity analysis was performed on the change in WACC by +0.5%/-0.5% (31 December 2016: +0.5%/-0.5%). The assumptions used in recoverable
amount calculations of lifecell were:
A post-tax WACC rate of 26.5% for the period from 2018 to 2022, a post-tax WACC rate of 25.9% for the period after 2022 and a terminal growth rate of
6.0% were used to extrapolate cash flows beyond the 6-year forecasts period based on the business plans.
A post-tax WACC rate of 28.7% for the period from 2017 to 2021, a post-tax WACC rate of 27.9% for the period after 2021 and a terminal growth rate of
6.0% were used to extrapolate cash flows beyond the 5-year forecasts period based on the business plans. The pre-tax rate for disclosure purposes was
30.0%.
As the recoverable amount of lifecell was higher than its carrying amount, no impairment charge was recognized.
Belarusian Telecom
The aggregate carrying amount of goodwill arising from the acquisition of Belarusian Telecom was impaired at 31 December 2011. The cumulative
impairment loss recognized in the statement of profit or loss is TL 228,774.
At 31 December 2017, impairment of Belarus CGU was tested using the assumption that Belarusian Telecom was the CGU.
The recoverable amount of Belarusian Telecom is determined based on fair value less cost of disposal calculations which require the use of assumptions.
The calculations use cash flow projections based on financial budgets approved by management covering a five-year period. Cash flows beyond the
five-year period are extrapolated using the estimated growth rate.
Sensitivity analysis was performed on the change in WACC by +0.5%/-0.5% (31 December 2016: +0.5%/-0.5%). The assumptions used in recoverable
amount calculations of Belarusian Telecom were:
A post-tax WACC rate of 25.4% for the period from 2018 to 2022, a post-tax WACC rate of 24.9% for the period after 2022, and a terminal growth rate of
8.0% were used to extrapolate cash flows beyond the 5-year forecast period based on the business plan.
F54
TURKCELL İLETİŞİM HİZMETLERİ A.Ş.Notes to the Consolidated Financial Statementsas at and for the Year Ended 31 December 2017(All amounts disclosed in the consolidated financial statements and notes have been rounded off to the nearest thousand currency units and are expressed in Turkish Liras unless otherwise stated.) TURKCELL ANNUAL REPORT 2017
209
13. IMPAIRMENT OF ASSETS (CONTINUED)
A post-tax WACC rate of 29.4% for the period from 2017 to 2021, a post-tax WACC rate of 28.7% for the period after 2021 and a terminal growth rate of
10.0% were used to extrapolate cash flows beyond the 5-year forecast period based on the business plan. The pre-tax rate for disclosure purposes was
30.9%.
As the recoverable amount of Belarusian Telecom was higher than its carrying amount, no impairment charge was recognized.
Turkcell Superonline
As at 31 December 2017, the aggregate carrying amount of goodwill allocated to Turkcell Superonline is TL 32,834 (31 December 2016: TL 32,834). No
impairment test was performed for goodwill allocated to Turkcell Superonline on the grounds of materiality.
14. INVESTMENT PROPERTIES
Cost
Opening balance
Addition
Disposal
Transfer to property, plant and equipment (*)
Closing balance
Accumulated depreciation
Opening balance
Transfer to property, plant and equipment
Depreciation and impairment charges
during the year
Disposal
Other
Closing balance
Net book amount
31 December 2017
31 December 2016
165,472
-
(940)
(64,594)
99,938
(119,202)
22,366
(2,337)
215
-
(98,958)
980
164,467
1,005
-
-
165,472
(114,895)
-
(3,530)
-
(777)
(119,202)
46,270
(*) During the year, the Group transferred its building located in Istanbul, Tepebası from investment properties to property, plant and equipment due to the change in purpose of use.
Determination of the fair values of the Group’s investment properties
The Group engages qualified external valuers, authorized by the Capital Markets Board of Turkey, to perform the valuation of investment properties.
Management works closely with the qualified external valuers to establish the appropriate valuation techniques and inputs to the model. The fair values
of these investment properties were determined using a variety of valuation methods: direct capitalization approach and income capitalization approach,
replacement cost approach and market approach. In estimating the fair values of the properties, the highest and best use of the property is its current use.
Rent income from investment properties during the year ended 31 December 2017 is TL 2,821 (31 December 2016: TL 2,317 and 31 December 2015: TL
1,836). Direct operating expenses for investment properties during the year ended 31 December 2017 is TL 22 (31 December 2016: TL 22 and 31 December
2015: TL 126).
F55
SECTORAL AND FINANCIAL INFORMATIONTURKCELL ANNUAL REPORT 2017TURKCELL İLETİŞİM HİZMETLERİ A.Ş.Notes to the Consolidated Financial Statementsas at and for the Year Ended 31 December 2017(All amounts disclosed in the consolidated financial statements and notes have been rounded off to the nearest thousand currency units and are expressed in Turkish Liras unless otherwise stated.) 210
14. INVESTMENT PROPERTIES (CONTINUED)
The Group’s investment properties and their fair values at 31 December 2017 and 2016 are as follows:
31 December 2017
Investment properties in Izmir
Investment properties in Gebze
Investment properties in Ankara
Investment properties in Istanbul
Investment properties in Adana
Investment properties in Balıkesir
Other investment properties
Other investment properties
31 December 2016
Investment properties in İstanbul:
- Istanbul Tepebasi
- Kucukcekmece
Investment properties in Gebze
Investment properties in Izmir
Other investment properties
Other investment properties
Other investment properties
Total
Level 1
-
-
-
-
-
-
-
-
-
Level 2
-
-
-
-
-
-
-
-
-
Level 3
52,110
16,690
15,160
13,000
3,150
3,112
3,970
2,146
109,338
Valuation Method
Replacement cost approach
Income capitalization approach
Market approach
Market approach
Replacement cost approach
Replacement cost approach
Replacement cost approach
Market approach
Level 1
Level 2
Level 3
Valuation Method
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
321,835
12,890
12,558
42,315
17,419
8,946
2,410
418,373
Direct capitalization approach
Replacement cost approach
Income capitalization approach
Replacement cost approach
Market approach
Replacement cost approach
Direct capitalization approach
F56
TURKCELL İLETİŞİM HİZMETLERİ A.Ş.Notes to the Consolidated Financial Statementsas at and for the Year Ended 31 December 2017(All amounts disclosed in the consolidated financial statements and notes have been rounded off to the nearest thousand currency units and are expressed in Turkish Liras unless otherwise stated.) TURKCELL ANNUAL REPORT 2017
211
14. INVESTMENT PROPERTIES (CONTINUED)
Significant unobservable inputs and sensitivity of fair values of respective investment properties are as follows:
Fair values of the investment properties determined based on the “direct capitalization” approach will increase/(decrease) significantly, when there is a
significant decrease/ (increase) in capitalization rate and a significant increase/(decrease) in current market rentals. Capitalization rate is calculated by
dividing comparable properties’ annual net operating income by the selling price of the respective properties.
In the “income capitalization” approach, a significant increase/(decrease) in rentals will cause a significant increase/(decrease) in the fair value. In addition,
a slight decrease/(increase) in risk premium and discount rate which are calculated by considering the current market conditions will cause a significant
increase/(decrease) in the fair value.
In the “replacement cost approach”, a significant increase/(decrease) of construction costs and miscellaneous costs of any similar properties in the market
will cause a significant increase/(decrease) in the fair value.
In the “market approach”, a significant increase/(decrease) in the market value of any properties which are located in the similar areas with similar
conditions will cause a significant increase/(decrease) in the fair value.
F57
SECTORAL AND FINANCIAL INFORMATIONTURKCELL ANNUAL REPORT 2017TURKCELL İLETİŞİM HİZMETLERİ A.Ş.Notes to the Consolidated Financial Statementsas at and for the Year Ended 31 December 2017(All amounts disclosed in the consolidated financial statements and notes have been rounded off to the nearest thousand currency units and are expressed in Turkish Liras unless otherwise stated.)
212
F58
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G
TURKCELL ANNUAL REPORT 2017TURKCELL İLETİŞİM HİZMETLERİ A.Ş.Notes to the Consolidated Financial Statementsas at and for the Year Ended 31 December 2017(All amounts disclosed in the consolidated financial statements and notes have been rounded off to the nearest thousand currency units and are expressed in Turkish Liras unless otherwise stated.)
213
16. ASSET HELD FOR SALE AND DISCONTINUED OPERATIONS
Disposal of Fintur
Classification
On 1 October 2016, the Group announced its intention to exit from jurisdictions in which Fintur operates and initiated an active program to locate a buyer.
Starting from 1 October 2016, Fintur has been classified as held for sale and reported as a discontinued operation.
The Group is still committed to the plan to exit from jurisdictions in which Fintur operates and the delay in the initial one-year period to complete the sale
was caused by events and circumstances beyond the Group’s control. The Group has taken necessary actions to respond to those circumstances and Fintur
is being actively marketed at reasonable prices given the change in circumstances.
Presentation
Fintur is classified as held for sale and reported as a discontinued operation and therefore disclosed separately on a single line as discontinued operation in
the consolidated statements of profit or loss, comprehensive income and cash flows. Investment in Fintur is presented as held for sale in the consolidated
statement of financial position. Comparative periods in the consolidated statements of profit or loss, comprehensive income and cash flows are restated to
reflect the classification of Fintur as a discontinued operation.
Measurement
Equity accounting for Fintur ceased from 1 October 2016, and in accordance with IFRS 5, Fintur has been measured at the lower of carrying amount and
fair value less costs of disposal. As at 31 December 2017, carrying value of investment in Fintur is TL 1,294,938 (31 December 2016: TL 1,222,757) which is
lower than the fair value less costs of disposal indicating that no impairment is required at 31 December 2017.
F59
SECTORAL AND FINANCIAL INFORMATIONTURKCELL ANNUAL REPORT 2017TURKCELL İLETİŞİM HİZMETLERİ A.Ş.Notes to the Consolidated Financial Statementsas at and for the Year Ended 31 December 2017(All amounts disclosed in the consolidated financial statements and notes have been rounded off to the nearest thousand currency units and are expressed in Turkish Liras unless otherwise stated.)
214
16. ASSET HELD FOR SALE AND DISCONTINUED OPERATIONS (CONTINUED)
The reconciliation of statement of profit or loss statement of Fintur is listed below (The financial statements are presented in USD);
1 January -
30 September 2016
617,214
(369,104)
248,110
(69,983)
(69,818)
(31,258)
77,051
(61,203)
15,848
(30,947)
(15,099)
1 January-
31 December 2015
1,325,535
(674,334)
651,201
(123,244)
(95,380)
(23,850)
408,727
162,357
571,084
(128,121)
442,963
(28,695)
13,596
(15,099)
2017
197,431
72,848
23,999
4,429
12,078
45,835
356,620
327,194
115,769
442,963
2016
183,029
72,848
29,201
28,772
217,658
43,726
575,234
Revenue
Cost of sales
Gross profit
Selling and marketing expenses
General and administrative expenses
Other operating (expenses), net
Operating profit
Finance (expense)/income, net
Profit before income tax
Total income tax
(Loss)/profit for period
Attributable to:
-owners of the parent
-non-controlling interests
(Loss)/profit for period
17. OTHER NON-CURRENT ASSETS
Prepaid expenses
Receivables from the Public Administration
Deposits and guarantees given
VAT receivable
Advances given for property, plant and equipment
Others
F60
TURKCELL İLETİŞİM HİZMETLERİ A.Ş.Notes to the Consolidated Financial Statementsas at and for the Year Ended 31 December 2017(All amounts disclosed in the consolidated financial statements and notes have been rounded off to the nearest thousand currency units and are expressed in Turkish Liras unless otherwise stated.) TURKCELL ANNUAL REPORT 2017 215
18. DEFERRED TAX ASSETS AND LIABILITIES
Recognized deferred tax assets and liabilities
Deferred tax assets and liabilities at 31 December 2017 and 2016 are attributable to the following:
Property, plant and equipment and intangible
assets
Investment
Reserve for employee termination benefits and
provisions (*)
Asset classified as held for sale
Trade and other payables
Tax losses carried forward
Tax allowances
Other assets and liabilities
Deferred tax assets/(liabilities)
Offsetting
Net deferred tax assets/(liabilities)
Assets
Liabilities
Net
2017
41,903
32,926
202,112
-
11,717
-
10,775
31,916
331,349
(235,289)
96,060
2016
3,516
33,242
55,288
-
57,686
1,508
32,200
65,905
249,345
(198,090)
51,255
2017
2016
2017
2016
(680,134)
-
(64)
(92,327)
(26,091)
-
-
(87,795)
(886,411)
235,289
(651,122)
(532,547)
-
-
(90,209)
-
-
-
(33,494)
(656,250)
198,090
(458,160)
(638,231)
32,926
202,048
(92,327)
(14,374)
-
10,775
(55,879)
(555,062)
-
(555,062)
(529,031)
33,242
55,288
(90,209)
57,686
1,508
32,200
32,411
(406,905)
-
(406,905)
(*) The Company has treated provisions recognized for legal claims (Note 36) as being deductible for tax purposes and recognized deferred tax assets amounting to TL 74,975 in the consolidated financial
statements.
Movement in deferred tax assets/(liabilities) for the years ended 31 December 2017 and 2016 were as follows:
Opening balance
Income statement charge
Tax charge relating to components of other comprehensive income
Prior year corporate tax base differences
Exchange differences
Closing balance, net
2017
(406,905)
(133,791)
(6,449)
(2,729)
(5,188)
(555,062)
2016
(64,822)
(222,497)
(7,066)
(109,640)
(2,880)
(406,905)
F61
SECTORAL AND FINANCIAL INFORMATIONTURKCELL ANNUAL REPORT 2017TURKCELL İLETİŞİM HİZMETLERİ A.Ş.Notes to the Consolidated Financial Statementsas at and for the Year Ended 31 December 2017(All amounts disclosed in the consolidated financial statements and notes have been rounded off to the nearest thousand currency units and are expressed in Turkish Liras unless otherwise stated.)
216
18. DEFERRED TAX ASSETS AND LIABILITIES (CONTINUED)
The Group did not recognise deferred income tax assets of TL 502,523 in respect of tax losses amounting to TL 2,698,248 that can be carried forward
against future taxable income. The unused tax losses were mainly incurred by lifecell and Belarusian Telecom that are not likely to generate taxable income
in the foreseeable future.
Unused tax losses will expire at the following dates:
Expiration Date
2018
2019
2020
2021
2022
2023
2024
2025
Indefinite
Total
19. TRADE RECEIVABLES AND ACCRUED REVENUE
Receivables from subscribers
Undue assigned contracted receivables
Accrued revenue
Accounts and notes receivable
Amount
8,911
9,394
8,775
4,467
3,506
281
128,314
803,533
1,731,067
2,698,248
31 December 2017
1,369,948
347,596
632,631
498,397
2,848,572
31 December 2016
1,223,183
1,215,314
558,169
293,238
3,289,904
Trade receivables are shown net of provision for impairment amounting to TL 705,213 at 31 December 2017 (31 December 2016: TL 964,080). Movements in
provision for impairment of trade receivables and due from related parties are disclosed in Note 33. The accounts and notes receivable represent receivables
from distributors and roaming receivables. The Group’s exposure to currency risk and credit risk arising from trade receivables are disclosed in Note 33.
Letters of guarantee received with respect to the accounts and notes receivable amounted to TL 339,543 and TL 156,647 at 31 December 2017 and 2016,
respectively.
The undue assigned contracted receivables are the remaining portion of the assigned receivables from the distributors related to the handset campaigns
which will be collected from subscribers in instalments by the Company. When monthly instalment is billed to the subscriber, that portion is transferred to
“Receivables from subscribers”. The Company measures the undue assigned contracted receivables at amortized cost, bears the credit risk and recognizes
interest income throughout the contract period.
The accrued revenue represents accrued revenue from subscribers. Due to the high volume of subscribers, there are different billing cycles. Accordingly,
an accrual is made at the end of each reporting period to accrue revenue for services rendered but not billed. Contracted receivables related to handset
campaigns, which will be billed after one year is presented under non-current trade receivables amounting to TL 131,392 (31 December 2016: TL 217,492).
F62
TURKCELL İLETİŞİM HİZMETLERİ A.Ş.Notes to the Consolidated Financial Statementsas at and for the Year Ended 31 December 2017(All amounts disclosed in the consolidated financial statements and notes have been rounded off to the nearest thousand currency units and are expressed in Turkish Liras unless otherwise stated.) TURKCELL ANNUAL REPORT 2017
217
20. RECEIVABLES FROM FINANCIAL SERVICES
Current receivables from financial services
Non-current receivables from financial services
31 December 2017
2,950,523
1,297,597
4,248,120
31 December 2016
1,486,906
909,466
2,396,372
Movements in provision for impairment of receivables from financial services are disclosed in Note 33.
Starting from 2016 the Group and its distributors have offered handset campaigns where subscribers can buy handsets using loans placed by Turkcell
Finansman. The Group assumes credit risk in these transactions. Turkcell Finansman collects the loan from the subscriber during the contract period and
does not recognize handset revenue since it is not acting as principal in the handset sale.
21. INVENTORY
As of 31 December 2017 inventories amounting to TL 104.102 which consist of mainly mobile phone, modem, tablet, sim card and tower construction
materials (31 December 2016: TL 131,973).
22. OTHER CURRENT ASSETS
Prepaid expenses
Restricted cash
Receivables from the Ministry of Transport, Maritime Affairs and Communications
Subscriber acquisition costs
Receivables from tax office
Advances given to suppliers
VAT receivable
Special communication tax to be collected from subscribers
Other
31 December 2017
322,388
183,806
143,669
138,177
93,917
55,754
38,934
38,318
145,642
1,160,605
31 December 2016
294,540
289
32,299
108,628
52,561
57,020
49,211
36,941
138,646
770,135
Prepaid expenses mainly comprise of prepaid rent expenses and frequency usage fees.
Subscriber acquisition costs are bonus payments to dealers for acquisition of subscribers contracted for a period of time.
As at 31 December 2017, restricted cash amounting to TL 183,483 represents the deposits as guarantees in connection with the foreign currency loans
utilized by Turkcell Finansman and restricted cash amounting to TL 323 represents the time deposits at a local bank as guarantees in connection with the
loans utilized by Azerinteltek.
F63
SECTORAL AND FINANCIAL INFORMATIONTURKCELL ANNUAL REPORT 2017TURKCELL İLETİŞİM HİZMETLERİ A.Ş.Notes to the Consolidated Financial Statementsas at and for the Year Ended 31 December 2017(All amounts disclosed in the consolidated financial statements and notes have been rounded off to the nearest thousand currency units and are expressed in Turkish Liras unless otherwise stated.)
218
23. CASH AND CASH EQUIVALENTS
Cash in hand
Banks
- Demand deposits
- Time deposits
Other cash and cash equivalents
Cash and cash equivalents
31 December 2017
192
4,712,141
603,553
4,108,588
-
4,712,333
31 December 2016
223
6,051,472
569,826
5,481,646
657
6,052,352
As at 31 December 2017, the average effective interest rates of TL, USD and EUR time deposits are 14.3%, 5.8% and 2.2% (31 December 2016:11.0%, 3.6%
and 2.0%) respectively.
As at 31 December 2017, average maturity of time deposits is 32 days (31 December 2016: 49 days).
24. EQUITY
Share capital
As at 31 December 2017, share capital represents 2,200,000,000 (31 December 2016: 2,200,000,000) authorized, issued and fully paid shares with a par
value of TL 1 each. In this respect, share capital presented in the consolidated financial statements refers to nominal amount of registered share capital.
Every holder of shares are entitled to receive dividends as declared and approved and is entitled to one vote at a meeting in person or by proxy.
Companies with their shareholding percentage are as follows:
Turkcell Holding A.Ş. (“Turkcell Holding”)
Public Share
Other
Total
Inflation adjustment to share capital
Inflation adjusted capital
31 December 2017
31 December 2016
(%)
51,00
48,95
0,05
100,00
TL
1.122.000
1.077.004
996
2.200.000
(52.352)
2.147.648
(%)
51,00
48,95
0,05
100,00
TL
1.122.000
1.077.004
996
2.200.000
(52.352)
2.147.648
As at 31 December 2017, total number of shares pledged as security is 995,509 (2016: 995,509).
Legal reserves
The legal reserves consist of first and second reserves, appropriated in accordance with the Turkish Commercial Code (“TCC”). The TCC stipulates that the
first legal reserve is appropriated out of statutory profits at the rate of 5% per annum, until the total reserve reaches 20% of a company’s paid-in share
capital. The second legal reserve is appropriated at the rate of 10% per annum of all cash dividends in excess of 5% of the paid-in share capital. Under the
TCC, the legal reserves can only be used to offset losses and are not available for any other usage unless they exceed 50% of paid-in share capital.
F64
TURKCELL İLETİŞİM HİZMETLERİ A.Ş.Notes to the Consolidated Financial Statementsas at and for the Year Ended 31 December 2017(All amounts disclosed in the consolidated financial statements and notes have been rounded off to the nearest thousand currency units and are expressed in Turkish Liras unless otherwise stated.) TURKCELL ANNUAL REPORT 2017 219
24. EQUITY (CONTINUED)
Treasury shares
During 2016, the Company purchased 6,815,563 of its shares on-market with prices ranging from full TL 8.92 to full TL 9.99. The buy-back was approved by
the Board of Directors on 27 July 2016. Total cost of TL 65,607 was deducted from equity.
Dividends
Turkcell:
On 23 March 2016, the Company’s Board of Directors has recommended payment of a dividend amounting to TL 1,200,000 (equivalent to USD 340,987 as
of 31 December 2016) out of profits for the year ended 31 December 2015 This represents a gross cash dividend of full TL 0.5454545 (net TL 0.4636364)
(equivalent to full USD 0.15 and USD 0.13, respectively as of 31 December 2016) per share. The proposed dividend was discussed and rejected by the
shareholders at the Ordinary General Assembly Meeting dated 29 March 2016.
On 25 May 2017, the Company’s General Assembly has approved payment of a dividend amounting to TL 3,000,000 (equivalent to USD 841,633 as of 25
May 2017, the date of the Ordinary General Assembly Meeting) out of profits for the period from 1 January 2010 to 31 December 2016. This represents a
gross cash dividend of full TL 1.3636364 (equivalent to full USD 0.3825604 as of 25 May 2017, the date of the Ordinary General Assembly Meeting) per
share. The Company paid TL 3,000,000 in total including withholding taxes in three instalments on 15 June, 15 September and 15 December 2017 to the
shareholders.
Inteltek:
According to the resolution of the General Assembly Meeting of Inteltek dated 31 March 2017, the shareholders decided to pay a dividend amounting to TL
63,528 out of profits for the year ended 31 December 2016 (remaining amount after deducting interim dividends for the six-month period ended 30 June
2016 amounting to TL 20,455) and a dividend out legal reserves amounting to TL 11,585. The aggregate amount of dividends were paid as of 31 December
2017. According to the the resolution of General Assembly Meeting of Inteltek dated 25 December 2017, shareholders decided to pay dividend amounting
to TL 28,402 for the first 9 months of 2017 profit. The related dividend payment was made in January 2018.
Azerinteltek:
According to the four different resolution of the General Assembly Meeting of Azerinteltek within 2017, shareholders decided to pay dividend amounting to
13,131 AZN (31 December 2017: 27,838 TL) from the profit realized for the last quarter of 2016, first, second and third quarter of 2017.The related dividend
payment was made in 2017.
According to resolution of the General Assembly Meeting of Azerinteltek , in January 2018 ,Board of Directors has been decided to pay dividend amounting
5.288 AZN (31 December 2017: 11.620 TL) from the profit realized for the last quarter of 2017. The related dividends were made in 2018.
F65
SECTORAL AND FINANCIAL INFORMATIONTURKCELL ANNUAL REPORT 2017TURKCELL İLETİŞİM HİZMETLERİ A.Ş.Notes to the Consolidated Financial Statementsas at and for the Year Ended 31 December 2017(All amounts disclosed in the consolidated financial statements and notes have been rounded off to the nearest thousand currency units and are expressed in Turkish Liras unless otherwise stated.)
220
25. EARNINGS PER SHARE
Numerator:
Profit attributable to owners of the Company
Denominator:
Weighted average number of shares (*)
Basic and diluted earnings per share for profit attributable to owners
of the Company (in full TL)
(*) Refer to Note 24 - Treasury shares
Numerator:
Profit from continuing operations attributable to owners of the Company
Denominator:
Weighted average number of shares (*)
Basic and diluted earnings per share for profit from continuing
operations attributable to owners of the Company (in full TL)
(*) Refer to Note 24 - Treasury shares
26. OTHER NON-CURRENT LIABILITIES
Consideration payable in relation to the acquisition of Belarusian Telecom
Deferred revenue
Deposits and guarantees received from dealers
2017
2016
2015
1,979,129
1,492,088
2,067,654
2,193,184,437
2,193,184,437
2,200,000,000
0.90
2017
0.68
2016
0.94
2015
1,979,129
1,534,252
1,700,318
2,193,184,437
2,193,184,437
2,200,000,000
0.90
0.70
0.77
2017
323,691
85,646
-
409,337
2016
295,062
74,241
58,244
427,547
Consideration payable in relation to the acquisition of Belarusian Telecom represents present value of the long-term contingent consideration payables to
the seller. Payment of USD 100,000 (equivalent to TL 377,190 as of 31 December 2017) is contingent on the financial performance of Belarusian Telecom,
and based on management’s estimations, the amount is expected to be paid during the first quarter of 2021 (31 December 2016: the first quarter of 2020).
Discount rate used for calculating present value of the consideration payable in relation to the acquisition of Belarusian Telecom as of
31 December 2017 is 4.8% (31 December 2016: 5.6%).
F66
TURKCELL İLETİŞİM HİZMETLERİ A.Ş.Notes to the Consolidated Financial Statementsas at and for the Year Ended 31 December 2017(All amounts disclosed in the consolidated financial statements and notes have been rounded off to the nearest thousand currency units and are expressed in Turkish Liras unless otherwise stated.) TURKCELL ANNUAL REPORT 2017 221
31 December 2017
31 December 2016
6,376,981
1,770,482
108,164
2,368
8,257,995
2,643,112
1,513,425
2,022
14,556
105,039
-
4,278,154
5,300,756
1,589,227
41,539
3,580
6,935,102
1,581,135
922,867
2,054
6,575
94,473
238,956
2,846,060
27. LOANS AND BORROWINGS
Non-current liabilities
Unsecured bank loans
Debt securities issued
Finance lease liabilities
Secured bank loans
Current liabilities
Unsecured bank loans
Current portion of unsecured bank loans
Current portion of secured bank loans
Current portion of finance lease liabilities
Current portion of long-term debt securities issued
Debt securities issued
F67
SECTORAL AND FINANCIAL INFORMATIONTURKCELL ANNUAL REPORT 2017TURKCELL İLETİŞİM HİZMETLERİ A.Ş.Notes to the Consolidated Financial Statementsas at and for the Year Ended 31 December 2017(All amounts disclosed in the consolidated financial statements and notes have been rounded off to the nearest thousand currency units and are expressed in Turkish Liras unless otherwise stated.) 222
F68
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(
TURKCELL ANNUAL REPORT 2017TURKCELL İLETİŞİM HİZMETLERİ A.Ş.Notes to the Consolidated Financial Statementsas at and for the Year Ended 31 December 2017(All amounts disclosed in the consolidated financial statements and notes have been rounded off to the nearest thousand currency units and are expressed in Turkish Liras unless otherwise stated.)
223
27. LOANS AND BORROWINGS (CONTINUED)
Finance lease liabilities are payable as follows:
Within one year
Between 1-5 years
More than 5 years
Future minimum
lease payments
17,447
55,722
60,401
133,570
31 December 2017
Future finance
charges
2,891
5,541
2,418
10,850
Recognized as a
liability
14,556
50,181
57,983
122,720
Future minimum
lease payments
7,908
26,506
19,859
54,273
31 December 2016
Future finance
charges
1,333
3,752
1,074
6,159
Recognized as a
liability
6,575
22,754
18,785
48,114
For the majority of the borrowings, the fair values are not materially different to their carrying amounts, since the interest payable on those borrowings is
either close to current market rates or the borrowings are of a short-term nature.
Details of the Group’s exposure to risks arising from current and non-current borrowings are set out in Note 33.
28. EMPLOYEE BENEFITS
Retirement pay liability provision
Unused vacation provision
Provision for annual leave
31 December 2017
149,449
48,217
197,666
31 December 2016
120,755
43,798
164,553
As 31 December 2017 and 2016, provision for annual leave amounted to TL 48,217 and TL 43,798, respectively.
Provision for employee termination benefits
Movements in provision for employee termination benefits are as follows:
2017
120,755
32,696
3,738
13,877
(21,617)
149,449
2016
74,435
25,933
34,532
8,361
(22,506)
120,755
1 January
Service cost
Remeasurements
Interest expense
Benefit payments
31 December
F69
SECTORAL AND FINANCIAL INFORMATIONTURKCELL ANNUAL REPORT 2017TURKCELL İLETİŞİM HİZMETLERİ A.Ş.Notes to the Consolidated Financial Statementsas at and for the Year Ended 31 December 2017(All amounts disclosed in the consolidated financial statements and notes have been rounded off to the nearest thousand currency units and are expressed in Turkish Liras unless otherwise stated.)
224
28. EMPLOYEE BENEFITS (CONTINUED)
The sensitivity of provision for employee termination benefits to changes in the significant actuarial assumptions is:
31 December 2017
Sensivity Level
Change in assumption
Impact on provision for employee termination benefits
31 December 2016
Sensivity Level
Change in assumption
Impact on provision for employee termination benefits
Discount Rate
Inflation Rate
1% increase
(14.6%)
(21,820)
1% decrease
18.1%
27,050
1% increase
18.3%
27,349
1% decrease
(14.3%)
(21,371)
Discount Rate
Inflation Rate
1% increase
(14.7%)
(17,751)
1% decrease
18.1%
21,857
1% increase
18.6%
22,460
1% decrease
(15.1%)
(18,234)
The above sensitivity analyses are based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur,
and changes in some of the assumptions may be correlated.
Defined contribution plans
Obligations for contribution to defined contribution plans are recognized as an expense in the consolidated statement of profit or loss as incurred. The
Group incurred TL 8,107, TL 7,722 and TL 8,364 in relation to defined contribution retirement plan for the years ended 31 December 2017, 2016 and 2015,
respectively.
Share based payments
The Group has a share performance based payment plan (cash settled incentive plan) in order to build a common interest with its shareholders, support
sustainable success, and ensure loyalty of key employees. The KPIs of the plan are; the total shareholder return in excess of weighted average cost of
capital (WACC), and ranking of total shareholder return in comparison with BIST-30 and peer group. Bonus amount is determined according to these
evaluations, and it is distributed over a three-year payment plan.
As of 31 December 2017, the Group recognized expenses of TL 29,413 regarding this plan (31 December 2016: None).
29. DEFERRED REVENUE
Deferred revenue primarily consists of right of use sold but not used by prepaid subscribers and it is classified as current at 31 December 2017 and 2016.
The amount of deferred revenue is TL 193,381 and TL 93,800 as at 31 December 2017 and 2016, respectively.
F70
TURKCELL İLETİŞİM HİZMETLERİ A.Ş.Notes to the Consolidated Financial Statementsas at and for the Year Ended 31 December 2017(All amounts disclosed in the consolidated financial statements and notes have been rounded off to the nearest thousand currency units and are expressed in Turkish Liras unless otherwise stated.) TURKCELL ANNUAL REPORT 2017
225
Total
187,541
(4,205)
15,328
(2,258)
1,012
197,418
Total
130,619
56,343
(1,308)
(1,526)
3,413
187,541
Obligations for
dismantling, removing
and site restoration
180,652
(8,461)
15,328
-
1,012
188,531
Obligations for
dismantling, removing
and site restoration
126,516
52,031
(1,308)
-
3,413
180,652
Legal claims
6,889
4,256
-
(2,258)
-
8,887
Legal claims
4,103
4,312
-
(1,526)
-
6,889
30. PROVISIONS
Non-current provisions:
Balance at 1 January 2017
Provisions recognized/(reversed)
Unwinding of discount
Transfer to current provisions
Effect of changes in exchange rates
Balance at 31 December 2017
Balance at 1 January 2016
Provisions recognized/(reversed)
Unwinding of discount
Transfer to current provisions
Effect of changes in exchange rates
Balance at 31 December 2016
Provision for legal claims are recognized for the probable cash outflows related to legal disputes. Refer to Note 36.
The Group is required to incur certain costs in respect of a liability to dismantle and remove assets and to restore sites on which the assets were located.
The dismantling costs are calculated according to best estimate of future expected payments discounted at a pre-tax discount rate that reflects current
market assessments of the time value of money and the risks specific to the liability.
It is expected that the obligations for dismantling, removing and site restoration will be realized in accordance with the useful life of GSM services
materials.
Additions to obligations for dismantling, removing and site restoration during the period are non-cash transactions and are recorded against property, plant
and equipment.
F71
SECTORAL AND FINANCIAL INFORMATIONTURKCELL ANNUAL REPORT 2017TURKCELL İLETİŞİM HİZMETLERİ A.Ş.Notes to the Consolidated Financial Statementsas at and for the Year Ended 31 December 2017(All amounts disclosed in the consolidated financial statements and notes have been rounded off to the nearest thousand currency units and are expressed in Turkish Liras unless otherwise stated.) 226
30. PROVISIONS (CONTINUED)
Obligations for dismantling, removing and site restoration are discounted using a discount rate of 5.6% at 31 December 2017 (31 December 2016: 5.4%).
Current provisions:
Balance at 1 January 2016
Provisions recognized/(reversed)
Amounts used
Transfers from non-current provisions
Effect of changes in exchange rates
Balance at 31 December 2016
Balance at 1 January 2017
Provisions recognized/(reversed)(**)
Amounts used
Transfer from non-current provisions
Unwinding of discount
Effect of changes in exchange rates
Balance at 31 December 2017
(*) Includes share-based payment (Note 28).
(**) Refer to Note 36.1 and 36.3.
31. TRADE AND OTHER PAYABLES
Legal claims
10,260
140,457
(134,019)
1,526
42
18,266
Legal claims
18,266
583,788
(1,188)
2,258
2,531
24
605,679
Bonus
141,855
251,005
(220,269)
-
800
173,391
Bonus(*)
173,391
318,603
(263,080)
-
-
606
229,520
Payable to suppliers
Taxes payable
Accrued treasury share, universal service fund contribution and contributions to the ICTA’s expenses
Accrued selling and marketing expenses
4.5G license fees payable
Other
Payable to suppliers arises in the ordinary course of business.
Other
-
785
-
-
-
785
Other
785
(785)
-
-
-
-
-
2017
2,527,152
415,650
305,208
79,011
-
369,445
3,696,466
Total
152,115
392,247
(354,288)
1,526
842
192,442
Total
192,442
901,606
(264,268)
2,258
2,531
630
835,199
2016
1,718,788
302,346
262,748
58,879
1,522,615
236,615
4,101,991
Taxes payables include VAT payables, special communications taxes payable, frequency usage fees payable to the ICTA and personnel income taxes payable.
The Company is obliged to pay the Undersecretariat of the Treasury (the “Turkish Treasury”) a monthly treasury share equal to 15% of gross revenue. Of
such fee, 10% is paid to the Ministry of Transport, Maritime Affairs and Communications of Turkey for a universal service fund. In addition, the Company
pays annual contributions in an amount equal to 0.35% of gross revenue to the ICTA’s expenses.
Accrued selling and marketing expenses mainly result from services received from third parties related to the marketing activities of the Group but not yet
invoiced.
F72
TURKCELL İLETİŞİM HİZMETLERİ A.Ş.Notes to the Consolidated Financial Statementsas at and for the Year Ended 31 December 2017(All amounts disclosed in the consolidated financial statements and notes have been rounded off to the nearest thousand currency units and are expressed in Turkish Liras unless otherwise stated.) TURKCELL ANNUAL REPORT 2017
227
32. DERIVATIVE FINANCIAL INSTRUMENTS
The Group has the following derivative financial assets and liabilities:
Derivative financial assets:
Participating cross currency swap and FX swap contracts
at 31 December 2017
Buy
Sell
Currency
USD
TL
TL
TL
TL
TL
TL
TL
TL
TL
TL
TL
TL
TL
TL
TL
Total
Notional amount
47,304
69,680
81,480
95,550
67,410
98,625
52,164
69,744
203,600
435,000
386,500
293,500
242,873
194,000
1,650,000
275,850
Currency
EUR
USD
EUR
USD
USD
EUR
USD
USD
EUR
USD
USD
USD
USD
USD
EUR
EUR
Notional amount
39,835
20,000
20,000
25,000
18,000
25,000
14,620
19,780
50,000
150,000
100,000
100,000
70,500
50,000
500,000
60,000
Fair value (TL)
1,005
6,554
9,965
72
1,498
17,354
4,465
6,996
27,198
142,085
(4,645)
90,071
33,535
(2,951)
627,385
1,078
961,665
Maturity
02 January 2018
27 August 2018
14 December 2018
24 January 2019
28 January 2019
13 June 2019
16 July 2019
22 July 2019
23 July 2019
16 September 2020
16 September 2020
16 September 2020
16 September 2020
16 September 2020
25 October 2025
22 April 2026
At 31 December 2017, total derivative financial assets of TL 981,396 also include accrued interest income of TL 19,731.
Participating cross currency swap and FX swap contracts
at 31 December 2016
Buy
Sell
Currency
TL
TL
TL
TL
TL
TL
TL
Total
Notional amount
18,455
73,400
824,750
328,600
495,000
435,000
293,500
Currency
EUR
EUR
EUR
EUR
EUR
USD
USD
Notional amount
5,000
20,000
250,000
100,000
150,000
150,000
100,000
Fair value (TL)
86
598
116,674
47,949
81,534
84,416
51,481
382,738
Maturity
3 January 2017
24 Mar 2017
12 April 2021
12 April 2021
12 April 2021
16 September 2020
16 September 2020
At 31 December 2016, total derivative financial assets of TL 390,958 also include accrued interest income of TL 8,220.
F73
SECTORAL AND FINANCIAL INFORMATIONTURKCELL ANNUAL REPORT 2017TURKCELL İLETİŞİM HİZMETLERİ A.Ş.Notes to the Consolidated Financial Statementsas at and for the Year Ended 31 December 2017(All amounts disclosed in the consolidated financial statements and notes have been rounded off to the nearest thousand currency units and are expressed in Turkish Liras unless otherwise stated.)
228
32. DERIVATIVE FINANCIAL INSTRUMENTS (CONTINUED)
Derivative financial liabilities:
Participating cross currency swap and FX swap contracts
at 31 December 2017
Buy
Sell
Currency
TL
TL
TL
TL
TL
TL
TL
TL
TL
TL
TL
TL
TL
Total
Notional amount
470,232
180,023
141,001
219,162
115,022
17,204
15,916
91,556
137,834
82,013
1,143
97,997
269,451
Currency
USD
USD
USD
USD
USD
USD
EUR
EUR
EUR
EUR
EUR
EUR
USD
Notional amount
122,680
47,250
36,786
57,245
30,150
4,500
3,500
20,140
30,400
17,860
250
21,500
70,500
Fair value (TL)
(2,465)
(545)
(726)
(1,043)
(435)
(284)
(157)
(620)
(601)
(1,413)
(25)
(2,154)
(5,010)
(15,478)
Maturity
2 January 2018
2 January 2018
3 January 2018
4 January 2018
5 January 2018
10 January 2018
10 January 2018
22 January 2018
05 February 2018
19 February 2018
5 Mart 2018
19 December 2019
22 December 2020
Currency forward contracts at 31 December 2017
Buy
Currency
USD
Total
Notional amount
50,000
Fair value (TL)
(2,246)
(2,246)
Maturity
30 January 2018
At 31 December 2017, total derivative financial liabilities of TL 110,108 also include accrued interest expense of TL 92,384.
F74
TURKCELL İLETİŞİM HİZMETLERİ A.Ş.Notes to the Consolidated Financial Statementsas at and for the Year Ended 31 December 2017(All amounts disclosed in the consolidated financial statements and notes have been rounded off to the nearest thousand currency units and are expressed in Turkish Liras unless otherwise stated.) TURKCELL ANNUAL REPORT 2017
229
32. DERIVATIVE FINANCIAL INSTRUMENTS (CONTINUED)
Derivative financial liabilities:
Participating cross currency swap and FX swap contracts
at 31 December 2016
Buy
Sell
Notional amount
21,009
7,050
Currency
USD
USD
Notional amount
5,960
2,000
Currency
TL
TL
Total
Fair value (TL)
(55)
(18)
(73)
Maturity
3 January 2017
3 January 2017
Currency forward contracts at
31 December 2016
Buy
Currency
USD
Total
Notional amount
30,071
Fair value (TL)
(1,286)
(1,286)
Maturity
28 February 2017
At 31 December 2016, total derivative financial liabilities of TL 41,726 also include accrued interest expense of TL 40,367.
For information about the methods and assumptions used in determining the fair value of derivatives please refer to Note 2i.
33. FINANCIAL INSTRUMENTS
Credit risk
Exposure to credit risk:
The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk at the reporting date is:
Trade receivables
Receivables from financial services
Cash and cash equivalents*
Participating cross currency swap and FX swap contracts
Other current assets**
Held to maturity investments
Due from related parties
* Cash in hand is excluded from cash and cash equivalents.
** Prepaid expenses and advances given are excluded from other current assets and other non-current assets.
19
20
23
32
22
37
2017
3,004,206
4,248,120
4,712,141
981,396
316,042
11,992
5,299
13,279,196
2016
3,525,297
2,396,372
6,052,129
390,958
93,376
-
5,861
12,463,993
F75
SECTORAL AND FINANCIAL INFORMATIONTURKCELL ANNUAL REPORT 2017TURKCELL İLETİŞİM HİZMETLERİ A.Ş.Notes to the Consolidated Financial Statementsas at and for the Year Ended 31 December 2017(All amounts disclosed in the consolidated financial statements and notes have been rounded off to the nearest thousand currency units and are expressed in Turkish Liras unless otherwise stated.)
230
33. FINANCIAL INSTRUMENTS (CONTINUED)
Credit risk (continued)
Credit quality:
The maximum exposure to credit risk for trade receivables and receivables from financial services arising from sales transactions including those classified
as due from related parties at the reporting date by type of customer is:
Receivable from subscribers
Receivables from financial services
Receivables from distributors and other operators
Other
The aging of trade receivables and due from related parties at 31 December 2017 and 2016:
Not past due
Past due up to 3 months
Past due 3 to 6 months
Past due over 6 months
The aging of receivables from financial services at 31 December 2017 and 2016:
Not past due
Past due up to 3 months
Past due 3 to 6 months
Past due over 6 months
2017
2,472,596
4,248,120
516,352
20,557
7,257,625
2017
2,124,719
317,649
95,738
471,399
3,009,505
2017
3,659,521
513,925
39,233
35,441
4,248,120
2016
3,061,130
2,396,372
376,204
93,824
5,927,530
2016
3,138,043
285,561
48,775
58,779
3,531,158
2016
2,350,375
16,533
20,227
9,237
2,396,372
As at 31 December 2017, trade receivables, due from related parties and receivables from financial services of TL 1,473,385 (2016: TL 439,112) were past
due but not impaired. These relate to a number of independent customers for whom there is no recent history of default.
The other classes within trade receivables, due from related parties and receivables from financial services do not contain impaired assets and are not past
due. Based on the credit history of these other classes, it is expected that these amounts will be received when due. The Group holds TL 339,543 (2016: TL
156,647) collateral in relation to these receivables.
F76
TURKCELL İLETİŞİM HİZMETLERİ A.Ş.Notes to the Consolidated Financial Statementsas at and for the Year Ended 31 December 2017(All amounts disclosed in the consolidated financial statements and notes have been rounded off to the nearest thousand currency units and are expressed in Turkish Liras unless otherwise stated.) TURKCELL ANNUAL REPORT 2017
231
33. FINANCIAL INSTRUMENTS (CONTINUED)
Impairment losses
Individual receivables which are known to be uncollectible are written off by reducing the carrying amount directly. The other receivables are assessed
collectively to determine whether there is objective evidence that an impairment has been incurred but not yet been identified. The Group considers that
there is evidence of impairment if any of the following indicators are present:
• significant financial difficulties of the customer
• probability that the customer will enter bankruptcy or financial reorganisation, and
• default or delinquency in payments
Receivables for which an impairment provision was recognized are written off against the provision when there is no expectation of recovering additional
cash.
Impairment losses are recognized in profit or loss within administrative expense (Note 10). Subsequent recoveries of amounts previously written off are
credited against administrative expense (Note 10).
Movements in the provision for impairment of trade receivables and due from related parties are as follows:
Opening balance
Provision for impairment recognized during the year
Amounts collected
Exchange differences
Receivables written off during the year as uncollectible
Unused amount reversed (*)
Closing balance
31 December 2017
964,311
180,948
(224,460)
3,128
(138,529)
(79,958)
705,440
31 December 2016
816,373
452,767
(251,553)
5,038
(58,314)
-
964,311
(*) The Company signed a transfer of claim agreement with a debt management company to transfer some of its doubtful receivables stemming from the years between 1998 to 2016. Transferred doubtful
receivables comprise of balances that the Company started legal proceedings.
Movements in the provision for impairment of receivables from financial services are as follows:
Opening
Provision for impairment recognized during the year
Amounts collected
Unused amount reversed (*)
Closing balance
31 December 2017
10,170
117,293
(37,503)
(16,968)
72,992
31 December 2016
-
11,593
(1,423)
-
10,170
(*) The Company signed a transfer of claim agreement with a debt management company to transfer some of its doubtful receivables stemming from the year 2017. Transferred doubtful receivables
comprise of balances that the Company started legal proceedings.
F77
SECTORAL AND FINANCIAL INFORMATIONTURKCELL ANNUAL REPORT 2017TURKCELL İLETİŞİM HİZMETLERİ A.Ş.Notes to the Consolidated Financial Statementsas at and for the Year Ended 31 December 2017(All amounts disclosed in the consolidated financial statements and notes have been rounded off to the nearest thousand currency units and are expressed in Turkish Liras unless otherwise stated.)
232
F78
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TURKCELL ANNUAL REPORT 2017TURKCELL İLETİŞİM HİZMETLERİ A.Ş.Notes to the Consolidated Financial Statementsas at and for the Year Ended 31 December 2017(All amounts disclosed in the consolidated financial statements and notes have been rounded off to the nearest thousand currency units and are expressed in Turkish Liras unless otherwise stated.)
233
33. FINANCIAL INSTRUMENTS (CONTINUED)
Foreign exchange risk
The Group’s exposure to foreign exchange risk at the end of the reporting period, based on notional amounts, was as follows:
31 December 2016
Foreign currency denominated assets
Other non-current assets
Due from related parties
Trade receivables and accrued income
Other current assets
Cash and cash equivalents
Foreign currency denominated liabilities
Loans and borrowings-non-current
Debt securities issued-non-current
Other non-current liabilities
Loans and borrowings-current
Debt securities issued-current
Trade and other payables-current
Due to related parties
Derivative financial instruments
Participating cross currency swap and FX swap contracts
Currency forward contracts
Net exposure
Foreign currency denominated assets
Other non-current assets
Due from related parties
Trade receivables and accrued income
Other current assets
Cash and cash equivalents
Foreign currency denominated liabilities
Loans and borrowings-non-current
Debt securities issued-non-current
Other non-current liabilities
Loans and borrowings-current
Debt securities issued-current
Trade and other payables-current
Due to related parties
Derivative financial instruments
Participating cross currency swap and FX swap contracts
Currency forward contracts
Net exposure
F79
USD
244
1,210
14,178
19,929
807,372
842,933
(483,910)
(451,588)
(99,273)
(80,029)
(26,845)
(175,083)
(398)
(1,317,126)
257,960
(30,071)
(246,304)
EUR
2,131
388
61,841
7,144
378,057
449,561
(959,482)
-
-
(21,985)
-
(425,992)
(334)
(1,407,793)
525,000
-
(433,232)
31 December 2017
USD
72
571
18,890
43,039
688,717
751,289
(557,180)
(469,387)
(85,816)
(206,535)
(27,848)
(328,323)
(1,172)
(1,676,261)
937,011
50,000
62,039
EUR
2,681
407
57,283
35,049
237,697
333,117
(960,629)
-
-
(285,827)
-
(29,442)
(394)
(1,276,292)
748,650
-
(194,525)
SECTORAL AND FINANCIAL INFORMATIONTURKCELL ANNUAL REPORT 2017TURKCELL İLETİŞİM HİZMETLERİ A.Ş.Notes to the Consolidated Financial Statementsas at and for the Year Ended 31 December 2017(All amounts disclosed in the consolidated financial statements and notes have been rounded off to the nearest thousand currency units and are expressed in Turkish Liras unless otherwise stated.) 234
33. FINANCIAL INSTRUMENTS (CONTINUED)
Exposure to currency risk (continued)
Sensitivity analysis
The basis for the sensitivity analysis to measure foreign exchange risk is an aggregate corporate-level currency exposure. The aggregate foreign exchange
exposure is composed of all assets and liabilities denominated in foreign currencies. The analysis excludes net foreign currency investments.
10% strengthening of the TL, UAH, BYN against the following currencies at 31 December 2017 and 31 December 2016 would have increased/(decreased)
profit or loss before by the amounts shown below. This analysis assumes that all other variables, in particular interest rates, remain constant.
USD
EUR
Profit or loss
31 December 2017
(23,400)
87,838
31 December 2016
86,679
160,725
10% weakening of the TL, UAH, BYN against the following currencies at 31 December 2017 and 31 December 2016 would have increased/(decreased) profit
or loss before tax by the amounts shown below. This analysis assumes that all other variables, in particular interest rates, remain constant.
Profit or loss
31 December 2017
23,400
(87,838)
31 December 2016
(86,679)
(160,725)
USD
EUR
F80
TURKCELL İLETİŞİM HİZMETLERİ A.Ş.Notes to the Consolidated Financial Statementsas at and for the Year Ended 31 December 2017(All amounts disclosed in the consolidated financial statements and notes have been rounded off to the nearest thousand currency units and are expressed in Turkish Liras unless otherwise stated.) TURKCELL ANNUAL REPORT 2017
235
33. FINANCIAL INSTRUMENTS (CONTINUED)
Interest rate risk
As at 31 December 2017 and 2016 the interest rate profile of the Group’s interest-bearing financial instruments was as follows:
Fixed rate instruments
Time deposits
USD
EUR
TL
Other
Restricted cash
USD
EUR
TL
Other
Finance lease obligations
USD
EUR
TL
Unsecured bank loans
TL fixed rate loans
UAH fixed rate loans
Secured bank loans
BYN fixed rate loans
Trade and other payables
EUR fixed rate payables
Debt securities issued
USD
TL
Variable rate instruments
USD floating rate loans
EUR floating rate loans
Note
23
22
27
27
31
27
27
31 December 2017
31 December 2016
Effective
Interest Rate
Carrying
Amount
Effective
interest rate
Carrying
Amount
5.8%
2.2%
14.3%
12.9%
-
-
-
-
28.1%
3.4%
27.6%
14.7%
13.9%
11.6%
-
5.8%
-
3.2%
2.1%
2,590,025
1,069,303
436,224
13,036
64,503
118,983
-
320
(41)
(116,797)
(5,882)
(1,620,391)
(520,933)
(4,390)
3.6%
2.0%
11.0%
11.1%
-
-
-
-
20.7%
3.4%
-
12.1%
15.0%
11.9%
2,817,650
1,383,978
1,243,843
36,175
-
-
-
-
(80)
(48,034)
-
(1,819,944)
(407,171)
(5,634)
-
2.6%
(1,522,615)
(1,875,521)
-
(2,880,615)
(5,511,579)
5.8%
10.7%
3.2%
2.3%
(1,683,700)
(238,956)
(1,984,533)
(3,593,110)
(*) Includes 4.5G license payables related to the frequency bands which the Company has been awarded with. The last instalment of 4.5G license payable amounting to TL 1,534,702 was paid on 26 April
2017.
F81
SECTORAL AND FINANCIAL INFORMATIONTURKCELL ANNUAL REPORT 2017TURKCELL İLETİŞİM HİZMETLERİ A.Ş.Notes to the Consolidated Financial Statementsas at and for the Year Ended 31 December 2017(All amounts disclosed in the consolidated financial statements and notes have been rounded off to the nearest thousand currency units and are expressed in Turkish Liras unless otherwise stated.)
236
33. FINANCIAL INSTRUMENTS (CONTINUED)
Sensitivity analysis
Cash flow sensitivity analysis for variable rate instruments:
An increase/decrease of interest rates by 100 basis points would have (decreased)/increased equity and profit or loss by the amounts shown below. This
analysis assumes that all other variables, in particular foreign exchange rates, remain constant. The analysis is performed on the same basis at 31 December
2017 and 2016:
31 December 2017
Variable rate instruments (financial liability)
Cash flow sensitivity (net)
31 December 2016
Variable rate instruments (financial liability)
Cash flow sensitivity (net)
Fair values
Profit or loss
Equity
100 bps increase
100 bps decrease
100 bps increase
100 bps decrease
(83,922)
(83,922)
(55,776)
(55,776)
83,922
83,922
55,776
55,776
-
-
-
-
-
-
-
-
Fair value of the Group’s financial assets and financial liabilities that are measured at fair value on a recurring basis
This section explains the judgements and estimates made in determining the fair values of the financial instruments that are recognized and measured at
fair value in the financial statements. To provide an indication about the reliability of the inputs used in determining fair value, the Group has classified its
financial instruments into the three levels prescribed under the accounting standards. An explanation of each level is as follows:
• Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date;
• Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly; and
• Level 3 inputs are unobservable inputs for the asset or liability.
F82
TURKCELL İLETİŞİM HİZMETLERİ A.Ş.Notes to the Consolidated Financial Statementsas at and for the Year Ended 31 December 2017(All amounts disclosed in the consolidated financial statements and notes have been rounded off to the nearest thousand currency units and are expressed in Turkish Liras unless otherwise stated.) TURKCELL ANNUAL REPORT 2017
237
33. FINANCIAL INSTRUMENTS (CONTINUED)
Fair values (continued)
31 December 2017
31 December 2016
Fair value hierarchy Valuation techniques
Fair values
FX swap contracts
(4,675)
611
Level 2
Participating cross currency swap
contracts (*)
Currency forward contracts
950,862
(2,246)
382,054
(1,286)
Level 3
Level 2
Present value of the estimated future cash
flows based on observable yield curves and
end period FX rates
Present value of the estimated future cash
flows based on unobservable yield curves and
end period FX rates
Forward exchange rates at the balance sheet
date
(*) Participating cross currency swap contracts include EUR-TL interest and currency swap contracts, EUR put and call options, amounting to nominal value of EUR 560,000 and also USD-TL interest and
currency swap contracts and put and call options amounting to nominal value of USD 400,000 in total. The EUR-TL participating cross currency swap contracts, which are EUR 100,000, EUR 150,000
and EUR 250,000, was combined into one contract as of 26 May 2017 and the maturity of the contracts was extended to 23 October 2025. Additionally, cross currency swap contracts include EUR-TL
interest and currency swap contracts nominal value of EUR 43,585 and USD-TL interest and currency swap contracts amounting to nominal value of USD 298,611 in total. Cross currency swap contracts
include EUR-TL cross currency swap contracts nominal value of EUR 184,900 and USD-TL currency swap contracts amounting to nominal value of USD 238,400 in total. Regarding these contracts, TL
92,384 accrual of interest expense and TL 19,731 accrual of interest income has been reflected to consolidated financial statements as at 31 December 2017 (31 December 2016: TL 40,367 and TL 8,220
respectively). Since bid-ask spread is unobservable input; in valuation of participating cross currency swap contracts, prices in bid- ask price range which were considered the most appropriate were used
instead of mid prices. If mid prices were used in the valuation the fair value of participating cross currency swap contracts would have been TL 129,870 lower as at 31 December 2017 (31 December 2016:
TL 23,291).
There were no transfers between fair value hierarchy levels during the year.
Movements in the participating cross currency swap contracts for the years ended 31 December 2017 and 31 December 2016 are stated below:
Opening balance
Fair value gains recognized in profit or loss
Closing balance
31 December 2017
382,054
568,808
950,862
31 December 2016
-
382,054
382,054
F83
SECTORAL AND FINANCIAL INFORMATIONTURKCELL ANNUAL REPORT 2017TURKCELL İLETİŞİM HİZMETLERİ A.Ş.Notes to the Consolidated Financial Statementsas at and for the Year Ended 31 December 2017(All amounts disclosed in the consolidated financial statements and notes have been rounded off to the nearest thousand currency units and are expressed in Turkish Liras unless otherwise stated.)
238
33. FINANCIAL INSTRUMENTS (CONTINUED)
Fair values (continued)
Valuation inputs and relationships to fair value
The following table summarizes the quantitative information about the significant unobservable inputs used in level 3 fair value measurement of contingent
consideration.
Fair value at
Inputs
31 December 2017
31 December 2016
Unobservable
Inputs
31 December 2017
31 December 2016
Contingent
consideration
323,691
295,062
Risk-adjusted
discount rate
Expected
settlement date
4.8%
first
quarter
of 2021
5.6%
first
quarter
of 2020
Relationship of unobservable
inputs to fair value
A change in the discount rate by
100 bps would increase/decrease
FV by TL (9,834) and TL 10,241
respectively.
If expected settlement date
changes by 1 year FV would
increase/decrease by TL (14,884)
and TL 15,602 respectively.
Changes in the consideration payable in relation to acquisition of Belarusian Telecom for the years ended 31 December 2017 and 31 December 2016 are
stated below:
Opening balance
Gains recognized in profit or loss
Closing balance
Financial assets:
2017
295,062
28,629
323,691
2016
235,281
59,781
295,062
Carrying values of significant portion of financial assets do not differ significantly from their fair values due to their short-term nature.
Financial liabilities:
Fair values of financial liabilities are assumed to approximate their carrying values due to their short term nature and floating interest rates.
As at 31 December 2017, the fair value of debt securities issued by the Company with a nominal value of USD 500,000 and fixed interest rate (Note 27), is
TL 2,063,972.
As at 31 December 2016, the fair value of debt securities issued by the Company and Turkcell Finansman, with a nominal value of USD 500,000 and TL
500,000 comparatively, and fixed interest rate (Note 27), is TL 1,921,199.
F84
TURKCELL İLETİŞİM HİZMETLERİ A.Ş.Notes to the Consolidated Financial Statementsas at and for the Year Ended 31 December 2017(All amounts disclosed in the consolidated financial statements and notes have been rounded off to the nearest thousand currency units and are expressed in Turkish Liras unless otherwise stated.) TURKCELL ANNUAL REPORT 2017
239
34. OPERATING LEASES
Lease contracts, which mainly comprise leases of radio, transmission, office and internet capacity, expire on various dates. The leases have varying terms,
escalation clauses and renewal rights. On renewal, the terms of the leases are renegotiated.
Commitments for minimum lease payments in relation to non-cancellable operating leases are payable as follows:
Within one year
Later than one year but not later than five years
Later than five years
Rental expense relating to operating leases are as follows:
Minimum lease payments
Contingent rentals
Total
2017
144,424
346,832
167,227
658,483
2016
837,575
-
837,575
2016
163,336
345,374
101,328
610,038
2015
751,816
1,733
753,549
2017
812,385
-
812,385
Rental expenses have been recognized within cost of sales and administration expenses for the years ended 31 December 2017, 2016 and 2015.
35. GUARANTEES AND PURCHASE OBLIGATIONS
At 31 December 2017, outstanding purchase commitments with respect to property, plant and equipment, inventory, advertising and sponsorship amount to
TL 592,956 (31 December 2016: TL 915,868). Payments for these commitments will be made within 3 years.
The Group is contingently liable in respect of letters of guarantee obtained from banks and given to public institutions and private entities, and financial
guarantees provided to subsidiaries amounting to TL 4,926,916 at 31 December 2017 (31 December 2016: TL 2,370,723).
At 31 December 2017, the Company has commitments regarding lifecell’s 3G license amounting to UAH 217,793 (equivalent to TL 29,269 as at 31 December
2017).
F85
SECTORAL AND FINANCIAL INFORMATIONTURKCELL ANNUAL REPORT 2017TURKCELL İLETİŞİM HİZMETLERİ A.Ş.Notes to the Consolidated Financial Statementsas at and for the Year Ended 31 December 2017(All amounts disclosed in the consolidated financial statements and notes have been rounded off to the nearest thousand currency units and are expressed in Turkish Liras unless otherwise stated.)
240
36. COMMITMENTS AND CONTINGENCIES
The following disclosures comprise of material legal lawsuits, investigations and in-depth investigations against the Company.
License Agreements
Turkcell:
On 27 April 1998, the Company signed the Agreement for grant of concession for the establishment and Operation of the Pan-European Mobile Telephone
System, GSM (hereinafter referred to as the “License Agreement”) with the Turkish Ministry. In accordance with the License Agreement, the Company was
granted a 25 year license for the provision of GSM services for a license fee of $500,000.
3G License
On 30 April 2009, the Company signed a separate License Agreement with ICTA which provides authorization for providing IMT 2000/UMTS services and
establishment and operation of the required infrastructure. Turkcell acquired the A license providing the widest frequency band for a consideration of EUR
358,000 (excluding VAT). The license is effective for duration of 20 years starting from 30 April 2009. According to the agreement, Turkcell has provided
IMT 2000/UMTS services starting from 30 July 2009.
4.5G License
The 4.5 licensing process is finalized by signing of IMT License Commitments Document by Turkcell and therefore, ICTA granted Turkcell 4.5G License on 27
October 2015. The 4.5G License is effective for 13 years until 30 April 2029. According to the License, Turkcell started to provide 4.5G services on 1 April
2016.
Belarusian Telecom:
Belarusian Telecom owns a license issued on 28 August 2008 for a period of 10 years and was valid till 28 August 2018. According to the Sale and Purchase
Agreement signed, the State Property Committee of the Republic of Belarus committed to grant the license from the acquisition date of 26 August 2008 for
a period of 10 years. In accordance with the Edict of the President of the Republic of Belarus dated 26 November 2015, numbered 475, the license is now
issued without limitation of the period of validity. Starting from 1 March 2016, the license is valid from the date of the licensing authority’s decision on its
issue and for an unlimited period. Under the terms of its license, Belarusian Telecom is required to gradually increase its geographical coverage until the end
of 2018. Belarusian Telecom has fulfilled all coverage requirements except covering all Belarusian settlements. The number of uncovered settlements is 657
out of a total of 22,552 settlements.
lifecell:
lifecell owns twelve activity licenses, for GSM 900, GSM 1800, a technology neutral license, issued for 3G, one license for international and long-distance
calls and eight PSTN licenses for eight regions in Ukraine. As of December 31, 2017, lifecell owned 28 frequency use licenses for IMT-2000 (UMTS), GSM-
900, GSM-1800, CDMA-800, Wi-fi and microwave Radiorelay and Broadband Radio Access, which are regional and national. 3G activity and frequency
licenses were issued in March 2015, reissued due to company name change in March 2016 and are valid for 15 years. Additionally, lifecell holds a specific
number range – three NDC codes for mobile networks, sixteen permissions on a number resource for short numbers, eleven permissions on a number
resource for SS-7 codes (7 regional and 4 international), one permission on a number resource for Mobile Network Code, nine permissions on a number
resource for local ranges for PSTN licenses, two permissions on a service codes for alternative routing selection for international and long-distance fixed
telephony and one permission on a code for global telecommunication service “800”.
F86
TURKCELL İLETİŞİM HİZMETLERİ A.Ş.Notes to the Consolidated Financial Statementsas at and for the Year Ended 31 December 2017(All amounts disclosed in the consolidated financial statements and notes have been rounded off to the nearest thousand currency units and are expressed in Turkish Liras unless otherwise stated.) TURKCELL ANNUAL REPORT 2017
241
36. COMMITMENTS AND CONTINGENCIES (CONTINUED)
License Agreements (continued)
Inteltek:
On 12 August 2008, Spor Toto conducted a tender which allowed private companies to organize fixed odds and paramutual betting games based on sports
competitions. Inteltek gave the best offer for the tender. On 29 August 2008, Inteltek signed a contract with Spor Toto, receiving the rights to operate the
fixed odds and paramutual betting games based on sports competitions for the next ten years. New commission rate, which is 1.4% of the takings arising
from the operation of the fixed odds and paramutual betting games based on sports competitions (until 1 March 2009, commission rate was 7% of gross
takings), is applicable starting from March 2009. As at 31 December 2017, Inteltek has a letter of guarantee of TL 159,752 (31 December 2016: TL 159,752)
provided to Spor Toto.
Inteltek has a mobile agency agreement with Spor Toto, receiving the rights to assign mobile sub agencies to operate the fixed odds and paramutual betting
games based on sports competitions. As at 31 December 2017, Inteltek has a letter of guarantee of TL 25,000 (31 December 2016: TL 25,000) provided
to Spor Toto for mobile agency agreement. The targeted payout is 50% of the turnover balance including VAT. The fact that Inteltek is obliged to pay the
difference between the realized and the targeted payout balances, whenever the pool balance falls negative, creates an excess payment risk.
Kibris Telekom:
On 27 April 2007, Kibris Telekom signed the License Agreement for Installation and Operation of a Digital, Cellular, Mobile Telecommunication System
(“Mobile Communication License Agreement”) with the Ministry of Communications and Public Works of the Turkish Republic of Northern Cyprus which
is effective from 1 August 2007, replacing the previous GSM-Mobile Telephony System Agreement dated 25 March 1999. In accordance with the Mobile
Communication License Agreement, Kibris Telekom was granted an 18 year GSM 900, GSM 1800 and IMT 2000/UMTS license for GSM 900, GSM 1800
frequencies while the usage of IMT 2000/UMTS frequency bands is subject to the fulfillment of certain conditions.
On 14 March 2008, Kibris Telekom was awarded a 3G infrastructure license at a cost of $10,000 including VAT, which was paid at the end of March 2008.
Under the terms of the license, the system had to be operational by mid-October 2008. In 2010, Kibris Telekom has completed the radio transmission (air
link) project providing direct international voice and data connection with mainland and started using it from the third quarter of 2010. The Project is the
only direct connection in Turkish Republic of Northern Cyprus besides Telecommunication Authority.
F87
SECTORAL AND FINANCIAL INFORMATIONTURKCELL ANNUAL REPORT 2017TURKCELL İLETİŞİM HİZMETLERİ A.Ş.Notes to the Consolidated Financial Statementsas at and for the Year Ended 31 December 2017(All amounts disclosed in the consolidated financial statements and notes have been rounded off to the nearest thousand currency units and are expressed in Turkish Liras unless otherwise stated.)
242
36. COMMITMENTS AND CONTINGENCIES (CONTINUED)
License Agreements (continued)
Azerinteltek:
Azerinteltek, in which Inteltek’s shareholding is 51%, was established on 19 January 2010, and authorized to organize, operate, manage and develop the
fixed-odds and para-mutual sports betting games by the Ministry of Youth and Sports of Azerbaijan for a period of 10 years. The agreement signed with
Azeridmanservis which is founded by the Ministry of Youth and Sports of Azerbaijan is renewed with the same terms and conditions in accordance with
the new legislation enforced in Azerbaijan regarding the betting games based on sports on 30 September 2010. Azerinteltek officially commenced sports
betting games on 18 January 2011. On 4 March 2015, Azerinteltek authorization of organizing, operating, managing and developing the fixed-odds and para-
mutual sports betting games of was extended till 2 March 2025.
Since January 1, 2013, Azerinteltek was authorized for the sales of lottery tickets as a main distributor by Azerlotereya. As at 1 January 2016, the
authorization for the sales of lottery tickets decided to be extended yearly.
Management believes that the Group is in compliance with the terms and conditions of the license agreements in all material respects as at 31 December
2017 and 2016.
36.1 Dispute on Treasury Share Amounts
Turkcell has the 2G and 3G Concession Agreements which was signed with the regulatory party in Turkey for rendering mobile telecommunication services.
According to the 2G and 3G Concession Agreements, The Company is obliged to pay each month 15% of its monthly gross sales; with the exception of the
interest for late payment of the amounts charged to its subscribers and of the indirect taxes, fiscal obligations such as fees and duties and the invoiced
amounts recorded in the accounts to the Treasury as treasury share. The Company is obliged to pay 90% of this share to Treasury and 10% of the remaining
as the universal services share to the Ministry. The Company is also obliged to pay once a year 0.35% of its gross sale as the Authority contribution share.
As “Applicable Law and Settlement of Disputes” of the 2G and 3G Concession Agremeent, the parties agreed that the disputes shall be settled by three
arbitrators to be appointed in accordance with the arbitration rules of the International Chamber of Commerce for 2G while the Council of State is
authorized to solve the disputes arising from the agreement and its annexes thereof for 3G.
The Undersecretariat of Treasury and ICTA alleged that Company made deficient treasury payments in the past, The Company objected to these claims.
After then, the Company has resolved the following within the scope of Provisional Article 13 added to the Telegraph and Telephone Law No.406 dated 4
February 1924 of the Law on the Amendment of Certain Tax Laws and Other Laws No. 7061 published in the Official Gazette dated December 5th, 2017:
to restructure relevant disputes and their interest fees and to choose the method of increasing tax base from the options in order to restructure relevant
disputes and their interest fees for the periods for which examination is ongoing or has not been yet initiated. The Company applied for restructure, and
according to the Law The Company submitted waiver petition or accepted the cases related to the restructured amounts. It is expected that the Courts
grant decisions about the statement of waiver/acceptance of the aforementioned cases.
F88
TURKCELL İLETİŞİM HİZMETLERİ A.Ş.Notes to the Consolidated Financial Statementsas at and for the Year Ended 31 December 2017(All amounts disclosed in the consolidated financial statements and notes have been rounded off to the nearest thousand currency units and are expressed in Turkish Liras unless otherwise stated.) TURKCELL ANNUAL REPORT 2017
243
36. COMMITMENTS AND CONTINGENCIES (CONTINUED)
36.1 Dispute on Treasury Share Amounts (continued)
Based on the Laws stated above, the total amount, including principal and interest, calculated is TL 206,365 and is TL 209,159, respectively. The payment
will be made in 6 equal installments in two-month periods, starting from January 31st, 2018. The total payment including interest on installments is TL
436,300.
Based on the management opinion, the probability of an outflow of resources embodying economic benefits to settle the obligation is certain, thus,
including discount TL 417,668 provision is recognized in the consolidated financial statements as at and for the period ended 31 December 2017 (31
December 2016: None).
36.2 Dispute on Special Communication Tax
Large Tax Payers Office levied Special Communication Tax (SCT) and tax penalty on the Company amounting to TL 527,639 in total, of which SCT
amounting 211,056 and penalty amounting to TL 316,583 based on the claim stated on Tax Investigation Reports related to SCT prepared for the years
2008-2012. The Company filed lawsuits in the Tax Courts for the cancellation of each tax and tax penalty claim. In some of the cases, The Court decided in
favour of The Company or in favour of the Court. The parties appealed the decisions regarding the parts against them.
The Large Tax Payers Office has collected TL 80,355 calculated for the parts against the Company for the assessment of the SCT for the year 2011 by
offsetting the receivables of the Company from Public Administrations.
As per the Law no. 6736, the Company filed applications for the restructuring of penalties and interest on the SCT regarding the dispute on the tax amount
for the years 2008, 2009, 2010, 2011 and 2012. Tax Office rejected the application for the year 2011 and the case is pending for the year 2011; accepted the
other restructuring applications for the years 2008, 2009, 2010, 2012 and the Company paid the restructuring amount of TL 117,058.
Limited tax investigation for the period of 2013 has been started in 2014 and the result of investigation has not yet been notified to Turkcell. Large Tax
Payers Office has begun the limited tax investigation for the period of 2013. For the year of 2014, 2015 and 2016 a new investigation has been initiated.
Based on the probable payment including interest in case of restructuring the SCT for the year 2013 as per the Law no. 6736, the Company accrued
provisions in the consolidated financial statements as at and for the period ended 31 December 2017 amounting to 24,175 TL including discount (31
December 2016: 14,866).
36.3 Investigation initiated by ICTA on subscription numbers and radio utilization and usage fees
ICTA commenced in-depth investigations, against the GSM operators for the years, 2004-2009, 2010-2011, 2012, 2013 and 2014. As a result of the
investigations, ICTA imposed administrative fines to the Company amounting TL 11,240 in total and decided to warn the Company. The administrative
fines were paid within 1 month following the notification of the decision of ICTA, with 25% discount. The Company filed lawsuits for the cancellation of
aforementioned administrative fines and ICTA’s administrative acts. ICTA filed lawsuits against Company for the collection of the radio utilization and usage
fee amount which was alleged that the Company paid deficiently.
The Company has resolved the following based on the Laws No. 7061 as explained in detailed note 36.1 to restructure radio fees which are in dispute and
respective penalty, default interest regarding these disputes. The Company applied for restructure, and according to the Law The Company submitted
waiver petition or accepted the cases related to the restructured amounts. It is expected that the Courts grant decisions about the statement of waiver/
acceptance of the aforementioned cases.
F89
SECTORAL AND FINANCIAL INFORMATIONTURKCELL ANNUAL REPORT 2017TURKCELL İLETİŞİM HİZMETLERİ A.Ş.Notes to the Consolidated Financial Statementsas at and for the Year Ended 31 December 2017(All amounts disclosed in the consolidated financial statements and notes have been rounded off to the nearest thousand currency units and are expressed in Turkish Liras unless otherwise stated.)
244
36. COMMITMENTS AND CONTINGENCIES (CONTINUED)
36.3 Investigation initiated by ICTA on subscription numbers and radio utilization and usage fees (continued)
The total amount, including principal and interest, calculated within the scope of clause 2 is TL 156,637. The payment will be made in 6 equal installments in
two-month periods, starting from 31 January 2018. The total payment including interest on installments is TL 164,469.
Based on the management opinion, the probability of an outflow of resources embodying economic benefits is certain, thus, including discount TL 157,446
provision is recognized in the consolidated financial statements as at and for the period ended 31 December 2017 (31 December 2016: None).
36.4 Disputes regarding the Law on the Protection of Competition
On the grounds of the investigation initiated by the Competition Board on the grounds that the Company violated the competitive environment through
abusing its dominant position in the Turkish mobile market and it was decided to apply administrative fine amounting to TL 91,942 on the Company. A
lawsuit was filed by the Company. The case is still pending.
The payment order has been sent to the Company by the Tax Office. The Company filed a lawsuit for the stay of execution and cancellation of the payment
order. The Court accepted the lawsuit and cancelled the payment order. Tax Office appealed the decision. The Company replied the appeal request. Appeal
process is still pending.
Three private companies filed a lawsuits against the Company in relation with this case claiming in total of TL 113,084 together with up to 3 times of the
loss amount to be determined by the court for its material damages by reserving its rights for surpluses allegedly. The cases are still pending.
Based on the management opinion, the probability of an outflow of resources embodying economic benefits is uncertain, thus, no provision is recognized in
the consolidated financial statements as at and for the period ended 31 December 2017 (31 December 2016: None).
36.5 Other ongoing lawsuits and investigations
Within consolidated financial statements prepared as of 31 December 2017, obligations which are related to following ongoing disputes have been
evaluated.
Based on the management opinion, an outflow of resources embodying economic benefits is deemed to be less than probable, thus, no provision is
recognized in the consolidated financial statements as at and for the period ended 31 December 2017 (31 December 2016: None).
Subject
Disputes related with ICTA
31 December 2017
Anticipated Maximum Risk
(excluding accrued interest)
13,367
31 December 2016
Anticipated Maximum Risk
(excluding accrued interest)
22,544
31 December 2017
Provision
-
31 December 2016
Provision
-
In addition, Tax Audit Committee carries out limited tax investigations regarding the Company’s VAT and corporate tax practices for the years 2012,
2013 and 2014 and VAT practices for the years 2015 and 2016. Based on the management opinion, the probability of an outflow of resources embodying
economic benefits is uncertain, thus, no provision is recognized in the consolidated financial statements as at and for the period ended 31 December 2017.
F90
TURKCELL İLETİŞİM HİZMETLERİ A.Ş.Notes to the Consolidated Financial Statementsas at and for the Year Ended 31 December 2017(All amounts disclosed in the consolidated financial statements and notes have been rounded off to the nearest thousand currency units and are expressed in Turkish Liras unless otherwise stated.) TURKCELL ANNUAL REPORT 2017
245
37. RELATED PARTIES
Transactions with key management personnel
Key management personnel comprise of the Group’s members of the Board of Directors and chief officers.
There are no loans to key management personnel as of 31 December 2017 and 2016.
The Group provide additional benefits to key management personnel and contribution to retirement plans based on a pre-determined ratio of compensation.
Short-term benefits (*)
Termination benefits
Long-term benefits
(*) Includes share-based payment.
31 December 2017
74,696
604
548
75,848
31 December 2016
50,001
10,064
479
60,544
31 December 2015
52,767
13,454
655
66,876
The following balances are outstanding at the end of the reporting period in relation to transactions with related parties:
Due from related parties
Telia Sonera International Carrier AB (“Telia”)
Kyivstar GSM JSC (“Kyivstar”)
GSM Kazakhstan Ltd (“Kazakcell”)
Azercell Telekom MMC (“Azercell”)
MegaFon OJSC (“Megafon”)
Hobim Bilgi Islem Hizmetleri AS (“Hobim”) (*)
Vimpelcom OJSC (“Vimpelcom”)
Other
(*) Hobim is not a related party effective from 20 June 2017.
31 December 2017
1,256
1,061
830
364
281
-
-
1,507
5,299
31 December 2016
607
75
937
446
1,387
1,223
586
600
5,861
Due from related parties is shown net of allowance for doubtful receivables amounting to TL 227 at 31 December 2017 (31 December 2016: TL 231).
Due from Megafon, Telia, Vimpelcom, Azercell, Millenicom and Kyivstar resulted from telecommunications services.
Due from Kazakcell, mainly resulted from software services and telecommunications services
F91
SECTORAL AND FINANCIAL INFORMATIONTURKCELL ANNUAL REPORT 2017TURKCELL İLETİŞİM HİZMETLERİ A.Ş.Notes to the Consolidated Financial Statementsas at and for the Year Ended 31 December 2017(All amounts disclosed in the consolidated financial statements and notes have been rounded off to the nearest thousand currency units and are expressed in Turkish Liras unless otherwise stated.)
246
37. RELATED PARTIES (CONTINUED)
Due to related parties
Kyivstar GSM JSC (“Kyivstar”)
Wind Telecomunicazioni S.P.A.
Vimpelcom (Bvı) Ltd.
Geocell LLC (“Geocell”)
Megafon
Hobim (*)
Other
31 December 2017
2,346
1,738
1,552
447
17
-
880
6,980
31 December 2016
2,382
-
100
445
892
6,260
1,122
11,201
(*) Hobim is not a related party effective from 20 June 2017.
Due to Kyivstar, Megafon, Geocell, Wind Telecomunicazioni S.P.A. and Vimpelcom (Bvı) Ltd.mainly resulted from telecommunications services received.
The Group’s exposure to currency risk related to outstanding balances with related parties is disclosed in Note 33.
The following transactions occurred with related parties:
2017
30,875
10,020
7,230
6,362
1,583
-
-
-
4,962
61,032
2016
30,964
15,761
20,775
11,773
2,585
3,422
997
-
3,149
89,426
2015
41,728
16,955
20,489
14,958
4,183
4,831
8,861
217,080
6,049
335,134
Revenue from related parties
Sales to Kyivstar
Telecommunications services
Sales to Telia
Telecommunications services
Sales to Vimpelcom
Telecommunications services
Sales to Megafon
Telecommunication services
Sales to Azercell
Telecommunication services
Sales to Krea (*)
Call center services, fixed line services, rent
and interest charges
Sales to Millenicom (**)
Telecommunication services
Sales to KVK Teknoloji (***)
Simcard SIM card and prepaid card sales
Sales to other related parties
F92
TURKCELL İLETİŞİM HİZMETLERİ A.Ş.Notes to the Consolidated Financial Statementsas at and for the Year Ended 31 December 2017(All amounts disclosed in the consolidated financial statements and notes have been rounded off to the nearest thousand currency units and are expressed in Turkish Liras unless otherwise stated.) TURKCELL ANNUAL REPORT 2017
37. RELATED PARTIES (CONTINUED)
Transactions with related parties (continued)
Related party expenses
Charges from Kyivstar
Telecommunications services
Charges from Hobim (****)
Invoicing and archiving services
Charges from Vimpelcom
Telecommunications services
Charges from Megafon
Telecommunications services
Charges from Telia
Telecommunications services
Charges from Azercell
Telecommunications services
Charges from Krea
Digital television broadcasting services
Charges from KVK Teknoloji
Dealer activation fees and others
Charges from other related parties
247
2015
49,608
29,570
4,348
4,342
3,409
28
15,826
76,743
15,151
199,025
2017
49,178
16,993
10,853
5,169
3,120
734
-
-
11,832
97,879
2016
47,595
31,832
2,721
3,162
2,499
1,361
5,975
-
8,497
103,642
(*) Transactions with Krea include transactions until 26 August 2016.
(**) Transactions with Millenicom include transactions until 21 January 2016.
(***) KVK Teknoloji is not a related party effective from 6 July 2015. Transactions with KVK Teknoloji include transactions until that date.
(****) Transactions with Hobim include transactions until 20 June 2017.
Transactions with Kyivstar:
Kyivstar, an entity under common control with Alfa, is rendering and receiving telecommunications services such as interconnection and roaming.
Transactions with Hobim:
Hobim, one of the leading data processing and application service provider companies in Turkey, is owned by Cukurova Group. The Company has entered
into invoice printing and archiving agreements with Hobim under which Hobim provides the Company with monthly invoice printing services, manages
archiving of invoices and subscription documents. Prices of the agreements are determined through alternative proposals’ evaluation.
Transactions with Vimpelcom:
Vimpelcom, an entity under common control with Alfa, is rendering and receiving telecommunications services such as interconnection and roaming.
Transactions with Megafon:
Megafon, a subsidiary of Sonera, is rendering and receiving telecommunications services such as interconnection and roaming.
F93
SECTORAL AND FINANCIAL INFORMATIONTURKCELL ANNUAL REPORT 2017TURKCELL İLETİŞİM HİZMETLERİ A.Ş.Notes to the Consolidated Financial Statementsas at and for the Year Ended 31 December 2017(All amounts disclosed in the consolidated financial statements and notes have been rounded off to the nearest thousand currency units and are expressed in Turkish Liras unless otherwise stated.)
248
37. RELATED PARTIES (CONTINUED)
Transactions with related parties (continued)
Transactions with Telia:
Telia, a subsidiary of Sonera, is rendering and receiving telecommunications services such as interconnection and roaming.
Transactions with Azercell:
Azercell, a subsidiary of Sonera, is rendering and receiving telecommunications services such as interconnection and roaming.
Transactions with Krea:
Çukurova Holding has signed a share purchase agreement with BeIN Media Group LLC related to the sale of their shares in Krea. Share transfer has finalized
as at 26 August 2016.
Krea, a direct-to-home digital television service company under the Digiturk brand name.
There are no specific agreements between Turkcell and digital channels branded under Digiturk name. Every year, as in every other media channel, standard
ad spaces are purchased on a spot basis. Also, Krea provides instant football content related to Spor Toto Super League to the Company to be delivered to
mobile phones and tablets.
The Company has agreements for fixed telephone, leased line, corporate internet, and data center services provided by the Company’s subsidiary Turkcell
Superonline.
Transactions with KVK Teknoloji:
KVK Teknoloji shares held by Cukurova Group were acquired by MV Holding on 6 July 2015. The Company has a distributorship agreement with KVK
Teknoloji.
F94
TURKCELL İLETİŞİM HİZMETLERİ A.Ş.Notes to the Consolidated Financial Statementsas at and for the Year Ended 31 December 2017(All amounts disclosed in the consolidated financial statements and notes have been rounded off to the nearest thousand currency units and are expressed in Turkish Liras unless otherwise stated.) TURKCELL ANNUAL REPORT 2017
249
38. SUBSIDIARIES
The Group’s ultimate parent company is Turkcell Holding. Subsidiaries of the Company as at 31 December 2017 and 31 December 2016 are as follows:
Subsidiaries Name
Kibris Telekom
Turkcell Global Bilgi
Country of Incorporation
Turkish Republic of Northern
Cyprus
Turkey
Turktell
Turkey
Turkcell Superonline
Turkcell Satis
Eastasia
Turkcell Teknoloji
Global Tower
Financell
Rehberlik
Lifecell Ventures
Beltel
Turkcell Gayrimenkul
Global LLC
UkrTower
Turkcell Europe
Turkcell Odeme (1)
Lifecell
Turkcell Finansman
Beltower
Turkcell Enerji (2)
Paycell (3)
Lifecell Digital (4)
Belarusian Telecom
Lifetech
Inteltek
Azerinteltek
Turkey
Turkey
Netherlands
Turkey
Turkey
Netherlands
Turkey
Netherlands
Turkey
Turkey
Ukraine
Ukraine
Germany
Turkey
Ukraine
Turkey
Republic of Belarus
Turkey
Ukraine
Turkish Republic of
Northern Cyprus
Republic of Belarus
Republic of Belarus
Turkey
Azerbaijan
Business
Telecommunications
Customer relations management
Information technology, value added GSM services and
entertainment investments
Telecommunications, television services and content
services
Sales and delivery
Telecommunications investments
Research and development
Telecommunications infrastructure business
Financing business
Directory Assistance
Telecommunications investments
Telecommunications investments
Property investments
Customer relations management
Telecommunications infrastructure business
Telecommunications
Payment services and e-money license
Telecommunications
Consumer financing services
Telecommunications Infrastructure business
Electricity energy trade and wholesale and retail
electricity sales
Payment services and e-money license
Telecommunications
Telecommunications
Research and development
Information and Entertainment Services
Information and Entertainment Services
Effective Ownership Interest
31 December
31 December
2016 (%)
2017 (%)
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
80
80
55
28
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
-
-
-
80
80
55
28
(1) Turkcell Odeme operating under “Paycell” brand has been authorized by the Banking Regulation and Supervision Agency (“BRSA”) to operate as an “electronic money institution” and to provide
intermediation service for invoice payments. The decision was published in the Official Gazette on 22 July 2017.
(2) Turkcell Enerji that will be engaged in electricity energy trade, wholesale sales and retail sales was incorporated on
20 February 2017. The Company is a wholly owned subsidiary of Turktell and has obtained its electricity supply license upon approval from Energy Market Regulatory Authority (“EMRA”) as at 11 May
2017.
(3) The company “Paycell LLC” which is established in Ukraine by lifecell and wholly owned by the company granted the “financial company” status on September 21, 2017. Paycell LLC will apply for
financial services and local money transfer licenses to provide digital payment services to customers via credit device sales and e-money.
(4)The transactions in relation to the incorporation of Lifecell Digital Limited in the Turkish Republic of Northern Cyprus (“TRNC”), which will offer services as an internet service provider, by our wholly-
owned subsidiary Kıbrıs Mobile Telekomünikasyon Limited based in TRNC is completed as at 14 December 2017.
F95
SECTORAL AND FINANCIAL INFORMATIONTURKCELL ANNUAL REPORT 2017TURKCELL İLETİŞİM HİZMETLERİ A.Ş.Notes to the Consolidated Financial Statementsas at and for the Year Ended 31 December 2017(All amounts disclosed in the consolidated financial statements and notes have been rounded off to the nearest thousand currency units and are expressed in Turkish Liras unless otherwise stated.)
250
38. SUBSIDIARIES (CONTINUED)
Details of non-wholly owned subsidiaries that have material non-controlling interests to the Company are disclosed below:
Place of
incorporation
and principal
place of business
Name of subsidiary
Inteltek
Turkey
Individually immaterial
subsidiaries with non
–controlling interest
Proportion of ownership interests
and voting rights held by
noncontrolling interest
Profit/(loss) allocated to
non-controlling interests
31 December 2017 31 December 2016 31 December 2017 31 December 2016 31 December 2017 31 December 2016
50,863
Accumulated non-controlling
interests
45.00%
45.00%
46,072
35,924
39,346
22,706
58,630
12,369
51,715
9,855
55,927
5,769
56,632
Summarized financial information in respect of Inteltek is set out below. The summarized financial information below represents amounts before intragroup
eliminations.
Inteltek
Current assets
Non-current assets
Current liabilities
Non-current liabilities
Equity attributable to owners
Revenue
Expenses
Profit for the year
Other comprehensive income/(loss) for the year
Dividend paid to non-controlling interests
Net cash inflow from operating activities
Net cash inflow from investing activities
Net cash outflow from financing activities
Effects of foreign exchange rate fluctuations on cash and cash equivalents
Net cash outflow/(inflow)
31 December 2017
223,119
9,290
125,286
4,742
102,381
31 December 2016
191,199
17,367
30,516
65,020
113,030
2017
184,025
(104,194)
79,831
172
(46,582)
73,575
19,930
(75,113)
8,574
26,966
2016
178,408
(90,973)
87,435
(618)
(44,888)
69,497
17,470
(119,751)
18,213
(14,571)
F96
TURKCELL İLETİŞİM HİZMETLERİ A.Ş.Notes to the Consolidated Financial Statementsas at and for the Year Ended 31 December 2017(All amounts disclosed in the consolidated financial statements and notes have been rounded off to the nearest thousand currency units and are expressed in Turkish Liras unless otherwise stated.) TURKCELL ANNUAL REPORT 2017
39. CASH FLOW INFORMATION
Net debt reconciliation:
Balance at 1 January 2017
Cash inflows
Cash outflows
Other non-cash movements
Balance at 31 December 2017
Cash and cash equivalents
Net debt
40. SUBSEQUENT EVENTS
Debt securities issued
1,922,656
209,808
(503,391)
246,448
1,875,521
Loans
7,810,392
24,030,222
(22,768,911)
1,466,205
10,537,908
Financial Leasings
48,114
72,421
(1,068)
3,253
122,720
251
Total
9,781,162
24,312,451
(23,273,370)
1,715,906
12,536,149
4,712,333
(7,823,816)
Fintur, in which the Group holds 41.45% stake, has completed the transfer of its 99.99% total shareholding in Geocell LLC to Silknet JSC on 20 March 2018,
a joint stock company organized under the laws of Georgia, for a total consideration of USD 153,000 upon receiving the necessary regulatory approvals.
The transaction has no impact on consolidated financial statements since Fintur is classified as “assets held for sale” in the statement of financial position.
2600 MHz frequency tender as part of the 4G License Tender, which the Group’s fully owned subsidiary lifecell based in Ukraine had applied to participate,
has been held on 31 January 2018. At the tender, lifecell has been awarded with the license for 15 years bidding UAH 909,251 (TL 129,155) for 15 MHz
frequency band, the total of Lot 1 and Lot 2. Payment amounting to UAH 909,251 (equivalent to TL 129,155) of license was made in cash on 1 March 2018.
1800 MHz frequency tender as part of the 4G License Tender, which the Group’s fully owned subsidiary lifecell based in Ukraine had applied to participate,
was held on 6 March 2018. As a result of the tender, lifecell was awarded with the license for 15 years for 15 MHz frequency band on Lot 1 with its UAH
795,000 bid.
The 2017 General Assembly will be held on March 29, 2018 and the Board of Directors has proposed a dividend distribution for the year 2017 amounting to
TL 1,239,500 which represented approximately 63% of distributable net income for the year 2017 on 15 February 2018. Dividend distribution decision is
subject to approval of the General Assembly. This distribution is proposed to be paid in three equal installments on June 18, 2018, September 17, 2018 and
December 17, 2018. The dividend amount is in line with the Group’s dividend policy approved during the Ordinary General Assembly Meeting held on March
26, 2015 and without deduction for tax settlements provisioned as disclosed on January 30, 2018.
Fintur, in which the Group holds 41.45% stake, has transferred its 51.3% total shareholding in Azertel Telekomunikasyon Yatirim Diş Ticaret A.Ş (“Azertel”)
to Azerbaijan International Telecom LLC (“Azintelecom”), a fully state owned company by the Republic of Azerbaijan, at the price of EUR 221,700
on 5 March 2018. The signing of definitive agreement, the transfer of shares to Azintelecom and the transfer of proceeds to Fintur were completed
simultaneously. The transaction has no impact on consolidated financial statements since Fintur is classified as “assets held for sale” in the statement of
financial position.
F97
SECTORAL AND FINANCIAL INFORMATIONTURKCELL ANNUAL REPORT 2017TURKCELL İLETİŞİM HİZMETLERİ A.Ş.Notes to the Consolidated Financial Statementsas at and for the Year Ended 31 December 2017(All amounts disclosed in the consolidated financial statements and notes have been rounded off to the nearest thousand currency units and are expressed in Turkish Liras unless otherwise stated.) 252
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ISTANBUL
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ADANA
ADAPAZARI
ANKARA
ANKARA
ANTALYA
BURSA
LOCATION
HEADQUARTERS
TEPEBEŞI PLAZA
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ADDRESS
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TURKCELL ANNUAL REPORT 2017 GLOSSARY
253
Abbreviation
Explanation
2G
3G
4.5G
4x4 MIMO
5G
The second generation telecommunication system, which used digital data stream for the first time, additionally providing
packet-based data communication and voice and data services.
A third generation mobile telecommunication system established according to IMT-2000/UMTS standards, or standards
developed based on these standards.
A generation containing technologies of more advanced features than standard 4G technology.
A technology developed to improve performance using multiple antennas simultaneously.
A generation containing technologies that having more advanced features than standard 4G technology.
AAC
(Advanced Audio Coding)
Audio code with better sound quality and compression ratio than MP3
Access Transport
Access Transport Access and carrier network type providing high capacity
ARPU
Average monthly revenue generated per mobile subscriber.
Base Station
A fixed transceiver device in each cell of a mobile communications network enabling communication between mobile phones
and radio signals within the cell.
Carrier Aggregation
A technique allowing more bandwidth and consequently higher speeds to be obtained by joining frequencies called carriers.
Cat-M
The class, in which machine-to-machine communication (Internet of Things) terminals require a relatively high data
transmission speed
CELTIC+ (Celtic-Plus)
EUREKA Cluster focusing on the Information and Communications Technology and Telecommunications
Datacenter Interconnect
A technology that enables different data centers to serve, connecting to each other.
DL 256 QAM
The data transmission speed is increased by the coding of a downward sign over 8 bits (using high modulation)
EUREKA (Exceptional
Unconventional Research
Enabling Knowledge
Acceleration)
EVS
(Evolved Voice Service)
It is an intergovernmental R&D organization financed by governments of more than forty countries.
New Generation Voice Coding System defined by 4.5G technology
FDD
Frequency Division Duplex A technique using different frequency bands in sending and receiving processes within
communication.
GHz (Giga Hertz)
A frequency unit
Gbps
(Giga bits per second)
A data transmission speed unit
GSM
GSMA
This is a digital mobile communication system, standardized by the European Communications Standards Institute and based
on digital transmission with roaming and the cellular network structure being used in Europe, Japan and various other
countries.
The GSM Association is a community consisting of mobile operators and telecom-related companies with the aim of
standardizing and developing the Mobile Telecommunications Sector.
HD (High Definition)
High Definition Broadcast
IoT (Internet of Things)
The mobilization, interpretation and communication/interaction of the data received through sensors
ITEA3 ITEA
IMT Spectrum
ISS
ITU
IVVR
EUREKA Cluster programme supporting innovative, industry-driven, pre-competitive R&D projects in the area of Software-
intensive Systems & Services
A spectrum that has been allocated to mobile operators by related regulatory bodies on a certain basis and which has been
offered to their use for a limited/unlimited period of time.
Internet Service Provider
The International Telecommunication Union An international standardization institution with headquarters in Geneva that
determines many standards in telecommunication.
Interactive Voice & Video Response
SECTORAL AND FINANCIAL INFORMATIONTURKCELL ANNUAL REPORT 2017 254
GLOSSARY
Abbreviation
Explanation
LTE
LTE-A
M2M
MIMO (Multiple Input –
Multiple Output)
Mbps
MHz
MVNO
NB-IoT (Narrow Band
Internet of Things)
NGMN
(The Next Generation
Mobile Networks)
Technology that ensures to achieve very high speeds by combining carriers in the same or different frequency bands.
A mobile communications standard comprising advanced features such as carrier coupling, which enables mobile broadband
speed of over 150 MBps in LTE.
Machine to Machine is the general name of the technology that allows devices to exchange information and conduct
transactions without human intervention.
The use of more than one antenna component at the same time
A data transmission speed. 1 Mbps equals 2 (20) bpse.
A unit of frequency.
Virtual Mobile Network Service
A technology defined by 3GPP for Internet of Things
It is an organization, which has world's leading operators as members including Turkcell, suppliers and universities around the
world and that guides the technology standards and companies producing technology in accordance with operator needs.
NPS
(Net Promoter Score) – The score that measures whether or not customers recommend the products they use to others
Ooakla Speed Test
An application that measures instant internet speed in fixed or mobile networks.
Overlay Network
Roaming
SDN-Ready Network
SON (Self Organizing
Networks)
SMS
On-net
TAS
A term used to describe networks, which are installed on the existing network and that use the existing infrastructure, but
are independently located networks
A mobile communications feature enabling the subscribers of a network to use their own mobile phones and numbers within
the coverage area of another operator.
IP network architecture, which can be programmed with software. Technology that ensures the control of IP networks with a
centralized software and application based routing.
Networks that can organize/optimize themselves
A mobile communication system allowing users to receive and send messages that can be constituted of both alphabetic and
numerical characters of up to 160 characters, to and from mobile phones through a short message service.
A call originating from an operator network and ending on the same operator network.
Turkish Accounting Standards
UL 2 CA (Ultra Light 2
Carrier Aggregation)
Combining two carriers from terminal through the base station and upstream transmission of data through these combined
carriers
Ultra Fast Convergency
Enables the transition on the back up line to be realized very quickly.
VoLTE
VPN
WiFi
IP based high quality audio technology through a 4.5G network.
Technology that can provide secure connectivity through the Internet, or another network and serve point-to-point, or point-
to-multipoint.
A standard generated for the transfer of data through wireless cables. Laptops, smart phones, PCs, etc. having a receiver and
transmitter of WiFi standard can benefit from wireless broadband internet services.
TURKCELL ANNUAL REPORT 2017 255
SECTORAL AND FINANCIAL INFORMATIONTURKCELL ANNUAL REPORT 2017 256
TURKCELL ANNUAL REPORT 2017 About Turkcell
Turkcell is a digital operator headquartered in Turkey, serving
its customers with its unique portfolio of digital services along
with voice, messaging, data and IPTV services on its mobile
and fixed networks.
Turkcell Group companies operate in 9 countries – Turkey,
Ukraine, Belarus, Northern Cyprus, Germany, Azerbaijan(1),
Kazakhstan, Georgia(2), Moldova. Turkcell Group reported TRY
17.6 billion revenue in 2017 with total assets of TRY 34.0 billion
as of December 31, 2017.
Turkcell launched LTE services in its home country on April
1st, 2016, employing LTE-Advanced and 3 carrier aggregation
technologies in 81 cities. In 2G and 3G, Turkcell’s population
coverage in Turkey is at 99.61% and 97.94%, respectively, as of
December, 2017. Turkcell offers up to 10 Gbps fiber internet
speed with its FTTH services.
It has been listed on the NYSE and the BIST since July 2000,
and is the only NYSE-listed company in Turkey.
Read more at www.turkcell.com.tr
All financial results in this annual report are prepared in accordance with International Financial Reporting Standards (IFRS) and expressed in Turkish Lira
(TRY or TL) unless otherwise stated.
(1) On March 5, 2018, Fintur has transferred its 51.3% total shareholding in Azertel Telekomunikasyon Yatirim Diş Ticaret A.Ş, 100% shareholder of Azercell, to Azerbaijan International Telecom LLC.
(2) On January 25, 2018, Fintur signed a binding agreement with Silknet JSC, a joint stock company in Georgia, to transfer its 100% shareholding in Geocell.
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Turkcell İletişim Hizmetleri A.Ş.
Turkcell İletişim Hizmetleri A.Ş.
Turkcell Küçükyalı Plaza, Aydınevler Mahallesi İnönü Caddesi
Turkcell Küçükyalı Plaza, Aydınevler Mahallesi İnönü Caddesi
No: 20 Küçükyalı Ofispark B Blok - Maltepe / Istanbul
No: 20 Küçükyalı Ofispark B Blok - Maltepe / Istanbul
Tel: +90 (212) 313 1000
Tel: +90 (212) 313 1000
Fax: +90 (216) 504 4058
Fax: +90 (216) 504 4058
Customer Services Tel: 532 or +90 (532) 532 0000
Customer Services Tel: 532 or +90 (532) 532 0000
www.turkcell.com.tr
www.turkcell.com.tr
Trade Register Number: 304844
Trade Register Number: 304844
Annual Report 2017
1440 Minutes
with
Turkcell
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