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25-Year
Heartfelt
Bond
Turkcell İletişim Hizmetleri A.Ş.
Turkcell Küçükyalı Plaza, Aydınevler Mahallesi İnönü Caddesi No: 20 Küçükyalı Ofispark B Blok - Maltepe/Istanbul
Tel: +90 (212) 313 1000
Fax: +90 (216) 504 4058
Customer Services Tel: 532 or +90 (532) 532 0000
www.turkcell.com.tr
Trade Register Number: 304844
Turkcell Annual Report 2019
With 25 years of achievements behind us as
Turkey’s Turkcell, we will continue to introduce
cutting-edge technologies to Turkey and our
people, while contributing to the nation's digital
transformation, and create value for each moment
of our customers' lives through our innovative,
value added services and solutions.
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 is the operator with the highest revenues among the integrated
telecom sector players in Turkey.
Turkcell Group companies operate in 5 countries - Turkey, Ukraine,
Belarus, Northern Cyprus and Germany.
Turkcell launched LTE services in its home country on April 1, 2016,
employing LTE-Advanced and 3 carrier aggregation technologies in
81 cities. Turkcell is providing fiber data access to households at
speeds up to 10 Gbps. Turkcell Group reported TRY 25.1 billion revenues
in FY19 with total assets of TRY 45.7 billion as of December 31, 2019.
Turkcell has been listed on the NYSE and the BIST since July 2000, and
is the only NYSE-listed Turkish company. Read more at www.turkcell.
com.tr/english-support
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.
Proudly produced by FİNAR.
www.finarkurumsal.com
TRY
25.1
Billion
REVENUES
41.5%
EBITDA
MARGIN
21.4%
EBIT
MARGIN
TRY
3.2
Billion
NET INCOME
TABLE OF CONTENTS
Turkcell Group
Chairman’s Message
18
22
Board of Directors
24 Message from the CEO
Executive Officers
28
Top Management of Subsidiaries
30
32
Turkcell Group
33 Our Vision, Mission and Target
34
36
2019 at a Glance
2019 Highlights
Turkcell's Marketing Communication Activities
The Shining Star of Techfin: Paycell
Turkcell Sales Channels
Digital Business Solutions
International Sale and Wholesale
2019 Operations
38 Digital Services Spreading Worldwide
40 Our Superior Technology
48 Our Consumer Business
56 Our Corporate Business
58
62 Our Digital Services
74
76
78
80
82 Customer Experience Focus
86
Successful Financial Management
88
Social Responsibility and Sustainability
94
Sponsorships
98
Human Resources
104 Turkcell Academy
110 Our Subsidiaries
118 Awards
Corporate Governance
124
Investor Relations
128 Credit Ratings
129 Subsequent Events after the Reporting Period
132 2019 Financial Year Corporate Governance Principles Compliance Report
144 Other Issues Regarding Corporate Governance
145 Conclusion of the Subsidiary Report
Turkcell Group: 2019 Financial & Operational Review
Sectoral and Financial Information
146 Telecommunications Sector in Turkey
147 Developments in Our Companies
151
155 Forward Looking Statements
156 Review of Risk Assessment
159
274 Our Offices
275 Glossary
Independent Auditor’s Report and Consolidated Financial Statements
You can have access to
the Digital Annual Report with
the QR Code.
Unique customer
experience
We have further strengthened the bond with our
customers through offerings that appeal to their
hearts and minds, while creating value in their lives.
As a result of these efforts, we were identified
as the most loved brand in the industry. We
continued to improve customer experience through
uninterrupted, high quality and innovative
services, while maintaining our leadership
in terms of Net Promoter Score.
LOVEMARK
NET PROMOTER
SCORE
LEADER
TURKCELL ANNUAL REPORT 2019 TURKCELL ANNUAL REPORT 2019 TURKCELL ANNUAL REPORT 2019 High-speed
communication over
robust infrastructure
We continue investing in our infrastructure with
a focus on constantly enhancing the quality
of service delivered to our customers. We are
proud to be among the few telecom operators
capable of providing the fastest 4.5G service,
not only in Turkey but in the world on our
strong infrastructure established over
rich frequency resources.
234 MHz
SPECTRUM
RESOURCES
1.2 Gbps
SPEED
TURKCELL ANNUAL REPORT 2019 Strong analytics
capability on superior
technology
Leveraging our advanced analytics capability
and technology investments, we interpret big
data generated from our operations through
artificial intelligence and business intelligence
systems and conduct over 2 million
daily interactions with our customers
each day with the aim of providing
customized offers.
70 MILLION
MONTHLY
CUSTOMER
INTERACTIONS
1,263 R&D
EMPLOYEES
6
TURKCELL ANNUAL REPORT 2019
7
TURKCELL ANNUAL REPORT 2019 8
TURKCELL ANNUAL REPORT 2019 Strong team creating
the future
As the Turkcell family of around 22 thousand
members, we continuously develop our skills
through training programs of rich content,
adapting ourselves to the rapidly changing
requirements of the digital era to better
respond to customer needs.
6-8 MONTHS
TRAINING
PROGRAMS
EACH
YEAR ~200
YOUNG TALENTS
EMPLOYMENT
9
TURKCELL ANNUAL REPORT 2019 Telecom services that
make a difference
As part of our telecom business, we aim to reach
more customers through mobile and fixed offerings
that make a difference and accordingly register
1 million subscriber net additions each year over the
following three years. While focusing
on postpaid subscribers in our mobile business,
we deliver internet service to more
households via our Superbox product,
which enables us to provide fiber
like service over our strong
mobile network.
1.5 MILLION
POSTPAID NET
SUBSCRIPTIONS
323
THOUSAND
SUPERBOX
SUBSCRIBERS
10
TURKCELL ANNUAL REPORT 2019 11
TURKCELL ANNUAL REPORT 2019 12
TURKCELL ANNUAL REPORT 2019 Unique digital
services
Through our digital services, we offer our
customers a richer value proposition while
meeting all their digital needs. We interact
with our customers across a diverse range of
digital platforms, which enables us to better
understand their needs. We share our successful
digital model and know-how in this field
with other operators, thereby
contributing to their own
digital transformation.
STANDALONE DIGITAL
SERVICES REVENUE
TRY 1 BILLION
NUMBER OF
COUNTRIES WHERE
WE EXPORT OUR
DIGITAL SERVICES
37
13
TURKCELL ANNUAL REPORT 2019 Significant contribution
to digital transformation
We accompany institutions on the digitalization
journey they embark on in order to optimize their
costs and create new revenue streams, through
our end-to-end services offered as part of our
digital business solutions focus area. Meeting all
their information technology related needs
through Turkcell’s offerings, institutions
become more competitive, thereby
adding value to their
business processes and
commercial future.
DIGITAL
BUSINESS
SOLUTIONS
REVENUE
GROWTH
44%
LARGEST
DATA CENTER
OPERATOR IN
TURKEY
14
TURKCELL ANNUAL REPORT 2019 15
TURKCELL ANNUAL REPORT 2019 16
TURKCELL ANNUAL REPORT 2019 Value accretive
techfin services
We are one of the most ambitious players in
fintech, which we refer to as techfin, through
our Paycell and Financell brands. We deliver
financial services to our individual and
corporate customers in a faster,
easier and more reliable manner.
PAYCELL
3-MONTH ACTIVE
USER BASE
4.5 MILLION
PAYCELL REVENUE
TRY 252 MILLION
17
TURKCELL ANNUAL REPORT 2019 CHAIRMAN’S MESSAGE
As the Turkcell family, we continued our activities in
2019 with the responsibility of serving in an industry of
strategic importance to the Turkish economy.
Dear Shareholders,
2019 was a year dominated by global
macroeconomic uncertainties, and one where
economic activity lost momentum in both
developed and emerging markets. World
economies were adversely impacted both
by trade war between the United States and
China, and geopolitical tensions across diverse
geographies. Meanwhile, Turkey entered into a
rebalancing period thanks to measures taken
in the second half of 2018 targeting savings,
fight against inflation and exports. In particular,
interest rates, the currency and inflation
were taken under control as part of the New
Economic Program, with a growth trend
achieved in the second half of 2019.
As the Turkcell family, we continued our
activities in 2019 with the responsibility of
serving in an industry of strategic importance
to the Turkish economy. And in meeting the
communication needs of our customers, we
created value for them with innovative products
and services that make their lives easier.
QUARTER CENTURY ON CREATING VALUE
FOR OUR COUNTRY AND PEOPLE
We have sustained our investments over
the quarter century since the establishment
of our company to serve our country and
people through value-focused technologies.
Indeed, we have invested TRY 31 billion over
the past 5 years alone. Accordingly, we have
pioneered the technological transformation of
Turkey and other countries that we operate
in. Today we offer products and services
that help our people, companies and public
institutions to differentiate themselves among
the competition on a global scale, whereby we
lead Turkey's digital transformation.
SUSTAINABLE GROWTH THROUGH
STRATEGIC FOCUS AREAS
In pursuit of profitable and sustainable growth,
we focus on the three strategic focus areas
of digital services, digital business solutions,
and our financial services platform, in addition
to our core telco business. We continue to
strengthen our digital services portfolio and
offer them in the international markets. As part
of our digital business solutions focus, we offer
end-to-end solutions that comprehensively
meet the technological needs of private sector
enterprises and public institutions, supporting
their digital transformation. We provide
companies and institutions with diverse services
and products ranging from cybersecurity and
cloud solutions, to the internet of things and
integrated information systems infrastructure.
With respect to our financial services platform,
we have continued to expand the user base
and merchants of Paycell, having implemented
new service integrations.
We are aware that the key driver of the
successes we target through our activities
in strategic focus areas is the customer
appreciation of our products and services. To
this end, we have further strengthened the
bond with our customers and maintained our
position in 2019 as the operator with the highest
net promoter score. We successfully managed
customer demand leveraging our robust
infrastructure in which we consistently invest.
Furthermore, thanks to our advanced analytical
capabilities, we effectively analyzed data
generated from our operations with the use of
artificial intelligence and business intelligence
systems, thereby provided tailor-made offers to
our customers.
In pursuit of profitable and
sustainable growth, we focus
on the three strategic focus
areas of digital services,
digital business solutions,
and our financial services
platform, in addition to our
core telco business.
18
TURKCELL ANNUAL REPORT 2019 We always state that Turkey's
data should remain in Turkey,
and we pursue our activities
accordingly.
AHMET AKÇA
Chairman of the Board of Directors
TURKCELL GROUPTURKCELL ANNUAL REPORT 2019 CHAIRMAN’S MESSAGE
We are aware that 5G technology, which will enable the
transition to Industry 4.0, will play a leading role in the
digital transformation of our country. In this respect, we are
working to ensure the most effective use of this technology.
WE CONTINUE TO INVEST IN NEW
TECHNOLOGIES…
We are among the few operators in the world
to provide the fastest 4.5G service thanks
to our rich frequency resources and robust
infrastructure.
As the leading digital operator of Turkey, we
continued our preparations for 5G technology
in 2019 via local and international collaborations
so as to pursue our leading position in the
market and continue to provide our customers
the highest quality service. We shared our
know-how and expertise with other industry
participants on local and international
platforms. We are aware that 5G technology,
which will enable the transition to Industry
4.0, will play a leading role in the digital
transformation of our country. In this respect,
we are working to ensure the most effective
use of this technology.
One of the key issues that our country
must agree upon with respect to 5G is
joint infrastructure. We believe that all the
necessary steps should be taken with full
industry participation prior to the 5G transition.
Furthermore, fiber infrastructure investments are
vital in meeting Turkey's digitalization targets
and 5G technology transition process.
We maintain the pace of our efforts to ensure
that Turkey produces technology rather than
merely using it. Accordingly, we have made
significant progress in the domestic production
of antenna systems, base stations, and radio-
link devices with ASELSAN, ULAK, and other
local manufacturers.
One of the key issues of today and the
near future is data storage and processing.
We always state that Turkey's data should
remain in Turkey, and we pursue our activities
accordingly. In this respect, we have established
world class datacenters equipped with state
of the art technology and security in Gebze
and Izmir to best serve our country. In October
2019, we expanded our datacenter investments
by opening Turkey's largest data center in
Ankara. We have continued to increase our
data storage capacity with this environmentally
friendly data center featuring 12 thousand m2 of
white space.
AWARENESS OF SUSTAINABILITY
REGARDING PEOPLE, THE
ENVIRONMENT AND THE ECONOMY
OVERALL...
In 2019, we continued to factor sustainability
into our activities by considering people,
the environment and the economy as a
whole. While carrying out numerous social
responsibility and sponsorship activities in
support of our society, we also focused on
minimizing our environmental impact. We
continued to be listed on the BIST Sustainability
Index which confirms our successful activities in
this field.
We believe in the importance of contributing to
sustainable growth so as to safeguard natural
resources for future generations. We aim to
meet all our electricity consumption needs
from renewable sources by 2030. Accordingly,
we opened our first solar power plant in the
Turkish Republic of Northern Cyprus in 2019. Our
data center in Ankara became Turkey's first to
generate its own electricity from solar panels.
We also expanded our sustainability efforts to
financing activities through the "Sustainability
Linked Loan" agreement with BNP Paribas.
This credit facility will enable us to reduce our
financing costs while fulfilling our environmental
responsibility.
We believe in the importance
of contributing to sustainable
growth so as to safeguard
natural resources for future
generations. We aim to
meet all our electricity
consumption needs from
renewable sources by 2030.
20
TURKCELL ANNUAL REPORT 2019 We will remain motivated to further improving our service
quality and developing products and services in accordance
with needs and expectations of our customers. We will
continue to achieve this by leveraging our superior infrastructure,
technology investments and highly-skilled human capital.
We granted financial
support to the students, who
study artificial intelligence,
natural language processing,
machine learning and similar
fields at undergraduate,
graduate and PhD level,
in support of general
and technology-oriented
education in Turkey.
We initiated efforts in the national natural
language processing field under the Turkcell
Foundation established in 2018. We provided
financial support to the robotics, science and
mathematics teams of various high schools
for the international competitions that they
participated in. These efforts enabled us to
encourage and support high school and middle
school students and boost their technological
awareness. We also granted financial support
to the students, who study artificial intelligence,
natural language processing, machine learning
and similar fields at undergraduate, graduate
and PhD level, in support of general and
technology-oriented education in Turkey.
As part of our social responsibility activities
enabling equal access to information, we
reached out 30 thousand students with the
Whiz Kids project, realized in cooperation with
the Ministry of National Education.
Among the participants of the "Women
Developers of the Future" project, carried out
in partnership with the Union of Chambers
and Commodity Exchanges of Turkey Women
Entrepreneurs Board, one hundred had been
employed by Turkcell as testing experts as of
year-end 2019. This project attracted great
attention at the forum organized by the United
Nations Development Program in New York
during the United Nations week.
WE WILL CONTINUE TO WORK FOR
OUR COUNTRY AND PEOPLE AS WE
HAVE OVER THE PAST QUARTER
CENTURY...
As the Board of Directors and the Management
Team, we will continue to provide innovative
services to our customers, create value for our
shareholders and increase the welfare of our
country and people in the upcoming period. In
this respect, we will remain motivated to further
improving our service quality and developing
products and services in accordance with
needs and expectations of our customers. We
will continue to achieve this by leveraging our
superior infrastructure, technology investments
and highly-skilled human capital.
I would like to thank our customers,
shareholders, investors, employees and all
stakeholders for their growing interest in Turkcell
in 2019. I hereby declare that we will continue
to work relentlessly in the upcoming periods
with the pride in our company as it leads
Turkey's digital transformation.
Respectfully yours...
AHMET AKÇA
Chairman of the Board of Directors
21
TURKCELL GROUPTURKCELL ANNUAL REPORT 2019 BOARD OF DIRECTORS
AHMET AKÇA (1)
Chairman of the Board and Independent Board Member*
Ahmet Akça was appointed as an independent member to the
Turkcell Board of Directors by Capital Markets Board in March
2013. Since August 2013, he has been serving as the Chairman of
the Turkcell Board of Directors. From 1981 to 1988, Mr. Akça served
as a Foreign Trade Manager in two reputable companies in glass
and food industry. In 1988, he became the CEO of an international
trade company, a position he held until 1992. He later started his
own business, Akça Lojistik Hizmetleri ve Tic. A.Ş and Tedarik Lojistik
Hizmetleri A.Ş. which he still runs as the Chairman. Mr. Akça also
serves as an independent member at the Board of Directors at BİM
A.Ş. since May 2018. Mr. Akça studied Mathematics at Middle East
Technical University and Sociology at Istanbul University for a certain
period, and graduated from the Department of Economics at Bursa
Economics and Commercial Sciences Academy.
(7)
(6)
(2)
(1)
(3)
(4)
(5)
22
TURKCELL ANNUAL REPORT 2019 ATİLLA KOÇ (2)
Independent Board Member*
Atilla Koç was appointed as an independent member to the Turkcell
Board of Directors by Capital Markets Board in March 2013. 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
Ulubey, Nusaybin and Bayındır districts, and as the Governor of
Siirt and Giresun provinces. He has also been the Prime Minister’s
Undersecretary, the General Secretary of Ankara Metropolitan
Municipality, and the Central Governor. Then, Mr. Koç served as
AKP Aydın Deputy in the 22nd and 23rd period of the Grand National
Assembly of Turkey and as Minister of Culture and Tourism in the
59th Government. Atilla Koç graduated from Ankara University’s
Faculty of Political Science.
MEHMET HİLMİ GÜLER (3)
Independent Board Member*
Mehmet Hilmi Güler was appointed as an independent member
to the Turkcell Board of Directors by Capital Markets Board
in March 2013. He formerly worked as a Project Engineer and
Group Chairman at TUSAŞ Aerospace Industries. Mr. Güler also
served as Vice President and Board Member of the Scientific and
Technological Research Council of Turkey (TÜBİTAK), as Chairman
and General Manager of the Machines and Chemical Industries
Board (MKEK), as the General Manager and Chairman of Etibank,
as the Chief Undersecretary to the Prime Minister, and as Board
Member and Executive Director at ERDEMİR and İGDAŞ. Mr. Güler
also served as Minister of Energy and Natural Resources in the
58th, 59th and 60th Governments. Mehmet Hilmi Güler has been
serving as Mayor of Ordu Metropolitan Municipality since 2019 local
elections. Mehmet Hilmi Güler graduated from Middle East Technical
University’s Department of Metallurgical and Materials Engineering
where he obtained his Master’s Degree and PhD.
BÜLENT AKSU (4)
Board Member
Bülent Aksu was appointed to the Turkcell Board of Directors on
March 7, 2019. Bülent Aksu has 22 years of managerial experience
in finance, accounting, tax and management fields in various
sectors including telecommunications, energy, petrochemicals,
textiles and audit. He began his career at Inspection Board of
Kuveyt Türk A.Ş. as an Auditor, and then undertook Finance
Manager and Group Finance Director roles, respectively at Çalık
Holding in 2003. Between 2008 and 2012 he served as CFO and
Board Member at Akfel Group. Mr. Aksu undertook CFO role at
Azerbaijani National Oil and Gas Company’s (SOCAR) subsidiaries
Petkim Petrokimya Holding A.Ş. and STAR Rafineri A.Ş., respectively
from 2012 to 2016. Bülent Aksu carried out numerous merger and
acquisition transactions in various industries, and actively managed
financial transactions including project financing and bond issuance
in international and domestic markets. He led the conclusion of
the financing agreement of USD 3.3 billion with 18 years maturity
signed between 23 local and international financial institutions and
STAR Rafineri, one of the most prominent industrial investments of
our country. This agreement had been the top project financing
transaction made in Turkey to that date in terms of the amount
and maturity. Moreover, it had been the largest project financing
transaction in Europe in 2014. Bülent Aksu served as CFO of
Turkcell from July 20, 2016 to July 17, 2018. Mr. Aksu made valuable
contributions to Turkcell having implemented international practices
enabling Turkcell to become an exemplary company of our country
in terms of balance sheet and FX risk management along with his
innovative solutions to funding investments. Mr. Aksu strengthened
Turkcell’s leading position in local and international capital markets
having carried out first Asset Backed Securities (ABS) issuance in
non-banking sector, and having led financing bill, lease certificate
and Eurobond transactions. He served as a Board Member of
Türk Telekomünikasyon A.Ş. from November 2018 to March 2019.
Mr. Aksu took office as Deputy Minister for the Ministry of Treasury
and Finance as of 3rd of August, 2018. On May 13, 2019 he was
appointed as the Chairman of Board of Directors of Turk Eximbank.
In 2016 and 2018, Mr. Aksu was voted among the top 50 most
influential CFOs in Turkey by the Fortune Turkey magazine. Bülent
Aksu graduated from Istanbul University Faculty of Business
Administration (English) in 1996.
HÜSEYIN AYDIN (5)
Board Member
Hüseyin Aydin was appointed to the Turkcell Board of Directors on
March 8, 2019. He began his career as an Associate Inspector at
Ziraat Bank and held several roles as Inspector, Department Head,
Duisburg/Germany Representative, and Branch Manager. Between
March 28, 2003 and April 13, 2005, he served as an Executive Board
member at Halkbank. From April 28, 2004 to November 12, 2014, he
also served as a Board member at Pamukbank T.A.Ş. From April
14, 2005 to May 31, 2005, he carried out deputy chairman role at
T.C. Ziraat Bankası A.Ş. Mr. Aydın became the General Manager of
Halk Bank on May 31, 2005. Having joined Ziraat Bank as the CEO
on July 15, 2011, Mr. Aydın also serves as the Chairman of the Banks
Association of Turkey and Board Member of Turkiye Wealth Fund
Management Co. Mr. Aydın was born in 1959 in Borçka/Artvin. He
graduated from Ankara Academy of Economics and Commercial
Sciences Faculty of Economics.
INGRID MARIA STENMARK (6)
Board Member
Ingrid Maria Stenmark was appointed to the Turkcell Board of
Directors by the General Assembly decision on March 29, 2018.
Ms. Stenmark is currently the Senior Vice President and Head
of CEO Office at Telia Company. She is responsible for Group
Strategy, Enterprise Risk Management, Ethics and Compliance and
also overseeing Internal Audit at Telia Company. In addition, she
has the responsibility for the associate operations in Turkcell and
Latvia. Since joining Telia Company in 1994, Ms. Stenmark has held
a number of senior positions in the Group, including Head of Group
Regulatory Affairs, acting General Counsel, and responsible for the
associates Turkcell and MegaFon. Ingrid Maria Stenmark holds a
Master of law from the University of Stockholm.
CHRISTOPHER JAMES POWELL (7)
Board Member
Christopher James Powell was appointed to the Turkcell Board
of Directors in December 2019. Mr. Powell was appointed as the
Chief Finance Officer of LetterOne Technology in 2015. Mr. Powell
has a broad remit including accounting, reporting, tax, structuring
and commercial transactions. He also serves as a Board member
for various companies within LetterOne. Mr. Powell was previously
the Head of Finance at Pallinghurst, a boutique private equity
investment house, where he was responsible for financial reporting,
accounting, investment valuations and investor relations. Prior to
Pallinghurst, he worked within the financial reporting team for
Anglo American plc, on the company’s transition to International
Financial Reporting Standards and technical accounting. Mr. Powell
also led various finance transformation projects. Mr. Powell has a
BA in History and an MA in Modern European History, both from the
University of Manchester. He qualified as a chartered accountant
(ICAEW) with Deloitte in 2004.
* 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.
23
TURKCELL GROUPTURKCELL ANNUAL REPORT 2019 MESSAGE FROM THE CEO
As 2019 was our 25th anniversary, it held special importance
for us. In the quarter century behind us, we worked
relentlessly to create value for our people and country; we
have achieved countless successes, while having marked
many firsts and pioneered numerous innovations.
Dear Shareholders,
As Turkcell family, we continued our activities in 2019
to offer innovative services and solutions that add
value to the lives of our customers. We played a
leading role in digital transformation of Turkey and
other countries that we operate in leveraging our
infrastructure investments, which enable us to introduce
latest technologies to our customers. The steps that
we have taken towards strengthening the bond with
our customers led to sound operational performance
as well as strong financial results. As 2019 was our
25th anniversary, it held special importance for us. In
the quarter century behind us, we worked relentlessly
to create value for our people and country; we have
achieved countless successes, while having marked
many firsts and pioneered numerous innovations. In the
upcoming period, we will pursue our customer-oriented
strategy carrying out activities with the responsibility of
our past accomplishments that encourages us to reach
our goals. Accordingly, we will introduce our customers
with latest technologies and high-quality services that
serves their hearts and minds.
2019 was a year of global uncertainties and cost
increases due to trade wars and geopolitical tension,
and yet one where a macroeconomic rebalancing
occurred in our domestic market. As Turkcell Group, we
achieved strong financial results pursuing profitable
growth on the back of our strategy, which we reviewed
towards further customer centricity, and successful
financial risk management practices. Turkcell Group
consolidated revenues increased 18.1% year-on-year,
reaching TRY 25.1 billion. Consolidated EBITDA rose by
18.6% to TRY 10.4 billion leading to an EBITDA margin
of 41.5%. Our EBIT margin was at 21.4%. Net income
rose year-on-year by 60.6% to a record-high TRY 3.2
billion. Our operational capital expenditures to sales
ratio was 18.0%, in-line with our plans. Moreover, we
distributed our shareholders TRY 1.01 billion dividends
thanks to our strong balance sheet, cash generation
strength and profitable operations despite challenging
macroeconomic conditions.
CONFIDENCE IN ECONOMY AND STRONG
COMMITMENT TO OUR INVESTORS
Thanks to the firm steps taken by Turkey’s Economic
Administration and the New Economy Program, we
have entered into a period where macroeconomic
uncertainties are diminishing, clarity is improving and
positive outcomes of the rebalancing policies are
becoming more evident. Throughout the year, we
further strengthened our organizational structure and
identified strategic focus areas for the upcoming period.
With the confidence based on positive macroeconomic
developments, we disclosed our three-year targets
and strategic priorities for 2020-2022 period to all our
stakeholders at meetings held first in London and then
in Istanbul. In this three-year period, we target 13% - 16%
revenue growth (CAGR), 39% - 42% EBITDA margin and
18% - 21% EBIT margin. We expect an operational capex
to sales ratio of 16% - 18%. Having communicated these
strong targets, we will continue our efforts to create value
for all stakeholders in the upcoming period.
STRENGTHENING CUSTOMER BOND WITH A
FOCUSED APPROACH
As Turkcell family, we carry out our activities keeping in
mind that customer appreciation of our products and
services is key to our achievements. In this respect, this
year we redesigned our sales organization with the
aim to further strengthen the bond with our customers.
Accordingly, we established an organizational structure
enabling us to focus more closely on customer needs,
and design more effective services and solutions in a
faster manner. Moreover, as part of the customer initiative
implemented across the whole organization, we put 90
actions swiftly into life which strengthened our bond with
customers even further. We continued our net promoter
score leadership in 2019 thanks to innovative services
and products, and strengthening customer focus. We
are particularly proud to be named as the best-loved
telecommunications operator (Lovemark) in Turkey this
year.
INNOVATIVE SERVICES AND SOLUTIONS ON STRONG
AND HIGH QUALITY INFRASTRUCTURE
Thanks to our wide frequency spectrum and investments,
we are among the few operators in the world to provide
the fastest 4.5G service to our customers with 1.2 Gbps
speed. Superbox, which enables us to provide fiber-speed
internet service to households over our mobile network, is
among our stand-out innovative products. As the first and
most widespread fixed wireless access product in Turkey,
Superbox continues to earn appreciation of customers
and expand its user base every day. This technology,
which is expected to become widespread worldwide
with the introduction of 5G networks, confirms our
infrastructure’s readiness for 5G. Meanwhile, we are also
one of the few operators in the world that can offer 10
Gbps speed over fiber infrastructure.
Given the importance of data in digital age, and with
the conviction that Turkey's data should remain in Turkey,
we carry out activities in this area and continue to
increase our data storage and processing capacity. On
a datacenter investment of approximately TRY 1 billion to
date, we are the largest datacenter operator in Turkey.
We opened Turkey’s biggest data center in Ankara in
2019 and increased the number of datacenters at world
standards to eight with a total of 33,500 m2 of white
space.
Thanks to our wide
frequency spectrum and
investments, we are among
the few operators in the
world to provide the fastest
4.5G service to our customers
with 1.2 Gbps speed.
TRY 25.1 billion
Turkcell Group
consolidated revenues
increased 18.1% year-on-
year, reaching
TRY 25.1 billion.
24
TURKCELL ANNUAL REPORT 2019 We carry out our activities
keeping in mind that customer
appreciation of our products
and services is key to our
achievements.
MURAT ERKAN
Chief Executive Officer
TURKCELL GROUP MESSAGE FROM THE CEO
On the back of advanced analytical capabilities and
technology investments, we interpret big data generated
from our operations using artificial intelligence and
business intelligence systems.
A key issue of the coming period is the transition to
5G. Given the speed and capacity increase it offers,
we believe that 5G technology, the infrastructure
of Industry 4.0, will lead to a rapid transformation
across all sectors, playing a vital role in our country’s
digital transformation. As Turkcell, we continue our
preparations for the transition to 5G without let up in
pace, realizing industry firsts. We cooperate with sector
representatives at various platforms in local and global
arena and share our experiences playing a leading role
in setting industry standards. Meanwhile, we conduct
tests with our suppliers preparing our network for
the transition. We achieved record high speed of 2.3
Gbps as part of the test implemented this year over
5G compatible commercial smartphones for the first
time. Moreover, we broadcasted 5G signal in pilot
base stations in Istanbul, Ankara and Izmir over existing
frequency bands.
We are aware that joint infrastructure will play a vital
role in the transition to 5G, ensuring the efficient use of
national resources to the benefit of all participants. We
continue our related efforts accordingly. In this respect,
with the infrastructure sharing agreements signed
with Turksat and Vodafone Turkey, we share our fiber
infrastructure and offer fixed internet services to more
households. As Turkcell, we also participate in initiatives
to develop local 5G technologies. Most recently, we
started to use domestically produced 4.5G compatible
antennas, developed by ASELSAN, on our network.
CUSTOMIZED OFFERS TOUCHING LIFE ENABLED BY
ANALYTICAL CAPABILITIES
As Turkcell, we interact with 36 million customers
every day. On the back of advanced analytical
capabilities and technology investments, we
interpret big data generated from our operations
using artificial intelligence and business intelligence
systems. This enables us to provide customized offers
to our customers. We conduct more than 70 million
interactions with our customers every month and offer
solutions to best meet their needs. We have one of
the largest R&D centers in Turkey with 1,263 engineers
employed, allowing us to improve our analytical
capabilities continuously. We develop numerous
solutions and services that meet needs of Turkcell and
our customers.
STRONG AND AGILE TURKCELL FAMILY DEVELOPING
SKILLS CONTINUOUSLY
We are a very large family with nearly 22 thousand
employees. We are committed to adapting ourselves to
the rapidly changing requirements of the digital age with
the aim to provide innovative and high-quality services
and solutions to our customers in the fastest manner and
introduce them with the latest technologies. Under the
leadership of our corporate university Turkcell Academy,
we organize trainings, the content of which is determined
in accordance with corporate needs. Our employees
across all levels of organization attend these trainings
prepared in cooperation with world’s leading universities
and develop their knowledge and skills continuously.
We have the most comprehensive young talent
recruitment program in Turkey. As part of this important
program, over which we receive thousands of
applications each year, we recruit young and successful
fresh university graduates. We strengthen Turkcell family
with new skills and competencies thanks to young talents’
innovative ideas, dynamism and high energy.
TELECOMMUNICATION SOLUTIONS CONNECTING
MILLIONS
The customer demand to our differentiated mobile
and fixed offerings under our core telecommunication
business continued with strengthening momentum in 2019.
Renewing our customer approach and strengthening our
focus, we registered net postpaid subscriber additions
of 1.5 million this year, the highest print of the past 10
years. On the fixed front, our fiber subscriber base grew
by 99 thousand net additions and reached 1.5 million.
Meanwhile, subscribers using our IPTV service reached
720 thousand. Superbox, appreciated by our customers
for its fiber like speed in regions not covered by fiber
infrastructure, reached 323 thousand subscribers on
strong demand.
The demand for mobile data continued to rise in 2019
with increasing number and consumption of 4.5G users.
Average monthly mobile data usage per user, increased
53% year-on-year to 9.0 GB in the fourth quarter of the
year while average mobile data usage of 4.5G users
reached 11.5 GB in December.
We registered mobile ARPU (Excluding M2M) growth
of 17.7% year-on-year driven mainly by increased data
consumption, upsell efforts and expanding postpaid
subscriber base. Fiber residential ARPU posted all time
high growth of 17.5% mainly on offers renewed at the
start of the year, upsell efforts and increasing number of
IPTV users.
We have the most
comprehensive young
talent recruitment program
in Turkey. As part of this
important program, over
which we receive thousands
of applications each year, we
recruit young and successful
fresh university graduates.
26
TURKCELL ANNUAL REPORT 2019 We have conducted around
1,000 projects in which
we analyzed the digital
transformation needs of
our customers operating in
various sectors, offering the
right solution and service.
As Turkcell family, we attach
great importance to social
responsibility projects for our
country and citizens. In this
respect, we are committed to
adding value to the lives of
our citizens and customers by
using power of technology
in social responsibility
activities.
DIGITAL SERVICES ADDING VALUE TO LIFE
Turkcell continued to offer solutions to meet all digital
needs of its customers through digital services, one
of the key components of our strategic plan. These
services have a positive impact on ARPU levels as well
as retention of customers.
BiP, fizy, TV+, Dergilik and lifebox were the most
preferred Turkcell applications this year. We have
recently added an “emergency button" to our locally-
developed communication and life platform BiP, which
registers average daily traffic of 274 million messages.
This function offers the ability to automatically send
location and a message to predetermined contacts
in an emergency situation. We began to offer AI-
enabled personalized content on our Dergilik, fizy and
TV+ platforms, while also entering into advertising
collaborations. Stand-alone digital service revenues
that we aim to increase 2.5 times over the next 3 years
scaled TRY 1 billion in 2019.
We continue to lead Turkey’s digital transformation
on the back of domestic and national digital services
developed by our engineers and software developers.
We share our digital model and experience in this area
with other operators in various countries, contributing to
their own digital transformation.
SUPPORT TO CORPORATE CUSTOMERS’
DIGITAL TRANSFORMATION WITH END-TO-END
SOLUTIONS
We support private sector companies and public
institutions during their digital transformation journey
with our digital business solutions, another strategic
focus area. Offering various solutions, we enable our
customers to differentiate from competition while
we contribute to digital economy of Turkey. We offer
numerous services in various fields including cloud
technologies, data center services, cyber security,
information technologies and Internet of Things (IoT).
We aim to lead the market in 3 years leveraging our
extensive sales network, strong partner ecosystem and
superior infrastructure.
We have conducted around 1,000 projects in which
we analyzed the digital transformation needs of our
customers operating in various sectors, offering the
right solution and service. In 2019, we inaugurated the
fifth city hospital where we established integrated
information system infrastructure. The medical
equipment and software systems at Bursa City Hospital
communicate with each other over networks and
sensors as part of the IT infrastructure established by
Turkcell. The digital infrastructure that we established
for the healthcare industry continues to be recognized
at international platforms. In 2019, we were awarded
HIMSS 6 accreditation for Adana City Hospital and
HIMSS 7 for Yozgat City Hospital at the HIMMS
(Healthcare Information and Management Systems
Society) Eurasia 2019 Health IT Conference and
Exhibition, which made the whole Turkcell family feel
particularly proud.
DIFFERENTIATING SOLUTIONS AT TECHFIN
In 2019, we continued to improve our competencies in
techfin area, where technology and financial services
are integrated. Paycell possesses great growth
potential in mobile payment area thanks to its wide
services and solutions portfolio in different verticals,
access to Turkcell's extensive sales network, strong
customer base and technology expertise. Paycell
makes life easier for our customers by offering direct
carrier billing, money transfer, payment services and
wallet, plus cash top-up for the Turkcell prepaid line
and the public transportation card IstanbulKart as
well as Paycell card. We also provide merchants QR
based payment alternative and mobile POS solutions.
As at the end of 2019, Paycell has approximately 4.5
million 3-month active users, with Paycell accepted
as a means of payment at 7 thousand points. In the
upcoming period, we will focus on expanding user base
and merchants rapidly to become the leading mobile
payment platform in Turkey.
Financell, our consumer finance business that facilitates
our customers’ access to technology products
extended TRY 14.5 billion of consumer loans to 5.1 million
customers to date. Furthermore, this year we started to
offer financing for corporates through Financell for their
smart device and other technology needs, advancing
their digital transformation.
POWER OF TECHNOLOGY ENABLING EQUAL
OPPORTUNITIES
We continued social responsibility efforts leveraging
the power of technology with the aim to enable equal
opportunities in accessing information.
We introduced 30 thousand students with future
technologies via the Whiz Kids initiative. We have
reached out to 50 thousand students having launched
the mobile application of Whiz Kids in 2019. We protect
children from virtual risks through Digital Intelligence
application and make lives of children and their families
easier by raising their awareness of the digital world.
We also continued Women Developers of the Future
project in cooperation with Turkish Union of Chambers
and Exchange Commodities (TOBB) and TOBB Women
Entrepreneurs Board this year.
As part of the People without Boundaries initiative, we
carried out numerous activities to enable inclusion of
disabled people in social life and make their lives easier.
The Gem in Me project was designed to support the
education of children with autism. This project enables
personal development of autistic children in special
classrooms and over free digital application, and brings
ease and comfort to the lives of their families. We
ensured hearing impaired customers to receive service
from call center employees who are capable in sign
language thanks to the integration implemented in My
Sign Language application in 2019.
As Turkcell family, we attach great importance to social
responsibility projects for our country and citizens. In
this respect, we are committed to adding value to the
lives of our citizens and customers by using power of
technology in social responsibility activities.
OUR INNOVATIVE SERVICES AND SOLUTIONS TO
CONTINUE TO BRING VALUE…
The year of 2019 was one with numerous achievements
in many areas, as we continued to bring value to our
customers' lives through innovation and quality services.
We thank all our colleagues for the part they have
played in our success, along with our Board of Directors
for their unyielding trust and support. We also express
our gratitude to our customers and business partners,
who have remained with us throughout our success
story.
Yours sincerely,
MURAT ERKAN
Chief Executive Officer
27
TURKCELL GROUPTURKCELL ANNUAL REPORT 2019 EXECUTIVE OFFICERS
7
10
5
4
1
KADRİ ÖZDAL (4)
Executive Vice President - Consumer Sales
Kadri Özdal was appointed as the Executive Vice President of
Consumer Sales on September 26, 2019. He started his professional
career at Vodafone in 1999 and worked in sales, marketing and
commercial operations departments. He then joined Turk Telekom
and held positions in sales development, channel optimization and
management functions. He served as sales development director and
then as CSO from 2011 to 2012. Between 2012 and 2016, Kadri Özdal
took part in foundation and management of n11.com which is one
of the largest e-commerce platforms in Turkey and held CSO role. In
February 2016, he joined Turkcell as Alternative Sales Channels Director
and managed non-exclusive and digital sales channels, finally having
served as Retail Channels Sales Director. Kadri Özdal graduated
from Dokuz Eylül University, Faculty of Economics and Administrative
Sciences, Department of Public Administration.
CEYHUN ÖZATA (5)
Executive Vice President - Corporate and Residential Sales
Ceyhun Özata was appointed as the Executive Vice President of
Corporate and Residential Sales on September 26, 2019. He started
his professional career at Reuters and worked as a Customer Advisor
from 1995 to 1996. He held Assistant Manager of Customer Operations
role at Superonline from 1996 to 1999. He served as a CRM and Product
Management Manager at IXIR AŞ from 1999 to 2001. Starting from
2002, Özata held Project Manager, Online Sales Manager, CRM &
Direct Sales Director, and Marketing Director positions at Turkcell
Superonline. From 2008 to 2015, he served as the Vice President
of Retail Sales at Turkcell Superonline which accelerated fiber
infrastructure investments. Lastly, he served as the Sales Director of
Turkcell Residential and Small Medium Business Management starting
from 2015 until his most recent assignment. Ceyhun Özata graduated
from Boğaziçi University, Department of Electronics.
MURAT ERKAN (1)
Chief Executive Officer
Murat Erkan was appointed as Turkcell Chief Executive Officer on
March 15, 2019. Mr. Erkan, who started his career at Toshiba, worked
as an Application Engineer at Biltam Mühendislik and then served as
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. Mr. Erkan served as the
Business Unit Manager at Aneltech working on solutions related to
telecommunications, mobile, ICT, the defense industry and industrial
products sectors starting from 2006. Murat Erkan joined Turkcell Group
in June 2008 as the General Manager of Turkcell Superonline, and he
assumed the role of Executive Vice President of Sales from December
2015 to March 2019. Murat Erkan graduated from Yıldız Technical
University Electronics and Telecommunication Engineering Department.
He completed the Strategic Marketing Program at Harvard Business
School in 2010.
OSMAN YILMAZ (2)
Executive Vice President - Finance (CFO)
Osman Yılmaz was appointed as Turkcell Chief Financial Officer on
August 1, 2018. Mr. Yılmaz started his professional career at Türkiye İş
Bankası Treasury Department in 2006. In 2007, he worked at BNP/TEB
Treasury Department. From 2008 to 2016, he served as Senior Fund
Manager in Structured Products and Group Head of Fixed Income and
Multi Asset Funds at HSBC Global Asset Management. In August 2016,
he joined Turkcell family as Director of Treasury, Risk and Collection
Management. Mr. Yılmaz holds a dual BSc degree in Economics and
Management from London School of Economics and Istanbul Bilgi
University, MSc in Financial Engineering from Boğaziçi University and a
PhD in Finance from Özyeğin University.
SERHAT DEMİR (3)
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 Turkey office. From 2003 to 2007 he
worked at Yıldız Holding Legal Department and in 2007 he served as
the Legal Counsel at Çalık Holding A.Ş. Between 2009 and 2015,
Mr. Demir undertook Çalık Holding Legal Affairs Director role and in the
meantime he also served as member of Board of Directors at holding
level and at group companies that operated in telecom and finance
fields. Serhat Demir graduated from the Faculty of Law at Istanbul
University.
28
TURKCELL ANNUAL REPORT 2019 2
9
3
8
6
ÖMER BARBAROS YİŞ (6)
Executive Vice President - Marketing
Ömer Barbaros Yiş was appointed as the Executive Vice President of
Marketing on September 26, 2019. Having started his career in 2006 as
Corporate and Consumer Pricing Specialist at Turkcell, he held various
Senior Product Manager roles in the marketing department. From 2010
to 2013, he continued his career as the Global Telecom Industry Director
in Peppers & Rogers Group. In 2013 he joined Turk Telekom, where
he served as the Existing Customer Management Director, Premium
Segment Customer Management Director and then Fixed Products
Revenue Management Director. In 2017, Ömer Barbaros Yiş joined Turkcell
as Strategic and Focused Marketing Director and then he assumed
Consumer Marketing Director role. Ömer Barbaros Yiş graduated from
Koç University with a double major in Business Administration and
Economics and received his Master’s Degree and PhD in Economics from
Universitat Autonoma De Barcelona. He is fluent in English and Spanish.
ATAÇ TANSUĞ (7)
Executive Vice President - Digital Services and Solutions
Ataç Tansuğ was appointed as the Executive Vice President of Digital
Services and Solutions on September 26, 2019. Mr. Tansuğ started his
professional career as System Support Engineer at Datapro in 1999.
Between 2002 and 2009, he served as International NGN/IMS Service
Support Engineer, Team Leader and Team Manager in Alcatel-Lucent.
From 2009 to 2011, he held Product Service Director role responsible
for Turkey and Azerbaijan and Global Customer Service Director role
in his last two years in the company. He joined Turkcell Group as the
Chief Technology Officer of Turkcell Superonline in 2013. Later he
was appointed as Transmission & Core Network Planning Director at
Turkcell in 2016. Lastly, he held Digital Services & Solutions Technology
Director position in Turkcell. He graduated from the Department of Civil
Engineering at Boğaziçi University.
SERKAN ÖZTÜRK (8)
Executive Vice President - Information and Communication Technologies
Serkan Öztürk was appointed as the Executive Vice President of
Information and Communication Technologies in September 2015.
Between 2017 and 2019, he also served as the Executive Vice President of
Customer Experience in addition to his existing role. Serkan Öztürk joined
Turkcell in 2000 as a Project Supervisor. 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. From 2011 to 2015 he served as Turkcell Customer Relations
Management and Business Intelligence Solutions (CRM & BIS) Director.
Serkan Öztürk graduated from Middle East Technical University Electrical
and Electronics Engineering department. He received his MBA degree
from Istanbul University.
GEDİZ SEZGİN (9)
Executive Vice President - Network Technologies
Gediz Sezgin joined Turkcell as a Network Engineer in 1995. In
October 2015, he was appointed as the Executive Vice President of
Network Technologies. Previously, he served as Senior Vice President
of Information and Communication Technologies, Chief Information
and Communication Technologies Officer, Director of Application
Operations, Director of Service Network under the ICT Function and
held various executive positions in the Technology Function. Mr. Sezgin
started his career at Alcatel Teletaş in 1991. He graduated from Istanbul
Technical University Electronics and Communication Engineering
Department and received his Master’s Degree and PhD from the same
university.
ALİ TÜRK (10)
Executive Vice President - Supply Chain Management
Ali Türk joined Turkcell as the Senior Vice President of Supply Chain
Management in May 2016. He was appointed as the Executive Vice
President of Supply Chain Management in March 2017. Mr. Türk started
his career at Başak Hayat Sigorta in 1999. From 2002 to 2007, he
held various managerial positions responsible for logistics planning,
warehouse and supply chain management processes at Ülker
Group companies. From 2007 to 2011, he worked at Ceva Lojistik as
Warehouse and Value Added Operations Group Manager. Mr. Türk
joined Turkish Airlines in 2011 as Cargo Operations Vice President.
He was appointed as Turkish Airlines Cargo Operations President in
2012. Ali Türk graduated from Istanbul Technical University Industrial
Engineering Department and completed Executive MBA program of
Istanbul Technical University.
*Seyfettin Sağlam, who has been serving as the Executive Vice President of Human
Resources of our Company, has decided to resign from his position, effective as of
July 24, 2019.
29
TURKCELL GROUPTURKCELL ANNUAL REPORT 2019 TOP MANAGEMENT OF SUBSIDIARIES
3
2
4
1
ÇAĞATAY AYNUR (4)
General Manager of Turkcell Global Bilgi
Çağatay Aynur joined Turkcell Group in 2000. On July 1, 2015, he was
appointed as the General Manager of Turkcell Global Bilgi. Prior to this role,
he 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 at Turkcell. Mr. Aynur graduated
from Department of Metallurgical Engineering at Middle East Technical
University in 1993.
ADEM DUMAN (5)
General Manager of Turkcell Finansman
Adem Duman was appointed as the General Manager of Turkcell
Finansman A.Ş. as of September, 2018. He is also the deputy chairman of the
Association of Financial Institutions and board member of the Federation of
European Finance Corporation Association (Eurofinance). Duman started his
banking career as a management trainee at Interbank in 1996. From 2000
to 2005, he worked as the Head of Corporate Banking at BNP AK Dresdner
Bank. From 2005 to 2014, Duman served as the Manager and Director of
the Foreign Capital Firms Desk, Structured Finance and BNP Paribas Synergy
Director and then as the Large Corporate Customers Director at Turkish
Economy Bank. In 2015, he joined Vakıf Emeklilik A.Ş. and served as Deputy
General Manager in charge of Finance, Marketing and Human Resources
Transformation Project and in addition to his role, he was also responsible
for the Actuarial, Risk Management, Law and Internal Control functions for
one year period. Adem Duman graduated from Boğaziçi University Political
Science and International Relations department and received his Executive
MBA degree from the same university.
MURAT ERKAN (1)
Chief Executive Officer
Please see page 28 for detailed CV.
İSMET YAZICI (2)
General Manager of lifecell Ukraine
İsmet Yazıcı joined Turkcell in 2009. Mr. Yazıcı has been serving as the
General Manager of lifecell, Turkcell’s subsidiary in Ukraine since May 2017.
Prior to this position, Yazıcı worked as the Deputy General Manager of Sales
and Business Development at Global Tower between 2009 and 2010 and
as the General Manager between 2010 and 2011 at Global Tower. From 2011
to 2015, he served as the General Manager at BeST, Turkcell’s subsidiary
in Belarus and as General Manager at Kuzey Kıbrıs Turkcell between 2015
and 2017. Beginning his professional career in 1993, Yazıcı served as the
Research & Development Engineer, International Sales Engineer, Romania
Country Manager, Product Marketing Manager, EMEA Region CDMA Business
Development Director, and Enterprise Leader, respectively, at the Turkey and
USA offices of Nortel until 2009. İsmet Yazıcı received his bachelor’s degree
in Electrical-Electronics Engineering from Hacettepe University in 1992, and
his postgraduate degree in Political Science from Marmara University in 1998
and in International Marketing and Management from the University of Texas
in 2001. In 2011, he received his second undergraduate degree from Istanbul
University, Faculty of Law.
ERDAL YAYLA (3)
General Manager of BeST
BeST General Manager Erdal Yayla joined Turkcell İletişim Hizmetleri A.Ş.
as a Financial Controller & Reporting Specialist in 2003. He served as the
Manager of Financial Accounting, Controlling and Reporting Department
(2004-2010), Deputy General Manager of Finance (2010-2016) and Acting
General Manager (2014-2015), respectively at lifecell in Ukraine. He served
as the Deputy General Manager of Finance at BeST, Turkcell's subsidiary
in Belarus since March 2016, and he assumed the Acting General Manager
role since November 2018 until March 2020. Mr. Yayla started his career as
a Senior Auditor at PricewaterhouseCoopers in 1999, and then worked as a
Financial Controller at LafargeHolcim in 2002. Erdal Yayla graduated from
Marmara University Faculty of Economics and Administrative Sciences in
1999 and completed the Executive Development Program at Wharton School
in 2016.
30
TURKCELL ANNUAL REPORT 2019 5
6
7
8
9
ERKİN KILINÇ (8)
General Manager of Turkcell Energy Solutions
Erkin Kılınç joined Turkcell Energy Solutions as the General Manager in
2017. Kılınç began his career at Ode Insulation as Sales Specialist in 1998.
Subsequently, he served as Sales Specialist at Doğan Foreign Trade&Agency
Operations (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 Kılınç received his bachelor’s degree
in Mechanical Engineering from Istanbul Technical University in 1998, and
Executive MBA degree from Işık University in 2003.
KAAN TURAN (9)
General Manager of Turkcell Digital Business Services
Kaan Turan joined Turkcell Group in 2013. He serves as the General Manager
of Turkcell Digital Business Services since March 1, 2020. Prior to that role he
worked as System Integration and IT Services Manager, Digital Integration &
IT Solutions Director, Strategic Partnership & Business Development Director
and finally acting General Manager of Turkcell Digital Business Services
in Turkcell. Before joining Turkcell he worked as Managed Services and
Solutions Management Executive in ATOS Turkey, as Global Large Deals
Solution Director in Siemens AG Germany, as Service Factory Operations
Manager, as Knowledge Manager and as IT Architect Consultant in Siemens
Turkey, respectively. Kaan Turan graduated from Middle East Technical
University, Department of Electrical – Electronics Engineering in 2000.
MELİKE KARA (6)
General Manager of Turkcell Payment and Electronic Money Services
Melike Kara, worked as a manager in Turkcell Mobile Financial Services
Department from 2011 to 2015. In February 2015, Ms. Kara was appointed as
Turkcell Ödeme ve Elektronik Para Hizmetleri A.Ş. General Manager. Kara
graduated from the 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 held
various positions in the field of marketing and business development within
Garanti Bank Payment Services business line.
HARUN MADEN (7)
General Manager of Kuzey Kıbrıs Turkcell
Harun Maden was appointed as the General Manager of Kuzey Kıbrıs
Turkcell as of April 2017. Between 1986 and 1989, he started working as an
Industrial Control and Automation Engineer at Kerimoğlu Makinacılık ve
Ticaret. He worked for Datateknik between 1989 and 2002, as a Technical
Manager (1989-1991), Product Development Manager (1991-1993), Sales and
Marketing Coordinator (1993-1996) and Deputy General Manager
(1996-2002), respectively. Between 2002 and 2006, he served as a Member
of the Board of Directors and as the General Manager at Hızlı Sistem Bilişim
and also as a Member of the Board of Directors at Hızlı Sistem Mağazacılık.
In addition, Mr. Maden served as a Management Consultant at Türk Telekom
between 2003 and 2004. He worked as the General Manager of Teletek
Telekomünikasyon and Global İletişim between 2007 and 2009. Between
2010 and 2015, he held several executive roles at affiliated companies of
IBB. Mr. Maden worked as the acting General Manager of IBB Kültür in 2011,
Founder and Chairman of the Board of IBB İstelkom between 2012 and
2015 and as a Member of the Board of Directors and General Manager
of İBB Belbim between 2010 and 2015. Mr. Maden worked as the General
Manager, as the Chairman of the 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 graduated from
Istanbul Technical University Faculty of Electrics, Department of Electronic
Communication in 1982.
31
TURKCELL GROUPTURKCELL ANNUAL REPORT 2019 TURKCELL GROUP
Turkcell Group companies operate in 5 countries
including Turkey, Ukraine, Belarus, TRNC and
Germany.
GERMANY
BELARUS
lifecell Europe
Mobile Customers 0.2 million
BeST
Mobile Customers 1.5 million
Revenues TRY 365 million
UKRAINE
lifecell
Mobile Customers 8.9 million
Revenues TRY 1,316 million
TURKEY
TURKCELL TURKEY
Mobile Customers 32.7 million
Fixed Customers 2.3 million
IPTV Customers 720 thousand
Revenues TRY 21.5 billion
TRNC
Kuzey Kıbrıs Turkcell
Mobile Customers 0.5 million
Revenues TRY 222 million
On December 12, 2018, Turkcell signed a binding agreement and on April 2, 2019 completed the transfer of its shares in Fintur to Sonera Holding B.V., the majority shareholder of Fintur.
32
TURKCELL ANNUAL REPORT 2019 OUR VISION, MISSION AND TARGET
OUR VISION
Superior digital services for
a better future
OUR MISSION
To add value to the digitalization
journey of our customers both in Turkey
and across the globe and enrich their
lives with our continuously improving
competencies and robust ecosystem
OUR TARGET
Sustainable growth at digital services
To become the digital transformation
leader of Turkey and No. 1 IT service
provider within three years
Leadership at new generation
techfin services
33
TURKCELL GROUPTURKCELL ANNUAL REPORT 2019 2019 AT A GLANCE
2019 was a year where Turkcell registered strong
financial and operational results thanks to actions
in strategic focus areas and effective balance sheet
management.
STRONG
REVENUES,
EBITDA, EBIT AND
NET INCOME
PERFORMANCE
Our revenues grew 18.1% to TRY 25.1 billion, with
an EBITDA margin of 41.5% and an EBIT margin of
21.4%. Record high net income of TRY 3.2 billion
was registered on 60.6% growth.
We managed our balance sheet in
accordance with our neutral-long FX position
target and finished 2019 with an USD 115
million long FX position. We improved
leverage with a focus on robust balance sheet
focus and strong cash generation capability.
LOW LEVERAGE
AND LONG FX
POSITION
STRONG
MOBILE POSTPAID
SUBSCRIBER NET
ADDITIONS
We registered mobile postpaid subscriber
net additions of 1.5 million in 2019, the
highest print of the past decade. This
was achieved on the back of increasing
customer focus, innovative services and
solutions.
34
TURKCELL ANNUAL REPORT 2019 Our mobile ARPU* grew 17.7% to TRY 42.6
while our residential fiber ARPU reached
TRY 67.0 on a record 17.5% growth.
SOLID ARPU
PERFORMANCE
5G
READY
Our innovative Superbox product continued
to earn customer appreciation and expand
its user base each day. In the meantime,
Superbox demonstrated Turkcell’s strong
mobile infrastructure's readiness for 5G.
We pursued our leadership in net
promoter score by far providing services
and solutions that add value to the lives
of our customers in 2019.
CUSTOMER
EXPERIENCE
INCREASING
DATA
CONSUMPTION
Average monthly data consumption of
Turkcell 4.5G users exceeded 10 GB.
*Excluding M2M
35
TURKCELL GROUPTURKCELL ANNUAL REPORT 2019 2019 HIGHLIGHTS
Turkcell Group continued its strong growth momentum
registering revenues of TRY 25.1 billion on 18.1% growth.
Group EBITDA and EBIT rose 18.6% and 19.6%, respectively.
Turkcell registered record high net income of TRY 3.2 billion
on 60.6% growth in 2019.
FINANCIAL HIGHLIGHTS
Turkcell Group Revenues
(TRY million)
Turkcell Group EBITDA(1)
(TRY million)
Turkcell Group EBIT(2)
(TRY million)
Turkcell Group Net Income
(TRY million)
7
3
1
,
5
2
2
9
2
,
1
2
6
2
4
0
1
,
8
8
7
,
8
0
8
3
,
5
0
0
5
4
,
18.1%
GROWTH
8
1
0
2
9
1
0
2
18.6%
GROWTH
8
1
0
2
9
1
0
2
19.6%
GROWTH
8
1
0
2
9
1
0
2
60.6%
GROWTH
Turkcell Group Financial Indicators
Turkcell Turkey (TRY million)
Revenues
EBITDA
EBITDA Margin
Turkcell International (TRY million)
Revenues
EBITDA
EBITDA Margin
Turkcell Other Subsidiaries(3) (TRY million)
Revenues
EBITDA
EBITDA Margin
2018
18,093
7,404
40.9%
1,457
613
42.1%
1,743
771
44.3%
2019
21,487
8,789
40.9%
2,003
904
45.1%
1,647
733
44.5%
6
4
2
,
3
9
1
0
2
1
2
0
2
,
8
1
0
2
Change
18.8%
18.7%
-
37.5%
47.5%
3.0pp
(5.5%)
(5.0%)
0.2pp
(1) EBITDA is a non-GAAP financial measure.
(2) EBIT is a non-GAAP financial measure and is equal to EBITDA minus depreciation and amortization expenses.
(3) “Other subsidiaries” which is mainly comprised of our information and entertainment services, call center business revenues, financial services revenues, energy business revenues and
inter-business eliminations.
In the tables totals may not foot due to rounding differences. The same applies to the percentage comparisons.
36
TURKCELL ANNUAL REPORT 2019 In 2019, Turkcell's total number of customers was
46.7 million, with 35.7 million in Turkey.
OPERATIONAL INDICATORS
Mobil ARPU(1) (TRY)
Residential Fiber ARPU (TRY)
6
.
2
4
9
1
0
2
2
.
6
3
8
1
0
2
17.7%
GROWTH
.
0
7
6
.
0
7
5
17.5%
GROWTH
8
1
0
2
9
1
0
2
On the mobile front, our postpaid subscribers
expanded by 1.5 million net annual additions in 2019,
the highest print of the past 10 years. Our mobile
postpaid subscribers was at 20.4 million as at the
year end 2019. Our fiber subscribers reached 1.5
million on 99 thousand annual net additions. IPTV
subscribers was at 720 thousand on 106 thousand
annual net additions.
Turkcell Turkey Operational Indicators
Number of Subscribers (million)
Mobile Postpaid (million)
Mobile Prepaid (million)
Fiber (thousand)
ADSL (thousand)
Superbox (thosand) (2)
Cable (thousand)
IPTV subscribers (thousand)
(1) Excluding M2M.
(2) Superbox subscribers are included in mobile subscribers.
2018
36.7
18.8
14.9
1,385.6
905.6
33.5
-
613.4
2019
35.7
20.4
12.4
1,484.7
719.1
323.2
49.2
719.7
Change
(2.7%)
8.5%
(16.8%)
7.2%
(20.6%)
864.8%
n.a
17.3%
37
TURKCELL GROUPTURKCELL ANNUAL REPORT 2019 DIGITAL SERVICES SPREADING WORLDWIDE
Our digital services, techfin solutions and digital business
services, enriching our customers’ lives, attracted great
attention on international platforms.
Our digital services, techfin solutions and digital
business services, enriching our customers’
lives, attracted great attention on international
platforms.
TURKCELL’S DIGITAL SERVICES
SHOWCASED AT MOBILE WORLD
CONGRESS.
Tens of Turkcell’s digital services including BiP,
fizy, TV+, Digital Operator, Dergilik, lifebox, Yaani,
UpCall, GollerCepte, Akademi and Kopilot were
presented to international audience at Mobile
World Congress held in Barcelona, Spain. The
details of Turkcell’s success story, achieved after
the digital export move announced at previous
year’s event, was also shared with the audience.
Turkcell, bringing a breath of fresh air into the
telecom industry by successfully leveraging OTT
and telecom capabilities, announced that its digital
services were to be used in 37 countries through
its subsidiary lifecell Ventures. After Turkey, Belarus,
Ukraine, TRNC, Moldova and Germany, Turkcell’s
digital services are to be used in Albania through
ALBtelecom, Caribbean through Digicel.
At the Global Mobile (GLOMO) Awards held
in Barcelona, Turkcell received the Industry
Leadership Award in the “Technology for
Women” category. Turkcell was the only
telecommunications company representing Turkey
in the finals at the GLOMO Awards. Moreover,
GSMA (World Mobile Operators Association)
presented Turkcell with the Pioneering Award for
its efforts in the security field of Internet of Things
(IoT).
MURAT ERKAN ON GSMA’S BOARD OF
DIRECTORS
Our Chief Executive Officer Murat Erkan has
become one of the 25 members of the GSMA’s
Board of Directors. GSMA, having more than 800
members, leads the global mobile communications
industry. Domestic and international experience
of Turkcell, which is on GSMA’s Board for the
third time, will continue to be shared on global
platforms by our Chief Executive Officer. Moreover,
Turkcell plans to contribute to GSMA sponsored
research studies on developing new generation
communication technologies, supporting the digital
economy with mobile platforms and using mobile
communications for social benefit.
TURKCELL LED DISCUSSIONS ON THE
DIGITAL ECONOMY AND 5G IN LONDON.
Our Chief Executive Officer Murat Erkan visited
GSMA’s London headquarters, the center of the
world’s mobile communications sector, and told
worldwide employees of the organization about
Turkey and Turkcell. During his speech to employees,
Murat Erkan explained steps taken by Turkcell towards
development of Turkey’s digital economy. Mr. Erkan
also met GSMA senior management and exchanged
ideas on actions to be taken in 5G field, which will
shape the future of the industry. Prior to his GSMA
visit, Mr. Erkan met with journalists in London and
talked about the current issues facing the industry and
Turkcell’s strategic objectives.
TURKCELL POSTED THE WORLD RECORD FOR
5G SPEED.
Turkcell conducted a speed test on its 5G pilot
network with 5G compatible mobile phones that
came to market abroad. During the speed test
performed using a commercial 5G mobile phone
on Turkcell 5G infrastructure, established at Turkcell
Tepebaşı Plaza in Istanbul, we set a new world record
by reaching a speed above 2 Gbps.
Over the spectrum allocated by Information and
Communication Technologies Authority (ICTA) for the
purpose of this test, Turkcell reached 2.3 Gbps speed
on 3.5 GHz band through a 5G compatible commercial
mobile phone at Istanbul Tepebaşı Plaza. With this
result, Turkcell reached the highest speed in the world
to that date over a commercial phone using 100 MHz
bandwidth on 3.5 GHz frequency spectrum. While
real 5G was experienced over commercial mobile
phones, another milestone was reached as part of 5G
research and development studies in Turkey.
Tens of Turkcell’s digital
services including BiP,
fizy, TV+, Digital Operator,
Dergilik, lifebox, Yaani,
UpCall, GollerCepte, Akademi
and Kopilot were presented
to international audience at
Mobile World Congress held
in Barcelona, Spain.
38
TURKCELL ANNUAL REPORT 2019 At the Global Refugee Forum
organized by the United
Nations Refugee Agency in
Geneva, where Turkcell Chief
Executive Officer Murat
Erkan participated, Turkcell
was presented as a global
model with its innovative
social responsibility projects.
TURKCELL: ONE OF GSMA’S ARTIFICIAL
INTELLIGENCE RESEARCH LEADERS
Turkcell, pioneer of technology, has become one
of the project leaders in the Global Artificial
Intelligence (AI) Study, which will be executed in
collaboration with GSMA and The Alan Turing
Institute. Under this advanced technology research
and development effort, which will contribute
significantly to the development of artificial
intelligence globally, Turkcell has been working
on an AI algorithm that enables uninterrupted
communication by detecting factors that create
signal disturbance instantly.
MOBILE CONNECTION PANEL, UNITED
NATIONS REFUGEE AGENCY - HELLO
HOPE
At the Global Refugee Forum organized by the
United Nations Refugee Agency in Geneva, where
Turkcell Chief Executive Officer Murat Erkan
participated, Turkcell was presented as a global
model with its innovative social responsibility
projects. At the Mobile Connection Panel held as part
of the event, Turkcell’s Chief Marketing Officer, Ömer
Barbaros Yiş presented the “Hello Hope” application
and services provided to refugees by Turkcell.
TURKCELL JOINS LEADING INITIATIVE OF
THE UNITED NATIONS FOR SUSTAINABLE
DEVELOPMENT.
Turkcell’s vision of taking every step with
sustainability consciousness continues to find
response on a global scale. Turkcell has become
one of the founding members of the CFO Taskforce
initiative established by the United Nations Global
Compact, the largest global corporate sustainability
effort. This worldwide initiative, also participated by
Turkcell’s Chief Financial Officer Osman Yılmaz, aims
to lay out a roadmap and formulate sustainable
corporate finance principles for the long-term.
BUSINESS CALL TO ACTION, UNDP -
WOMEN DEVELOPERS OF THE FUTURE
Digital operator Turkcell joined the Business Call
to Action (BCtA) network in the United Nations
Development Program. This effort aims to accelerate
the activities of companies towards achieving
sustainable development goals. Within the “Women
Developers of the Future” initiative, Turkcell provided
technology training to approximately 4 thousand
women in Turkey. Turkcell is training 200 of the
participants to become testing experts by 2021.
TURKCELL BROUGHT TOGETHER
INTERNATIONAL REPRESENTATIVES OF
THE TELECOM INDUSTRY.
The International Operator Customer Event, which
brings together the most important players of the
global telecommunications industry, was organized
this year for the first time in Istanbul and hosted by
Turkcell. More than 60 international companies from
Europe, Asia and the USA participated in the event,
which addressed the future of the industry and
discussed digitalization process of operators.
39
2019 OPERATIONSTURKCELL ANNUAL REPORT 2019
OUR SUPERIOR TECHNOLOGY
In August, we recorded 2.3 Gbps download speed on a
commercial smartphone, operating over 3.5 GHz spectrum,
using Turkcell 5G test networks. We set a new world record
in this field by reaching the highest speed to that date.
We started working on 5G use case scenarios
with vertical sectors, one of the most important
focal points of 5G. We conducted our first
demo in the healthcare sector in October as
part of remote-controlled mobile diagnosis
efforts. A doctor at the hospital was able to
manage the 5G-connected haptic gloves
remotely, and to perform ultrasound control
of a patient in the ambulance, and to monitor
the results on his screen live and with high
resolution. We also conducted another
demonstration at Trabzon Stadium with a
focus on the use of 5G at sporting events.
During the demonstration, we enabled to guide
movements of the athlete through virtual reality
glass using 5G technology and to experience
the actions from the eyes of the athlete.
We will continue our efforts to create diverse
5G use case scenarios with various vertical
sectors to meet the digitalization needs of
different industries in Turkey as well as to boost
sector-wide productivity.
TURKCELL CHANGED THE DYNAMICS
OF THE MOBILE MARKET WITH
SUPERBOX!
Superbox is a mobile broadband internet
service that we offer to households who do not
have access to fiber broadband or who are not
satisfied with the performance of ADSL service
provided via copper cable. We are already
using Fixed Wireless Access (FWA) technology
- one of the most important services of 5G
- to provide broadband internet services to
households via Turkcell’s robust 4.5G network.
Our Superbox service, which we launched in
2017, expanded its service portfolio to reach
out a wider user base in 2019. Superbox has
changed the dynamics of the mobile market
with its exceptional performance reaching
323 thousand customers as year-end up from
33 thousand at the beginning of the year.
WE CONTINUE TO ENHANCE OUR
TURKCELL SUPER NETWORK,
ESTABLISHED ON ADVANCED
TECHNOLOGIES, THROUGH OUR
RESEARCH ACTIVITIES ON 5G.
At Turkcell Technology Summit held in April,
we broadcasted 5G signal over our existing
spectrum and demonstrated that the Turkcell
network was 5G-ready. With this effort, we
became the first operator worldwide to
broadcast 5G over an FDD band. We made our
core network ready for end-to-end 5G NSA
architecture.
In August, we recorded 2.3 Gbps download
speed on a commercial smartphone, operating
over 3.5 GHz spectrum, using Turkcell 5G test
networks. We set a new world record in this
field by reaching the highest speed to that
date.
Our Superbox service,
which we launched in 2017,
expanded its service portfolio
to reach out a wider user
base in 2019. Superbox has
changed the dynamics of
the mobile market with its
exceptional performance
reaching 323 thousand
customers as of year-end
up from 33 thousand at the
beginning of the year.
40
TURKCELL ANNUAL REPORT 2019 DOMESTIC AND NATIONAL
TECHNOLOGIES ARE NOW IN
TURKCELL’S NETWORK…
In 2019, we reaped the benefits of our long-
lasting efforts on developing domestic
and national products requiring advanced
technology. We completed the Local 4.5G
Antenna Development project executed in
collaboration with ASELSAN and launched
it successfully in August. In this respect, we
became the first operator in Turkey using
domestic 4.5G antennas and started to provide
mobile communication services using domestic
antennas on our live network. Additionally, we
signed agreements with our business partners
to expand the domestic ecosystem and to
locally manufacture new generation antennas.
In 2019, Turkcell also took major steps forward
in its 4.5G Domestic Base Station development
project. We signed a landmark agreement
with ULAK Haberleşme A.Ş. at Mobile World
Congress in Barcelona, where the leaders of
the mobile telecommunication world meet, and
became the first and only operator in Turkey
to provide the largest support to the domestic
base stations.
With the agreement covering a period of four
years, domestic and national base stations are
targeted to be used at a total of 2,900 Turkcell
sites across Turkey. Thanks to intensive efforts
to develop and to expand the domestic base
station network, we completed the installation
of 250 domestic base stations during the year.
In 2019, we also continued to provide significant
support to the End-to-End Domestic and
National 5G Communication Network project
with our experts from various functions of
Turkcell. This project is co-executed by ULAK
Haberleşme A.Ş. and the Communication
Technologies Cluster (HTK) to develop domestic
and national products compatible with 5G
technology.
WORLD’S LARGEST AIRPORT
CONNECTS WITH TURKCELL.
As Turkcell, we established the 5G-ready
communication infrastructure with cutting-edge
technologies at Istanbul Airport, the largest
airport facility in the world under one roof.
With this project, three operators established
a digital indoor system with active sharing for
the first time in Turkey. Moreover, we enabled
an experience possessing Gbps speed at an
airport with an annual capacity of 90 million
passengers which became a role model to the
global industry.
41
We became the first
operator in Turkey using
domestic 4.5G antennas and
started to provide mobile
communication services
using domestic antennas on
our live network.
TURKCELL STRENGTHENS CORPORATE
CLIENTS WITH SOFTWARE-BASED SD-
WAN TECHNOLOGY FOR A DIGITALIZED
TURKEY.
The world’s first digital operator, Turkcell
combines the corporate cloud and software-
based networking services, which play a critical
role in digital transformation of corporations
with operator competencies. Corporate
customers are enabled to access all internet,
VPN and security services from a single device.
Thus, corporate clients do not have to allocate
additional resources to technology investments
that they need.
Advantages of SD-WAN:
• Opportunity to use high bandwidth with
line integration
• Multi-service management from a single
•
device
Real-time network monitoring with detailed
screening and reporting
• Cost and time savings
• Application-based traffic engineering
We have now completed the network
architecture to use this service, which is
currently offered to our corporate customers, at
our own TİM stores as well. We will commence
installations during 2020.
2019 OPERATIONSTURKCELL ANNUAL REPORT 2019 OUR SUPERIOR TECHNOLOGY
Twelve of our projects as part of our R&D activities
conducted with domestic and international partners have
received funding from R&D supporting organizations,
including European Commission’s Horizon 2020 Program,
Celtic Next and TÜBİTAK.
As part of 5G Valley
studies, we enriched
our collaborations with
universities by employing
graduate students from
Bilkent, Middle East Technical
and Hacettepe Universities
in order to raise human
resources for the industry.
R&D ACTIVITIES FOR 5G AND BEYOND
Pursuant to our vision of being a technology
producing/developing company rather than
being only a consuming one, Turkcell continues
its cooperation with certification institutions,
universities, public institutions, suppliers and
Small Medium Enterprises as well as its internal
R&D efforts.
Twelve of our projects as part of our R&D
activities conducted with domestic and
international partners have received funding
from R&D supporting organizations, including
European Commission’s Horizon 2020 Program,
Celtic Next and TÜBİTAK.
As part of 5G Valley studies, we enriched our
collaborations with universities by employing
graduate students from Bilkent, Middle East
Technical and Hacettepe Universities in order
to raise human resources for the industry.
Moreover, we provide support for the human
capital potential to be guided efficiently
by cooperating with local R&D teams of
enterprises in Turkey with global scale.
As studies on next generation vehicles globally
start to shift to autonomous and connected
vehicle technologies, Turkcell increased its focus
on activities in the cellular vehicle-to-everything
(C-V2X) which is a vehicle communication
technology supported by cellular connectivity
systems. Our 5G-MOBIX project is supported
under the collaborative, connected and
autonomous mobility category of the European
Union Horizon 2020 R&D program. Within
this effort, we put 5G supported vehicle
communication applications, which are to be
demonstrated at the Turkey-Greece border,
into practice with our business partners. We
also demonstrated an autonomous vehicle
at Turkcell Technology Summit with Ericsson
Turkey. During this demo, where cellular
communication technologies were used, visitors
experienced commuting via driverless public
transport.
42
TURKCELL ANNUAL REPORT 2019 We signed a cooperation
agreement with University of
Edinburgh, which is widely
known for its work related
to artificial intelligence, and
commenced R&D studies
on AI applications in the
network.
Turkcell is also conducting research studies on
open network formations. Last year, we became
a member of ONF (Open Network Foundation)
and TIP (Telecom Infra Project) and we also
closely monitor the research efforts of O-RAN
Alliance. We are in close contact with O-RAN
manufacturers and aim to test their solutions
within our network. In this respect, we also
participated in the R&D project related to open
networks together with Netsia and international
operators such as Telefonica and KDDI.
TURKCELL CONTRIBUTES TO
TECHNOLOGY STANDARDIZATION.
Turkcell takes an active role in determining the
standards that guide the technology roadmaps
in the industry. We regularly attend meetings
of pioneering organizations in standardization
studies such as GSMA, ITU-T, ETSI, 3GPP, NGMN,
5G-PPP, ONF and TIP, of which we are a
member.
We are closely monitoring 3GPP RAN2 (radio
layer) research studies especially as part of our
domestic 5G base station development projects.
Turkcell is diversifying and increasing its activities
in 3GPP by offering a study item related to smart
network scoring to the 3GPP SA5 (network
management) group. At ITU-T, we are part of
the Machine Learning in Networks and 2030
Network Technologies working groups. We also
contribute to 5G projects at NGMN Alliance, of
which we are a member.
SMARTER INFRASTRUCTURE WITH AI
While network complexity is expected
to increase significantly with 5G, flexible
network management will be possible with
the expansion of software-based network
components. For this reason, artificial
intelligence applications will become
increasingly widespread in automatic network
management and optimization. Machine
learning techniques that are currently in use
in many projects such as estimating traffic
density, capacity and electricity consumption,
and detecting abnormalities in the Turkcell
network also contribute to network efficiency.
Turkcell participated in the Global Artificial
Intelligence Challenge competition organized
by GSMA and The Alan Turing Institute for the
first time this year with the proposed project
titled “Detection and Localization of Signal
Disturbances in Networks.” Our proposal ranked
among the top four projects selected among
80 applications submitted by mobile operators
worldwide.
We also signed a cooperation agreement with
University of Edinburgh, which is widely known
for its work related to artificial intelligence, and
commenced R&D studies on AI applications in
the network.
43
2019 OPERATIONSTURKCELL ANNUAL REPORT 2019 OUR SUPERIOR TECHNOLOGY
We are advancing infrastructure monitoring methods
utilizing digital technologies in order to provide high
quality and 24/7 uninterrupted services to our customers.
WE WERE AWARDED THE WINNING
PRIZE AT GLOTEL AWARDS WITH OUR
CUSTOMER-FOCUSED MALFUNCTION
MANAGEMENT APPLICATION,
ESTABLISHED OVER AI.
We are advancing infrastructure monitoring
methods utilizing digital technologies in order
to provide high quality and 24/7 uninterrupted
services to our customers. We analyze millions
of metrics including alarms, performance
data, and customer complaints using artificial
intelligence technologies. Then, we establish
causal relationships and even diagnose problems
ahead of complaints. Moreover, developing
automation solutions, we minimize human effort
and boost efficiency. In 2019, we filed patent
applications for six of our research studies. With
our customer-focused malfunction management
application, we received the Winning Prize at
the 2019 Glotel Awards finals held in London in
November 2019. With the Base Station Service
Interruption Estimation project, developed by
Turkcell engineers, we forecast potential problems
in base stations that are vital to communication
services and prevent site interruptions using local
AI capabilities. This project advanced to the finals
at the 2019 Loyalty Awards competition.
CUSTOMER ORIENTED COMPLAINT
MANAGEMENT
Consumers
We improved the rate of network oriented
customer complaints by 20% year-on-year. By
enabling all customers to file complaints via the
Digital Operator application, we communicated
complaints directly to the operational teams
and shortened the solution timeframe. For
mobile interruptions that result in customer
complaints, we engaged the IVR Announcement
on District basis and provided quick feedback
to the customers. With our Digital Operator
vision, we developed the estimated failure time
announcement in case of interruptions in the fixed
network preventing uncertainty about downtime.
Corporates
We developed an automated system that detects
the services facing problems and performs the
first checks independent of the user. To respond to
complaints of corporate customers, we filed two
patent applications for the work related to our ways
of doing business digitally:
• We developed automation software that
•
ensures the quality and continuity of the service
by checking security definitions.
Turkcell triggered capacity increase process by
automatically detecting capacity overload in
customer connection lines.
CORPORATE SERVICE PROCESSES
We started to use simplified installation processes
and robotic process automation in corporate service
activations. Our first robot, which we named “SD-
BEE,” automatically performs the job assignment, IP
subscription research, job order controls and similar
processes. Turkcell’s developments in the automation
field continue with the focus on Zero Touch.
THE DIFFERENCE THAT WE CREATED IN
CUSTOMER EXPERIENCE WAS RECOGNIZED
WITH AN AWARD IN EUROPE.
Turkcell’s data optimization platform was
awarded the Best NFV/SDN Business Case with its
contribution to customer experience by utilizing the
benefits of virtualization in the best manner. Beating
highly competitive peers, Turkcell received the
award at the Network Virtualization & SDN Europe
event in Berlin.
This innovative solution enhances customer’s internet
experience, improving page response times up to
35%, data download speeds up to 27% and data
upload speeds up to 60% with TCP optimization.
The completely virtual platform is a differentiating
service in the industry as the largest virtual data
optimization solution running on open stack with
1.4 Tbps capacity. Having preserved the existing
infrastructure, the cost savings achieved from the
flexibility provided by virtualization were also cited
by jury members.
By enabling all customers to
file complaints via the Digital
Operator application, we
communicated complaints
directly to the operational
teams and shortened the
solution timeframe.
44
TURKCELL ANNUAL REPORT 2019 As data has gained
importance both within the
industry and the organization
in recent years, Turkcell
integrated enriched network
data into its data analytics
platform as part of the Deep
Network Intelligence project
which aims to bring Turkcell
to an advantageous position
in competition in this field.
VIRTUALIZATION JOURNEY
CONTINUES.
Turkcell continued its Telco Cloud investments
and virtualization efforts in 2019. The number of
our virtualized network services has reached 24
with the installation of more than one thousand
servers. One-hundred percent virtualization was
achieved in VoLTE, new generation voice over
data network. Virtualized capacity of network
services carrying data traffic reached 2.6 Tbps
and preserved its position as the largest
infrastructure in the region. Having completed
the analysis, tender and procurement stages
management layer activities, we started
installation and integration. Turkcell continues its
industry leading efforts in adapting the latest
generation network services supporting container
to Telco Cloud.
Turkcell is part of the CNTT (Common NFVI
Telco Task) community, where 15 operators and
contributing solution providers come together to
form a common Network Function Virtualization
Infrastructure definition. With this effort, the
experiences of leading operators in virtualization
infrastructures are transformed into standard
methods and processes that can be used by all
operators. With the proliferation of NFV, operators
aim to decrease costs and time to market and
reduce the complexity of their operations.
DEEP NETWORK INTELLIGENCE
As data has gained importance both within the
industry and the organization in recent years,
Turkcell integrated enriched network data into
its data analytics platform as part of the Deep
Network Intelligence project which aims to
bring Turkcell to an advantageous position in
competition in this field. With the use of this
data, we gained experience in communicating
our customers in the most accurate way and
establishing realistic marketing models to the
most possible extent.
TARGETED ADVERTISING
With this project through which we contributed
to digital advertising world, new technologies
integrating Data Analytics Platform, which
enables showing customers interest specific
content anonymously, and network systems
were established. Thus, while it was enabled
to show ideal promotions in accordance with
customer interests, new revenue sources were
generated for Turkcell with revenue sharing
model.
45
2019 OPERATIONSTURKCELL ANNUAL REPORT 2019 OUR SUPERIOR TECHNOLOGY
Implementing a business model enabling us to offer our
cyber security activities carried out in-house to other
enterprises, we have developed Domestic and National
Cyber Security products and services.
HYBRID BASIC NETWORK
In the PCRF (Policy and charging rules
function) infrastructure, one of the most crucial
components of the main network, Turkcell
developed a hybrid platform architecture which
is a first in the industry. Hybrid architecture,
where legacy and virtual infrastructures are
actively used together as a grift, was put
into service with the cooperative design of
Turkcell and Huawei engineers. With this new
model, having retained and virtualized existing
investment, a new infrastructure was created to
provide flexible and rapid growth.
eCALL LAUNCH
eCall is a solution recommended by the
European Commission to ensure that vehicles
receive fast and automatic assistance in the
event of an accident. When an accident occurs,
in-vehicle equipment automatically calls the
emergency center and transmits respective
information about the accident. This information
includes accident time, reason for activation,
GPS coordinates and vehicle information.
CYBER SECURITY IS BECOMING
INCREASINGLY IMPORTANT WITH
DIGITALIZATION!
With the ever-growing digitalization of enterprises, the
number of systems and business processes connected
to internet rise fast. This brings along growing number
of global and local cyber security risks. For various
reasons, organizations are not always capable of
employing their own in-house cyber security experts,
or investing adequately to anticipate and prevent
potential risks. Thus, implementing a business model
enabling us to offer our cyber security activities
carried out in-house to other enterprises, we have
developed Domestic and National Cyber Security
products and services. In addition to the DDoS
attack prevention service, which we have offered to
corporate clients for years, we continued to develop
new services in 2019 and increased our revenues. We
have expanded our customer portfolio to over 1,100
users with advanced cyber security services such as
Remote Cyber Attack Monitoring and Case Analysis
SOC (security operation center) services; various
security testing services such as intrusion tests; identity
and access management consultancy service and
cyber threat intelligence portal BOZOK.
In the PCRF (Policy and
charging rules function)
infrastructure, one of the
most crucial components of
the main network, Turkcell
developed a hybrid platform
architecture which is a
first in the industry. Hybrid
architecture, where legacy
and virtual infrastructures
are actively used together as
a grift, was put into service
with the cooperative design
of Turkcell and Huawei
engineers.
46
TURKCELL ANNUAL REPORT 2019 Cyber Defense Centre (CDC)
team of Turkcell earned
the title of Most Mature
SOC (security operations
center) Team in the
telecommunications industry
globally receiving a score
of 3.2/4.0 during an audit
conducted by Micro Focus
Global SIOC team as part of
Maturity Level Assessment.
TURKCELL HAS THE MOST MATURE SOC
TEAM GLOBALLY.
TURKCELL HELD ITS THIRD CYBER
CAMP IN 2019 TO TRAIN EXPERTS TO
PROTECT TURKEY’S CYBER BORDERS.
24 out of 1,667 students and recent graduates
who applied to Cyber Camp 2019 had the
opportunity to be trained in cyber security
field by leading industry experts for 10 days.
After an assessment of those who successfully
completed the program, four participants
were offered full time employment in
different divisions of Turkcell’s Cyber Security
Department.
ENERGY SAVING FOR SUSTAINABILITY
Being committed to sustainability across all
aspects of its operations, Turkcell continues
to utilize environmentally friendly solutions in
infrastructure, software and business processes.
In 2019, Turkcell reached energy savings of
about TRY 9.2 million having engaged energy
saving software features during the times of
low network traffic.
Cyber Defense Centre (CDC) team of Turkcell is
part of FIRST group and has FIRST certification.
The CDC team earned the title of Most Mature
SOC (security operations center) Team in the
telecommunications industry globally receiving
a score of 3.2/4.0 during an audit conducted
by Micro Focus Global SIOC team as part of
Maturity Level Assessment. Our CDC team
can provide cyber-attack monitoring, case
analysis, incident intervention and cyber threat
intelligence services on the back of capabilities
they develop continuously.
TURKCELL RECEIVED “IoT SECURITY
AWARDS” AT GSMA MOBILE
CONGRESS FOR ITS STUDIES IN IoT
SECURITY.
The world GSM Association (GSMA), which
leads the global mobile communications
industry and has more than 800 mobile
operator members, presented Turkcell with the
“Pioneer Award” for its efforts in IoT security.
Meeting the standards set by the GSM
Association, one of the important reference
points of the telecommunications industry,
Turkcell was also recognized as a leader in IoT
security and was presented with “IoT Security
Champion” award.
47
2019 OPERATIONSTURKCELL ANNUAL REPORT 2019 OUR CONSUMER BUSINESS
Using our analytical competencies, we empower
individuals and enterprises, making their life easier,
more enjoyable and secure through digital products and
services that meet their needs.
Shake & Win welcomes
you every week with
surprise gifts!
As the digital partner of our customers, we
consider them as the most important members
of Turkcell family for 25 years and strive to
add value to every second of their lives. Using
our analytical competencies, we empower
individuals and enterprises, making their life
easier, more enjoyable and secure through
digital products and services that meet their
needs.
NEW POSTPAID WORLD FULL OF GIFTS
With the new postpaid world, Turkcell has made
its popular add-on campaign a permanent one.
Now, data quotas of customers who promise to
stay at Turkcell are doubled. In addition, Turkcell
customers receive additional 10 GB, 20 GB or 30
GB as free gifts for the first month depending on
their new packages.
In our new offer structure, customers who
upgrade to a higher package are given three
Joker gifts of up to 2 GB weekly data. These
gifts are automatically defined to be used
at any time within 12 months after package
upgrade take effect.
As the digital partner of
our customers, we consider
them as the most important
members of Turkcell family
for 25 years and strive to
add value to every second of
their lives.
48
We don’t forget those who have remained as
Turkcell customers for over 10 years, offering special
benefits and privileges to them. We turn the years
spent together with them into opportunities by
doubling Joker gift contents, offering discount
opportunities in package transitions, designing
special campaigns for add-on packages and
providing privileges in Shake and Win. As part of
the communication campaign, our promotional
video explaining Joker packages, additional
benefits to customers of over 10 years and special
advantageous gifts to upsell packages, started to
be broadcasted in September and ranked among
Turkcell’s most popular commercial of the year.
We determine the most convenient promotional
offers for our customers through smart solutions
and make these available via all channels.
Determining more convenient offers for our
customers through our smart solutions based on the
feedback we receive from them and consequently
contacting them individually, we aim to boost
customer satisfaction.
In addition to Platinum and GNÇ packages, which
have been available for many years, we have
also offered Platinum Black for customers who
want more internet content and the Golden Ages
package targeting minutes focused consumption of
customers over 65 years.
MOBILE DATA USAGE
(AVERAGE GB/USER)
10.8
9.0
7.6
5.9
4.4
5.9
4.3
3.0
3.4
4Q 2017
4Q 2018
4Q 2019
Non 4.5G Users
4.5G Users
Total Users
TURKCELL ANNUAL REPORT 2019 We continued to enrich our Smart Invoice offering
with new incentives, where customers can use their
packages in peace without risk of exceeding their
quotas and keep their invoices under control. We
provided our willing customers the opportunity to use
monthly 1 GB package with Smart Invoice for
12 months commitment. In this respect, customers
can purchase internet packages at advantageous
rates and use them without the worry of exceeding
their data quotas. All Turkcell customers can also
easily go online with new 2 GB, 3 GB, 6 GB and
10 GB additional internet packages.
With the Comfortable tariffs launched in June, we
told our customers to use as if prepaid but pay as
postpaid and supported this innovative tariff with
a 360-degree communication plan. Moreover, we
added another member to the Emocan family with
the launch of Datakan Emocan representing the
world of technology and smart devices, as part of
this communication campaign.
WE STOOD BY OUR CUSTOMERS WITH
SEGMENT-SPECIFIC PRIVILEGES.
Lifecell My First Line: First Step into the Digital
World
With Lifecell My First Line offering, we launched new
packages specially designed for children between
8-14 years old, who are taking their first step into
the digital world, and aimed to support them with
secure and conscious use of this world. In Lifecell
My First Line, we introduced new services that
were not previously available in the market. Family
Profile, which is activated automatically and free of
charge as part of secure internet usage, provides
protection from online risks and harmful content.
With Time Management feature, parents can make
various selections for weekdays and weekends, and
choose 4-hour time periods, where they can limit
their children’s internet use or search. With My Child
is Safe service, parents can manage their children’s
calls, prevent them from talking to people they do
not know, review their phone usage or identify their
location. With the free of charge Ad Blocking service,
children can enjoy an ad-free internet experience.
We also provided additional benefits to enrich
our packages with Turkcell digital services. We
aim to support reading habit among youth and
accordingly those, who read three magazines in
Children’s category of Dergilik within a month, can
earn 1 GB of data. Young users can also benefit both
from online English courses of Turkcell Academy
and gamified trainings of DQ (Digital Intelligence
Project) education platform, which helps children to
become conscious users of the digital world, free
of charge. Children with autism spectrum disorder,
down syndrome and learning disabilities can benefit
from the internationally certified educational game
application “My Gem Inside” specially developed with
the guidance of psychologists and expert trainers.
GNÇ Stood by Young People This Year, too with New
Features.
We put customer-oriented, innovative actions
specifically designed for our young customers into life.
Throughout the year, we renewed both postpaid and
prepaid GNÇ offers. With GNÇ 24/7 Campaign, Turkcell
removed the time limit of the internet quota, which was
only available at night (from 10:00 pm to 6:00 am).
Additionally, all customers in particular youth packages,
where the add-on campaign is included, can now
benefit from this campaign free of charge. We also offer
additional data usage for the most popular social media
applications.
We started 360-degree marketing activities for our film,
which we shoot regarding renewed GNÇ packages, and
communicated it to young people.
The GNÇ application was downloaded 8.5 million times
this year to become Turkey’s most downloaded youth
application.
Turkcell recorded a year filled with the success of
“Çatlat” campaign, which has become indispensable
for young users. Within the scope of the promotional
campaign, 60 million “eggs” have been “cracked”
to date, resulting in gifts for young people. Network
mapping was used as a first globally to diversify the
gifts awarded depending on location density. Çatlat
was awarded a patent for its innovative platform
infrastructure. With this newly developed smart system,
Turkcell uses its network efficiently, reducing costs and
facilitating young people to meet rich internet incentives.
In 2019, Turkcell also touched the lives of young users
with creative solutions. On May 19, we created the
Youngest Digital Map of Turkey with the contribution of
the country’s youngsters. Young people entered their
hometowns via the GNÇ application and put their
“signatures” on the map. GNÇ Talks, organized at 5
universities, became a source of inspiration for youth
enabling them listen to the stories of successful figures
known from social media on “Digital World Skills.” We
live broadcasted these events to all GNÇ users over the
GNÇ application.
In June, Turkcell received great attention to its
“GNÇ Bi’fikir (A Young Idea)” competition to foster
entrepreneurship among Turkey’s young people with a
total of 2,500 applications although it was the first year
of the event. After the competition, we provided support
to the finalists for their projects. This effort was a new
addition to our portfolio of social responsibility initiatives.
SİM: Turkcell’s Platform to Support Women
With SİM, which we launched in 2017 as Turkey’s first
and only digitally integrated women’s platform, we
continued to support women by launching new features
and content in 2019. Share the Discount, a key feature
introduced in 2018, was strengthened in 2019 with
promotional campaigns. Female customers supported
women’s solidarity sharing more than 1 million discounts
49
With the Comfortable tariffs
launched in June, we told
our customers to use as if
prepaid but pay as postpaid
and supported this innovative
tariff with a 360-degree
communication plan.
2019 OPERATIONSTURKCELL ANNUAL REPORT 2019 OUR CONSUMER BUSINESS
We continue to be a brand that adds value, makes a
difference and offers superior services in the eyes of our
customers by adding innovative features to the Turkcell
Platinum privileges world.
and want to become an expert, can also find a job
by clicking on the Apply to Become a Female Expert
button. Secondly, Turkcell launched the “e-Women”
platform, where female users can offer the products
they produce at home for sale. The e-Women project
supports both the domestic and local economy with
products crafted by women.
Turkcell’s new service “Let’s Ask” is designed to add
value to the lives of women by serving as a platform
to pose questions to and get answers from experts
such as psychologists, gynecologists, chefs and
beauticians.
Turkcell Platinum
We continue to be a brand that adds value, makes
a difference and offers superior services in the eyes
of our customers by adding innovative features to
the Turkcell Platinum privileges world. This specially
designed brand addresses customers that have high
volume data usage and intensive communication
needs. To better serve this segment, Turkcell provided
platinum customers with unprecedent privileges and
innovative features this year. Expanding to a user base
of 2.5 million, Turkcell Platinum enriched the lives of
customers with sponsorships and privileges offered
throughout the year.
Platinum customers using Paycell, Turkcell’s new
generation payment platform, can now benefit from
double of the previous level of the privileges. With the
Platinum Black program, designed for those who use
data intensively, we make life easier for customers
with surprise gifts, an extra 5 GB each month, six times
the previous level of benefits and access to special
Call Center service. In addition, Platinum Black attracts
attention as the first integrated loyalty program with
the feature of offers for both Superonline and Turkcell.
among themselves. With “Customized Astrology”
service in SİM, our customers can receive special
horoscope commentary each week in accordance
with their place, time and date of birth.
We added value to the lives of 310 thousand
women with the SİM Coupon campaign, the
biggest promotion of the year. Turkcell designed
the campaign based on women’s past habits of
accumulating coupons. Customers converted the
digital coupons they collected from SİM into internet
bonus.
During the year, SİM took two major steps in adding
value to the female-driven economy. First, Turkcell
said “There is no gender of jobs, only experts” with
its “Women Experts” initiative. Now, people, who
want to employ women experts at home or in the
workplace, can contact the appropriate person
from among 45 different professions over the
application. Similarly, women, who look for a job
In 2019, we expanded our focus from 5 to 10 provinces
as part of Turkcell Platinum Anatolia, an effort which
started last year. Turkcell offered local benefits and
privileges in many areas where it touched the lives
of customers. We made special agreements in these
provinces for services such as Havaş airport shuttle,
restaurant discounts, car wash and automotive rental,
all announced via local communications.
Expanding to a user base of
2.5 million, Turkcell Platinum
enriched the lives of
customers with sponsorships
and privileges offered
throughout the year.
50
TURKCELL ANNUAL REPORT 2019 Turkcell is committed to
making life easier for its
customers with its broad
digital services portfolio.
We give customers the
opportunity to share
more, access information
faster and make life more
enjoyable in the fast-
digitalizing world.
Our #senyapdiye campaign,
specially designed to
integrate with our 25th year
communications, attracted
great attention from our
customers. We continued
to enable our customers to
experience digital services
and present GB data gifts
by repeating our campaign
periodically throughout the
year.
By expanding the sponsorship of Turkcell
Platinum Offroad Park, we transformed the
location into a park where customers can enjoy
fresh air and engage in recreational activities
with their children. As a result, Turkcell Platinum
Park now features Offroad, an open-air cinema,
entertaining workshops for children and Geyikli
Restaurant.
While continuing our existing benefits with
partners such as Turkish Airlines, D&R, valet
parking services in Istanbul and Ankara, Zorlu
PSM, and 1001 Culture&Art, Turkcell added other
privileges, including coffee gifts from Caribou
Coffee. With its ever-expanding customer base,
Turkcell Platinum provides more benefits for
customers by partnering with leading brands
in diverse categories such as clothing, online
shopping, dining and beverages. Compared
to last year, we achieved a 107% increase in
campaign utilizations and a 23% rise in the
number of individual customers served through
localization and new privileges.
In 2020, Turkcell Platinum plans to touch
customers’ lives with a focus on healthy living
and children. We will provide new privileges for
Platinum customers' children, their most valued
ones. As part of this focus, we will start new
brand collaborations while further integrating
technology into the lives of our valuable
customers. Compared to last year, Turkcell
aims to make customers feel more valuable
with smart technology by adding features
such as step counter, QR reading and Platinum
application customization.
TURKCELL LAUNCHED DIGITAL
CAMPAIGNS TO BOOST CUSTOMER
LOYALTY USING ITS TECHNOLOGY
COMPETENCIES.
For the 25th Anniversary #senyapdiye: We Make
Life Easier for Our Customers in a Digitalized
World.
Turkcell is committed to making life easier for
its customers with its broad digital services
portfolio. We give customers the opportunity
to share more, access information faster and
make life more enjoyable in the fast-digitalizing
world. As part of our marketing activities for
our 25th anniversary, we created a gamified
and entertaining marketing campaign aimed
at showing that Turkcell provides solutions that
meet ever-changing customer needs with its
broad digital service portfolio and enabling
customers to experience those services. Turkcell
customers participating in the campaign had the
opportunity to experience a different application
every week for a total of six weeks and earn 25
GB data in total. Our #senyapdiye campaign,
specially designed to integrate with our 25th
year communications, attracted great attention
from our customers. We continued to enable
our customers to experience digital services
and present GB data gifts by repeating our
campaign periodically throughout the year. With
the #senyapdiye promotional campaign, Turkcell
distributed a total of 7 million gifts and reached
3 million new digital service users.
51
2019 OPERATIONSTURKCELL ANNUAL REPORT 2019
OUR CONSUMER BUSINESS
Shake and Win campaign has become a platform to
introduce our customers with digital services and enable
them experience these services by providing gifts of
which 32% consists of TV+, fizy, Dergilik, lifebox and BiP.
Turkcell Customers Continue to Win with “Shake
and Win.”
Shake and Win, Turkcell’s most popular
promotional campaign, has provided 1.3 billion
gifts to 27 million Turkcell mobile customers since
its launch on November 28, 2016. As part of the
campaign, where the customers get a new
“right to shake” every Friday, we provided double
rights to shake to each customer during the
weeks of Eid al-Fitr, Eid al-Adha and Turkcell’s
25th anniversary.
Starting from March 2019, we started to provide
customers with free data gifts every week in
order to make them feel the rich world of Shake
and Win.
For the first time this year, Turkcell gave its
customers data gifts that they can share with
their loved ones in Ramadan. Customers shared
some 4.5 million gifts with their friends and
family.
Shake and Win provided a total of
772 million GB and 440 million Turkcell digital
services gifts to Turkcell customers, allowing
them to experience the privilege of being a
Turkcell customer.
GIFTS OF SHAKE AND WIN
Paycell
5%
App Data
13%
DSS
32%
Data
50%
Shake and Win campaign has become a platform
to introduce our customers with digital services and
enable them experience these services by providing
gifts of which 32% consists of TV+, fizy, Dergilik,
lifebox and BiP.
We have also presented data gifts to our Platinum
customers and Turkcell customers who have been
with us for more than 10 years to make them feel
the advantageous world of Turkcell.
Taking the advantage of Shake and Win’s large
traffic, we started to provide special offers to our
customers on a second screen after they perform
the shake action. Our objective was to make a
better offer to our customers, upsell them or direct
them to TRY uploads making use of the power of
digital media by leveraging the high participation
rate of the campaign.
Downloads of the Digital Operator application,
where customers can access Shake and Win, have
risen from 10 million to 48.6 million since the launch
of the campaign. while the three-month active
users reached 21.2 million.
This year we focused more on Anatolian provinces
as part of Shake and Win campaign. We started to
provide an additional shake right every month for
12 months to Turkcell customers living in the target
geographic region that we select each month.
Shake and Win has a positive impact on valuable
customer retention efforts thanks to the ongoing
benefit perception given to smartphone owners.
First AI-Based Social Benefit Platform: “Smile”
As part of our brand-new social benefit platform
“Smile,” we implement social support projects
as our customers smile. Turkcell customers,
who participated in the “Smile and Make Them
Smile” campaign over the Digital Operator (DO)
application between October 2 and 7, supported
our animal friends with only one smile. With
the artificial intelligence infrastructure that we
integrated into the DO application, we determined
the smiling moments of our customers through
As part of our brand-new
social benefit platform
“Smile,” we implement social
support projects as our
customers smile.
772 million GB
Shake and Win provided a
total of 772 million GB and
440 million Turkcell digital
services gifts to Turkcell
customers, allowing them
to experience the privilege
of being a Turkcell
customer.
52
TURKCELL ANNUAL REPORT 2019 Gift Pool
With the new screens added to the Digital
Operator application, Turkcell customers can
now monitor the gifts they earn from a single
platform. In this respect, we maintain the
perception of “worth paying” at the highest
level and boost customer loyalty with specially
designed gifts.
We Continued to Create Value by Increasing Our
Analytical Competencies.
Using its analytics capabilities, Turkcell strives to
get to know customers better and provide them
with the best customized offers in accordance
with their usage profile.
While planning marketing communication of
our campaigns, we first analyzed the behavior
of existing customers who had characteristics
resembling the target audience. Utilizing the
obtained data, Turkcell offered its digital services
including TV+, fizy, Dergilik, BiP according to the
actual need of each customer. We also took
specific actions for customer groups that we
determined on a geographical basis.
INNOVATION ACROSS ALL AREAS OF LIFE
Turkcell Users Freely Access Life Abroad.
In 2019, Turkcell enhanced its brand perception
by offering customers enriched offers abroad in
more countries with more advantages.
Overseas Vacation Surprise from Turkcell During
Eid al-Adha
Turkcell offered a unique gift to customers
during Eid al-Adha so that they could easily
celebrate the holiday with their relatives. Thanks
to this special gift, Turkcell customers conveyed
the holiday spirit from across the world by
talking to friends and family over the internet.
Turkcell gifted 1 GB data usage as well as 60
minutes of calls or 60 SMS to all the individual
and corporate postpaid customers abroad
regardless of their tariff. With the special holiday
gifts for Eid al-Adha covering 88 countries,
Turkcell customers, who were abroad, had the
chance to celebrate the holiday with family and
friends as if they were in Turkey.
Roam Like Home Now in 98 Countries
Turkcell customers can now use their domestic
tariffs abroad as if they were in Turkey for
a daily additional charge with no additional
transaction needed. In 2019, we added
13 new countries to the existing feature of Roam
Like Home and started to implement it in
98 countries. To use this feature, Turkcell
customers only need to have any postpaid
tariffs that include data, minutes and SMS,
regardless of the price of the tariffs or their
customer segment.
53
Using its analytics
capabilities, Turkcell strives
to get to know customers
better and provide them with
the best customized offers in
accordance with their usage
profile.
photos they uploaded during participation. We
also presented a message of differentiating
amounts of food donation based on the level
of their smile. As a result of the campaign we
conducted particularly for October 4, World
Smile Day and Animal Protection Day, we
donated food to Yedikule Animal Shelter on
behalf of our customers who participated in the
campaign. Although there were no additional
benefits for customers, 310 thousand of them
participated in the campaign in a very short
time period.
As part of the social benefit platform, Turkcell
launched the “Smile and Make Them Blossom”
campaign in November as an extension of
this innovative initiative. This time, we gave
customers the opportunity to contribute to the
donation of seedlings to be planted in Izmir with
a single smile. Smile platform, which is located
in Digital Operator application and features an
AI infrastructure entirely developed internally at
Turkcell, has become Turkcell’s brand new social
benefit platform. Smile platform is also the first
example of how technology and social benefit
can share common ground and add value to the
social environment.
2019 OPERATIONSTURKCELL ANNUAL REPORT 2019 OUR CONSUMER BUSINESS
In 2019, Turkcell continued to meet customers’ needs
with Superbox, which provides 4.5G speed with
superior technology.
Superbox Introduces Turkcell Fiber Speed to Our
Residential Customers, Who Do not Have Access
to Fiber Infrastructure.
In 2019, Turkcell continued to meet customers’
needs with Superbox, which provides 4.5G speed
with superior technology. With the easy installation,
portability and fast internet features, Superbox
offers high-speed internet and a unique customer
experience to households that do not have access
to fiber infrastructure. Superbox continued to post
rapid growth, expanding its customer base 10 times
this year. Turkcell’s Superbox continues to attract
the attention of customers with its unlimited and
quota package options.
The most effective advertisement that reminded
Turkcell to customers in September was the
Superbox advertisement with 1.2% contribution.
In addition, Turkcell was the top of mind brand in
September since April 2018, according to the IPSOS
Adwatch September 2019 report.
A World without Fair Usage Quota Entered Our
Life.
Turkcell’s unlimited packages without Fair Usage
Quota (FUQ), which became a focus in 2018, were
enriched in 2019 with the transition of all businesses
into a world without FUQ. Turkcell presented
customers with a 100 Mbps speed gift in the first
month so that they could experience this unique
speed in fiber. We started a new trend in the market
by launching 12-month offers as an alternative to
the conventional 24-month commitments. With this
approach, Turkcell offered the opportunity to extend
the comfort zones of our customers by providing
them with customized offers.
Turkcell launched no Fair Usage Quota before
competitors and owned this area earlier. Bringing a
new approach with the “Spilling Internet” concept,
we conducted a series of 360-degree marketing
communication activities to emphasize an era of
abundance on the internet through Turkcell Fiber. As
a result of these successful communications, Turkcell
won the Golden Effie in the “Telecommunications”
category at Effie Awards 2019 with its “No Fair Usage
Quota at Turkcell” concept.
In 2019, Turkcell reached 1.5 million total customers
who experienced its unique high-speed fiber internet.
Throughout the year, in our fixed customer base, the
percentage of fiber users rose from 60% to 66%. We
continued to support our multi-play strategy with our
TV+ product which we provided on our fiber service.
On the fixed side, one out of every two Turkcell
fiber customers also used TV+ in their homes.
FIBER RESIDENTIAL
NET PROMOTER SCORE (NPS)
NET PROMOTER SCORE (NPS) OF
(Multiplay with TV)
GAP WITH COMPETITION
4.5 USERS - GAP WITH COMPETITION
50.8%
52.2%
49.5%
53.3%
23
22
21
26
25
24
29
26
11
10
9
10
15
14
12
11
1Q 2019
2Q 2019 3Q 2019 4Q 2019
Points over the next best competitor
Points over the third best competitor
Points over the next best competitor
Points over the third best competitor
1Q 2019
2Q 2019
3Q 2019
4Q 2019
1Q 2019
2Q 2019
3Q 2019
4Q 2019
54
TURKCELL ANNUAL REPORT 2019 We Digitize Universities.
Within the framework of our project to facilitate
digitization of universities, we started to deliver
high-speed internet service with Wi-Fi hotspots
on more than 60 university campuses in Turkey.
As part of this service, all on-campus operator
customers enjoy 1 GB of free internet usage thanks
to Fast Login technology. University students who
prefer Turkcell postpaid youth packages get 10
GB free internet per month. To date, more than
200 thousand users have consumed over 180 TB
data via Turkcell Wi-Fi network via more than 750
thousand connections.
Collaborations with Sports Clubs
Turkcell added Yeni Malatyaspor and Gaziantep
Football Club to its list of collaborations that
started with Galatasaray, Bursaspor and
Trabzonspor to digitize sports clubs. With these
various collaborations, sports fans embrace the
digital world while supporting their favorite clubs.
Thanks to the specially-designed digital packages
we offer, customers can access the rich content
of Turkcell digital services, while gaining 200 MB
per week for each goal that their team scores
and 1 GB per day for each match that their team
wins. Furthermore, we create added value for
customers with unique benefits such as gift match
tickets, autographed sports balls, jerseys and
training visits. The positive impact of these sports
collaborations are reflected in the Positive Mention
Score - one of the most important indicators of
success in the sector.
Gaming Packages
By focusing on end-to-end player experience
in the gaming industry, one of the most rapidly
growing sectors of the country, we developed
the Turkcell Gaming Ecosystem to meet all the
needs of our gaming customers. Turkcell offered
this unique experience to customers via Gaming
packages that include internet use for mobile
games and brand partnerships exclusive for the
gaming world.
Within the framework of our cooperation with
Tencent Games, the biggest game company in
the world, we launched Gaming packages and
provided internet access available only within a
game to customers for the first time in Turkey. One
of the two packages launched, the “Play” package
provides Turkcell customers with 3 GB internet
available at PUBG Mobile, the most played
mobile game in Turkey. In the “Play and Watch”
package, Turkcell provides 5 GB data available
on PUBG Mobile and YouTube. Besides delivering
a better gaming experience to players with data
benefits, we also make Turkcell customers and
gamers feel privileged in their every day lives
with advantageous collaborations specially
targeting their specific needs as part of our loyalty
programs.
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Within the framework of our
cooperation with Tencent
Games, the biggest game
company in the world, we
launched Gaming packages
and provided internet access
available only within a game
to customers for the first
time in Turkey.
As part of a joint infrastructure project
contributing to Turkey’s advanced technology
transformation and development, Turkcell
started serving its customers using Türksat’s
cable infrastructure. In addition, we boosted
the number of households with fiber access
through our fiber infrastructure sharing project
with Vodafone Net. Turkcell continues to address
the needs of its customers through a wide
range of products and services with advanced
technologies.
Turkcell maintains its position as the most
recommended brand among customers thanks
to its differentiating strengths in enabling
uninterrupted connections, timely response to
customer needs and high internet speeds.
DIGITAL BUSINESS PARTNERSHIPS
In line with our digital strategies, we are
implementing innovative collaborations in various
industries such as sports, gaming, education, and
transportation.
2019 OPERATIONSTURKCELL ANNUAL REPORT 2019 OUR CORPORATE BUSINESS
As the world’s first digital operator, we established Turkcell
Digital Business Services with the aim of supporting enterprises
at every stage of their digitization process; hence, we took
another major step in our 25th anniversary towards our goal of
contributing to Turkey’s digital ecosystem.
TURKCELL: DIGITAL TRANSFORMATION
PARTNER OF INSTITUTIONS
As the world’s first digital operator, we established
Turkcell Digital Business Services with the aim
of supporting enterprises at every stage of their
digitization process; hence, we took another major
step in our 25th anniversary towards our goal of
contributing to Turkey’s digital ecosystem. With the
aim to provide end-to-end IT services in line with
our vision of being the digital business partner
of companies, Turkcell Digital Business Services
delivers numerous value-added services including
cloud, cyber security, Internet of Things (IoT), big
data, business solutions, system integration and
artificial intelligence solutions.
SUPPORT AT WORKPLACE: TURKCELL
FOR SMES
With “Support at Workplace" communication
campaign, Turkcell embraced the idea “If SMEs
grow, Turkey grows.” Accordingly, we set out to
accompany small and medium-sized businesses
on their digitization journey. As part of our
marketing communication campaign, which
made use of television, radio, magazines and
outdoor media, we introduced our wide range of
innovative products and services to SMEs helping
them in their integration journey to digital world
to decrease costs, increase productivity and
strengthen against competition. These included
innovative products and services like E-Company
Accounting, Supercam, Team Mobile, Turkcell
Academy, and Secure E-Commerce.
FREEDOM IN COMMUNICATION: FREE
PACKAGES AT WORKPLACE
Turkcell continued to launch innovative solutions
for the communication needs of our corporate
customers in 2019. Thanks to Free Packages at
Workplace, launched in May, each company
can create its own tariff for its employees. With
this application, which eliminates the same tariff
requirement for each employee, companies are
free to choose minutes and data needs for their
staff. The new Free Packages at Workplace
allows companies to create their own customized
packages by choosing between 5 to 50 GB of
data quotas and from 1 thousand to 10 thousand
minutes voice call options for their employees.
All tariff options in Free Packages at Workplace
include Turkcell’s rich digital services such as
Dergilik, fizy, TV+ and lifebox at no additional cost.
In addition, those who prefer 18 GB and 25 GB
internet options can benefit from Turkcell Platinum
while those who prefer 35 GB and 50 GB can
benefit from Turkcell Platinum Black privileges.
Free Packages at Work also offers the opportunity
to use the tariff content in 88 countries at no
additional cost. As a result, employees can meet
their communication needs from their package
content in 88 countries for one day with 18 GB
option, two days with 25 GB option, three days
with 35 GB option and five days with 50 GB
option at no additional charge.
A NEW ERA IN CONTRACT STRUCTURE:
SUPPORT AT WORKPLACE PACKAGES
With Support at Workplace Packages, launched
in January 2019, Turkcell ensures customers to
experience its exceptional quality with free digital
services and quotas with appropriate content
specific to their needs. Featuring rich content,
Support Packages at Workplace provides
double internet benefits to customers with their
commitment to internet quotas instead of price.
Since all contract and non-contract customers
benefit from the same pricing in new packages,
Turkcell prevents different levels of billings with this
package at the end of the contract periods.
Moreover, we offer gifts up to 5 GB for 12 months
with the “Support at Workplace Gift Internet
Packages” particularly to new customers who
sign up to Support at Workplace Packages. In this
respect, we continue to boost the data packages
of new customers so that they can benefit from
more advantageous offers of Turkcell.
With “Support at Workplace"
communication campaign,
Turkcell embraced the
idea “If SMEs grow, Turkey
grows.” Accordingly, we set
out to accompany small and
medium-sized businesses on
their digitization journey.
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TURKCELL ANNUAL REPORT 2019 In April, Turkcell organized
Turkey’s largest technology
event with the theme “For
You to Do It.”
TURKEY’S TECHNOLOGY SUMMIT
In April, Turkcell organized Turkey’s largest
technology event with the theme “For You to Do
It.” Over the course of 31 sessions, the technology
summit featured 78 experts who delivered
speeches of over 1,060 minutes in total on topics
of shaping the future, including robotics, artificial
intelligence, Internet of Things and digitization.
This mega event was attended by thousands of
attendees and 10 thousand staff from Turkcell.
Robotics scientist and inventor Rodney Brooks
was the keynote speaker at the event. The
summit brought Turkcell’s corporate business
partners together with leaders of the science and
technology world.
The event, which boasted high participation,
enabled Turkcell customers to experience many
different products at 40 different experience areas.
In addition, we reached over 3.5 million people
through press coverage of the summit.
corporate customers participated in the events in
each of two provinces. Customers from the respective
regions were informed in full detail about Turkcell
products as part of the events.
CUSTOMIZED SOLUTION ADVISOR: SUPPORT
AT WORKPLACE WIZARD
In February, Turkcell launched the Support at Workplace
wizard, where digital products and solutions are offered
depending on the needs of corporate customers. This
effort aims to support Turkcell customers to make a
difference by digitizing, growing and adding value to
their business. We provided customer-specific product
and solution recommendations to corporate customers
over the respective website, where they could select
their requirements grouped into four main categories
associated with their business. The system is designed
to provide ease of use and direct solutions to meet
customer needs. Our relevant teams were directed to
offer solutions and recommendations to customers
who left their contact information.
TECHNOLOGY LEADERSHIP IN ANATOLIA:
TURKCELL TECHNOLOGY MEETINGS
TURKCELL REMAINS THE LEADER IN MARKET
SHARE AND NET PROMOTER SCORE
In addition to customer events held in Istanbul,
Turkcell organized the first of a series of events
targeting corporate customers in Anatolia targeting
issues which they looked for solutions. The initial
Anatolian corporate customer event was held in
February in Izmir. At the event, which was opened
by Turkcell’s Chief Marketing Officer, directors from
various functions across the organization provided
information on Turkcell’s products and solutions.
Corporate customers from Izmir and neighboring
provinces showed great interest in the event, where
Turkcell Support at Workplace tariff structure was
also launched. The second round of the Anatolia-
focused event was held in Ankara. Four hundred
By expanding its contribution to the corporates’
digitization journey, Turkcell boosted both its market
share and brand image. Particularly in the SME
segment, we strengthened our competitive position
gaining higher market share compared to our
closest competitor. During this reporting year, while
competitors’ brand reputation and Net Promoter Score
(NPS) were adversely affected because of the ongoing
network problems, Turkcell widened the gap with the
competitors on the basis of “Trusted Brand” and “Loved
Brand” criteria. In 2019, we continued our NPS leadership
among corporate customers. The NPS differential
between the closest competitor and Turkcell reached
7 points.
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In 2019, we continued our
NPS leadership among
corporate customers. The
NPS differential between
the closest competitor and
Turkcell reached 7 points.
2019 OPERATIONSTURKCELL ANNUAL REPORT 2019 TURKCELL'S MARKETING COMMUNICATION ACTIVITIES
ÜSTÜN TEKNOLOJİMİZ
As the world’s first and only digital operator, we differentiated
through our successful marketing communication activities
throughout the year focusing on solutions that enriched
customers’ lives, social responsibility projects, promotional
campaigns and offers for special dates.
Turkcell, leading the digital transformation of Turkey, has
touched hearts across the country with ads that reflect its
human-oriented vision for quarter centuries. In the video
“Sugar Engineer,” we expanded on the Women Developers
of the Future project, which aims to open the doors of the
future equally for all by providing technology education to
women. The film features a young girl who has aspired to
become a Sugar Engineer since early childhood. She goes
on to save her father’s life with the technology which she
created developing a computer code thanks to support
she received from Women Developers of the Future.
Our Sugar Engineer video ranked the first on YouTube
Ads Leaderboard in August 2019. The ad campaign
was recognized for its excellence on prestigious award
platforms such as Felis and Crystal Apple.
As Turkey’s Turkcell, we continued to strengthen our
messages of unity and cohesion that we conveyed to
Turkish society by focusing on days of special significance
to the country, including April 23th, May 19th, July 15th, August
30th, and October 29th.
Turkcell launched the “Unreachable” initiative to draw
attention to many people who are lost due to various
reasons and to issues encountered by those people’s
relatives. In this respect, we raised awareness for the
first time globally by transforming the message of
“Unreachable” into a platform. We reached out some
4.5 million people in a single day with our key messaging
on unreachable and accessed 11.5 million people with our
campaign over media channels. Turkcell also took place
in more than 100 print media publications with this effort.
Most significantly, we implemented all these with zero
media budget.
With our short-listed Unreachable project at Cannes
Lions Festival, we received the Grand Prix Award in the
“Voice” category at Golden Drum, one of Europe’s biggest
advertising competitions. In addition, we were presented
with the Grand Prize at four international prestigious
award ceremonies.
In customer-focused communications, Turkcell embraced
the motto around “No Fair Usage Quota,” bringing a
fresh approach with the “Spilling Internet” concept.
Our advertising campaign, where we emphasized the
abundance of internet with Turkcell Fiber, received awards
from Golden Effie, Felis and Crystal Apple.
As the world’s first and only digital operator, we
differentiated through our successful marketing
communication activities throughout the year
focusing on solutions that enriched customers’
lives, social responsibility projects, promotional
campaigns and offers for special dates. In 2019,
as Turkcell, we were presented with 76 awards, at
home and abroad. As a result, Turkcell received the
highest number of marketing communication prizes
in its history – an exceptional accomplishment in its
25th anniversary.
As Turkcell, we have carried out numerous projects
since our foundation that have added value to
every day life which is part of our core mission. One
of our initiatives, “Look at the Road on the Road
(Metin Oktay),” was designed to draw attention to
and generate awareness about traffic accidents in
Turkey. With one of the top causes of automobile
accidents being mobile phone usage on the road,
this was one of our most important campaigns
of 2019. According to the IPSOS Adwatch June 19
Report, the Metin Oktay advert ranked among the
“Most Remembered Ads". The hashtag associated
with this campaign became a Trending Topic
on Twitter and received 99% positive feedback.
Reaching out a total of 12 million people, Metin
Oktay campaign received four awards from the
advertising world’s most well-known platforms,
including Felis and Crystal Apple.
In 2019, as Turkcell, we were
presented with 76 awards,
at home and abroad. As a
result, Turkcell received the
highest number of marketing
communication prizes in
its history – an exceptional
accomplishment in its 25th
anniversary.
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TURKCELL ANNUAL REPORT 2019 increase in new users and 78% more downloads
of fizy compared to the performance during
last year’s High School Music Contest. Our
commercial won the Grand Prize at Felis and
Crystal Apple.
With the aim of strengthening fizy’s exclusive
content offering, we shot a videoclip featuring
Serenay Sarıkaya, a popular figure in Turkey.
The video was broadcasted exclusively on fizy
to boost active users. As being the first ever
videoclip of Alice Musical and Serenay Sarıkaya,
the unique content attracted great attention and
became the most viewed content on fizy for
three weeks. The rate of fizy downloads during
the respective communication period increased
by 30%.
As part of the campaign, where lifebox’s
benefits were explained with an insight-oriented
approach and which targeted the youth
audience, three videos were published, boosting
both active users and downloads of lifebox.
Filmekimi, organized by Istanbul Foundation
for Culture and Arts (İKSV) in cooperation with
TV+, was the most appreciated cinema activity
during the fall season. With its program including
movies that were shown at world festivals,
received awards, attracted the attention of
critics and audiences, and highly anticipated
contents, Filmekimi brought movie fans together
with the best and latest films of the year over a
10-day marathon in Istanbul between October
4-13, in Ankara between October 11-15, and Izmir
between October 18-22.
We expanded Dergilik’s active users
communicating special offers designed for the
application, where we provide thousands of
magazines and newspapers in hundreds of
categories, from sports to magazines, fashion to
decoration.
SOCIAL MEDIA
Turkcell, the world’s first digital operator, offers
digital solutions to customers from a single
point in line with its vision of being a digital
infrastructure and technology provider. Adopting
digital transformation in its communication
strategy, Turkcell uses digital channels in the
most efficient manner. On magazines, now
considered a traditional communication medium,
we provided interactive advertisements via
the Dergilik application and guided customers
to purchase the product directly. Similarly,
Turkcell boosts its sales rates in the device and
accessory categories by making direct sales
via social media channels. By communicating
events such as Mobile World Congress
organized by GSMA, where we told our story
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Turkcell never gives up being the pioneer of
innovation while continuing to provide benefits
to its customers through a wide range of offers
and tariffs. In April, we launched the “So Clear”
campaign with Lifecell to refresh the image of
our dynamic, lively and abundant internet world.
Simultaneously, we communicated our “Lifecell
My First Line” package, designed for the first time
to target the youth segment in this lively, colorful
and abundant internet world. Our advertisement
introduced the package to parents.
At Martech Awards 2019, where businesses are
recognized for excellence in using marketing
and technology, Turkcell won an award in
the category “Best Technology Use in Loyalty
Program Applications” with its BiP Surprise Point
project. We were also presented with an award
in the “Best Technology Use in Outdoor Units”
category with our Lifecell Wi-Fi Outdoor project.
At MIXX Awards Turkey, organized by IAB Turkey,
we garnered the Bronze MIXX with our “Lifecell -
Come If You Dare” campaign.
OUR DIGITAL SERVICES
With the aim of introducing the BiP Translation
feature, Turkcell’s video featuring Shota, widely
appreciated and admired in Turkey, boosted
active use of BiP. Our film received awards from
the Felis and Crystal Apple platforms.
The fizy High School Music Contest, winner of
the World’s Most Successful Youth Organization
award, was held this year under the sponsorship
of fizy. Hundreds of high school students from
every city across Turkey formed their own bands
and applied to the competition. The bands
competed with each other on the way to the
finals. This year, we aimed to raise the interest
of young people in the competition, to increase
participation and also to boost the activity of
fizy during voting period. With the 360-degree
marketing communication, which we conducted
before and during the contest, we achieved 62%
Adopting digital
transformation in its
communication strategy,
Turkcell uses digital channels
in the most efficient manner.
2019 OPERATIONSTURKCELL ANNUAL REPORT 2019 TURKCELL'S MARKETING COMMUNICATION ACTIVITIES
As part of our mission as Turkcell, we also put digital
solutions in life with our people-oriented marketing
communication efforts while continuing to contribute
to Turkey’s digitization.
Our website serves as the
closest and most convenient
Turkcell store, welcoming 27
million visitors on average
every month. Equipped to
meet all customers’ needs on
24/7 basis, turkcell.com.tr
has become more dynamic
with its refreshed design
and improved infrastructure
updates.
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of digital transformation to the entire world,
Turkcell ensured that its customers experienced
the whole story digitally via social media and
digital channels instantly. Thanks to effective
use of media channels, the hashtags of our
communication activities #TeknolojiZirvesi
and #GNÇTalks, which ranked first on Turkey’s
agenda, also took place on the global agenda.
We also carried out digital transformation in
the area of social responsibility and uploaded
dance lessons on Sign Language and Dream
Companion applications specially designed for
visually impaired and hearing impaired individuals.
As Turkcell, we were very proud to be part of
the event enabling visually impaired and hearing
impaired to perform tango as a first worldwide.
As part of our mission as Turkcell, we also put
digital solutions in life with our people-oriented
marketing communication efforts while continuing
to contribute to Turkey’s digitization.
TURKCELL RENEWED ITS WEBSITE:
turkcell.com.tr.
In a digital world, where experiences vary
widely and technology changes quickly, we
renewed the turkcell.com.tr and its e-commerce
section to enable visitors of our website the
best experience. Our website serves as the
closest and most convenient Turkcell store,
welcoming 27 million visitors on average every
month. Equipped to meet all customers’ needs
on 24/7 basis, turkcell.com.tr has become
more dynamic with its refreshed design and
improved infrastructure updates.
Delivering an efficient e-commerce experience,
Turkcell provides customers with fast, easy and
secure shopping opportunities. Furthermore, we
offer a multi-channel experience to customers,
who visited Turkcell stores but abandoned the
TURKCELL ANNUAL REPORT 2019 Turkcell put efforts to
better analyze customer
behavior and optimize
marketing expenses based
on detailed data analysis.
Over the course of the year,
our planning became more
focused with the help of
our analytical tools and we
achieved successful results.
Through cross-marketing
strategy, we contributed
to the efficiency of our
investments by actively using
advertising spaces on our
mobile applications (BiP, fizy,
Yaani, Dergilik) for Turkcell
campaigns.
transaction on the tablets, by presenting those
individual offers once again on the website. We
provide an uninterrupted customer experience
by including an artificial intelligence supported
chatbot to visitors who cannot find the solution
they search for.
Together with its renewed website design
and functionality, our website provides more
customization opportunities and facilitates to
access remaining package content, pay bills and
purchase additional packages. With the support of
automation software, we boosted our capability
to present personalized offers and campaigns to
customers.
Visitors of turkcell.com.tr continue to access all
products, services, digital services and campaigns
offered by Turkcell to its customers, in a more
customized way.
WE DEVELOPED EFFECTIVE MARKETING
AND MEDIA PLANS USING ADVANCED
TECHNOLOGIES.
Turkcell put efforts to better analyze customer
behavior and optimize marketing expenses based
on detailed data analysis. Over the course of the
year, our planning became more focused with
the help of our analytical tools and we achieved
successful results.
With the digital operator campaign, Turkcell
directed customers to perform their transactions
via the application, reducing call rates to call
centers.
At the launch of Platinum Black, we analyzed
media consumption habits of Platinum customers
and executed our TV, outdoor, digital and
magazine media plans accordingly.
Through cross-marketing strategy, we contributed
to the efficiency of our investments by actively using
advertising spaces on our mobile applications (BiP, fizy,
Yaani, Dergilik) for Turkcell campaigns.
Turkcell boosted the effectiveness of its media planning
efforts leveraging data obtained from its applications
regarding radio listening from fizy, channel/program
watching trends from TV+, magazines and newspaper
reading from Dergilik.
TURKCELL CONTINUES TO REFINE ITS
CONTENT STRATEGIES.
We have effectively used influencer marketing for
various products and promotional campaigns. As
part of a project implemented for the first time, seven
influencers agreed to share content under a common
hashtag simultaneously. As a result, Turkcell posted
a 50% increase in online product demand rates
seasonally.
Through the cooperation with sahibinden.com, Turkcell
communicated the message “Turkcell Superonline Fiber”
in locations with fiber infrastructure and “Superbox”
in locations without fiber based on the online queries
performed.
We performed integrations to the scenarios of the most
watched TV series in line with the natural flow of the
programs. After the broadcasts, Turkcell recorded a
nine-fold increase in contact backup feature of lifebox,
and ten-fold increase in first language selection of BiP
Translate.
In line with higher levels of digital video views, Turkcell
engaged in integrations with series and content of
online platforms.
WE WERE AWARDED GLOBALLY AND
LOCALLY ONCE AGAIN IN 2019.
Turkcell also measured the impact of Google ads
not only on online search, but also on store visits.
We started using Smart Shopping advertising for
the first time and achieved a three-fold increase on
ROAS (return on advertising spend).
In the Adwatch Survey published monthly by the IPSOS
research agency, Turkcell was placed in top five brands
whose ads were most remembered for a total of four
months, and consequently for three months.
For the first time, Turkcell became a brand that
uses “user targeting” on Yandex and showed ads
targeting potential customers with the Yaani store
button campaign.
We were presented with the Silver award at MMA
(Mobile Marketers Association) Smarties in EMEA and
with Bronze at MMA Turkey with our “Translation”
campaign facilitating the instant translation feature of
BiP.
In line with digital’s ever-growing share in total
media consumption habits, Turkcell continues
to increase the share of its ad spend allocated
to digital advertising. Besides using various
measurement methods, Turkcell has also increased
its control mechanisms. This year, we began to
analyze visible and invalid traffic rates of our digital
video and visual ads via reports from global tools
and include them in our ad optimization studies.
Turkcell earned the Bronze prize at the Mixx Awards
with Lifecell campaign - “Come If You Dare.”
Yaani’s “May It Be Tree That You’re Searching” campaign
won a Bronze award in the category of “Mobile Calls”
both globally and in Turkey at MMA Smarties.
Our Lifecell Influencer Roadblock app won the Crystal
Apple in the “Excellence in Media App” category at the
Crystal Apple Awards.
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2019 OPERATIONSTURKCELL ANNUAL REPORT 2019 OUR DIGITAL SERVICES
ÜSTÜN TEKNOLOJİMİZ
Having been downloaded 42 million times worldwide, BiP,
Turkey’s domestic and national communications and lifestyle
platform, maintained its leading position as Turkey’s most
downloaded app as at the end of 2019.
BiP differentiates from
other global players with
several features including
lost messaging, group video
calls up to 10 users, fast and
secure money transfer as if
sending messages and also
the option of using of two
phone numbers on a single
mobile phone, called Second
Number at BiP.
BiP
Having been downloaded 42 million times
worldwide, BiP, Turkey’s domestic and national
communications and lifestyle platform,
maintained its leading position as Turkey’s most
downloaded app as at the end of
2019. BiP boosted its global penetration in
37 countries on the back of collaborations with
seven operators. Reaching 11.1 million 3-month
active users as of fourth quarter of 2019, BiP had
2.5 times usage increase with 90 billion messages
sent and 2.5 billion minutes of voice calls.
BiP Leads Competition via Innovative Features
Being utilized in Turkey and 192 countries around
the world regardless of mobile operator, BiP
provides uninterrupted communication service
via secure messaging and calls. Turkey’s most
downloaded domestic and national application,
BiP, competes globally with similar applications
on the same platform. BiP differentiates from
other global players with several features
including lost messaging, group video calls up
to 10 users, fast and secure money transfer as
if sending messages and also the option of
using of two phone numbers on a single mobile
phone, called Second Number at BiP.
In 2019, BiP provided several features to
its customers which were not offered by
competitors. BiP Translate removed language
barriers by providing instant translation in
instant messaging in 106 different languages
which is a first in the world. Meanwhile, SMS
Inbox (Android), which enables managing all
messages via a single interface, was offered to
BiP users at the beginning of the year.
BiP registered another first by enabling audio
and video calls over the web. With this new
feature, BiP users can send messages, make
voice or video calls over their computers or
tablets uninterruptedly even if their mobile
phones are switched off or have run out of
battery.
2.5 billion minutes
of voice calls
Reaching 11.1 million
3-month active users as
of fourth quarter of 2019,
BiP had 2.5 times usage
increase with 90 billion
messages sent and 2.5
billion minutes of voice
calls.
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TURKCELL ANNUAL REPORT 2019 Leveraging all of these new features as well
as improvement and customization efforts, BiP
boosted its Net Promoter Score by 8 points
achieving 4.5 score on both application markets.
BiP in Global Arena: Global Penetration with
Multicloud
While contributing to Turkey’s digital
transformation, BiP keeps all customer data
within the country at Turkcell data centers and
supports the objective of “Keeping Turkey’s
Data in Turkey.” Additionally, BiP is committed
to increasing its penetration among global
operator users by conducting sales and
marketing of domestic technology products
at EU standards. BiP continued to make its
name in the global arena with entering into
collaborations with ALBtelecom of Albania, and
Digicell in February. BiP is moving forward to
becoming a brand in global scale through its
alliances with seven operators abroad, mainly in
Ukraine, Belarus and Moldova enabling its use in
37 countries.
BiP aims to expand its penetration strategy in
global markets by offering ability to localize
data leveraging the multicloud infrastructure it
developed in 2019. The BiP Multicloud feature
enables operators and enterprises abroad
to develop their own digital communication
applications by using BiP’s infrastructure.
As a result, operators and enterprises can
keep their communication data secure in
their own countries/organizations. They can
also customize their own services with the
local Discover features and make revisions
in brand and logo design. Furthermore, as
part of this structure, all users either on BiP
or any customized application infrastructure
can continue to contact with each other
uninterruptedly.
BiP Marketplace
In line with its Marketplace growth strategy,
BiP’s revenues registered strong growth thanks
to its efforts to develop more than 200 services,
new business ideas and models. With its
payment infrastructure, which can be integrated
with various payment options, and its flexible
platform which enables services to be launched
rapidly and easily, BiP market place created
a technology-focused, innovative and rich
ecosystem participated by more than 1,000
software developers and business partners.
While responding to user needs regarding news,
technology, sports and healthy living on a much
larger scale, BiP Discover has also become a
major platform as a marketplace for software
developers and content providers.
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While contributing
to Turkey’s digital
transformation, BiP keeps
all customer data within
the country at Turkcell
data centers and supports
the objective of “Keeping
Turkey’s Data in Turkey.”
With its Channel feature, BiP provides users the
opportunity to become an influencer and reach
out millions of followers in a topic of their interest
or expertise, and allows users to connect socially.
BiP developed the Emergency feature
focusing on the critical need for uninterrupted
communications in the event of emergencies,
a necessity that sharply became evident after
the Istanbul earthquake. BiP Emergency feature
allows users to send their location and status to
relatives and close friends simultaneously via BiP
message and SMS, and also enables users to call
their close contacts uninterruptedly through BiP
over the internet. Moreover, BiP Emergency users
can access 112 Emergency, 155 Police Assistance
and 110 Fire Emergency with a single button.
In addition to differentiation from its competitors
leveraging superior technological features, BiP
undertook several activities throughout the
year with a focus on improving user experience.
Through the Personalized Main Menu (iOS)
enabling users to customize BiP in accordance
with their preferences and needs, selected BiP
features can be moved to the main menu or
removed entirely. Following technology trends,
BiP introduced the Night Mode feature to users
enabling both battery saving and improving the
messaging experience.
2019 OPERATIONSTURKCELL ANNUAL REPORT 2019 OUR DIGITAL SERVICES
fizy music archive, expanding every day with new audio
and video content through the agreements made with
leading content providers and distributors, includes more
than 35 million pieces of music content.
In 2019, with the lyrics feature, offered
exclusively to fizy Premium segment, users
could follow the lyrics of the songs that they
listened to. We continued our efforts throughout
the year in order to increase the lyrics of the 35
million pieces of music content included in the
rich catalog. fizy aims to become one of the
world’s richest music platforms in terms of lyrics
content in 2020.
While the premium user base expanded
rapidly on the back of ad displays within the
application, fizy became one of the preferred
channels where leading brands chose to
show their ads. fizy.com started to serve as
a separate payment channel to subscribe to
fizy Premium memberships by enabling credit
card payment option based on demand from
customers.
As part of the ambition to enhance user
experience to perfection, fizy increased the
number of customized recommendations in
order to be able to offer private content based
on user preferences. In addition, recommending
most popular, followed, shared and listened
songs to users, fizy achieved to increase the
average music listening time on application by
12%.
fizy music archive, expanding every day
with new audio and video content through
the agreements made with leading content
providers and distributors, includes more than
35 million pieces of music content. Both audio
and video content and special fizy radio
streams for fizy users are provided on the same
platform. In this respect, we continue our efforts
to further enrich the catalog/content.
In 2017, fizy opened its doors to the wider world
with its launch in Ukraine, which was followed
by Germany and Belarus, respectively, in 2018.
While its existing operations were strengthened
in these markets in 2019, efforts to expand into
new countries were also pursued.
fizy - TURKEY’S DIGITAL MUSIC
PLATFORM
fizy, with its nearly 3.5 million 3-month active
users and its rich archive of 35 million pieces,
is one of the most popular and most preferred
music platforms in Turkey. In 2019, fizy started
to deliver a more customized music experience
with recommendation lists while continuing to
offer its enriched content archive to customers
through private and personalized songs lists.
Similar songs and artists offerings based on
past usage trends were appreciated by the
users and accordingly the number of songs
listened on fizy rose 10% compared to previous
year. Meanwhile, fizy Premium users exceeded
600 thousand, setting a record thanks to new
features.
In addition to enjoying ad-free music
experience and high-quality sound, fizy
Premium users can view song lyrics and listen
to content offline. Moreover, fizy differentiates
from competition enabling premium users to
benefit from fizy-specific brand collaborations
and customer campaigns.
In addition to enjoying
ad-free music experience
and high-quality sound, fizy
Premium users can view song
lyrics and listen to content
offline.
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TURKCELL ANNUAL REPORT 2019 In 2020, fizy will continue
to provide music experience
to its customers at every
platform with diverse
collaborations and rich
business models.
TV+ plays an important role
in the journey of digitizing
user experience, enabling
users to access series, movies
and television programs
of their choice anytime,
anywhere.
fizy continued its sponsorship of the High
Schools Music Competition, which it has
sponsored for three years. Thanks to marketing
communication activities which started in
January, 708 schools participated in the
competition at the end of April where young
musical talents demonstrated their skills. The
competition attracted interest and attention
across the country. Moreover, this year a new
online competition platform called “Voice of the
City” was created for students who would like
to show their talents by participating personally.
Participants were voted digitally and the winner
in each city was selected accordingly. Winners
came to Istanbul and received their awards
during the finals of High School Music Contest.
Last year, fizy marked a first by becoming the
title sponsor of a popular culture festival in
Turkey, Istanbul Music Week. The event, which
was held between November 4-9, included
panels and concerts. Meanwhile, the fizy Music
Awards of 2018 were presented to winners
during festival week.
In 2020, fizy will continue to provide music
experience to its customers at every platform
with diverse collaborations and rich business
models.
TV+
TV+ plays an important role in the journey of
digitizing user experience, enabling users to
access series, movies and television programs
of their choice anytime, anywhere.
technical features enabling user friendly
experience, customers were offered a diverse
range of new content offerings this year. We
continued to enrich our national and local channel
coverage by expanding the number of channels
broadcasting in HD and UHD format. As a result,
TV+ has become the platform with the highest
number of UHD channels in Turkey.
TV+ became the broadcaster of the German
Bundesliga, one of the world’s most popular
football leagues; the UK Premier League, the most
prestigious football league in the world; the NBA,
home to the globe’s best basketball players; and
key motor sports events such as Formula 1 and
MotoGP. The world’s leading tennis tournaments,
Wimbledon and Roland Garros were broadcasted
exclusively on TV+ with 4K quality.
Hollywood’s blockbuster and star movies met
TV+ users immediately after cinema releases this
year. Captain Marvel, The Avengers: Endgame,
Toy Story 4, The Lion King, Lego Movie 2, Batman:
Hush are just a few of the major films available
to TV+ users. In a period where we expanded TV
channel offerings and TV series on demand, we
also introduced exclusive TV series to TV+ users.
TV series such as Wild District, Victor Lessard,
Beyond Appearances and The Son were only
broadcasted on TV+. The “Hidden Worlds” series,
a private production covering unknown lives and
unseen places across the world in documentary
format, was also only broadcasted on TV+. We
started to broadcast the box office champions
of Turkish cinema, the most beloved classics and
major Turkish movies on TV+.
In 2019, TV+ customers’ television viewing
time from home, mobile phones, computer
and tablets has increased to 96 minutes a
day. In 2019, the 3-months active user base
rose to 3.6 million. The TV+ bundle package
offering television, fiber internet and fixed calls
ranks among our most popular campaigns.
In addition to TV+’s rich content and superior
As part of its strategy to appear on every screen,
TV+ engaged Apple TV, Android TV and Smart TV
applications to be offered to household users and
increased the number of screens where users can
enjoy the new generation television experience.
In addition, our users can also project broadcasts
on their mobile devices to their TV sets using the
projection feature of TV+.
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2019 OPERATIONSTURKCELL ANNUAL REPORT 2019 OUR DIGITAL SERVICES
Enabling secure storage and sharing of photos, videos, music
and documents, lifebox offers a socialized experience to
users with its latest features and also ensures easier and
secure logins for users with new advanced security measures.
We launched a new TV+ mobile application to
provide the best mobile TV+ experience to our
users. During the technical and design planning,
we prioritized user needs and preferences.
The new TV+ was launched in October with
distinctive features from the competitors such
as ease of use and fast access to content.
Turkcell offers a unique TV and video viewing
experience through infrastructure improvements
that will enhance TV+’s performance and
enable us to provide customized offers to users.
By listening closely to our users, we take their
changing needs, preferences and global trends
into account. Our overarching aim is to improve
the holistic TV+ experience every single day.
lifebox - THE BEST THING TO HAPPEN
TO A PHONE!
Enabling secure storage and sharing of photos,
videos, music and documents, lifebox offers a
socialized experience to users with its latest
features and also ensures easier and secure
logins for users with new advanced security
measures. lifebox, where more than 6.4 billion
files are stored, enables users to easily back
up photos and videos without being limited
by their phone storage capacities. Offering
users the option to backup contacts, lifebox
differentiates from the competition. In 2019,
more than 2.7 million users backed up their
contacts at lifebox. As of fourth quarter, the
3-month active user base rose to 3.3 million.
With its new feature PhotoPick, which
recommends photos that may receive more
“likes” on social media among other photos
uploaded to the platform, lifebox now provides
users the opportunity to socialize. Utilizing this
feature, which is based on artificial intelligence
technology, users not only back up their photos
but also share them with hashtags suggested
by lifebox on social media.
Security measures for user access to lifebox
accounts have been increased with the
development of two-factor authentication
feature. Users, who are particularly concerned
about security, will have an easier and secure
login experience by activating this feature.
Providing users with the opportunity to back
up their content on different platforms in
their accounts, lifebox enabled social media
archiving, backing up Dropbox files as well as
the ability to backup music lists from Spotify in
2019.
lifebox has users all around the world. This
year lifebox added ALBtelecom to its existing
global collaborations in Ukraine, Cyprus, Belarus
and with Moldcell. In 2019, with the ongoing
integration with Digicell, lifebox continues to
expand by strengthening its presence overseas.
Providing language support in Turkish, English,
Arabic, German, Russian, Ukrainian, Romanian,
Spanish, and Albanian, lifebox also started to
provide French language support following the
collaboration with Digicell in 2019 in order to
further enlarge its global audience.
DERGİLİK - NEWSPAPER AND
MAGAZINES AT YOUR FINGER TIPS
Dergilik, where hundreds of newspapers and
magazines published in Turkey are provided
digitally on a single platform, reached
3 million 3-month active users in the 4th
quarter of 2019. In 2019, Dergilik improved
users’ experience in accessing digital
publications while enhancing their magazine
and newspaper download and reading
performance, thus enriching the overall reading
experience. In addition to the industry first
features like personal articles, offline reading,
downloading the current issue of the followed
magazine automatically by a single instruction,
the current issue notification of the magazines
included in the favorite list, reading hundreds of
magazines for the price of a single magazine,
Dergilik will continue to add new features
Dergilik, where hundreds of
newspapers and magazines
published in Turkey are
provided digitally on a single
platform, reached 3 million
3-month active users in the
4th quarter of 2019.
66
TURKCELL ANNUAL REPORT 2019 oxygen. The contribution to environment through
Dergilik will increase each day with ever rising
penetration of digital publishing.
Turkcell’s Dergilik also introduced users to
content from numerous publishers leading to
growth in the digital publishing sector. Dergilik
demonstrates leadership by creating equal
opportunities for both small and large publishers
of the sector and enabling them to coexist in its
ecosystem.
YAANİ - TURKEY’S MOBILE BROWSER
AND SEARCH ENGINE
Yaani, Turkey’s newest mobile browser and
search engine, met users in October 2017.
Standing out with its features of understanding
Turkish very well, generating most appropriate
results for the content sought for and enabling
Turkcell users a search experience including
data usage, Yaani differentiates showing the
closest locations to users as part of location-
based searches. In this respect, Yaani which
received intense interest from users, reached 9.7
million downloads while its 3-month active users
exceeded 3.7 million by end of 2019. The search
engine ranked first in the list of most downloaded
free apps in just two days after it was launched
on both in App Store and Google Play.
Yaani also remembers important days for Turkey
and displays a distinct logo for users on its main
page for each special day.
Celebrating its second birthday on October
25, 2019, Yaani continues to add new features.
The stores shortcut feature offers users the
opportunity to reach their destination in the malls
without getting lost with navigation provided
on the map to the target store in the shopping
mall. Users can monitor foreign exchange and
currency movements with the exchange shortcut
feature. The sports shortcut feature provides
details regarding matches to be played, live
or already played while users can view the
standings table. The discount shortcut feature
presents specific discounts for Yaani based on
agreements made with e-commerce sites.
Under the Yaani domain, Turkcell launched
0.yaani, a content rich platform that users can
access without using their data packages. While
the content on the 0.yaani platform is growing
day by day, users can also access the latest
news and magazines, and follow the score of
live matches without consuming their data. In the
music category, users can listen to the radio via
fizy without interruption, while watching video in
the TV category, as much as they wish.
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Standing out with its
features of understanding
Turkish very well, generating
most appropriate results
for the content sought
for and enabling Turkcell
users a search experience
including data usage, Yaani
differentiates showing the
closest locations to users
as part of location-based
searches.
that will enhance reading experience through
advanced technologies. Accordingly, Dergilik
plans to provide audio articles and personalized
magazines, newspapers and articles offerings
very soon.
Corporate Publications
Documents that institutions periodically
deliver to their customers, such as corporate
publications and sectoral catalogs, are now
accessible over Dergilik. Through this model,
enterprises will be able to offer a unique
experience to their customers, while saving
money and entering into digital broadcasting.
The corporations that reach their customers
through Dergilik will have dynamic pages rather
than fixed print magazine pages and they will
be able to interact with their customers. Users
will access the catalog they want any time,
regardless of place.
Our Positive Contribution to the Environment
In 2019, Dergilik recorded over 140 million
newspaper and magazine downloads. That
counts to roughly more than 7 billion pages.
From this point of view, Dergilik users saved
nearly 500 thousand trees in 2019 and led
to production of over 35 thousand tons of
2019 OPERATIONSTURKCELL ANNUAL REPORT 2019 OUR DIGITAL SERVICES
Fast Login, a customer ID authentication service provided
through the use of mobile phone number, which is
most securely protected information in personalized
authentication, stands out as one of the most reliable
solutions that Turkcell has introduced to this field.
personalized authentication, stands out as one
of the most reliable solutions that Turkcell has
introduced to this field. Compatible with Mobile
Connect service provided by World Association
of Operators (GSMA), Fast Login became the
first global application to meet commercial
sustainability criteria worldwide in 2018. The
innovative service, which served as a role
model for applications of other operators, was
renewed in 2019 in line with the needs of end
users and services.
With an aim to improve the end-user
experience, Turkcell simplified Fast Login’s
corporate identity and interfaces to make them
more user-friendly. The data sharing model
with service providers, which is included in Fast
Login infrastructure and which can be used
following users consent, has been enriched
with new features to share address, date of
birth, gender, age range information based
on service provider needs and also to obtain
Electronic Commerce Code permission on
behalf of service provider. In this respect, while
end-users can easily and quickly subscribe to
digital platforms, service providers can provide
end-users with faster and more personalized
services based on information for which users
provide consent.
Turkcell created Fast Login SDK (Software
Development Kit) in order to facilitate
integration with service providers and allow
them to offer e-mail confirmation in addition to
mobile number authorization to their users. End
users now have the option of verifying their ID
via their mobile phones or a personal e-mail
address, and can access services faster and
easier.
Fast Login is integrated to 60 Turkcell and
26 non-Turkcell applications with new
technology upgrades. In 2019, Fast Login,
reaching 23.2 million registered users, was used
490 million times with its easy, fast and secure
mobile authentication service.
FAST LOGIN
With the increasing number and use of
digital platforms, certain issues including
authenticating identity on multiple platforms,
wasting time, sharing more information than
necessary and ensuring security of such
information, have arisen.
Turkcell developed Fast Login to address
these issues. This feature enables users to be
authenticated through their mobile phone
number and have them access services more
quickly, securely and easily. Fast Login, a
customer ID authentication service provided
through the use of mobile phone number,
which is most securely protected information in
In 2019, Fast Login, reaching
23.2 million registered users,
was used 490 million times
with its easy, fast and secure
mobile authentication
service.
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TURKCELL ANNUAL REPORT 2019
stickers can be attached to make calls more
enjoyable while conference calls of up to seven
participants can be initiated with a single click
through group calling feature. Without the need to
turn-off phone, when the Do Not Disturb feature
is activated, the callers hear the message that the
number cannot be reached at the moment while
users can monitor the incoming calls.
The UpCall application has the capability to access
the number of an unknown person or place with
inquiry over name feature, and also to identify
unknown numbers.
With its renewed interface, UpCall allows users to
monitor and effectively manage all notifications
and settings with respect to mobile calls on a single
screen. UpCall is also positioned as an additional
channel where users can subscribe to Turkcell
call services from Special Offers for You tab.
UpCall, which currently enables subscription to call
services including “Whocalled,” “WhoCalled Extra,”
“PhoneisOn,” “PhoneisOn Extra,” “WhoisCalling” and
“CallNow,” also completed system integration of
UpCall+, Ad Blocking and PaidCall services in 2019.
Th UpCall application was made accessible to users
in Turkish Republic of Northern Cyprus in fourth
quarter 2019.
BEEHIVE - TURKEY’S CROWD FUNDING
PLATFORM
Beehive enables project owners to secure the
financial resources they need to launch their
products via the support of individuals across
society, in large and small amounts, rather than
relying on a specific person or institution. More
than 6 thousand project applications have been
submitted to Beehive to date. 39 out of 73 selected
projects successfully completed campaigns and
raised funds exceeding TRY 5.6 million. Initiatives
that successfully attracted funds and started
mass production have already begun to make a
difference in the world. These successful projects
have brought global awards to Turkey with the
unique added value they created. The domestic
drone Ape X, which raised TRY 783,955 in 2018 and
registered the Turkish record, was selected among
the top 20 most innovative drones worldwide at the
Drone Innovation Initiative competition.
The WeWALK smart stick, which successfully raised
its target funds within 24 hours, won a Gold prize in
the “Health and Wellness” category at the Edison
Awards. WeWALK was also named one of the best
inventions of 2019 by Time magazine.
Twin Science Set, one of the first three projects to
raise funds on Beehive, was introduced to the world
and represented Turkey at New Scientist Live 2019.
69
Beehive enables project
owners to secure the
financial resources they need
to launch their products via
the support of individuals
across society, in large and
small amounts, rather than
relying on a specific person
or institution. More than 6
thousand project applications
have been submitted to
Beehive to date.
GOLLERCEPTE - SPORTS AGENDA IS ON
YOUR MOBILE DEVICE ANYTIME
GollerCepte delivers faster service with its systems
infrastructure renewed in 2019. Over GollerCepte
Live Score, GollerCepte 1903, GollerCepte 1905,
GollerCepte 1907, GollerCepte 1967 applications,
we offer the ability to follow flash news, special
videos, live scores from the world, standings,
league tables and live narrative of matches to
users and particular highlights for fans of 4 big
teams in Turkey. With the start of the Turkish Super
League 2019-2020 season, GollerCepte three
month active users expanded 38% compared to
the same period of the previous year, climbing
up to the 4 million level. “100 MB for Every Goal”
game, which strengthens customer retention, is
played 4.5 million times a month.
Through the Information League competition
introduced in 2019, we aim to increase the time
spent on application enabling users to have more
enjoyable time. In addition to Information League,
we plan to integrate new games to the platform
in order to increase the number of active users
and time spent on the application. Moreover,
implementing the freemium model in 2019,
GollerCepte displayed ads to the users of this
model and translated the traffic over the platform
into sustainable revenue sources.
UpCall – APPLICATION CHANGING
THE CALLING EXPERIENCE
UpCall, which enhances and simplifies the calling
experience of customers through numerous
features, shows user the identity of the calling
number which is not registered on the phonebook.
Moreover, when starting a call, pictures and
2019 OPERATIONSTURKCELL ANNUAL REPORT 2019 OUR DIGITAL SERVICES
The My Sign Language application, facilitates communication
between hearing impaired individuals and those who do
not know sign language. My Sign Language includes sign
language equivalents of over 3,500 words.
Turkcell’s My Dream
Companion is a free and
all-access service for all
operator subscribers that
serve visually impaired
people via a mobile
application compatible with
iOS and Android operating
systems.
My Gem Inside is a mobile
application that digitally
supports education of
children with autism
spectrum disorder, down
syndrome and learning
difficulties and that can be
used free of charge by all
operator users.
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Smart Mimic, a personal security solution that
collected TRY 104,071 on Beehive, accessed the
US market with an investment received from
StartersHub. Smart Mimic took its place among
initiatives representing Turkey in Silicon Valley.
Beehive aims to boost domestic technology
development and increase awareness of
supporting technology development across
society.
Beehive, which quickly became the market
leader in terms of fund size, created another
opportunity for entrepreneurs. Turkey’s first
private marketplace for entrepreneurs launched
an online store in order to continue to support
entrepreneurs with product sales post-funding.
Some of the enterprises successfully funded over
Beehive also sell their products at turkcell.com.tr,
Turkey’s leading e-commerce platform.
MY DREAM COMPANION
MY SIGN LANGUAGE
The My Sign Language application, launched in August
2017, facilitates communication between hearing
impaired individuals and those who do not know sign
language. The application supports self-development of
hearing impaired people.
Within the scope of innovative application, numerous
services including simultaneous translator of texts
and speeches into Sign Language, a digital dictionary
including sign language equivalents of over 3,500 words,
current news in sign language, content on personal and
child development and Sign Language trainings are
provided to users. The app can be downloaded free of
charge by customers of all operators. Data used within
the application is completely free for Turkcell customers.
With the systems integration in 2019, Turkcell’s hearing
impaired customers can obtain service from trained Call
Center employees in Sign Language over the application.
MY GEM INSIDE
Turkcell’s My Dream Companion is a free and
all-access service for all operator subscribers
that serve visually impaired people via a mobile
application compatible with iOS and Android
operating systems.
My Gem Inside is a mobile application that digitally
supports education of children with autism spectrum
disorder, down syndrome and learning difficulties and
that can be used free of charge by all operator users.
TURKCELL ANNUAL REPORT 2019 The application was cited as a model in June
by Tent Partnership for Refugees, which was
founded by Hamdi Ulukaya, CEO of Chobani,
to enable refugees to better integrate to the
countries where they migrated and to the global
economy.
The Hello Hope mobile application was
introduced as one of the exemplary projects
in the world at Global Refugee Forum held for
the first time this year. The event was hosted by
United Nations Refugee Organization (UNHCR)
and the Swiss Government at the UN Geneva
Office in December with the participation of the
country presidents.
Hello Hope application can be used free of
charge by customers of all operators.
WHIZ KIDS
The Whiz Kids project, carried out in cooperation
with the Ministry of National Education since
2016, aims to bring talented students together
with technology. The initiative is designed to
attract students’ curiosity to this important arena.
Whiz Kids encourages students to develop their
talent by identifying them at the early stages
of their educational development. The mobile
application of Whiz Kids was launched at
Sanliurfa BILSEM, affiliated with the Ministry of
National Education, in June 2019.
With the launch of mobile application of Whiz
Kids, the archive of training materials has been
expanded and made accessible to all children in
Turkey free of charge.
DIGITAL INTELLIGENCE
Digital Intelligence training content, which is
recognized as a world standard for children’s
digital literacy by the Organization for Economic
Co-operation and Development (OECD), Institute
of Electrical and Electronics Engineers (IEEE) and
World Economic Forum (WEF), was introduced to
children in Turkey via its mobile application and
website.
The mobile application and web platform,
which comprises 10 hours of training material,
aims to enable children to acquire eight digital
competencies; Digital Citizenship Identity, Screen
Time Management, Coping with Cyber Bullying,
Cyber Security Management, Personal Security
Management, Critical Thinking, Digital Footprint
and Digital Empathy.
Digital Intelligence mobile application is offered
to children between ages 8-12 in Turkey for the
first time and free of charge by Turkcell.
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HELLO HOPE
Hello Hope mobile application, which was
launched in September 2016 with the aim of
supporting Syrian people in overcoming the
language barriers, a major obstacle to their
participation to social life in Turkey, today
reached more than 1 million users.
The application enables users to benefit from
immediate voice translation in Arabic and
Turkish. The users of the application can also
learn the 1,500 most common words and
every day phrases used in Turkish, both written
and verbally, and check their pronunciation
skills. The innovative application delivers useful
information on daily life in Turkey, news in
Arabic, and Arabic Call Center access with a
single button.
In 2019, in cooperation with the Ministry of
Family and Social Policies and United Nations
International Organization for Migration, written
and visual content for work permits were
added to the application.
The Hello Hope mobile
application was introduced
as one of the exemplary
projects in the world at
Global Refugee Forum held
for the first time this year.
The event was hosted by
United Nations Refugee
Organization (UNHCR)
and the Swiss Government
at the UN Geneva Office
in December with the
participation of the country
presidents.
2019 OPERATIONSTURKCELL ANNUAL REPORT 2019 OUR DIGITAL SERVICES
hesApplı, our cost management platform launched in
September 2019 to offer privileged solutions to SMEs, enables
them to get advantageous offers leveraging Turkcell Group’s
bargaining power.
Turkcell provides the fastest and most effective
solution to meet the marketing needs of
companies with its Digital Messaging Services. We
enabled firms to make a difference in marketing
communications with richer visual content through
Rich Content Message (RCM) and reach out the
right customer at the right time via location-based
SMS.
We provided companies the capability to send
SMS and RCM messages from a single platform
and report them instantly via our Message Base
service.
INDIVIDUAL ASSET TRACKING
Individual Asset Tracking solution, launched in
2016 to enable parents to reach their children at
any time, became the choice of more than 40
thousand parents in 2019. This innovative offering
enables parents to monitor their children from
GPS positioning, and informs them in case of
emergencies. They can also reach out their children
through voice and video calls with Turkcell quality.
Individual Asset Tracking solution, which is highly
appreciated by parents, continues to expand its
user base each year.
hesApplı - COST MANAGEMENT
PLATFORM FOR SMES
hesApplı, our cost management platform launched
in September 2019 to offer privileged solutions to
SMEs, enables them to get advantageous offers
leveraging Turkcell Group’s bargaining power.
Entering into its first cooperation with Petrol
Ofisi, Turkcell enabled SMEs to earn at least 4%
discount on fuel spending through the application
free of charge. We also reduce the costs of SMEs
while digitizing their business processes. Through
hesApplı, SMEs can purchase fuel without receipts
or invoices, and access detailed consumption
reports on the platform.
Turkcell also plans to add modules to hesApplı
to include major expense items of SMEs such as
electricity, car wash, food, insurance, among others
in the upcoming periods.
SUPERCAM AND SMART HOUSE
Turkcell has been offering Supercam to customers
with internal and external camera options in order to
provide security for houses and office spaces since
third quarter of 2018.
Our smart camera product sends instant
notifications to our customers, who desire to
protect their houses and workplaces from undesired
situations, over their mobile phones. Supercam
enables users to monitor recordings backwards with
the assurance of Turkcell while the video records
are stored securely in Turkcell cloud systems. With
the Supercam application, images can be viewed
live or offline. While offering a solution that make a
difference in camera technologies, Turkcell delivers
customer support and technical services, as well as
after-sales support and free of charge installation
for the product.
Turkcell will provide security and comfort to its
customers with diversified products in the upcoming
periods with the aim of becoming a key player in
the fast-developing smart home sector.
DIGITAL MESSAGING SERVICES AND
MESSAGE BASE
In 2019, tens of thousands of companies reached
their customers via Digital Messaging Services (DMS)
and continued to differentiate from the competition.
Supercam sends instant
notifications to our
customers, who desire to
protect their houses and
workplaces from undesired
situations, over their mobile
phones. Video records of
Supercam are stored securely
in Turkcell cloud systems.
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TURKCELL ANNUAL REPORT 2019 73
2019 OPERATIONSTURKCELL ANNUAL REPORT 2019 THE SHINING STAR OF TECHFIN: PAYCELL
The vision of Paycell is to be an enabler on financial
inclusion with the combination of technology and
financial services.
In this new digital era, where majority of
the interactions are occurring over digital
platforms, financial transactions of daily life
are increasingly becoming digitized, too on the
back of technological developments. While
the world has been going through rapid a
techfin transformation over the last decade, the
penetration of techfin services and solutions
has risen significantly. Techfin players in various
geographies reached considerable scale with
increasing transaction volumes and market
capitalizations leaving behind the leading players
of the banking industry on the back of innovative
solutions that facilitate lives of customers. As
Turkcell, we have been carrying out our techfin
activities since 2015 believing in the significant
potential of this area. With our Paycell brand, we
take rapid steps towards the target of becoming
the pioneering and leading player in techfin.
The Turkish market, where we have our
operations, offers significant potential for
the expansion of techfin services with its
attractive internal dynamics. In particular; the
high percentage of young people, the strong
smartphone penetration, unbanked population
of nearly 30 million, still high cash usage for
transactions and increasing e-commerce
volume are the prominent factors that have
significant potential to enhance the use of techfin
solutions. Moreover, regulatory environment,
which have become more supportive following
the introduction of recent legislations mainly on
mobile POS usage, open banking, and e-money,
also has the potential to positively impact techfin
activities.
The vision of Paycell is to be an enabler on
financial inclusion with the combination of
technology and financial services. Accordingly,
we introduce our services and solutions to our
customers in various verticals including direct
carrier billing, bill payment, money transfer and
payment facilitation over our application, which
we position as a Super App. In the fragmented
techfin market in Turkey, where competition
is focused on providing solutions in particular
verticals, Paycell differentiates and stands out with
its strong positioning enabled by its wide portfolio
of services as well as its access to Turkcell’s deep
technology expertise, large customer base and
sales channel. As part of its go to market strategy,
Paycell focuses on increasing the number of
merchants through mobile POS and QR payment
solutions while putting efforts to raise the number
of Super App users.
2019 was a year that Paycell continued its strong
growth. 7.3 million customers took advantage of
using Paycell’s financial services while Super App,
Paycell application which has been improved
with new functions throughout the year, reached
5 million downloads. The number of merchants
reached 7 thousand and 3-month active users
increased to 4.5 million by the end of the year. Total
revenues of Paycell increased by 35% to TRY 252
million in line with its plans.
Paycell provided customers a variety of innovative
services and solutions in 2019. Paycell users can
conveniently top-up their public transportation
istanbulkart on their mobile phones via the
Paycell app, with the option of paying through
their phone bills. Or they can transfer money 24/7
using their mobile phones without the need for
IBAN or account number. Moreover, Paycell Card,
which can also be used as “allowance card” for
the kids, facilitates the lives of parents. This year,
Paycell also became a member of VISA and BKM
launching its card with BIN, and enabled top-ups
and withdrawals at the ATMs of all banks. Our
meal card business Paye Kart, is an accepted
payment alternative across a wider network.
Welcomed at over 7 thousand locations, Paye Kart
also started to serve as a travel card for İstanbul.
Payment of purchases at n11, one of Turkey’s largest
e-commerce companies, can be performed using
the direct carrier billing option of Paycell. Following
the recent agreement, payments at Burger King
restaurants in Turkey can be conducted via using
QR codes on Paycell.
7.3 million customers
took advantage of using
Paycell’s financial services
while Super App, Paycell
application which has been
improved with new functions
throughout the year, reached
5 million downloads.
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TURKCELL ANNUAL REPORT 2019 75
2019 OPERATIONSTURKCELL ANNUAL REPORT 2019 TURKCELL SALES CHANNELS
We bring our integrated Turkcell solutions to customers across
all of our sales channels while striving to provide the same
level of superior quality service at every sales point.
store reflecting the outlook of Istiklal Pera district.
Incorporating the unique elements of iconic Istiklal
Street into the store, Turkcell offered a distinguished
atmosphere to surprise customers. With the exceptional
design of this flagship store, Turkcell was one of the
finalists at the Society of British and International
Design (SBID) Association Awards competition.
With the use of in-store sales platform “GO,”
Turkcell offered its devices, tariffs and digital service
products to customers in a visually rich, easy and
comprehensible way. We enhanced our service
model with the ability to provide customized offers
and boosted customer satisfaction by improving their
store experience. In addition to the benefits provided
to customers with “GO,” Turkcell accelerated the
staff development by giving instant training to store
employees during the sales process. We also improved
employee loyalty and motivation with our award
programs.
In addition to the rich product portfolio offered at
Turkcell stores, we upgraded our systems infrastructure
as part of the digital transformation process. This
improvement enabled us to provide attractive offers to
customers via numerous customized campaign models,
including “Yellow Days,” “Special Deal Campaign” and
“Opportunity Garage” in 2019. We also offered hourly
surprise campaigns under the name “Opportunity Hunt”
to customers visiting our retail stores by using QR code.
In 2019, Turkcell continued its Store Employee
Certification Program with a 94% success rate. By
accelerating the certification process, we ensured that
Turkcell staff members are certified within the first
two weeks of employment. In 2019, we expanded the
employee participation in our Advanced Certificate
Program to 358 from 300. The program was prepared
with the cooperation of Marmara University and
Turkcell Academy to further improve performance of
our store employees in retail sales. We also prepared
a Finance Certificate Program in order to enhance the
competency of our employees in finance. Nearly 5,000
of our store employees successfully completed the
training and qualified to take the SEGEM (Insurance
Training Center) Certificate exams.
CONSUMER SALES CHANNELS
OUR CHANNEL STRUCTURE
Turkcell, Turkey’s leading communication and
technology company, delivers all the advantages,
campaigns, devices, services and facilities to
its customers over its well-structured sales
channel. We provide customer-focused services
and develop innovative solutions in line with a
customer-centric strategy via our Turkcell Stores,
Alternative Sales Channels, Online Channel, Fiber
and DSL Solution Centers, and Corporate Sales
Channels.
We bring our integrated Turkcell solutions to
customers across all of our sales channels while
striving to provide the same level of superior
quality service at every sales point.
OUR RETAIL CHANNEL
Turkcell delivers high quality services at more than
1,300 Turkcell stores, of which transformations
were completed in 2018, and over 4,000 digital
sales points as part of its retail channel. Closely
monitoring the customer and retail trends, we
have reflected, differentiated and customized
the experience in our Istanbul Pera flagship
Turkcell delivers high quality
services at more than 1,300
Turkcell stores, of which
transformations were
completed in 2018, and over
4,000 digital sales points as
part of its retail channel.
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TURKCELL ANNUAL REPORT 2019 We focused on delivering
an uninterrupted and
exceptional customer
experience over Online Sales
Channel enabling flexible
models including product
delivery within 24 hours,
alternative payment options,
and the option to receive
product delivery at
a preferred store.
1.8 million
units sold
1.8 million units of TV+,
lifebox, fizy products have
been sold over Alternative
Sales Channels using big
data in conjunction with
our analytical models and
machine learning.
Turkcell Portal system, which was launched in 2018,
completed its expansion in 2019. On the back of
this portal, Turkcell has enabled the standardization
of the brand, product, quality and service of the
products in the accessory category. With this
system, randomly selected samples from the
products that we offer to customers in our Turkcell
stores, went through an additional special test
procedure at world standards as part of a special
cooperation with Turkish Standards Institute (TSE).
Over the past year, Turkcell has made 10 thousand
different products from over 40 brands accessible
to its distributors and dealers through Turkcell
Portal. We continue to add new brands and
product groups to this platform each day.
In 2019, Turkcell targeted localization of its offers
as well as communication as part of its customer
focus. With the aim of boosting market share and
customer loyalty, we developed tariffs and device
offers specific to the selected provinces. These
special deals included traffic plate-specific and
district-specific offers.
OUR ALTERNATIVE SALES CHANNEL
Telesales, Chain, Bank Channels and
Hypermarkets remain part of Turkcell’s Alternative
Sales Channel, which registered a sales volume
of 12 million units in 2019. Moreover, we also
developed sales competency and focus of chat
based channels including Social Media, Web Chat
and proactive chat, turning every point where we
interact with our customers into a sales channel.
Alternative Sales Channels are now the main
channel for Digital Services sales. 1.8 million units
of TV+, lifebox, fizy products have been sold
over Alternative Sales Channels using big data
in conjunction with our analytical models and
machine learning.
In 2019, thanks to the Environment Friendly Invoice
subscription over the Telesales Channel, Turkcell
reduced its printed invoice expenses saving
TRY 7.5 million annually.
OUR ONLINE SALES CHANNEL
As part of its digitization focus, Turkcell made a
strong start to 2019 with its Online Sales Channel
and took significant steps to lead Turkey’s
e-commerce industry forward. Prioritizing our
investments on new communication activities
and sales models, we achieved steady growth
in customer visits and accordingly registered
visits over 1 million per day in 2019. As part of our
phygital marketing strategy that we initiated in
2018, we continued our 360-degree marketing
communication activities via campaigns such as
Yellow Days, Opportunity Garage, while closely
coordinating all our sales channels.
We focused on delivering an uninterrupted and
exceptional customer experience over Online
Sales Channel enabling flexible models including
product delivery within 24 hours, alternative
payment options, and the option to receive
product delivery at a preferred store. As part
of the new business models that we develop,
we buy second hand handsets from customers
and provide discounts for their new handset
purchases.
We started to focus on hourly and late night
promotional campaigns with an aim to leverage
the time our customers spend on turkcell.com.tr
to the most possible extent and interact with
them as long as they remain active. On the back
of multiple payment solutions, we created a
journey where customers can make purchases
and reflect the cost to their telco invoices. We
also launched a new website where customers
can complete the purchase process in just three
minutes and find everything they are looking for.
CORPORATE SALES CHANNELS
As Turkcell, we have always been able to
introduce firsts to Turkey over the last 25 years
since the establishment of our company. As part
of our journey, we have successfully transformed
Turkcell from a classic telco operator into world’s
first digital operator. Taking into consideration
the changing dynamics in the world and in
Turkey, we have first completed our own digital
transformation. We continue to add value to
the lives of our customers over their digital
transformation journey through our digital
services.
As Corporate Sales channels of Turkcell, we
provide services to public, strategic, large and
small-scale corporate customers across Turkey
based on segmented structure.
Turkcell continues to grow rapidly in the
corporate market. We aim to position Turkcell as
a one-stop shop offering connectivity, services
around cloud and security solutions, integration
of such services and IT related solutions.
Institutions in Turkey aim digital transformation
to manage their costs efficiently, expand
their customer base and enhance customer
experience and loyalty. These institutions need
strong business partners, who are capable of
executing long-term projects rather than a long-
term single project. They need strong solution
partners that will accompany them on this long
journey meeting all of their needs. In accordance
with this vision, we established Digital Business
Services.
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2019 OPERATIONSTURKCELL ANNUAL REPORT 2019 DIGITAL BUSINESS SOLUTIONS
We provide end-to-end digital solutions to private sector
companies and public institutions. Thus, we contribute to
Turkey’s growing digital economy offering value propositions
which enable enterprises to grow revenues.
In line with our vision, we
have implemented about
1,000 custom made projects
to date and we continue to
manage these projects.
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Turkcell Digital Business Services was established
in January 2019 to serve as the digital
transformation partner of Turkcell corporate
customers. The new company will meet
corporate customers’ needs leveraging Turkcell’s
brand power of 25 years, its extensive sales
force covering public, strategic, large and small-
scale customers, and its superior technology
infrastructure.
We formulated a completely new business
model to offer vertical solutions in transportation,
finance, healthcare, education, logistics,
production, retail, energy and in similar fields
with the aim of meeting needs of all industries.
Moreover, added value services will be
developed based on advanced technologies such
as artificial intelligence, Internet of Things, and big
data while alternative financing models will be
offered as part of this new business model. We
provide end-to-end digital solutions to private
sector companies and public institutions. Thus, we
contribute to Turkey’s growing digital economy
offering value propositions which enable
enterprises to grow revenues.
In line with our vision, we have implemented
about 1,000 custom made projects to date
and we continue to manage these projects.
As part of these efforts, we analyze particular
needs of customers from various industries and
identify the appropriate solution. With our expert
project management team, we deliver several
solutions and services on different fields including
network, security and system management,
application management, end user support,
datacenter, digital transformation, IoT, mobile
applications, mobile user support. We implement
the most effective solution in accordance with
specific business processes of our customers.
We continue to offer end-to-end services to the
healthcare industry through our projects where
we provide digital solutions to five hospitals.
Although established just at the beginning of 2019,
Turkcell Digital Business Services company was
awarded by HIMSS (Healthcare Information and
Management System Society). We presented
the digital infrastructure that we developed
for the healthcare industry at HIMSS Eurasia
2019 Health Informatics Exhibition. We received
HIMSS 6 award with Adana City Hospital and
HIMSS 7 award with Yozgat City Hospital.
Turkcell Digital Business Services plays a leading
role in Turkey’s technological transformation
with its robust technology infrastructure. We
own a strong mobile network operating on the
widest spectrum, 45 thousand km end-to-end
fiber infrastructure and eight world-class data
centers that enable us to provide superior quality
TURKCELL ANNUAL REPORT 2019 We provide cyber security consultancy services
to corporate customers at all levels which is a
core component of digital transformation. We
manage processes like analysis, infrastructure
and testing for our customers. Turkcell Digital
Business Services has registered its competency
with FIRST (Forum of Incident Response Security
Teams) certification, one of the most prestigious
certificates in cyber security. FIRST works with
accredited security operations centers around the
world to ensure that measures are taken against
potential threats, and provides access to the
best resources for reactive/ proactive protection.
We are the first company in Turkey with FIRST
certification.
We continue to deliver end-to-end solutions
to enterprises and our partners contributing to
Turkey’s digitization journey through our Digital
Business Services company. In this context,
Turkcell IoT Platform enables companies to
remotely manage their devices and machines
over cloud without incurring infrastructure
investment costs. We also offer our business
partners operating in the IoT ecosystem the
opportunity to scale their solutions very quickly.
Through Big Data Services, which were launched
in 2019 as part of Turkcell Digital Business
Services, we help our customers to take strategic
decisions, increase profitability and enhance
efficiency by performing meaningful analyses
on dynamic and real data. With these efforts,
we continue to create value for customers
across many sectors including retail, real estate
(shopping center), transportation, finance, tourism,
energy and finance.
One integral part of digital transformation
is general device needs. In this respect, we
launched the Enterprise Device Lease service to
facilitate digital transformation of enterprises,
simplify their operations and increase efficiency.
Device leasing service enables companies to
make crucial savings from device investment,
which require upfront cash out flows and has
long payback periods, and allocate more
resources to their core business.
We also offer “Digital Transformation Financing”
to customers willing to purchase software,
servers, projects and services, which are among
the most important requirements of digital
transformation journey, via Turkcell group
company Financell. Financing is also available
to meet device purchases such as smartphones,
computers and tablets. In this respect, customers
can access customized devices prices, financing
limits and interest rates while they have the
option to extend their payments through
instalments over time and benefit from flexible
payment plans.
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Through Turkcell Cloud
services, we position
corporates’ whole
information technology
infrastructure within Turkcell
data centers reducing their
costs and providing a more
flexible infrastructure.
services. As the largest datacenter operator in
Turkey, we have this vision that “Turkey’s data
should remain in Turkey.” In accordance with
this vision, we lead the market in datacenter
operations and pursue our efforts.
As the main operator of Turkey’s cloud services,
we provide cloud services to our enterprise
customers. Through Turkcell Cloud services,
we position corporates’ whole information
technology infrastructure within Turkcell data
centers reducing their costs and providing a
more flexible infrastructure. Our customers can
purchase systems infrastructure and application
services over the platform at the desired capacity
and start using them within minutes, paying
based on usage. This integrated platform with
end-to-end automation also allows Turkcell
Digital Business Services customers to manage
their own resources. The latest technologies,
which will ensure business continuity, can be used
over Turkcell Cloud platform without incurring
investment costs. We provide an uninterrupted
service experience from fully backed up
infrastructures at five different data centers in
Istanbul, Ankara and Kocaeli through Turkcell
Cloud platform.
2019 OPERATIONSTURKCELL ANNUAL REPORT 2019 INTERNATIONAL SALE AND WHOLESALE
We lead the change in Turkey’s telecommunications sector
through business partnerships with national and international
operators in roaming, interconnection, wholesale voice and
wholesale data services.
Through collaborations with
leading global operators,
we have served as a
bridge providing wholesale
customers with uninterrupted
access from east to west,
at the speed of light.
8 Tbps
As part of our wholesale
data services, we have
increased our international
carrying capacity to over
8 Tbps.
80
We lead the change in Turkey’s
telecommunications sector through business
partnerships 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 through the activities that we
conducted since 2008 towards our vision of
transforming the Silk Road into the Fiber Road,
and our core strategy of positioning Turkey
as the primary internet route, with Istanbul
becoming a regional internet hub.
Through collaborations with leading global
operators, we have served as a bridge
providing wholesale customers with
uninterrupted access from east to west, at the
speed of light.
ISTANBUL, THE TRAFFIC EXCHANGE
HUB OF THE REGION
As part of our wholesale data services, we
have increased our international carrying
capacity to over 8 Tbps. We have cooperated
with the world’s largest global traffic exchange
platforms and played a major role in their
decision to enter Turkish market. Thus, we have
taken another crucial step in transforming
Istanbul into the traffic exchange hub of the
region. We have also played a significant role
in encouraging content providers to offer their
services from Istanbul.
WE EVALUATED 2019 ISSUES AT
THE WHOLESALE INTERNATIONAL
OPERATORS CUSTOMER EVENT.
As part of the event that we held in Istanbul on
September 17, 2019, we discussed 2019 issues
and evaluated new cooperation opportunities
that have potential to contribute to the sector
with nearly 200 top executives from more than
60 international companies in accordance with
our mission of positioning Turkey as a regional
digital hub and Istanbul as its technology
center.
TURKCELL ANNUAL REPORT 2019 By enabling other national
operators to utilize our
infrastructure, we both
created new business
opportunities and pioneered
high-profile and successful
projects that pave the way to
technological transformation
of our country.
INFRASTRUCTURE SHARING AND JOINT
INFRASTRUCTURE
By enabling other national operators to utilize
our infrastructure, we both created new
business opportunities and pioneered high-
profile and successful projects that pave the
way to technological transformation of our
country.
We have played a leading role in the initiation
and progress of activities around establishing
joint infrastructure solutions that will enable
our country to reach information in the
fastest, highest quality manner and with most
accurate cost structure, facilitate information
processing, ensure information storage and
create a competitive environment for all service
providers, with a focus on real productivity in
increasing richness of services.
eCALL, OUR MOBILE INFRASTRUCTURE
SOLUTION FOR THE AUTOMOTIVE
SECTOR
We are the first operator in Turkey that started
to provide the communications infrastructure
for “eCall,” the emergency call system for
imported vehicles.
This technological solution enables to locate
the position of the vehicle in the event of an
accident and allow paramedics get information
about the health conditions of the passengers
prior to arriving accident location. We had the
privilege to lead this crucial project which has
significant potential in preventing loss of lives
due to traffic accidents.
TURKCELL CUSTOMERS ROAM LIKE
HOME WHILE ABROAD.
We continue to position the efficiency, which
we gained through our cooperation activities
with international operators from all over
the world, as a benefit to our consumer and
corporate segment customers’ international
tariffs.
Roam Like Home package that started
with 51 countries now covers 98 countries.
Through this package, which enables our
subscribers travelling abroad to enjoy benefits
of their domestic tariffs, we meet all of their
communication needs through advantageous
offers.
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We continue to position the
efficiency, which we gained
through our cooperation
activities with international
operators from all over the
world, as a benefit to our
consumer and corporate
segment customers’
international tariffs.
2019 OPERATIONSTURKCELL ANNUAL REPORT 2019 CUSTOMER EXPERIENCE FOCUS
Our Digital Operator application, which we developed to
respond to customer needs by most appropriate means, turned
into the most preferred service and sales channel by Turkcell
customers and reached 48.6 million downloads in 2019.
FAST LOGIN
By integrating Fast Login to Turkcell’s numerous
digital channels and applications, we improved
the customers’ login experience and resolved the
issue of forgetting one’s password. Fast Login,
a customer ID authentication service provided
via mobile phone number, operates over World
GSM Association (GSMA)’s global solution Mobile
Connect infrastructure and is supported by
numerous GSM operators worldwide. Fast Login,
providing facilitated access to digital channels and
applications, has reached 23.2 million registered
users.
DIGITAL OPERATOR
Our Digital Operator application, which we
developed to respond to customer needs by most
appropriate means, turned into the most preferred
service and sales channel by Turkcell customers
and reached 48.6 million downloads in 2019. The
3-month active customers of the application
reached 21.2 million and Turkcell customers
performed 800 million transactions per month over
the application.
In addition to monitoring their remaining quotas
over the application, customers can review and pay
their bills, access packages, services and campaigns
that are most suitable for their usage habits, and
switch instantly between tariff options. We also
help our customers to make the right choices at the
right time with proactive notifications.
Furthermore, we offer affordable devices and
accessories to customers via Digital Operator. With
cargo tracking module, we display the status of
products they purchase.
Customers can report their network connectivity
complaints to Turkcell over the application by
establishing automatic call connection from the
“Help” feature. They can also easily make requests,
which require documentation, by adding the
images of the respective documents through the
“Submit Request” feature. They can follow the
status of their complaints and requests through the
“Notifications” feature. Moreover, customers can obtain
support from Turkcell Assistant, an artificial intelligence
solution, whenever they need to and perform numerous
transactions easily without calling call center.
In 2019, Turkcell continued the Shake and Win
promotional campaign with surprise gifts which varied
on a weekly basis. With Shake and Win conducted
every week, Turkcell offers customers internet packages
and digital service subscriptions. In 2019, we gave away
nearly 750 million gifts to customers via Shake and Win.
Our customers can manage all of their Turkcell
subscriptions including fixed broadband and mobile lines
from a single application by adding each to the platform
via the “Add account” function. Nearly 300 thousand
Superonline customers perform 2.7 million transactions
on a monthly basis using Digital Operator.
With the addition of the Gift Pool feature to the Digital
Operator this year, customers can view and track all
of the gifts and privileges they have earned to date,
and gifts and privileges they can potentially earn in
the following periods, over a single platform. Turkcell
combines all the gifts and opportunities it offers in the
enjoyable and dynamic design of the Digital Operator
application. Using Gift Pool, customers are able to learn,
examine and review the benefits of various campaigns
from Shake and Win to Surprise Point, and also the
#senyapdiye gifts and periodic advantages before
anyone else while they are directed to the channels
where they can earn those benefits. Applications
including Turkcell Platinum, GNÇ and Paycell, which offer
privileges to customers, are accessible over the Gift Pool.
Customers can also track the previous gifts earned in
the last one year over the Gift Pool.
MY COMPANY
We enable corporate customers to carry out all
respective transactions regarding their corporate lines
over a single platform through My Company application,
custom made for corporate customers. We forward
developments regarding corporate lines to respective
company officials through instant notifications. Turkcell
provides speed and convenience to company
officials enabling them to carry out transactions such
We enable corporate
customers to carry out all
respective transactions
regarding their corporate
lines over a single platform
through My Company
application, custom made for
corporate customers.
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TURKCELL ANNUAL REPORT 2019 Turkcell provides services in
Turkish, English, Arabic, and
Russian via its application
consultant team for 16
different digital services.
The application consultant
team receives 45 thousand
monthly requests through
various Turkcell applications.
72%
We can resolve nearly
72% of customer contacts
through our Chatbot
technology.
as switching to appropriate offers and campaigns,
SIM card changes, online and without paperwork.
In 2019, 230 million transactions were implemented
over My Company’s web and mobile application
platforms, which were used by 196 thousand
companies.
APPLICATION CONSULTANT
Turkcell provides services in Turkish, English, Arabic,
and Russian via its application consultant team for 16
different digital services. The application consultant
team receives 45 thousand monthly requests
through various Turkcell applications.
CHAT&CHATBOT
Turkcell enables customers to conduct transactions
regarding Turkcell lines and utilize the unique
benefits specially prepared for them over its Digital
Operator, GNÇ and Platinum applications. Across all
these applications and channels, Turkcell developed
chat based service channels where customers can
access us anytime and anywhere quickly and easily
without having to perform a call.
Customers can contact Turkcell via instant
messaging when they need to ask a question
about their lines or our applications.. We provide
average of 1.6 million chat sessions to customers
per month. With artificial intelligence based Chatbot
technology, Turkcell has increased the automation
level of its instantaneous chat based services for its
customers. We can resolve nearly 72% of customer
contacts through our Chatbot technology.
We pursue AI-based Chatbot related activities
expanding analytical models and keeping previous
analysis live. Moreover, as part of these activities, we
also monitor customer insights and make necessary
updates enriching scenario and channel based
analysis.
SOCIAL MEDIA
Turkcell connects with social media users 24/7
with a total of 54 accounts on Facebook, Twitter,
Instagram, YouTube and LinkedIn. We respond to
nearly 165 thousand comments of 50 thousand
social media users per month. Turkcell initiates
dialogues with users based on the nature of the
social platform and in accordance with its brand
positioning, and provides support for all of our digital
applications.
UNINTERRUPTED SERVICE EXPERIENCE
THROUGH MOBILE COMPENSATION
SOLUTIONS
We activated the uninterrupted service structure
targeting our customers whose disconnection
exceeds 24 hours. We provide 4 GB mobile data
support to these customers. Turkcell sent 509
thousand promo codes to 383 thousand customers
to ensure uninterrupted service to its customer base
in 2019.
EASE IN TV+
We eliminated the requirement to enter mobile
phone number and password on the TV+ Home
boot screen, after installation or resetting. With
this modification, we shortened the installation
experience and prevented complaints regarding this
issue.
FIXED CAMPAIGN INTERACTIVE VOICE
RESPONSE (IVR) SOLUTION
Turkcell started to recognize customers, who
consumed their data quotas, over IVR while provided
information and offering additional data package
at first contact before connecting to customer
representative.
VIDEO CALL CENTER
The Face to Face Customer Service channel of
Turkcell and Superonline started to provide video
services as of March 1 with the aim to foster social
support. This innovation also facilitates the lives of
hearing impaired customers. Customers can access
the Face to Face Customer Service from Digital
Operator, the Sign Language application, Turkcell
and Superonline stores and receive service in sign
language between 10:00-19:00 every day of the
week. Hearing impaired customers can use the
service free of charge. As part of the service model,
external calls and call-backs to customers can be
performed by call center representatives. Customers
can reach out to Call Center by clicking the link in
the message after an SMS is sent. Turkcell serves 2
thousand hearing impaired customers monthly over
the Video Call Center. We meet the demands of
100 additional customers per month by performing
external calls.
OPEN REQUEST/COMPLAINT QUERY IN
INTERACTIVE VOICE RESPONSE (IVR)
Customers, who contact Turkcell Superonline Call
Center for their unsolved requests/complaints, are
now provided with instant and proactive information
through the interactive voice response (IVR) system.
Through this improvement, Turkcell meets demands
of its customers through IVR without waiting to be
connected to a customer representative. We also
provide dynamic announcements to customers
through IVR according to five different units: Turk
Telekom, Field operations, ICT (information and
communications technology), Backoffice and
Finance. By providing services to 6,000
customers per month through our IVR, we save
TRY 410 thousand annually.
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2019 OPERATIONSTURKCELL ANNUAL REPORT 2019 CUSTOMER EXPERIENCE FOCUS
We conducted numerous projects to improve customer
experience over Interactive Voice Response (IVR), a digital
channel connecting Turkcell to its customers.
INTERACTIVE VOICE RESPONSE (IVR)
SYSTEM
We conducted numerous projects to improve
customer experience over IVR, a digital channel
connecting Turkcell to its customers.
We enabled customers to check their credit limits
via IVR and complete their transactions over the
digital channel without connecting to the Call
Center. As part of this structure, some 39 thousand
Platinum and individual mobile phone customers
completed their credit limit check transactions
over automated system.
Turkcell can proactively determine customers,
who contact the Call Center for complaints
regarding calling and internet experience, through
real-time solutions and offer location reset service.
KIOSK TRANSFORMATION
WE LISTEN TO THE “CUSTOMER’S
VOICE” THROUGH ALL CHANNELS.
Turkcell developed the Kiosk Transformation
(Support Line) project in accordance with its
digitalization strategies. With this effort, we
eliminated the need for the physical kiosk (Support
Line) in our stores improving experience with a
digital solution in more than 1,300 of our stores.
Turkcell’s customer experience team receives
and interprets costomer’s voice as part of the
customer interactions across every contact point.
Based on the feedback we get, we strive to
enhance our services to our customers.
The newly designed digital solution helps
customers, who need to connect to the Call
Center instantly; who want to receive Call Center
service in Turkish, English, Russian or Arabic; or
who want to be called by Turkcell regarding
suitable packages and tariffs.
DIGITAL SOLUTION PROCESS TO
FACILITATE THE LIVES OF CUSTOMERS
IN TURKCELL STORES
If a Turkcell customer enters a store and wants to
connect to the Call Center immediately, Turkcell
creates a request by selecting the language
based on the customer’s preference. In this
respect, the customer receives a special code and
reach a customer representative without waiting.
With an aim to improve ourselves and provide
better service to our customers, we analyzed and
interpreted customer feedback received through
Call Center, Social Media channels as well as chat,
application consultant and emails in 2019. Based
on these analysis, we determine our development
areas and action plan.
At the same time, we launched an online platform
called Customer’s Voice. This is a platform where
we can listen to past conversations between
our customers and our call center, which are
cleared from personal data, and understand their
experience more closely. Turkcell employees can
share these conversations among each other
with an aim to improve our service quality and
customer satisfaction.
Turkcell’s customer
experience team receives
and interprets customer’s
voice as part of the customer
interactions across every
contact point. Based on the
feedback we get, we strive
to enhance our services to
our customers.
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TURKCELL ANNUAL REPORT 2019 Turkcell designs its products,
services and solutions
understanding the needs of
customers. Carrying out
all of our activities with
design-oriented thinking, we
offer solutions that will make
a difference in the lives of
our customers.
In order to improve our products, services and
business processes continuously, we receive
feedback at every point of customer contact.
Some 400 thousand customers share their
experiences with us on a monthly basis and rate
their experience. Based on this feedback, Turkcell
aims to improve its service quality to ever higher
levels.
We continue to integrate new technologies into
our business processes to better understand our
customers. At the beginning of 2019, we integrated
artificial intelligence into our survey structure to
interpret customer surveys instantly. We started
to track trends by classifying received feedback
under specific titles.
PEOPLE ORIENTED DESIGN
Turkcell designs its products, services and solutions
understanding the needs of customers. Carrying
out all of our activities with design-oriented
thinking, we offer solutions that will make a
difference in the lives of our customers. Turkcell
listens to the needs of its customers, investigates
the root causes of their problems and tries to
discover the most appropriate solution to their
problems. We prototype solutions that we
discover, present them to our customers and
prepare our products or services based on their
feedback.
CUSTOMER ACTION
Turkcell encourages all employees to embrace
an “I’m here for my customer” approach and
awareness. In this respect, Turkcell initiated the
Customer Action transformation program. As
part of this program, all Turkcell employees are
expected to take decisions, design products and
services with an aim to make customers feel
“Safe, Valuable, Happy.”
Providing an exceptional experience to customers
is not only the responsibility of employees who
come into contact with customers directly. This
is also the responsibility of all Turkcell employees
who design, develop and plan all products and
services which are offered to our customers. Our
strategic priority is to raise customer awareness
among employees and make them feel as if our
customers are together with us all the time as
part of our business culture.
The customer action program includes all Turkcell
employees without any distinction of their
departments. As part of the shared objectives
approach, all employees implement actions that
will remove barriers in front of customers, provide
experiences that make a difference, and make
our customers say “I am glad that I am a Turkcell
customer."
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As part of the shared
objectives approach, all
employees implement actions
that will remove barriers in
front of customers, provide
experiences that make
a difference, and make
our customers say “I am
glad that I am a Turkcell
customer."
2019 OPERATIONSTURKCELL ANNUAL REPORT 2019 SUCCESSFUL FINANCIAL MANAGEMENT
As Turkcell Finance Team, we carried out activities to
maintain Turkcell's robust balance sheet structure and
profitability with timely measures taken in 2019.
In 2019, Turkcell continued to
effectively utilize hedging
tools against the volatilities
in financial markets.
As Turkcell Finance Team, we carried out
activities to maintain Turkcell’s robust balance
sheet structure and profitability with timely
measures taken in 2019, where global growth
slowed down significantly and financial markets
faced uncertainties due to ongoing trade war
disputes.
Our business model as Turkcell Finance, through
which we determined our core priorities as
pricing right, effective balance sheet risk
management, strong free cash flow generation
and efficient capital allocation, enabled Turkcell
to register strong growth and profitability,
and create value for shareholders despite
challenging market conditions.
In 2019, Turkcell continued to effectively utilize
hedging tools against the volatilities in financial
markets. Despite the sharp increase in hedging
costs, particularly in the first half of the year,
we took appropriate steps at the right time
choosing right instruments. In the beginning of
fourth quarter of 2019, we entered into long-term
hedging transactions leveraging the advantage
of falling inflation and CBRT interest rate cuts.
One of the major developments of 2019 was
the transfer of our shares in Fintur Holdings B.V.
(“Fintur”), in which we held 41.45% stake, to Sonera
Holding B.V., the other shareholder of Fintur. We
completed this transaction, which confirms our
“Asset Light” strategy to own physical assets in
Turkey and drive international expansion via digital
assets, on April 2, for final value of EUR 353 million.
We generated TRY 772 million profits from the
transfer of Fintur shares and generated a cash
inflow of TRY 2.2 billion strengthening our liquidity
and improving our leverage ratio.
We turned our limited short foreign exchange
position in 2018 to a long position at the end of
the first quarter of 2019. Our net foreign exchange
position target that we determined for upcoming
periods is neutral positive. We managed our
balance sheet throughout 2019 in accordance with
this target.
This year we continued to prioritize local currency
trade as part of our payments to vendors with
the aim to reduce our risk by diversifying our FX
transactions and FX position. In order to finance
trade in local currencies, we continued to make
long-term utilizations of Chinese Yuan financing
from existing credit facilities.
One of the major
developments of 2019 was
the transfer of our shares in
Fintur Holdings B.V. (“Fintur”),
in which we held 41.45%
stake, to Sonera Holding B.V.,
the other shareholder of
Fintur.
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TURKCELL ANNUAL REPORT 2019
In 2019, we significantly reduced our leverage
ratio with declining debt obligations led
by strong revenue growth, solid EBITDA
performance and robust cash flow generation.
We aim to further improve our leverage ratio in
the upcoming periods and maintain our average
debt maturity in the range of 4-5 years, as in
previous periods.
One key development of this year was the
introduction of the Inter-Operator Blacklist
system in May with the aim to manage financial
risk arising from collections effectively. This
system enabled all operators to share customers
with overdue payments over certain amounts
and terms over a common platform, identify
customers with high financial risk in the sector
and to take preventive measures accordingly.
The data sharing has been performed utilizing
blockchain technology as part of this system,
which was one of the biggest projects utilizing
this technology. Moreover, this was one of
the biggest partnerships established with the
consensus of all three operators and considered
as a positive step taken on behalf of our industry.
Furthermore, Finance Management embarked
on a major digital transformation journey in
2019. This effort aims to increase the digital and
process maturity of the Finance function to the
level of best practices by integrating the right
technology and digital applications into relevant
business processes. Turkcell plans to reduce the
time spent on operational processes and focus
on value added analysis and decision support
activities as a result of this transformation.
Through the developments that we plan to
implement in ERP infrastructure and increased
automation, we target to boost quality and
speed of our reporting structure. Turkcell has the
potential to automatize 77% of its operational
processes and 40% of its finance processes
with robotic automation and other technologies.
We aim to add value in different areas across
the organization increasing efficiency in our
processes. Accordingly, with the increased ability
to analyze big data more effectively and provide
reporting instantly in desired details, it will be
possible to take more accurate decisions. The
first phase of our efforts, detection process, is
70% complete. In this respect, 200 development
recommendations, 30% of which has the
potential to be automated by Robotic Process
Automation, were made. The second phase will
include efforts to execute these findings.
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In 2019, we significantly
reduced our leverage
ratio with declining debt
obligations led by strong
revenue growth, solid EBITDA
performance and robust cash
flow generation.
Digital transformation
activities aim to increase
the digital and process
maturity of the Turkcell
Finance Management
function to the level of best
practices by integrating the
right technology and digital
applications into relevant
business processes.
In March, in order to finance infrastructure
expenditures, Turkcell signed a 10-year loan
agreement with the guarantee of the Swedish
Export Credit Agency (EKN) amounting to
USD 150 million. With this long-term and cost-
effective loan that can be utilized until April 2021,
we once again demonstrated the confidence
that international banks have in Turkcell and
Turkey during a period of increasing global
uncertainties and risk premiums.
In May, we extended our sustainability efforts to
our financing activities signing a "Sustainability
Linked Loan" agreement of EUR 50 million with
a maturity of three years. We strengthened our
leading position in debt markets and continued
to diversify our financing resources and methods
with this loan, which is one of the firsts in its
field. As part of this loan, we aimed to reduce
our cost of funding as the interest rate applied
to the borrowing is to be reduced subject to
meeting sustainability based environmental
objectives. We also became one of the founding
members of the CFO Taskforce initiative, which
is one of the largest corporate sustainability
initiatives established by United Nations Global
Compact, through participation of our CFO,
Osman Yilmaz. The initiative aims to put forward
the road map and principles of sustainable
corporate funding.
We were awarded 6 titles this year at Bonds
& Loans Awards Turkey, which is organized
annually by GFC Media Group and where the
best financing transactions of the year were
rewarded, with three new financing transactions
we carried out in 2019. Our USD 150 million
EKN loan with 10-year maturity, EUR 50 million
Sustainability Linked Loan with 3-year maturity
and TRY 325 million sukuk issuances with
different maturities were awarded two titles
each reinforcing our leading position in debt and
capital markets.
2019 OPERATIONSTURKCELL ANNUAL REPORT 2019 SOCIAL RESPONSIBILITY AND SUSTAINABILITY
We have positioned the power of technology, which creates
equal opportunities for everyone, at the center of all of our social
responsibility since our foundation. We have focused on projects
to ensure equal opportunities for access to information as well as
social inclusion.
TURKCELL WHIZ KIDS PROJECT
The Turkcell Whiz Kids project, which is carried out in
cooperation with Ministry of National Education, aims to
introduce talented students to technology, discovering
and developing their talents at early ages. Whiz Kids
Technology Laboratories, established as part of the
project, provides students with laptops, 3D printers, smart
boards, electronic and robotic coding sets, and tool kits.
Children receive training and develop projects on artificial
intelligence, coding, space science, robotics, smart home
and cloud technologies. Online trainings enabled by the
new Whiz Kids training platform, which works over Open
EdX infrastructure used by the world’s leading universities
such as Stanford, Harvard and MIT, together with online
application will allow the project to reach out additional
20 thousand talented children by 2020.
As part of the project, we established a total of 33
classes in 27 cities. More than 2 hundred thousand
hours of online training was provided to 6 thousand
students face-to-face over the training platform while
online training sessions were viewed more than 5 million
times. Some 30 thousand students have met with the
technology of the future at Whiz Kids classes to date.
The Whiz Kids mobile application was launched this
year to enable Whiz Kid trainings to every student which
increased the reach of project to 50 thousand students.
DQ: DIGITAL INTELLIGENCE
The digital world and technology present extraordinary
opportunities for our children today while they also
possess real risks. Students use the power of the internet
and mobile technologies to discover, communicate
and learn like never before. However, this also raises
several issues for families and educators, from cyber
bullying and privacy concerns to uncertainty about the
reliability of information on the Internet. We introduced
Digital Intelligence to children aged between 8-12 free
of charge to address these issues. This application aims
to understand the time management skills of children on
the internet and enable them to become conscious users
of the digital world. Digital Intelligence has reached out
nearly 50 thousand students to date.
We have positioned the power of technology, which
creates equal opportunities for everyone, at the
center of all of our social responsibility projects since
our foundation. We have focused on projects to
ensure equal opportunities for access to information
as well as social inclusion.
TURKCELL FOUNDATION
In 2019, Turkcell Foundation remained committed to
supporting development of science and technology
in our country, increasing penetration of locally
produced technologies in global arena, using
technology in accordance with the needs of society,
ensuring a secure usage of technology by society
and developing sustainable projects that will meet
the actual and potential future needs in the spiritual
and social fields.
Turkcell Foundation supported young people of
our country to present their projects in the areas
of robotics, science and technology at national
and international platforms, and created scientific
development areas for schools with the Whiz
Kids project. Furthermore, we made donations by
providing technical equipment for visually impaired
students enabling them to have equal opportunities
in education. Scholarships were granted to
numerous students in Turkey under the umbrella
of Turkcell Foundation while scientific studies of
undergraduate, Master’s Degree and PhD students
were supported.
The Turkcell Whiz Kids
project, which is carried out
in cooperation with Ministry
of National Education,
aims to introduce talented
students to technology,
discovering and developing
their talents at early ages.
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TURKCELL ANNUAL REPORT 2019
development of our country, and take firm steps in
this regard. In accordance with this vision, we offer
solutions in various areas under the umbrella of “People
without Boundaries" initiative to facilitate the lives of
disabled people and increase their involvement in all
areas of social life.
Education without Boundaries Program
As part of the Education without Boundaries program
initiated in June 2015 under the auspices of the Ministry
of National Education, we support disabled students’
development towards education and employment with
an aim to boost the competencies of disabled children
in need of special education and ensure their active
participation in society. As part of the program, we
have reached out more than 30 thousand students in
104 schools through special classes and laboratories for
the visually, hearing and mentally disabled.
At the 68 Special Education Center established in
Turkey, students with mild mental disabilities are
prepared for employment after school in vocational
workshops. Students become ready for employment
after school through workshops in various fields
including accommodation and travel services, food and
beverage services, handicrafts, music and visual arts.
The technology classes established at 16 schools for
visually impaired students support their education
towards various employment fields.
In technology classrooms set up at 20 schools for
the hearing-impaired, students are provided with
specialized training according to their particular
interests which enable them to gain fundamental
computer skills required for employment at public
institutions and private companies.
For disabled children, who have not had the
opportunity to experience the city they live in or
neighboring cities, due to financial difficulties or
disability, cultural trips were organized which were
attended by 2 thousand students from 13 cities to
date. These trips enabled students to discover cities by
touching, feeling and hearing with their families.
Turkcell Dialogue Museum
“Dialogue in the Dark” and “Dialogue in Silence” exhibits,
which were initiated in cooperation with Istanbul Social
Enterprise, Istanbul Metropolitan Municipality (IMM) and
Metro Istanbul with the aim of creating awareness for
social problems, were transformed into a permanent
museum under the name “Turkcell Dialogue Museum.”
The museum introduces visitors to a different world
accompanied by visually impaired and hearing-
impaired guides.
Within the scope of the project, nearly 50 visually and
hearing-impaired individuals were employed in Istanbul
with the support of Turkcell. Turkcell Dialogue Museum
created awareness hosting nearly 220 thousand visitors
to date.
89
We develop projects for
women to have equal access
to information and provide
solutions to enable equal
participation of women in
social life.
WOMEN DEVELOPERS OF THE FUTURE
We develop projects for women to have equal
access to information and provide solutions to
enable equal participation of women in social life.
Women Developers of the Future project, which is
conducted by the participation of TOBB (Union of
Chambers and Commodity Exchanges of Turkey),
TOBB Women Entrepreneurs Board and Turkcell,
aims to train and support women in software and
mobile application development, increasing women
employment capacity and entrepreneurship in these
key areas. The target audience of the project is
high school and university graduates, and university
students over 18 years old, who want to work in
mobile technology industry or implement a business
idea using mobile technologies. Participants receive
in-class and online trainings that enable them to
develop mobile software development capabilities
while they are provided with mentor support to
improve their entrepreneurship skills. In this respect,
we provide women with the opportunity to
implement their idea and get their initiatives started.
Among the participants in trainings, 100 successful
women were employed as test experts at Turkcell
to conduct end-user tests. In the first year of the
project, 1,359 women attended mobile application
and entrepreneurship mentor training while in 2019,
1,510 women participated in the training program.
ACCESSIBILITY PROJECTS FOR DISABLED
PEOPLE
People without Boundaries
As Turkcell family, we attach great importance to
providing equal opportunities to all segments of
society, which is essential for economic and social
2019 OPERATIONSTURKCELL ANNUAL REPORT 2019 SOCIAL RESPONSIBILITY AND SUSTAINABILITY
Turkcell aims to create value for Turkey’s future positioning
access to equal opportunity vision at the core of its social
responsibility projects. In this respect, Turkcell took another
major step and initiated My Gem Inside project under the
umbrella of Education without Boundaries activities.
The My Gem Inside
project, which was
successfully funded by
Turkcell’s funding platform
Beehive, reaches out children
with autism and their
families in Turkey.
MY GEM INSIDE
Turkcell aims to create value for Turkey’s future
positioning access to equal opportunity vision
at the core of its social responsibility projects. In
this respect, Turkcell took another major step and
initiated My Gem Inside project under the umbrella
of Education without Boundaries activities. This
project, implemented under the auspices of Ministry
of Education, supports the education of children
with autism all around Turkey through special
classes established in schools and a free digital
application
The My Gem Inside project, which was successfully
funded by Turkcell’s funding platform Beehive,
reaches out children with autism and their families
in Turkey. As part of the project reaching out
children with autism over two main platforms,
special classes have been established for students
and a digital application has been developed. My
Gem Inside has reached out nearly 1,000 students
to date at 10 special education schools in Istanbul,
Izmir, Uşak, Ankara, Karabük, Nevşehir, Osmaniye,
Kilis, Çorum and Tekirdağ. The classrooms include
architectural equipment, various training materials
and tablet computers in accordance with the
needs of students. Training materials are designed
specifically to foster receptive and expressive
language development, self-care skills, large-small
muscle development, and social and cognitive skills.
The My Gem Inside application, which was
developed under the supervision of child
psychologists and expert trainers, supports the
mental, behavioral and emotional development of
children in need of special education. Moreover,
the application also provides instant reports and
informative content for families and teachers to
monitor the development of children. The application
has 30 thousand users in Turkey and worldwide
standing out as the most comprehensive application
in use in this area.
MY DREAM COMPANION & MY SIGN
LANGUAGE
We help individuals with disabilities to enable them
to contribute to society discovering their potential,
and gain autonomy in access to various social areas.
Our “My Dream Companion” application is designed
to serve visually impaired individuals. Meanwhile, “My
Sign Language” acts as a bridge between hearing
impaired people and their friends and families.
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TURKCELL ANNUAL REPORT 2019 My Sign Language facilitates
communication between
hearing-impaired individuals
and those who do not
speak Sign Language. The
application, which has
the most comprehensive
Turkish Digital Sign Language
Dictionary, supports the
personal development of the
hearing impaired.
Carrying out solar panels
and wind turbines projects in
2019, we took the first steps
towards transformation of
electricity supply. As part of
this transformation, we aim
to meet all our electricity
consumption needs from
renewable sources by 2030.
My Dream Companion enables the visually
impaired individuals to receive updates from
hundreds of news sources in various categories,
including science and technology, health, sports,
politics, and the economy. Users also gain access
to current articles of more than 2,500 columnists,
thousands of audio books, intellectual content
such as training materials and magazines. Utilizing
beacon technology, My Dream Companion
application helps visually impaired individuals to
get detailed information about retail stores they
pass by in 28 shopping malls in Turkey. Users also
benefit from navigation services through beacon
technology in numerous malls, university campuses
and museums. Audio description technology also
helps the visually impaired to experience movies in
all cinemas across Turkey without losing of visual
detail.
My Sign Language facilitates communication
between hearing-impaired individuals and those
who do not speak Sign Language. The application,
which has the most comprehensive Turkish Digital
Sign Language Dictionary, supports the personal
development of the hearing impaired.
HELLO HOPE
Turkcell developed the Hello Hope application to
support Syrians under temporary protection in
Turkey throughout their adaptation process and
enable them to learn Turkish. Hello Hope provides
free service to customers of all GSM operators
in Turkey. The application, which has been
downloaded more than 1 million times to date,
includes sections under the headings; Learning
Turkish, Voice Translation, Useful Information,
Education and News.
SUSTAINABILITY INITIATIVES
As Turkcell, we see sustainability at the heart
of our core business strategy. We issue Turkcell
Sustainability Report since 2011 each year. Starting
from 2014, Turkcell has measured its carbon
footprint as part of the Carbon Disclosure Project
(CDP). We have been listed on the Borsa Istanbul
Sustainability Index since 2015. Turkcell is proud to
be the first mobile operator with ISO 50001 and
ISO 14064 certification.
We take actions to reduce environmental
impacts resulting from our operational activities.
Accordingly, we improve our office applications
and business processes in accordance with
sustainability innovation principles. We include
all our employees and their families, suppliers,
investors and customers in our sustainability
process.
Actions Taken at Our Offices
Through Turkcell Waste Management Center
established within our company, we transform
food waste collected from dining halls and office
floors into soil-healing organic fertilizer.
We recycle paper used in our offices and try to
prevent unnecessary paper consumption through
centralized printing system. We use sensor lighting,
energy saving bulbs, smart watch systems and
smart lighting systems in all our offices.
We recycle unused electronic wastes of our
employees, even the ones from their homes.
Business Processes and Use of Renewable Energy
Turkcell Group is undergoing a sustainable
transformation of electricity supply. Carrying out
solar panels and wind turbines projects in 2019,
we took the first steps towards transformation of
electricity supply. As part of this transformation, we
aim to meet all our electricity consumption needs
from renewable sources by 2030. Accordingly,
we established Turkcell Group’s first solar power
plant in Northern Cyprus. Power plant project,
which was initiated in December 2018 and
completed in May 2019, has a power capacity of
900 KWp. Through renewable power plants to
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2019 OPERATIONSTURKCELL ANNUAL REPORT 2019 SOCIAL RESPONSIBILITY AND SUSTAINABILITY
We implement innovative sustainable products including
Dergilik, Turkcell Filiz and Kopilot to promote the
environmental sustainability of our customers and cities.
Turkcell targets to become
a completely carbon neutral
company by 2050.
be owned by this company and long-term capacity
leases from other power plants in Turkey, electricity
consumption of over 1 TWh will be derived from
environmentally friendly sources in the respective
time frame. Turkcell targets to become a completely
carbon neutral company by 2050.
Sustainable Innovative Products for Customers
We implement innovative sustainable products
including Dergilik, Turkcell Filiz and Kopilot to
promote the environmental sustainability of our
customers and cities.
Sustainable Projects
•
A tree is planted with the Ministry of Agriculture
and Forestry for every 100 searches conducted
on Yaani.
Base stations are made green to reduce carbon
footprint resulting from fuel consumption in
Turkcell and Superonline logistics operations.
This year thousands of trees have been planted
around base stations in cooperation with the
Foundation for the Association for Solidarity of
Environmental Organization (CEKUD).
•
•
We organized a marine
cleaning event in cooperation
with WWF (World Wide
Fund for Nature) and with
participation of Turkcell
Volunteers at the Turkcell
Platinum Bosphorus Cup.
92
•
•
•
Turkcell started the “Recycle into Education”
project in Turkey in conjunction with TUBISAD with
the aim to recycle electronic waste. Electronic
devices which are not used or has turned into
waste, are left to “techno waste” boxes that can
be found in Turkcell stores. Revenues generated
from the sale of these products are donated to
the Educational Volunteers Foundation of Turkey.
2019 was a year where we raised awareness
about the problem of pollution in our seas. We
organized a marine cleaning event in cooperation
with WWF (World Wide Fund for Nature) and
with participation of Turkcell Volunteers at
the Turkcell Platinum Bosphorus Cup. We also
exhibited artworks by Şinasi Yelkenci created with
wastes collected from the sea and the winner
of the race was presented with one of these
unique works. In addition, we included disposable
plastics in all areas, paying attention to recycling.
Contestants took their steps during Turkcell
Gallipoli Marathon to help plant new saplings.
Turkcell Peace Forest was established by planting
30 thousand trees in the Güzelyalı and Çınarlı
regions over recent years. In 2019, 100 thousand
saplings were planted in this forest.
TURKCELL ANNUAL REPORT 2019 93
2019 OPERATIONSTURKCELL ANNUAL REPORT 2019 SPONSORSHIPS
As Turkcell, we have been contributing to the development
of sports in Turkey for many years, and we continue our
activities to support Turkish athletes and Turkish National
Teams to be praised at the national and international arena.
In 2019, we extended our
National Football Team
sponsorship for 2 more years
with a press conference with
the participation of Turkcell,
Turkish Football Federation
(TFF) management, Turkcell
employees and athletes.
94
OUR CONTRIBUTION TO THE
DEVELOPMENT OF TURKISH SPORTS
CONTINUES.
As Turkcell we have been contributing to the
development of sports in Turkey for many years,
and we continue our activities to support Turkish
athletes and Turkish National Teams to be praised
at the national and international arena. In 2019,
we continued to support our National Teams in
football, athletics, swimming, billiards, traditional
sports and physically disabled sports branches.
Within the scope of individual sports, we
continued our support in the jogging, fishing
and sailing branches while also helped amateur
sports branches having sponsored and named
numerous organizations.
Turkcell, supporting Turkish sports since its
establishment through sponsorships and also
raising awareness, gathered all respective
activities under the umbrella of its brand,
TURKSPORU. Turkish athletes marked the year
2019 on the back of Turkcell’s sponsorship
activities. Turkish athletes raised the Turkish flag
at international platforms achieving World and
European Championships.
UNINTERRUPTED SUPPORT FOR FOOTBALL
Turkcell has been the main sponsor of the A
National Football Team since 2005 and the “Official
Communication Sponsor” since 2002. In 2019, we
extended our National Football Team sponsorship
for 2 more years with a press conference with
the participation of Turkcell and Turkish Football
Federation (TFF) management, Turkcell employees
and athletes. We continue to support our A National
Football Team. This year, we have shown once
again our support to our National Team on the
way to Euro 2020 with our song “Bi Sizi Konuşuruz,”
which is commonly known. Our #bisizikonuşuruz
video was the 3rd in September 2019 in YouTube Ads
Leaderboard.
WE SUPPORT THE DISABLED IN 18
DIFFERENT SPORTS AS PART OF OUR
COOPERATION WITH TURKISH SPORTS
FEDERATION FOR THE PHYSICALLY
DISABLED!
In 2019, Turkcell continued its support of diverse
activities to help disabled individuals engage more
actively in daily life. As part of sponsorship efforts,
we support all sports activities under Turkish Sports
Federation for the Physically Disabled.
TURKCELL ANNUAL REPORT 2019 Our physically disabled
athletes made us proud
with European and world
championships as well as
with 94 gold, 77 silver and
69 bronze medals won in
international tournaments
in 2019.
29 ATHLETES IN SIX BRANCHES
QUALIFY FOR THE PARALYMPIC GAMES!
Our physically disabled athletes made us proud
with European and world championships as
well as with 94 gold, 77 silver and 69 bronze
medals won in international tournaments
in 2019. 29 disabled athletes have already
qualified to attend 2020 Tokyo Paralympic
Games in six branches and qualifying
tournaments still continue for disabled athletes.
Sümeyye Boyacı achieved a first for Turkey in
disabled swimming branch and won the silver
medal in the 50-meter backstroke competition
at the Swimming World Championship held in
the United Kingdom. In seated volleyball sport,
which started to develop in the last years, we
represented Turkey by earning the right to
participate in the European Championship for
the first time in our history.
WE PROVIDE THE GREATEST PRIVATE
SECTOR SUPPORT TO AMATEUR
SPORTS.
The Athletics and Swimming Performance
Projects, which we started under the auspices
of Ministry of Youth and Sports in cooperation
with Athletics Federation of Turkey and Turkey
Swimming Federation in 2013 with the target of
2020 Tokyo Olympics, possesses TRY 56 million
of sports investment. Through these projects, we
have provided the largest and longest support
for amateur sports made so far in Turkey.
We have actively got involved in every stage
of the project, which targets to increase the
number of active athletes in athletics and
swimming and to become successful in
the international arena. We are working in
collaboration 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
athlete development, and corporate and
technological improvement.
In accordance with targets of Swimming and
Athletics Performance efforts that we started in
2013, 11 athletes in athletics and four athletes in
swimming qualified for the 2020 Tokyo Summer
Olympic Games. Qualifying tournaments will
continue until the end of June 2020.
We continue to be proud of talented athletes
whom we started to support starting from the
beginning of their career. At the U23 European
Championship held in Sweden in July, our
athletes won two gold and three silver medals.
In the European Youth Games Championship,
Beril Böcekler ranked first in the 400 meter free
style category. Meanwhile, our Mixed Swimming
Flag Team took third place at the European
Youth Championship.
Our cooperation with Athletics Federation
of Turkey and Turkey Swimming Federation
continued to bring important achievements.
Turkcell Chief Marketing Officer Ömer Barbaros
Yiş and federation presidents welcomed 4th
time European Cross-Country Champion
Yasemin Can, European Short Course
Swimming Championships silver medalist Aras
Kaya and bronze medalist Ümitcan Güreş on
their return to Turkey.
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2019 OPERATIONSTURKCELL ANNUAL REPORT 2019 SPONSORSHIPS
Turkcell, the biggest supporter of TURKSPORU (Turkish
Sports), is the official sponsor of the Turkey Athletic Talent
Screening and Orientation to Sports Project.
of Education and continues to raise the champion
athletes of the future. We completed the second
training module of four months for 47 thousand
athletes selected among 423 thousand students
as part of the first stage screening initiated in May
2018.
As part of the second stage of the biggest
infrastructure project in Turkish sports history, we
conducted screening of 803 thousand students.
The second training module of the 100 thousand
students, who had participated in screening and
were recognized as prone to sports was started.
Physical data of more than 1 million children has
been screened to date. We reached 1.2 million
students after two stages of screening. At the end
of the two stages, the project covered 957 districts
and 14,578 schools in 81 provinces and 146 thousand
children were identified.
TURKCELL ENRICHED turksporu.com.tr
Turkcell renewed the TURKSPORU website with the
aim to support sponsorships to Turkish sports and
collaborations towards digitalization of sports clubs.
As the first and only website in Turkey positioned as
the meeting point of sports, TURKSPORU website
was fully renewed to better promote activities
carried out under the TURKSPORU brand and
facilitate sports fans’ access to content about the
national team in the digital world. Designed to
be a reference source with ongoing updates, the
TURSKPORU website features valuable information
including biographies of our athletes who proudly
carried the Turkish flag, sports events, current news,
race calendars, records and achievements, glorious
moments on a daily and monthly basis and sports
terms for different branches.
The TURKSPORU website received the Jury award in
the Sports category and the People’s Favorite award
in the “Magazine & News & Blog” category at the
Golden Spider Competition. In addition, our Turkey’s
application website won the Jury award in the
Information & Technology category at the Golden
Spider Competition.
TURKCELL GALLIPOLI MARATHON IN
ITS 5TH YEAR
Turkey’s first thematic marathon, the Gallipoli
Marathon, was held for the 5th time on October 6,
on the Gallipoli Peninsula in the unique atmosphere
of the Morto Bay, with the participation of about
5,000 athletes.
We enabled participants to register for the
marathon through the channel opened exclusively
for the marathon over BiP, and communicated
marathon-specific information to all participants.
On the marathon day, we provided free fizy
access for all runners with chips enabling them to
listen to the local/foreign running lists we prepared
specially for this event.
FUTURE OF TURKSPORU IS SHAPED BY
ATHLETIC TALENT SCREENING PROJECT.
Turkcell, the biggest supporter of TURKSPORU
(Turkish Sports), is the official sponsor of the Turkey
Athletic Talent Screening and Orientation to Sports
Project. The project is executed in collaboration
with the Ministry of Youth and Sports and Ministry
As the first and only website
in Turkey positioned as the
meeting point of sports,
TURKSPORU website was
fully renewed to better
promote activities carried
out under the TURKSPORU
brand and facilitate sports
fans’ access to content about
the national team in the
digital world.
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TURKCELL ANNUAL REPORT 2019 enjoyed magnificent summer concerts series. 120
thousand people watched our concerts at Harbiye
Open Air Theatre.
As part of the marketing communication activities
over social media platforms, Instagram stories
received 2.7 million views and 2.5 million accesses.
Turkcell Starry Nights, which has become a classic
now, brought together all music lovers outdoors
during the summer months.
Turkcell Platinum Istanbul Night Flight
We hosted 8 thousand persons with seven concerts
in the magical environment of Hagia Eirene Church
under the main sponsorship of Turkcell Platinum
between May 25 and October 29, 2019. This was the
third edition of the special concert series.
Turkcell provided access to 1.5 million people through
marketing communication activities over social
media at concerts where world-famous local and
foreign artists performed.
Sakıp Sabancı Museum
We have supported Sakıp Sabancı Museum as a
Communication and Technology Sponsor since 2014.
We offer visitors various experiences at the museum
by integrating our technologies that make life easier.
fizy High School Music Contest
The 22nd edition of the High School Music contest
was held under the sponsorship of fizy. 708 high
schools from 49 cities competed and 27 thousand
people participated in the popular event. The fizy
High School Music Contest platform was visited
by 4.6 million users. The videos of the competition
received over 553 thousand votes over a three-week
period.
At the event where 35 high schools competed on
the final day, Private Moda Mimar Sinan Fine Arts
Anatolian High School and Private Kadıköy Evening
High School won first place in the competition.
fizy Music Awards and fizy Istanbul Music Week
The music awards in 10 different categories, the
winners of which were determined based on the
number of songs listened over Turkey’s popular music
platform fizy in 2019, were presented on November 4
at Volkswagen Arena.
Following the fizy Music Awards, the second edition
of fizy Istanbul Music Week, organized for the first
time in Turkey, brought Turkish popular music and
popular culture together under the same roof. The
event was held between November 4-9. More than
30 artists met with music lovers at various venues
across the city, including Volkswagen Arena, IF
Performance Hall Beşiktaş, Moda Kayıkhane and
Kadıköy Sahne. Panels held as part of fizy Istanbul
Music Week set the music agenda of Istanbul and
Turkey.
97
We deem culture and
art among Turkey's most
important values. We
continued our activities in
2019 to promote and uphold
art and culture.
WE SET SAIL FOR FREEDOM WITH
TURKCELL PLATINUM BOSPHORUS CUP!
Around 100 boats from all over the world
participated in Turkcell Platinum Bosphorus Cup
2019, held on September 28-29, 2019 for the 17th
time this year, which is one of Turkey’s most
important sports organizations in the international
arena. After two days of uninterrupted excitement,
the team to lift the grand cup this year was
“Istanbul Cerrahi Cheese” led by Levent Peynirci.
BUSINESS WORLD WENT FISHING IN
ÇEŞME WITH TURKCELL PLATINUM.
Turkcell Platinum Tuna Masters Alaçatı Fishing
Tournament was held between October 10-13, in
Port Alaçatı. The tournament, which has become
an international event with great interest from
foreign participants since its first day, hosted many
competitors from around the world this year as
well.
CULTURE AND ART
We deem culture and art among Turkey's most
important values. We continued our activities in
2019 to promote and uphold art and culture.
Zorlu PSM
As part of Zorlu Performing Arts Center’s main
sponsorship, we welcomed 650 thousand people
to our Turkcell Stage and Turkcell Platinum Stage in
2019. We reached more than 1 million people with
our advertising and branding areas within Zorlu
PSM throughout the year.
Turkcell Starry Nights
With the Turkcell Starry Nights, which took place
between July 19 and August 7, 2019, music lovers
2019 OPERATIONSTURKCELL ANNUAL REPORT 2019 HUMAN RESOURCES
ÜSTÜN TEKNOLOJİMİZ
As Turkcell Group Human Resources, we established our
organization structure over a flexible and agile foundation.
2019 was a year where we improved our organizational
structure even further in terms of agility.
As part of FLEXSourcing, a
new workforce management
model, Turkcell employees
can voluntarily devote up to
20% of their working hours
to innovative projects that
require a variety of different
perspectives, expertise and
competence.
WE BOOSTED OUR AGILITY.
FlexTalent: YOU ARE MUCH MORE!
As Turkcell Group Human Resources, we
established our organization structure over
a flexible and agile foundation. 2019 was a
year where we improved our organizational
structure even further in terms of agility. Aiming
to make full use of the talent and experience
of our employees, we doubled our agile team
numbers from 85 to 169 this year.
FLEXIBLE ORGANIZATION THAT
GENERATES END-TO-END VALUE
As part of FLEXSourcing, a new workforce
management model, Turkcell employees can
voluntarily devote up to 20% of their working
hours to innovative projects that require a
variety of different perspectives, expertise and
competence. More than 200 employees of
Turkcell took part in over 40 projects, ranging
from artificial intelligence to added value
efforts, in areas such as gamification, data
analytics, mass funding, among others.
FlexTalent, which we initiated in 2018, has become a
digital pool of Turkcell capabilities. Turkcell employees
can share their professional experiences, talents,
projects they participated in and information about
themselves using this platform.
With the CV creation tool added this year, Turkcell
employees can now apply for different career
opportunities within the organization with FlexTalent
CVs. Moreover, users have the ability to create a
BiP messaging group so they can easily form social
groups. Turkcell’s new goal is to make FlexTalent
accessible from anywhere. Employees are able to
leave their digital footprints in Turkcell over FlexTalent,
mobile version of which will be available soon.
TAKING A BREAK FROM EXPERTISE TO
WORK AS AN APPRENTICE
In 2019, 115 employees voluntarily participated in
Turkcell’s Apprenticeship program. As part of this
program, employees strengthened their empathy
muscles and explore working in new business lines
while boosting their understanding of new functional
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TURKCELL ANNUAL REPORT 2019
EMPLOYEE PROFILE
Female Manager
Male Manager
35%
65%
PhD
Master’s Degree
Undergraduate
Two-year Degree
High School
Other
0.1%
8.6%
43.6%
22.7%
24.1%
0.9%
Female
Male
53%
47%
The demographic information presented
above indicates the data of Turkcell Turkey
companies..
Turkcell employees reached
4,060 and Turkcell Group
employees reached 21,813 as
of December 31, 2019.
areas. Employees, who participated in this program,
gained week-long work experience in different
business functions, such as Network, Finance,
Law, Marketing, Human Resources and Customer
Experience. Program participants also brought their
own unique vision and perspective to the teams
they worked with.
FLEX PERFORMANCE: MORE FLEXIBLE,
MORE SUCCESSFUL
With the aim to make Flex Performance
system more effective and monitor employee
development more closely, Turkcell launched Flex
Interim Assessment interviews in 2019. This effort
is designed to measure employees’ performance
in the most accurate way. Thanks to Flex Interim
Assessment sessions, Turkcell employees received
more feedback from their managers. Meanwhile,
the Human Resources team and managers began
to more closely follow the development journey of
Turkcell employees.
CONTINUOUS FEEDBACK AT TURKCELL:
REFLEX
One of the most valuable aspects of working at
Turkcell is that we have many tools to support our
feedback culture. ReFlex is Turkcell’s main one-on-
one digital feedback mechanism for employees.
Through ReFlex, employees can give feedback,
appreciate each other and make constructive
suggestions in connection with the main targets
and sub-targets of their performance cards at any
time, from anywhere.
Turkcell’s workforce in their daily lives. After launching
the Behavior Model effort in 2018, we started the
“Turkcell Customer Action” in 2019 where employees
further strengthened the existing customer focus.
The Customer Action aims to ensure that customers,
Turkcell’s most valuable asset, feel safe, valuable and
happy. For this purpose, at Turkcell, we say “I am here
for our customers!”
DIGITALIZATION WITH DATA-BASED
ANALYTICS PERSPECTIVE
As part of our efforts in Human Resources analytics,
we pioneer a culture of data-based decision making in
Turkey inspiring the industry.
In 2019, we started to utilize the third version of HR
Dashboard, which had been initiated in 2018 to
observe various metrics with respect to employees,
organizations and the whole company in different
dimensions. HR Dashboard allows not only Human
Resource managers and professionals but also
managers in other functions to monitor the HR metrics
of their teams, make comparisons and access detailed
analysis.
HR Data Warehouse, which collects all employee data
in a single source, was enriched in 2019 with new data
sets related to the organization and the employee.
2019 saw Turkcell develop simulations and take steps
towards a more automated future with the help of
machine learning with the aim to focus on the answer
to “What will happen?” rather than “What happened?”
with a human resource analytics perspective.
ReFlex is accessible both from mobile and the
HRLife web platform. We plan to introduce Visual
ReFlex to increase its use among employees.
EVERY CANDIDATE IS DEEMED FIRST AS
A TURKCELL CUSTOMER.
EVEN HIGHER WITH YUPO
This year, Turkcell launched the YUPO (High
Potential) program for talented employees, who
demonstrate exceptional performance, independent
of their grade. YUPO is designed to transform
high potential employees’ capabilities into high
performance in accordance with Turkcell’s culture
and values. This program targets those who are
leading the way forward at Turkcell. After a long
and detailed evaluation, Turkcell’s YUPOs will have
the opportunity to improve themselves further
in 2020 with a specially designed development
program and various networking opportunities.
TURKCELL BEHAVIOR MODEL: CREATE
VALUE FOR YOUR COUNTRY, CUSTOMER
AND TEAM!
The Turkcell Behavior Model, which has been
developed to enable employees to see the big
picture in each activity they conduct, guides
This year, as part of the recruitment process, Turkcell
adopted the understanding that each of our employee
candidates is first our customer. With this perspective,
we renewed our interview processes, which is the first
phase of recruitment, from end to end. As part of this
process, in accordance with the “Generating Value
for Your Country” principle of Turkcell Behavior Model,
Turkcell now offers interview training to the candidates
prior to the meeting. Turkcell also administers a
personality inventory to employee candidates and
shares the results with them.
Anyone, who is a candidate to work at Turkcell, can
access the portal that is specially prepared for them
within the Turkcell Career Platform. The customized
portal includes position details, interview participants
and CVs, and all kinds of information about the
recruitment process. Following the interview, regardless
of whether the interview was positive or negative,
Turkcell likes to thank its candidates for their interest by
presenting a gift card that includes fizy, lifebox and TV+
from our digital products.
99
2019 OPERATIONSTURKCELL ANNUAL REPORT 2019 HUMAN RESOURCES
GNCYTNK, Turkcell’s university graduate employment
program, has been the most comprehensive young talent
recruitment effort in Turkey since its launch in 2016.
OUR DIGITAL CAREER PLATFORM IS
ONLINE.
Recruitment specialists can now perform all
interviews and archive them digitally over the
Turkcell Career Platform. Our Career Platform
enables the candidate, recruitment specialist
and the executive, who wants to fill an open
position, to track the recruitment process over
computer and mobile devices. Interview notes,
which previously were limited to those analog
ones taken during the meetings, can now
be archived and accessed for years. Turkcell
Career Platform completely eliminates the
need for paper use and fosters environmentally
conscious Turkcell employees.
CANDIDATE FEEDBACK SESSIONS
Recruitment process for candidates for open
positions does not always result with a positive
outcome. As Turkcell Human Resources, we hold
Candidate Feedback Sessions in order to make
such outcome more understandable for the
candidate. During this session, we provide the
candidate with detailed feedback on why we
cannot continue the process.
As part of this process, we aim to raise
candidate’s awareness and enhance overall
recruitment experience for candidates.
INTRODUCE YOUR CANDIDATE AND
RECEIVE A GIFT!
As Turkcell Human Resources we believe in the
idea that “The Best Brings the Best.” “Introduce
Your Candidate” initiative, which is established
over this idea, encourages employees to
recommend talented external candidates to
vacant positions that are announced on HR Life.
We also offer a small thank you gift through
Paycell to employees, who have been identified
appropriate candidates for any of the vacant
positions, accessible over the HR Life portal.
We hope to empower the Turkcell Family with
an even better-quality workforce in 2020 with
the “Introduce Your Candidate” initiative which
benefits not only the employees but also Turkcell
as a whole.
EYES OPEN TO LIFE WITH TURKCELL
In 2019, hundreds of visually impaired individuals
opened their eyes to life as part of the “Open
Your Eyes to Life with Turkcell” initiative executed
in cooperation with Yeryüzü Doktorları (Doctors
Worldwide). Within the scope of “Open Your
Eyes to Life with Turkcell” effort, which is the
most meaningful way we celebrate the birthdays
of our employees, Turkcell sponsors eye surgery
of an individual with vision problems every day
of the year in various African countries. Hence
on the birthdays of our employees, those special
days when our employee open their eyes to life,
we provide the gift of sight to visually impaired
individuals in another part of the world.
GNCYTNK, DREAMS WILL COME TRUE
WITH TURKCELL!
GNCYTNK, Turkcell’s university graduate
employment program, has been the most
comprehensive young talent recruitment effort
in Turkey since its launch in 2016. This year,
GNCYTNK was launched on Turkcell’s own
digital platform. Tens of thousands of Turkcell
candidates competed with each other over
various tests and applications to become part of
the Turkcell family. Some 153 young exceptional
talents, who were selected among many
thousands of candidates with utmost scrutiny,
became members of the Turkcell family. Our
2019 GNCYTNKs joined the Turkcell workforce
in the fall by completing orientation programs
that included field visits, educational games and
cultural training.
For the GNCYTNK 2019 advertising campaign,
we composed a rap song under the leadership
of our Internal Communications and Employer
Brand Division, using our creativity. We completed
We hope to empower the
Turkcell Family with an even
better-quality workforce in
2020 with the “Introduce
Your Candidate” initiative
which benefits not only the
employees but also Turkcell
as a whole.
In 2019, hundreds of visually
impaired individuals opened
their eyes to life as part
of the “Open Your Eyes to
Life with Turkcell” initiative
executed in cooperation with
Yeryüzü Doktorları (Doctors
Worldwide).
100
TURKCELL ANNUAL REPORT 2019 applied to our Cyber Camp, which aims to raise
awareness on cyber security and provide training to
exceptional young candidates. Four participants, who
successfully completed the lengthy and challenging
training process, started to work full time at Turkcell.
EMPLOYEE JOURNEY
Turkcell is a big family. As employees, we experience
the most precious moments and milestones of
our lives while at Turkcell. In order to make those
moments at Turkcell memorable, we accompanied
our employees either on good or bad days through
our 2019 Employee Journey program. Throughout the
year, Turkcell presented its employees with gifts as
part of 330 military service send-offs, 210 new born
baby welcomes, 155 weddings and 18 promotions.
Turkcell also presented its employees with the
maternity leave guide and a recipe book on Mothers’
Day. This special publication was compiled from
recipes of employee’s mothers.
DYNAMISM IN INTERNAL TRANSFERS
At Turkcell, we actively support the specialization of
employees in several areas and encourage them in
their career moves. Turkcell employees can apply to
vacant positions over the in-house human resources
portal HRLife. They can participate in the application
process without a prerequisite, and switch to their
new function should the candidate assessment
concludes with a positive outcome. Through this
initiative, Turkcell aims to increase transfers of
employees within the organization and increase
penetration of different skillsets and know-how in
various teams.
TogetHeR, EVERYWHERE
As Turkey’s Turkcell, we provide our services
nationwide. “We are TogetHeR” is a Turkcell Human
Resources established on-site visit program that we
implemented to keep in touch with all our employees
across our large organization. Under this effort, we
conducted nearly 550 face-to-face meetings with
Turkcell employees at 30 different locations. In order
to listen to Turkcell people face-to-face, we held
one-on-one meetings with approximately 4,850
employees during the year. These meetings shed
light on understanding our employees’ feelings and
thoughts more closely and helped us to identify key
focus areas for the future.
OUR EMPLOYER BRAND SHINES BRIGHTLY.
Turkcell has always been a “lovemark” for both
consumers and employee candidates. Behind this
success is our authentic communication activities
that do not distinguish Turkcell from Turkcell
employees and in effect uniting employees with the
company.
101
our song together with the 2018 GNCYTNKs
shooting a video clip at Turkcell studios using our
own internal resources. This effort contributed
to the exponential increase in the number of
applications we received. Moreover, the GNCYTNK
2019 advertising campaign attracted great
interest of juries at domestic and international
communications contests. The GNCYTNK 2019
advertising campaign won seven awards at
creative competitions in the UK, Germany and USA.
WHITE SHADOW PROGRAM IS NOW
DIGITAL
The White Shadow program through which our
colleagues serves as a guide to new hires on key
issues such as Turkcell corporate culture, working
environment and team dynamics, is now available
in the digital environment. The application
operates over the BiP channel. White Shadow has
provided guidance for new Turkcell employees on
many issues ranging from benefits, working hours,
getting corporate phone and computer to general
information about Turkcell.
CYBER CAMP 2019
As Turkcell we organize cyber security training
programs as the importance of cyber security is
growing in Turkey and globally and since there
is shortage of trained human resources in this
key area. This year, 1,667 talented young people
1,667 talented young
people applied to our
Cyber Camp, which aims
to raise awareness on
cyber security and provide
training to exceptional young
candidates.
2019 OPERATIONSTURKCELL ANNUAL REPORT 2019 HUMAN RESOURCES
We held numerous cheerful activities, where employees
came together simultaneously across our offices.
Accordingly, we enabled employees to enjoy cooperation
and strengthen their communications.
In 2018, we launched Flex Chats where we
continue to listen to Turkcell from Turkcell
people and discover the inspiring stories of this
big family and share them with employees.
Throughout the year, we organized more than
20 Flex Chat sessions and listened to Turkcell’s
exemplary activities from business owners.
Under Turkcell Advantage Club, we continue
to give advantageous discounts and offers to
our employees from 300 different companies
on average per month. Through Turkcell Active
Club, we carried out regional activities offering
nearly 40 discounted tours throughout 2019.
Our competitions in the BiP Intcom channel
continue apace. More than 500 employees won
various surprise gifts from over 50 competitions
held throughout the year.
TEAM WITH STRONG
COMMUNICATIONS
Turkcell maintains its success at the highest
level not only because we work intensively with
a goal-oriented approach but also because of
the fact that we know how to celebrate our
achievements and enjoy being together. We
firmly believe that teams that communicate
well work more efficiently and with a higher
motivation. In this respect, Turkcell organizes
various activities designed to increase
communications among teams. This approach
is central to our internal communications.
We held numerous cheerful activities, where
employees came together simultaneously
across our offices. Accordingly, we enabled
employees to enjoy cooperation and
strengthen their communications. Voice of
Managers (VOM) event was specially organized
for mid-level managers, where we fostered
an environment to guide Turkcell’s strategies
among them under the leadership of the
strategy team and gave them the opportunity
to strengthen bonds among each other.
Meanwhile, Voice of Directors (VOD) organized
in conjunction with the strategy team, targeted
director-level managers and included uplifting
events where directors had the opportunity
to know each other better and enhance the
culture of doing business together. During
events organized for Deputy General Managers,
we toured our offices and sales channel across
Turkey and received feedback from the field
teams. At our traditional iftar dinners during
Ramadan, we came together as Turkcell
employees from across Turkey, and we shared
holiday blessings together.
Turkcell did not forget Turkey’s special days: On
April 23, we hosted children of our employees
in dozens of Turkcell offices and presented a
memorable experience for them full of fun.
Turkcell also did not forget its teams working
overtime. As Turkcell Human Resources, we also
worked overtime with them to deliver them
cuisines from around the world to make their
long nights at office memorable.
EACH YEAR, MORE SPORTS
In 2019, Turkcell was active in several sports
branches including football, basketball,
volleyball, tennis, table tennis, swimming, sailing,
running, cycling, rowing, and chess with our
men and women teams. We won numerous
awards at both national and international
competitions.
Turkcell BiP Super League was a shining star
among other Turkcell sporting activities this
year through its size, which was comparable to
national leagues, and different classifications
including the women, men and veteran. As
part of the BiP Super League organization, 75
teams established by our employees across
Turkey competed in three different leagues.
Nearly 1,000 Turkcell employees played exactly
140 matches. The tournament participated by
teams from 21 cities in Turkey lasted 3 months.
We have already started training for our 2020
league and competitions!
Turkcell maintains its
success at the highest level
not only because we work
intensively with a goal-
oriented approach but also
because of the fact that we
know how to celebrate our
achievements and enjoy
being together.
In 2019, Turkcell was active
in several sports branches
including football, basketball,
volleyball, tennis, table
tennis, swimming, sailing,
running, cycling, rowing,
and chess with our men
and women teams. We won
numerous awards at both
national and international
competitions.
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TURKCELL ANNUAL REPORT 2019 1,100 Turkcell
employees
In 2019, 1,100 Turkcell
employees received
awards in recognition of
their activities that led to
a difference. The awards
were presented personally
by Turkcell’s General
Manager & Deputy
General Managers.
In 2019, Turkcell Volunteers
undertook many initiatives
and activities to support
Turkey’s future, children in
need.
ACHIEVEMENTS ARE REWARDED.
In 2019, 1,100 Turkcell employees received
awards in recognition of their activities that led
to a difference. The awards were presented
personally by Turkcell’s General Manager &
Deputy General Managers. Instant Reward, the
Mobile Platform of executives, enable them to
send instant rewards to employees for their
hard work. Our wide range of gifts, which
are offered instantly, became one of the most
popular and appreciated platforms of the year.
EMPLOYER BRAND COMMUNICATION
AND DIGITAL MATURITY IN OUR MEDIA
Launched in 2018, Turkcell’s Instagram
account @turkcelldehayat has become a
colorful and rich social media showcase with
visually rich posts, stories and updates. The
reach of @turkcelldehayat has expanded
rapidly without any advertising spending in a
completely organic way. The account has over
7 thousand followers to become the Turkcell
communication channel that gained the biggest
follower base in the shortest time. Turkcell
employees share moments from their every
day lives on @turkcelldehayat. The account
has also become a reference for employee
candidates, where they can understand the
work environment at Turkcell, especially at the
decision point.
Meanwhile, Turkcell’s dynamic news portal
@trkcll features content that employees
browse every day to keep a close watch on
the technology industry and remain aware of
innovations that are developed by Turkcell.
In 2019, Turkcell brought all its offices to the
same level in terms of communication. Making
sure that LCD screens across all our offices
work in proper way and feature the best
content, we continue to utilize this key platform
with content that attracts the attention of our
employees.
THE GREATEST GROUP OF VOLUNTEERS
IN TURKEY: TURKCELL VOLUNTEERS
In 2019, Turkcell Volunteers undertook many
initiatives and activities to support Turkey’s
future, children in need. As one out of every five
Turkcell employees is a Turkcell Volunteer, we
launched a unique assistance campaign with
our numerous volunteers.
Throughout the year, Turkcell Volunteers
focused on children and education and
responded to requests for help from all across
Turkey. We undertook projects in 10 different
provinces including Izmir, Trabzon, Hatay,
Kayseri, Urfa, Erzurum, Konya, Van, Antalya,
and Muş and provided support and assistance
where needed.
Moreover, we organized a large-scale Foster
Family Seminar for Turkcell employees who
wanted to become a foster family but need
more information on this issue. We created an
environment for them to direct their questions
to the right resources.
Turkcell Volunteers also provided support
to children with down syndrome. In order
to accompany young people with down
syndrome in their every day working life, we
visited numerous restaurants, where these
young people are employed, and tasted
the delicious food they prepared. As part
of these visits, we also had the chance to
encourage them with face-to-face contact and
communications.
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2019 OPERATIONSTURKCELL ANNUAL REPORT 2019 TURKCELL ACADEMY
ÜSTÜN TEKNOLOJİMİZ
Turkcell Academy leads the way in corporate training and
development in Turkey through its pioneering and exemplary
practices.
TURKEY’S LARGEST SOFTWARE
PLATFORM: TURKCELL DEVELOPERS OF
THE FUTURE
As Turkcell we continued our efforts to help Turkey
become one of the leading countries in software
development. In this respect, we aim to improve
the lives through technology, enable all segments
of society to reach out their dreams, remove
inequalities, financial difficulties and inadequate
resources. Through Turkcell Developers of the
Future Platform, we strengthen Turkey by offering
an integrated training and development solution in
numerous projects that add value to the society,
which are primarily Women Developers of the
Future, Tester Women and Children.
Python training sessions were launched with
the introduction of Microsoft SQL Server, Data
Literacy, Data Science and Introduction to Artificial
Intelligence in the Developers of the Future platform
in 2019. Furthermore, 2D Mobile Game Production
with C#, Data Visualization, Data Manipulation,
Data Preprocessing, Statistics for Data Science,
Big Data and Data Science Project Management
training were published in Unix Game Engine by
the year-end. In addition to technology training,
Turkcell provides everyone with the opportunity to
develop with Digital Literacy Training independent
of age and know-how level.
Over the Developers of the Future Platform, 6
million users from 100 different countries to date
utilized the training in Turkish targeting adults and
children on new technologies including mobile
and web programming. 23 thousand individuals
who successfully completed the online training on
the Developers of the Future platform, which has
230 thousand registered users, were awarded 50
thousand certificates of achievement. We do not
only offer an online training platform, but have
also become Turkey’s largest software community,
providing face-to-face mobile application
development training for 10 thousand students
at 105 universities in the TRNC and across the 81
provinces of our country.
“THE FUTURE WILL BE FIRST SHAPED BY
PEOPLE AND LEARNING ORGANIZATIONS."
Scientific, accurate, reliable source of information
that will add value to the business environment in
Turkey together with 21st century competencies and
technologies form the basis for our focus areas.
Turkcell Academy, established in 2006, is
committed to developing solutions that boost
Turkcell’s corporate performance. We continue to
expand our activities each year with ever-growing
responsibilities and areas of influence in the
learning world. Turkcell Academy leads the way
in corporate training and development in Turkey
through its pioneering and exemplary practices.
We create innovative solutions for our customers
by establishing collaborations with institutions and
organizations in Turkey that are innovative and
forward-looking.
In 2019, Turkcell Academy conducted exceptional
efforts to equip more than 55 thousand employees
and business partners in Turkcell ecosystem as well
as the overall society with competencies to meet
the needs of the future.
In 2019, Turkcell Academy
conducted exceptional
efforts to equip more than
55 thousand employees
and business partners in
Turkcell ecosystem as well
as the overall society with
competencies to meet the
needs of the future.
104
TURKCELL ANNUAL REPORT 2019 Following the launch of the
Women Developers of Future
initiative at the Presidential
Congress and Cultural
Center with the esteemed
participation of Mrs. Emine
Erdoğan, over 1,600 projects
were submitted from
64 provinces across Turkey.
WE BOOST FEMALE EMPLOYMENT IN
TURKEY WITH WOMEN DEVELOPERS
OF THE FUTURE PLATFORM.
Following the launch of the Women Developers
of Future initiative at the Presidential Congress
and Cultural Center with the esteemed
participation of Mrs. Emine Erdoğan, over 1,600
projects were submitted from 64 provinces
across Turkey.
findings by working remotely as end-user testers.
The Women Developers of the Future Awards
Ceremony took place in December 2019 with the
honored participation of Mrs. Emine Erdoğan. The
top three projects selected among the finalists
and project worthy of a special jury prize were
recognized with awards.
WE EQUIP CHILDREN WITH 21ST
CENTURY SKILLS.
Turkcell supported women in developing
mobile applications via software training over
a six-month period. In order to provide more
comprehensive software development training
program, we increased the 36-hour in-class
Mobile Application Development training time to
84 hours. Turkcell enabled an Assistant Instructor
to accompany primary Instructor during in-class
training. In addition to software training, we also
provided consultancy support for business model
and entrepreneurship development.
235 out of 640 women, who completed in-class
and remote Mobile Application Development
training, developed mobile applications as part
of 141 project ideas. At the end of the semi-finals
and final stages, the top three most successful
projects were presented with awards.
Women, who successfully complete the training
program in the Women Developers of Future
project, are also offered the opportunity to
become a test specialist for end-user tests of
Turkcell products and services. 100 trained female
professionals from 21 different cities across
Turkey have contributed to the development of
Turkcell products and services with thousands of
Turkcell continues to teach computer coding
to 660 children aged between 7-18 in an
entertaining way via Code.org, Scratch and App
Inventor training developed by Massachusetts
Institute of Technology. We are very excited to
train future developers with our Turkish language
support for the MIT Scratch 3.0 coding platform,
which is used by 33 million children worldwide to
actively develop games, animation and create
stories.
WE TRAIN FUTURE LEADERS.
As part of the Leadership Development Program
in 2019, we aim to adopt a human-oriented
approach in designing our work and business
processes in a changing world, develop ourselves
in various fields from big data to innovation and
new business models to get prepared to future,
harness trends of the future and shape business
accordingly.
These programs are implemented by focusing on
the development of approximately 700 Turkcell
Group Leaders from six different leadership levels,
from substitutes of executives to C-Level.
105
As part of the Leadership
Development Program in
2019, we aim to adopt a
human-oriented approach
in designing our work and
business processes in a
changing world, develop
ourselves in various fields
from big data to innovation
and new business models
to get prepared to future,
harness trends of the
future and shape business
accordingly.
2019 OPERATIONSTURKCELL ANNUAL REPORT 2019 TURKCELL ACADEMY
Digital Business Transformation Training, which was provided to
executive level employees in 2017 and 2018 to support vision of
becoming a Digital Operator, has been given as online training
in four different modules to all Turkcell employees in 2019.
Digital Business Transformation Training, which was
provided to executive level employees in 2017 and
2018 with an aim to support vision of becoming a
Digital Operator, has been given as online training
in four different modules to all Turkcell employees
in 2019. The training focused on Customer Focus,
Digital Innovation, Digital Demolition and Digital
Business Transformation in the Digital World.
As part of The “Leaders as Teachers” mentor
program, young talents, new executives and
director substitutes are positioned as mentees
while directors and experienced executives act as
mentors.
TURKEY’S FIRST COMPREHENSIVE
CORPORATE FINANCIAL EXPERTIZE
PROGRAM IS TURKCELL FINANCE
MASTERS.
The Turkcell Finance Masters Program aims
to instruct employees in basic financial issues,
increase their financial literacy and give a
financial perspective on Turkcell. The program
also introduces participants with the techfin world
to enable them to develop Turkcell products and
services with a digital economy perspective. The
innovative training program, which will continue
in 2020, is set to target raising experts in line with
Turkcell’s needs.
Trainings in a range of relevant topic areas
including Corporate Finance, Budget, Financial
Analysis, Feasibility, Financial Mathematics, Risk
Management, Techfin, and Blockchain were
delivered in cooperation with Rice University and
Boğaziçi University as part of the Turkcell Finance
Masters Program. Some 2,283 employees have
applied to the Masters program. About 2,000
of them, who completed the distance learning
program of Rice University, were awarded a
certificate. Some 1,283 participants attended
Boğaziçi University and the Capsim Finance
Simulation. 824 employees completed the program
and received the qualification certificate from
Boğaziçi University.
The Leaders of the Future program was designed
and implemented in collaboration with International
Institute for Management Development (IMD) for the
target audience of director and director substitutes.
The five-day program aimed to develop the target
audience in various focus areas of the digital
world including new business models, platform
economies, customer-oriented approach, innovative
thinking and value creation based on big data.
Turkcell’s digital transformation journey, which
started in 2015, was prepared by IMD Business
School as a case study under the title “How to
Respond to Digital Disruption.” The case study is
taught in the world’s leading universities.
The “Building Leaders” Certificate Program was
prepared in collaboration with Koç University
for manager substitutes and new management
prospects. The program aims to develop
participants in strategic thinking, strategic
marketing, finance and digital transformation. Two
alternative programs, Selection and pre-determined
Package, were designed for the target group of
experienced managers who have worked for three
years or more.
The Turkcell Finance Masters
Program aims to instruct
employees in basic financial
issues, increase their
financial literacy and give
a financial perspective on
Turkcell. The program also
introduces participants with
the techfin world to enable
them to develop Turkcell
products and services with a
digital economy perspective.
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TURKCELL ANNUAL REPORT 2019 in-class applications were blended together, the
selected project teams were entitled to participate
in bootcamps around the world.
ACADEMY TRAINERS
Within the scope of the Academy Trainers program,
Turkcell employees voluntarily provide training during
office hours on issues and topics of their expertise in
accordance with Turkcell’s corporate strategies.
This year, we conducted the Academy Trainer
Development Program, which includes more than
400 instructors, in cooperation with Marmara
University Continuing Education Center. We
provided training to our volunteer instructors in
Learning Psychology, Teaching Models and Methods,
Measurement Tools and Methods, Teaching Material
Development. After these trainings, Observation and
Feedback sessions were held to help the instructors
further improve their skills.
TURKCELL PRIMARY OBLIGATORY
TRAININGS
All Turkcell employees have received six different
trainings pursuant to primary obligatory training
program. The program includes trainings on
“Occupational Health and Safety,” “Information
Security Training,” “Business Continuity Training,”
“Bribery and Corruption,” “Competition Law” and
“Turkcell Common Values and Business Ethics Rules.”
We observe the positive impacts of these trainings in
internal and external audit processes each year.
IP (INTERNET PROTOCOL) EXPERT
PROGRAM
Turkcell conducted the IP Expert Program to
improve the IP knowledge level of Turkcell
Network employees required to design IP based
area infrastructure services and solutions. Some
200 employees applied to the program in two
categories, intermediate and advanced. The training
program was completed with a 100% success rate.
Participants were assessed through exams at the
completion of training. Certificates were granted
to participants after they successfully passed the
learning assessment tests.
HAP+
In addition to face-to-face learning through
seminars and in class trainings, HAP+ trainings benefit
Turkcell employees in their personal development.
Accordingly these trainings expand their vision
introducing new perspectives to our employees
through methods such as experiential learning and
distance learning methods. We provided training
in 90 different titles in four different categories and
covered a total of 5,000 people.
107
Turkcell Academy offers
a custom made one-year
training program for young
people, who are employed
within the scope of
GNCYTNK Program, launched
by Turkcell to hire talented
young people.
LONG-TERM TRAINING, DEVELOPMENT
JOURNEY: TURKCELL ACADEMY
GNCYTNK PROGRAM
Turkcell Academy offers a custom made one-
year training program for young people, who
are employed within the scope of GNCYTNK
Program, launched by Turkcell to hire talented
young people. The first phase of the program
includes four steps which are namely; Turkcell,
Customer, Technology and Culture. Orientation
program is provided with various teaching
methods accompanied with digital learning,
experiential learning and face-to-face learning.
As part of Turkcell step, GNCYTNKs met Turkcell
leaders and listened to our Company’s strategic
initiatives; and then, in the customer step, they
toured all around Turkey to provide service to
our customers at the customer contact points
for seven days. They came up with around
1,800 action proposals to improve customer
experience. In the culture step of the program;
they participated seminars regarding civilizations,
psychology and leadership styles.
In order to improve the technology vision of
GNCYTNKs, training programs were organized
with the corporate universities of technology
companies such as Huawei, Oracle, Cisco,
Ericsson, Nokia and HP. 87 of our young talents,
who successfully completed all training materials,
earned the opportunity to get training at the
headquarters of corporate universities.
“IMD & Turkcell Young Talent Business and
Innovation Program” designed specifically for
our young talents was launched. Our GNCYTNKs
received five days of training on customer
orientation, innovation, leadership, agility, and
digital transformation. After a special and
intensive training program where the content and
2019 OPERATIONSTURKCELL ANNUAL REPORT 2019 TURKCELL ACADEMY
Turkcell aims for its marketing teams to offer solutions that
make a difference. Marketing teams are expected to identify
appropriate customer insights and promote Turkcell activities
to customers in an optimal way.
CX LAB
“The CX Lab Customer Experience Development
Program” was designed for Turkcell customer
experience teams to develop customer-oriented
design perspectives. This program encompasses
five projects in the mobile, fixed, finance,
entertainment/communication and loyalty
categories. As part of the fixed category, a brand-
new modem and service model emerged as a
smart home assistant with Turkcell Evim 360. In
finance category, a new service was developed
to track joint expenditure and savings within the
Paycell Wallet solution. In the communication
category, Turkcell has implemented numerous
projects to support its product services.
MARKETING DEVELOPMENT PROGRAM
Turkcell aims for its marketing teams to offer
solutions that make a difference in a rapidly
developing and changing marketing world.
Marketing teams are expected to identify
appropriate customer insights, improve insights
via experiential marketing and promote Turkcell
activities to customers in an optimal way.
In this respect, the Marketing Development
Program includes in-class training on key topics
such as insight hunting, experiential marketing,
case studies, comparative assessment. Moreover,
the training is enriched with international
benchmarks. Under the program, participants
implemented 13 projects for Turkcell.
TECHNOLOGY DEVELOPMENT PROGRAM
Within the scope of Technology Development
Program, we provided 123 thousand hours of training
for 2.5 thousand employees through online training
platforms and in-class trainings.
As part of the CIT Training & Development
Program, 1,731 individuals supported their functional
development through in-class trainings under
150 topics. Meanwhile, 758 individuals received
online training under 77 different topics. In addition
to the focus on big data and 5G technologies,
training and development was provided in artificial
intelligence, data science and management, and
software.
WE DEVELOP TURKCELL STORES WITH
VARIOUS CERTIFICATE PROGRAMS IN
TECHNOLOGY RETAIL.
25 thousand Turkcell employees - 15 thousand
in Turkcell stores, 4 thousand in corporate
solution centers and 6 thousand in fiber solution
centers - have successfully completed Turkcell
certification programs. Turkcell launched these
programs in 2016 to train an advanced workforce
for the technology retail sector and make them
competent and specialized in their profession.
Having used diversified training solutions, Turkcell
focused its training efforts in line with its 2019
business strategies. With this approach, Turkcell
contributed to the success of its employees while
achieving its corporate goals.
Turkcell measures the competence level of
each employee with Online Evaluation Center
inventories, which are prepared with real customer
scenarios under this program. This effort aims to
boost the service quality provided to customers
and deliver the best customer experience.
In addition to the basic certification program
implemented at Turkcell corporate and individual
stores, we continue to invest in staff development
throughout our workforce. Similar to prior year,
500 store employees who passed the Advanced
Certification exam, went on to complete the
Advanced Certificate Program offered in
collaboration with Marmara University and
Turkcell Academy. We continue to create value on
customer satisfaction and market leadership focus
of Turkcell with our program designed to deepen
the expertise of our store employees.
In addition to the basic
certification program
implemented at Turkcell
corporate and individual
stores, we continue to
invest in staff development
throughout our workforce.
123,000 hours
of training
Within the scope of Technology
Development Program, we
provided 123 thousand hours
of training for 2.5 thousand
employees through online training
platforms and in-class trainings.
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TURKCELL ANNUAL REPORT 2019 In 2019, Turkcell Academy’s
Educational Development
Program won awards
from various international
organizations in recognition
of their business excellence.
WE TRAIN QUALIFIED PEOPLE IN
TECHNOLOGY FOR INDUSTRY.
TURKCELL ACADEMY’S AWARDS
Instructors from Turkcell Academy prepared
Turkcell’s Mobile Communications Software
Testing course in cooperation with Turkey’s most
reputable universities. As part of this course, we
introduce Turkey’s young people to technology
sector and support them with the know-how
of our employees. Turkcell provides scholarship
support to the research of PhD students having
studies in the field of artificial intelligence. We
also play a major role in bringing thousands of
students to the IT sector as qualified labor force
through certificate programs through which
we transfer our know-how at Turkey’s leading
universities.
WE ALSO DEVELOP THE EXPERTISE
OF OUR DISTRIBUTORS.
Under the leadership of Turkcell Academy, we
continue to implement digital and in-class training
solutions for 900 employees of KVK and GENPA
as part of the certification program specifically
designed for their needs. The training programs
focus on leadership, sales, product management,
corporate culture and functional focus areas.
In 2019, Turkcell Academy’s Educational
Development Programs won awards from various
international organizations in recognition of
their business excellence. First, Turkcell Academy
received the most prestigious award in the sector
at the Global Mobile Awards with its Women
Developers of the Future project. The innovative
effort was presented with the United Nations’
Call to Action award for its value and sustainable
business model, and was cited as one of the best
examples in the world.
Brandon Hall, one of the largest international
educational development assessment institutions,
presented two Gold awards to Turkcell Academy
in the “Program that Best Contributes to Business
Transformation” and “Best Contribution to
Business” categories for its “Turkcell Academy
Digital Transformation Program.” The “Building
Leaders Mini MBA Program,” in collaboration with
Turkcell Academy and Koç University, earned the
Bronze award in the “Leadership Development
Programs” category. Turkcell Academy General
Manager Banu İşci Sezen received the Most
Successful Female Leader award in the HR and
World Telecommunication competition at the HR
World Congress.
109
2019 OPERATIONSTURKCELL ANNUAL REPORT 2019 OUR SUBSIDIARIES
ÜSTÜN TEKNOLOJİMİZ
lifecell has 7.4 million three-month active, 8.9 million
registered customers and keeps its position as the market
leader in Ukraine in terms of smartphone penetration which
reached 80% in 2019.
company was also the first among all operators
to provide free online registration option to its
customers via Bank ID.
Closely monitoring the global technology trends,
lifecell was the first operator in Ukraine to offer
eSIM to its customers in November. Moreover, lifecell
strengthened its digital services portfolio with Mobile
ID, its offering for corporate customers. With the aim
of enriching its customers’ digital experience, lifecell
also launched public transportation SMS-ticket in
four large Ukrainian cities with plans to expand this
service to other cities soon.
lifecell deployed first segments of NB-IoT networks
running successful pilot projects with public
and private companies in energy sector which
demonstrated the advantages of the LTE based
solutions. Together with a partner, lifecell also built
LoRaWAN networks, which successfully served as
a platform to deliver smart solutions to retailers,
developers, energy and agriculture companies in
Kyiv and other cities.
lifecell continues to provide its customers with
Turkcell's leading digital services that include BiP,
lifebox, fizy, My lifecell, Dergilik. Experimenting new
sales channel models, lifecell also introduced the first
“digital kiosks” in major shopping malls in Kyiv, that
allowed customers to purchase sim-cards 24/7.
lifecell and Ericsson Ukraine deployed first 5G
network demo segment in May and introduced the
advanced capabilities of the fifth-generation mobile
internet technology at the Sweden-Ukraine Business
Forum in Kyiv. The 5G speed test was conducted
with the participation of state officials, regulatory
authority and the media where 25.6 Gbps of
download speed was achieved on 28Ghz ultra-high
frequency band.
For the past four years, lifecell has been the
technology sponsor of the National Football Team of
Ukraine that successfully qualified to the EURO 2020,
the Premium Sponsor of FC Dynamo Kiev, and the
official technology partner of the Ukrainian National
Paralympic Committee.
lifecell
lifecell started its operations in Ukraine in February
2005. The company has 7.4 million three-month
active, 8.9 million registered customers and keeps
its position as the market leader in Ukraine in
terms of smartphone penetration which reached
80% in 2019.
lifecell was the first operator in Ukraine to launch
4.5G services on 2.600 MHz frequency band in
2018 followed by a successful launch also on 1.800
MHz within the same year. lifecell has a population
coverage of 93.42% (GSM, 3G+ and 4.5G) and
geographical coverage of 95.54%. In 2019, number
of three-month active subscribers using 3G+ and
4.5G exceeded 4.3 million while mobile data usage
per user grew by 62%. lifecell’s revenue in TRY
terms increased 42% and reached TRY 1,316 million.
lifecell, other leading operators of the country and
the Prime Minister of Ukraine signed an agreement
in October to provide LTE services on 900 MHz
as well as providing the fourth-generation mobile
internet at main roads.
Mobile Number Portability (MNP) was introduced
in May. lifecell demonstrated the best positive
port-in/port-out performance in the market. The
lifecell continues to provide
its customers with Turkcell's
leading digital services that
include BiP, lifebox, fizy, My
lifecell, Dergilik.
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TURKCELL ANNUAL REPORT 2019 lifetech successfully provides IT based solutions
to Turkcell Group and other customers and
carries out software development projects both
in Belarus and other countries.
KUZEY KIBRIS TURKCELL
Kuzey Kıbrıs Turkcell was established in 1999 as
a 100% owned subsidiary of Turkcell. Having
operated until 2007 as part of a revenue-
sharing agreement with the Turkish Republic
of Northern Cyprus Telecommunication
Department, the Company signed an 18-year
GSM license contract in the same year.
With its infrastructure covering 100% of the
population and a subscriber market share of
64% according to 2019 third quarter data of
Information and Communication Technologies
Authority, Kuzey Kıbrıs Turkcell continues its
operations as the leading operator of Turkish
Republic of Northern Cyprus (TRNC).
Entering the fixed broadband market in TRNC
with Lifecell Digital Ltd. in 2018, Kuzey Kıbrıs
Turkcell has become the second player in the
market.
Kuzey Kıbrıs Turkcell continued its efforts
on corporate system integration projects
throughout the year. The company aims to be
the leader in this segment with its end-to-end
digital business solutions.
Kuzey Kıbrıs Turkcell also serves customers in
TRNC with its digital services portfolio; BiP, TV+
including local TV channels, lifebox and Dergilik
which offers local newspapers and magazines.
BiPBOX, which is accessed over BiP
discover, commenced first digital interactive
communication in TRNC, offering various
kinds of benefits, bargain products and brand
collaborations. Kuzey Kıbrıs Turkcell made its
way to the Loyalty Magazine Awards finals
with BiPBOX in the “Best Loyalty Program in the
Telecoms Sector” category.
In 2019, Kuzey Kıbrıs Turkcell registered revenues
of TRY 222 million on 23% annual growth.
lifecell sponsored the 6th IT Arena event, one
of the leading IT and technology conferences
in Eastern Europe, and shared cyber security
expertise of Turkcell with the participants and
local IT community. lifecell also opened “lifecell
lab,” the cyber and information security lab in
Kharkiv National University of Radio Electronics.
BeST
Having joined Turkcell Group in July 2008, BeST
(Belarusian Telecommunications Network) was
the first mobile operator to offer 3G services in
Belarus in November 2009. As of 2019 year-
end, BeST had 1.5 million subscribers, with a
population coverage of 99.9% and geographical
coverage of 97.7%.
BeST started to offer 4G services in August
2016 through LTE infrastructure established by
beCloud. BeST provides 4G LTE services across
all regions and major cities of Belarus, around
191 cities/towns/settlements. Share of 4G
subscribers already reached 54.6% of 3-month
active subscriber base in 2019 fostering mobile
data consumption and digital services usage.
Enhanced 4G services penetration led to
growth in average monthly data consumption
per user to 7.0 GB in 2019. 4G network already
serves 57% of total data traffic as of 2019.
While converting subscribers to 4G users,
BeST continues to transform itself from a
communication services provider to a digital
operator by offering diversified digital services
portfolio in accordance with Turkcell’s strategy.
While its tariff plans including data and
terminal bundles drives ARPU growth, BeST
enriches customers’ experience by bringing
connectivity and content together. BeST
already included BiP, fizy, lifebox, Magazines,
TV+, Games Platform to its digital services
portfolio. The digital tariff plan “Play,” bundling
all digital services was launched in 2019. Share
of subscribers using at least one digital service
already reached 27.8% of 3-month active
subscribers base in 2019.
Growth in 4G services penetration and
increasing data usage helped BeST’s revenues
to grow by 8% in local currency, reaching BYN
135 million in 2019. On TRY basis, the Company’s
revenues increased 25% to TRY 365 million.
lifetech was established as 99.9% owned
subsidiary of BeST to serve in the fields of
telecommunication and infrastructure solutions,
information and communication technologies,
software development and security systems.
111
191 cities/towns/
settlements
BeST started to offer 4G
services in August 2016
through LTE infrastructure
established by beCloud.
BeST provides 4G LTE
services across all regions
and major cities of
Belarus, around 191 cities/
towns/settlements.
Kuzey Kıbrıs Turkcell
continued its efforts on
corporate system integration
projects throughout the year.
The company aims to be
the leader in this segment
with its end-to-end digital
business solutions.
2019 OPERATIONSTURKCELL ANNUAL REPORT 2019 OUR SUBSIDIARIES
Turkcell Global Bilgi offers new generation services in
customer experience closely following the digitalization
trends and leveraging 20 years of experience in
customer services.
TURKCELL EUROPE
TURKCELL GLOBAL BİLGİ
Turkcell Europe was founded
in 2010 as a Mobile Virtual
Network Operator (MVNO)
in Germany. The company
serves nearly 170 thousand
customers under a marketing
partnership with Deutsche
Telekom.
Turkcell Europe was founded in 2010 as a Mobile
Virtual Network Operator (MVNO) in Germany.
The company serves nearly 170 thousand
customers under a marketing partnership with
Deutsche Telekom. Turkcell Europe provides
services under Turkcell’s lifecell global brand since
2018. lifecell Europe aims to enrich customer
experience leveraging digital offerings and
expand Turkcell’s digital products and services
across Germany.
Turkcell Global Bilgi offers new generation
services in customer experience closely following
the digitalization trends and leveraging 20
years of experience in customer services.
Turkcell Global Bilgi aims to enhance customer
satisfaction and consequently its revenues
creating customized solutions for more than 70
companies including Turkcell itself. The company
continues its activities acting as strategic business
partners of its customers.
8,400 women
employees
Turkcell Global Bilgi leads
the sector and creates
value with 8,400 women
employees, which make
up 60% of the total
workforce.
BiP, Turkey’s most innovative communications and
lifestyle platform became a new communication
channel for lifecell Europe where customers can
receive services and support. Moreover, first
month Super XL package gift campaign was
launched particularly for SIM card orders given
over “lifecell customer services” in BiP discover
section.
lifecell Europe became a representative of
fizy in Germany, which registered major
accomplishments in Turkey through significant
contributions to music sector with its rich content
archive. Customers use the fizy service free of
charge with the periodic and special campaigns.
lifecell Europe will utilize its stores and field teams
more effectively to promote enriched and unique
experience of digital services to its customers. In
this respect, lifecell and digital services concept
areas were established within retail stores. lifecell
Europe field teams were also trained to use and
master digital services. Furthermore, a selected
group of lifecell Europe dealers were hosted at
Turkcell headquarters and they attended a panel
discussion on lifecell Europe's contribution to the
digitalization of customers’ lives.
Turkcell Global Bilgi employs nearly 14 thousand
people in 25 locations; 19 in Turkey and 6 in
Ukraine as at the end of 2019. The company
leads the sector and creates value with
8,400 women employees, which make up 60%
of the total workforce.
Turkcell Global Bilgi made its first technology
investment in eastern part of Turkey with Erzurum
Call Center. Turkcell Global Bilgi is also the first
and only Turkish customer experience center
serving abroad with its investment in Ukraine.
Turkcell Global Bilgi, which is among the first
500 information technologies companies in
Turkey, ranked first in “Best Customer Experience”
category at the world finals of “2018 Top Ranking
Performers” awards of “ContactCenterWorld,” the
largest worldwide event in the call center industry.
Turkcell Global Bilgi manages various
communication channels including face-to-face,
phone, voice and video response systems (IVR
and IVVR), e-mail, web chat, next-generation
customer experience platform BiP and social
media while contacting customers. The company
creates customized solutions analyzing the
service model of its customers with an aim to
create a unique customer experience.
112
TURKCELL ANNUAL REPORT 2019 Turkey’s leading
tower company
BELARUS
UKRAINE
TURKEY
TRNC
GLOBAL TOWER
TURKCELL FINANCE
Global Tower, Turkey’s leading tower company,
today operates in four countries. Global Tower
provides telecommunications infrastructure services
including tower leasing, tower build & sell, contract
management, maintenance services to mobile
operators, radio and TV broadcasters, internet service
providers, energy companies and public institutions.
Global Tower also provides satellite services and
solutions to its customers in accordance with its end-
to-end services approach. The company currently
offers closed circuit satellite services over 2 thousand
points from its own infrastructure with geographic
redundancy. The company aims to enrich product and
service diversity by following industry trends.
Global Tower’s total revenues grew by 27% and
reached TRY 431 million while its EBITDA grew 30%
and reached TRY 290 million in 2019.
Global Tower operates a portfolio of 10,726 towers as
at the end of 2019;
•
Turkey: 8,636 (owned: 4,129, right of use: 2,304,
contract management: 2,203)
Ukraine: 1,141 (owned)
Belarus: 834 (right of use)
TRNC: 115 (right of use)
•
•
•
Global Tower closely follows the transformation
process of the global telecommunication
infrastructure sector, from tower management to
infrastructure management, and plans to introduce
new emerging services in the industry with its
customers. It is also observed that mobile operators in
Turkey have a positive attitude towards infrastructure
sharing and consolidation model which is pioneered
by Global Tower, in parallel to recent global trends.
A critical step can be taken in terms of operational
savings and resource efficiency with new regulatory
developments.
Established in March 2016, Turkcell Finansman A.Ş.
provides financing solutions to corporate and
individual customers as part of their purchases of
technology-based services and products under
the “Financell” brand.
Financell serves its customers through more than
1,300 Turkcell stores, 2,092 DSN+ (digital sales
points) stores and digital sales channels in Turkey.
Turkcell Finansman which has an asset size of
more than TRY 3 billion as at the end of 2019
has granted TRY 14.5 billion in loans to around
5.1 million customers to date and became one
of the most important players in the Turkish
financing sector. Financell extended its services
into the corporate lending market with its digital
transformation loan. Through the credit risk and
digital systems transformation projects carried
out in 2019, Turkcell Finansman performs credit
application assessments more rapidly and
continues to manage its credit risk effectively.
The company recently established a new techfin
initiative, Turkcell Sigorta Aracılık Hizmetleri A.Ş.,
and started providing insurance agency services
under the “Güvencell” brand. Having almost
completed the systems-related infrastructure in
fourth quarter of 2019, Güvencell started to deliver
innovative solutions in risk management area with
fast and easy-to-access products. Customers can
easily access and purchase insurance products
from all Turkcell channels including the call Center,
digital channels and dealers.
113
Global Tower, Turkey’s
leading tower company,
today operates in four
countries.
2019 OPERATIONSTURKCELL ANNUAL REPORT 2019 OUR SUBSIDIARIES
While the number of customers who benefitted from
Paycell's financial services reached 7.3 million, Paycell
application, enriched with new functions, reached 5 million
downloads in 2019.
TURKCELL PAYMENT
SERVICES AND ELECTRONIC
MONEY SERVICES*
payments and POS solutions were conducted while
partnerships were established with large accounts
for rapid penetration of such solutions in the market.
Turkcell Ödeme ve Elektronik Para Hizmetleri A.Ş.
(TÖHAŞ), the payment services company, extended
the scope of its operational permit obtained
from the BRSA in 2016 to operate as a Payment
Institution, with an E-Money license in 2017. The
company achieved significant progress in 2019.
Paycell aims to make lives of people easier by
allowing them access to financial services without
the need of a bank account. As a techfin company
specialized in diverse verticals, Paycell takes
firm steps towards becoming the leader techfin
platform in Turkey.
While the number of customers who benefitted
from Paycell's financial services reached 7.3 million,
Paycell application, enriched with new functions,
reached 5 million downloads in 2019.
The physical and virtual cards activated as part
of Paycell Card, which in particular targets users
under 18, exceeded 1 million in 2019.
Another fast-growing function of Paycell has
become the bill payments. In 2019, the number
of institutions, for which bill payment can be
performed over Paycell, reached 275 while
nearly 7.7 million invoices were paid using Paycell
throughout the year.
In addition to digital content payments, direct
carrier billing became an available option
for payments in other industries in 2019. The
İstanbulkart top-up payments, purchases at n11,
one of Turkey’s largest e-commerce companies,
can be performed through direct carrier billing
feature of Paycell. The new use cases of this
payment option were supported with campaigns
in order to increase active users.
As part of the focus to increase the number of
merchants, product developments regarding QR
TÖHAŞ has launched Turkey’s first meal and
transportation card, Paye Card, in partnership with
PTT and BELBIM.
TURKCELL TEKNOLOJİ
As one of Turkey’s largest and most competitive R&D
centers with more than 900 R&D engineers as at
the end of 2019, Turkcell Teknoloji marked numerous
achievements on both national and international
arena. Turkcell Teknoloji aims to develop innovative
technologies in communications and in the areas of
its impact. The company also targets to be a leader,
pioneer and role model in Turkey by employing
the most talented human capital in R&D industry
to the most possible extent. With the experience
accumulated throughout the transformation of
Turkcell from a technology-oriented network
provider to a service-oriented experience provider,
Turkcell Teknoloji strives to be an R&D center with
innovative solutions developed for domestic and
international markets
In accordance with the strategy of Turkcell to
penetrate its product and service offerings in
domestic and international markets, Turkcell
Teknoloji develops and commercializes digital and
ICT (information and communications technologies)
services at global standards based on the latest
technology and market requirements, and helps
Turkcell Group to expand its footprint.
Turkcell Teknoloji focuses on roaming solutions, big
data processing, business intelligence applications,
smart cloud platform and platform-developed
solutions, location based services and platforms,
customer relationship management and solutions,
network management solutions, next generation
value added services, mobile financial systems,
music and entertainment services, IPTV services,
mobile marketing solutions, Internet of Things
*After the registration of the General Assembly resolution on 20.02.2017, the trade name of Turkcell Ödeme Hizmetleri A.Ş. is referred to
as Turkcell Ödeme ve Elektronik Para Hizmetleri A.Ş.
As one of Turkey’s largest
and most competitive R&D
centers with more than
900 R&D engineers as at
the end of 2019, Turkcell
Teknoloji marked numerous
achievements on both
national and international
arena.
114
TURKCELL ANNUAL REPORT 2019 The postgraduate and
PhD programs, which are
designed to improve the
technical knowledge base of
Turkcell Teknoloji employees
in line with the requirements
of the sector, are continued
since 2014.
lifecell Ventures is a
100% owned Turkcell
subsidiary established in the
Netherlands. Entering into
collaborations and business
partnerships, lifecell Ventures
helps telecom operators in
other countries with their
digital transformation
strategy.
(IoT), geographic information systems, voice
identification, AR/VR, 5G infrastructure projects,
mobile communication solutions, campaign
management systems, smart Sim card solutions,
digital identity technologies, image and video
processing based on artificial intelligence, text
analysis (NLP), suggestion engines, voice analytics,
robot assistants, robotics process automation,
mobile analytical platforms, artificial intelligence
in health, learning and education applications
solutions, e-mail and search engine solutions,
digital broadcast solutions, CDN (Content Delivery
Network) solutions, Over-the-Top (OTT) and
blockchain solutions.
Turkcell Teknoloji aims to become a global
technology company with its national and
international patent application efforts. The patent
application process helps Turkcell Teknoloji to
develop differentiated and competitive services.
Moreover, this process enables the products
of Turkcell Teknoloji to have export potential.
The company continues its efforts to increase
awareness regarding patent application process
and shares its experience and know-how with
universities, startups, SMEs and other business
partners. Turkcell Teknoloji is the leader in the
telecommunications sector in Turkey with 1,605
national and 128 international patent applications
since 2008. Leading the development of new
technologies, Turkcell Teknoloji issued many
academic and technical publications on national
and international platforms in 2019 which positively
impacted the increased use of technology.
The postgraduate and PhD programs, which are
designed to improve the technical knowledge
base of Turkcell Teknoloji employees in line with
the requirements of the sector, are continued
since 2014. As part of these programs, courses are
instructed at Turkcell Teknoloji R&D Center with
an aim to encourage academic research and
bring the research results into practice within the
organization of Turkcell Teknoloji.
Turkcell Teknoloji enriched and diversified its
cooperation with universities in 2019 via joint R&D
projects determined based on needs, Master’s and
PhD programs, training and conferences conducted
at universities enabling technology transfer, and
the Young Talent program implemented to recruit
talented young people. Moreover, Turkcell Teknoloji
developed products in collaboration with startup
companies at technoparks, supported products/
services and technologies developed by these
companies. The company also helps startups to
increase their recognition including such firms in
European Union projects in which it participates
in. Turkcell Teknoloji plans to focus more on these
collaborative R&D activities in the coming years.
Turkcell Teknoloji aims to advance current technologies,
adapt this vision among its employees and enhance
the commercial potential of future technologies. In
this respect, the company plays an active role in the
technology ecosystem on various platforms. Turkcell
Teknoloji sits on the board of directors of ITEA and
Celtic Next cluster programs under the EUREKA
umbrella program in order to collaborate closely with
companies competent in advanced technology and
innovation areas. As part of this responsibility, Turkcell
Teknoloji plays a key role in creating new project
ideas to increase use of information, communication,
infrastructure and network technologies in all
smart verticals, and participates in R&D projects in
accordance with its strategies. In projects under the
EUREKA umbrella, funding support is assessed by
competent authorities, TÜBİTAK-TEYDEB. This gives
us an opportunity to work closely with TÜBİTAK
decision-makers. In recent years, Turkcell Teknoloji
has been successful in increasing the number of
project applications as part of the Horizon 2020 main
program and subprogram, which provide direct and
large grant support from the European Commission, on
platforms offering a more competitive and selective
environment for proposing project ideas. These projects
enabled Turkcell Teknoloji to carry out studies and
improve its technology closely working with prominent
industrial enterprises, SMEs, reputable universities and
research institutes, valuable academicians and startup
companies. In this respect, Turkcell Teknoloji aims to
expand this valuable ecosystem leveraging it effectively.
lifecell VENTURES
lifecell Ventures is a 100% owned Turkcell subsidiary
established in the Netherlands. Entering into
collaborations and business partnerships, lifecell
Ventures helps telecom operators in other countries
with their digital transformation strategy.
Leveraging Turkcell’s know-how and experience that
accumulated throughout its digital transformation
journey initiated in 2015, lifecell Ventures is taking firm
steps towards achieving Turkcell’s vision of expanding
digital services (OTT) and technology solutions (ICT) to
international markets.
The vision of lifecell Ventures is to offer applications
based on digital communications and content including
entertainment, music, TV as well as technological
solutions in the global markets. In 2017, the company
launched its first international digital solution partnership
with the Eastern Europe operator Moldcell with its “BiP”
and “lifebox” products. lifecell Ventures expanded digital
solution partnerships in 2019 through the launch of “BiP”
and “lifebox” with ALBtelecom, the Albanian mobile
operator. In February 2019, lifecell Ventures signed an
agreement with Digicell, which operates in Jamaica
and the French West Indies, at Barcelona Mobile World
Congress. lifecell Ventures expands its international digital
solution partnerships portfolio through sound business
partnerships all over the world.
115
2019 OPERATIONSTURKCELL ANNUAL REPORT 2019 OUR SUBSIDIARIES
Enerjicell became one of the most important
free-market electricity suppliers in Turkey in terms of
the number of registered counters in 2019 serving its
retail and corporate customers.
TURKCELL ENERJİ
ÇÖZÜMLERİ VE ELEKTRİK SATIŞ TİCARET
A.Ş. (TURKCELL ENERGY SOLUTIONS)
leveraging Turkcell’s brand power of 25 years, its
extensive sales force covering public, strategic,
large and small-scale customers, and its superior
technology infrastructure.
Having commenced its operations in 2018 with
the “Enerjicell” brand, Turkcell Enerji Çözümleri
ve Elektrik Satış Ticaret A.Ş., became one of the
most important free-market electricity suppliers
in Turkey in terms of the number of registered
counters in 2019 serving its retail and corporate
customers. Enerjicell, which will focus on corporate
customers in 2020, aims to change practice
towards creating customer experience in the
industry through its superior service quality.
Continuing its retail electricity service business,
Enerjicell also expanded its business into
renewable energy generation in 2019. Throughout
the year, Enerjicell pioneered renewable energy
investments in Turkcell’s buildings with self-
generated electricity consumption model. The
company engaged in and completed rooftop
solar panel projects, including the one in newly
established Ankara datacenter. Planning to
continue its renewable energy investments in
the coming years, Enerjicell aims to transform
Turkcell into a company, which will have carbon
free emissions and generate electricity from
environmentally friendly resources.
In 2019, Enerjicell also accelerated its efforts to
develop digital products and services designed
for the electricity market leveraging Turkcell’s
technology.
TURKCELL SALES AND DIGITAL
BUSINESS SERVICES
Turkcell Digital Business Services was established in
January 2019 to serve as the digital transformation
partner of Turkcell corporate customers. The
company meets corporate customers’ needs
Turkcell Digital Business Services formulated a
completely new business model to offer vertical
solutions in transportation, finance, healthcare,
education, logistics, production, retail, energy and in
similar fields with the aim of meeting needs of all
industries. Moreover, added value services will be
developed based on advanced technologies such as
artificial intelligence, Internet of Things, and big data
while alternative financing models will be offered
as part of this new business model. Turkcell Digital
Business Services provide end-to-end digital solutions
to private sector companies and public institutions.
Thus, the company contribute to Turkey’s growing
digital economy offering value propositions which
enables enterprises to grow revenues.
TÜRKİYE'NİN OTOMOBİLİ GİRİŞİM GRUBU
SANAYİ VE TİCARET A.Ş.**
Türkiye’nin Otomobili Girişim Grubu Sanayi ve
Ticaret A.Ş. (TOGG) was established on June 25,
2018 within the framework of Turkey’s Automobile
Project implemented through the coordination of The
Republic of Turkey Ministry of Industry and Technology
and The Union of Chambers and Commodity
Exchanges of Turkey. As one of the founding partners
of this company with a 19% shareholding, we aim to
be involved in fields promising great potential such
as connected vehicles, smart cities and intelligent
transportation. TOGG, aiming to develop new
generation electric and connected cars and to create
a mobility ecosystem around those, communicated
the progress achieved in design and engineering work
to public and introduced the C-SUV concept vehicle
along with C-Sedan model at the unveiling ceremony
in December. We will continue to support the electric
powered and brand-new automobile platform which
is also in-line with our sustainability focus.
*Our Company’s subsidiaries Turktell Bilişim Servisleri A.Ş., Global Bilgi Paz. Dan. ve Çağrı Servisi Hizm. A.Ş. and Turkcell Satış ve Dijital İş Servisleri A.Ş. signed
a binding termsheet on January 14, 2020 to transfer their total shareholding of 55% in İnteltek İnternet Teknoloji Yatırım ve Danışmanlık Ticaret A.Ş. (“Inteltek”)
including all rights and liabilities to the other shareholder of Inteltek, Intralot Iberia Holding SAU. The respective transaction is expected to be completed
within the first half of 2020 once the final share sale and purchase agreement (“SPA”) is signed and necessary legal approvals are obtained. The final value
of the transaction will be determined based on IFRS net book value of Inteltek and no material impact is expected on our financial statements
**Turkcell has 19% minority interest in TOGG company.
TOGG, aiming to develop
new generation electric and
connected cars and to create
a mobility ecosystem around
those, communicated the
progress achieved in design
and engineering work to
public.
Turkcell Digital Business
Services formulated a
completely new business
model to offer vertical
solutions in transportation,
finance, healthcare,
education, logistics,
production, retail, energy
and in similar fields with the
aim of meeting needs of all
industries.
116
TURKCELL ANNUAL REPORT 2019 117
2019 OPERATIONSTURKCELL ANNUAL REPORT 2019 AWARDS
Turkcell made a mark on its 25th
anniversary with the awards received.
Media Excellence Awards
We were rewarded for the Customer Touch
Point Platform in Analytics/Data category at
the Media Excellence Awards in the USA.
GSMA
At the Global Mobile (GLOMO) Awards held in
Barcelona, we received the Industry Leadership
Award in the “Technology for Women”
category for our social responsibility project
“Women Writing the Future” carried out to
increase women’s employment in technology.
Besides, GSMA (World Mobile Operators
Association) presented Turkcell with the
Pioneering Award for its efforts in the Internet
of Things (IoT) security. Turkcell was the only
telecommunications company representing
Turkey in the finals at the GLOMO Awards.
Bonds & Loans Awards Turkey
Turkcell received four awards at the Bonds &
Loans Awards Turkey, which is held annually by
GFC Media Group headquartered in London
and where the best finance transactions are
rewarded:
•
144a/RegS Bond Deal of the Year
• Corporate Debt Deal of the Year
Structured Loan Deal of the Year
•
Islamic Finance Deal of the Year
•
Steive Awards
Turkcell rewarded for Customer Touch Point
Platform in Analytics/Data category.
HR World Congress
Turkcell Academy General Manager Banu İşçi
Sezen rewarded as “Women Leader in Telecom
and Internet Industry” at Human Resources
World Summit organized in India. Thus, Banu İşçi
Sezen received the leadership award for the
third time.
JANUARY
Webrazzi Awards
Our Company topped the category, The Most
Digital Brand of the Year, at Webrazzi Awards.
Prida Awards
“Women Developers of the Future” rewarded at
Prida Awards in the category of Projects that
Contribute to the Society.
Deloitte Technology Fast 50 Award Ceremony
TÖHAŞ was included this year, too in Deloitte
Technology Fast 50 Turkey 2018 Program
organized by Deloitte, offering Turkey’s
fastest-growing technology companies
expansion opportunity to Europe and the globe.
Furthermore, TÖHAŞ was one of the three
techfin companies included in the program.
FEBRUARY
Customer Experience Management in Telecoms
Global Summit
Our Retail Store Evaluation solution created
over Huawei NT CEM service deemed worthy
of the grand prize in Best-in-class Example of
ROI in Customer Experience Management in
Telecoms Global Summit held in England.
Having left 25 years behind,
Turkcell got more than
100 rewards in 2019 at the
highly prestigious award
ceremonies at home and
abroad.
118
TURKCELL ANNUAL REPORT 2019 Marketing Türkiye - Good Life Brands Awards
Turkcell was rewarded in the "Best
Telecommunication Brand" category at the
award ceremony held by Marketing Türkiye on
April 4.
Eventex Awards
The first booth that we opened in Barcelona,
GSMA 2018 booth, won the first prize in Exhibition
Experience category at Eventex, which is known
as the Oscar ceremony of the event sector.
Martech Awards
Our Company was rewarded for Lifecell
Wifi Outdoor Turkcell project in the Best Use
of Technology in Open Air Units category
and Surprise Point project in the Best Use
of Technology in Turkcell Loyalty Program
application category at Martech Awards.
APRIL
Ace of Mice
"Technology Summit", which we organized last
year at Haliç Congress Center and which is the
biggest technology event of Turkey, was deemed
worthy of the Grand Prize in the "Best Event of
the Year" category at "Ace of Mice", the most
prestigious organization of the event sector in
Turkey.
The Most Effective 50 CFO of Turkey Award
The results of “50 Most Effective CFOs” research,
held for the fourth time this year and carried
out in collaboration with Fortune Turkey & Data
Experta were announced. Our CFO Osman
Yılmaz was shown among 50 Most Effective
CFOs in Turkey and rewarded at the ceremony
held at Hilton Istanbul Bomonti on April 18.
Gold Compass
Celebrating its 46th anniversary in the
communications sector, the Turkish Public
Relations Association (TÜHİD), rewarded winners
of the Golden Compass Turkey Public Relations
Awards in its 18th occasion this year. Turkcell
was deemed worthy of awards for Women
Developers of the Future and Turkey Athletic
Talent Screening and Orientation to Sports
Project.
ETİKA Turkey Ethics Awards
The Turkcell Group Internal Audit team won
the ETİKA 2018 Turkey Ethics Award, as part of
the Ethical Values Center Association (EDMER)
Turkey Ethics Awards, which evaluates institutions’
business ethics and related commitments. Our
Company was deemed worthy of the award by
the Ethical Values Center Association (EDMER) for
the second time.
119
MIXX Awards Turkey
At MIXX Turkey Awards, organized by IAB
Turkey for the ninth time this year, winners were
rewarded at the ceremony held in Four Seasons
Bosphorus Otel. Turkcell garnered the Bronze
MIXX with the “Lifecell - Come If You Dare”
campaign.
MARCH
Smart Transportation Summit Awards
Kopilot made its mark at the Smart
Transportation Summit held by AUS-Turkey under
the auspices of Transportation and Infrastructure
Ministry. The success of the Kopilot application,
developed by Turkcell engineers with the mission
to ensure driving safety, was rewarded at the
Summit. Kopilot deemed worthy of the “Wisdom
to Contribute to the Industry Award.”
Şikayetvar.com Awards
Turkcell came in first in the GSM category at
A.C.E. (Achievement in Customer Excellence)
Awards held by Şikayetvar.com - Diamonds
Awards.
Other awards granted at the competition based
on assessments on customer satisfaction:
•
Runner-up prize with Turkcell Superonline in
ISS category: “Gold Awards”
Third prize with Turkcell TV in digital platform
category: “Silver Awards”
•
Hacettepe University Crystal Deer Awards
As Turkcell, we were rewarded in the Best
Telecommunication Communication Company
category at the 2nd Crystal Deer Awards held by
Hacettepe University.
Turkcell was rewarded in
the "Best Telecommunication
Brand" category at the
award ceremony held by
Marketing Türkiye on April 4.
"Technology Summit", which
we organized last year
at Haliç Congress Center
and which is the biggest
technology event of Turkey,
was deemed worthy of the
Grand Prize in the "Best Event
of the Year" category at "Ace
of Mice", the most prestigious
organization of the event
sector in Turkey.
2019 OPERATIONSTURKCELL ANNUAL REPORT 2019 AWARDS
Turkcell was rewarded as the “Retail Employer of the
Year” becoming “The Best Employer of the Year around
the World” at “World Retail Awards” where all the
retailers around the globe compete in various categories.
World Procurement Awards 2019
Our Company was rewarded in the “Talent and
Development” category at World Procurement
Awards held on May 16th in London for the
development journey project created for our
young procurement officers.
JUNE
Loyalty Magazine Awards
Digital operator Turkcell was rewarded
the grand prize for “Surprise Point” in the
Gamification category at the Loyalty Magazine
Awards, where the most successful projects
around the world in marketing field are
evaluated. GNÇ Çatlat was crowned champion
of the Middle and Eastern Europe region.
JULY
Campaign Agency & Brand of the Year Awards
Turkcell deemed worthy of the gold award in
the Telecom category at Campaign Agency &
Brand of the Year Awards held for the second
time in Turkey.
Mobile Operators Association 2019
Our Company received the m-TOD Cross-
Operator Blacklist Project Success Award at
Mobile Operators Association 2019 Meeting
for Blockchain applications developed in
collaboration with all operators to manage
collection risk effectively.
CIPS MENA 2019
Talent management in the supply chain function
and development of purchasing officers in the
first two years brought reward in CIPS MENA
“People Development” category.
MAY
Effie Turkey Awards
We won the Gold award at Effie Turkey Awards
in the Telecommunication category with our
project “No Fair Use Quota at Turkcell Fiber.”
Social Media Awards Turkey Awards Ceremony
Turkcell won the 1st prize in the Best
Telecommunication Company category and 3rd
prize in TV+ and Digital TV Platforms at Social
Media Turkey Awards Ceremony.
Next Generation Optical Networking Global
Our Core Transport Network team returned
from Next Generation Optical Networking
Global Conference, held in France, with Best
Global Optical Service Provider award. We
proved that we have the best optic network
on the international platform by our Transport
Network projects carried out with Middle East,
Asia, the Arabian Peninsula operators that
positioned Istanbul as the new regional internet
hub, as per our strategy of transforming the
historic Silk Road into the new Fiber Road.
Network Virtualization & SDN Europe
Turkcell ranked number one by the Data
Optimization project in the “Best NFV/SDN
Solution” category at Network Virtualization
& SDN Europe organized in Berlin, capital of
Germany.
2019 World Retail Awards
Turkcell was rewarded as the “Retail Employer
of the Year” becoming “The Best Employer of
the Year around the World” at “World Retail
Awards” where all the retailers around the
globe compete in various categories.
Kızılay
Our Company received platin medal for the
support and donations to Kızılay at the award
ceremony held for Kızılay benefactors. Turkcell
Board of Directors Chairman, Ahmet Akça,
received the medal from our President Recep
Tayyip Erdoğan.
Digital operator Turkcell was
rewarded the grand prize
for “Surprise Point” in the
Gamification category at the
Loyalty Magazine Awards,
where the most successful
projects around the world
in marketing field are
evaluated. GNÇ Çatlat was
crowned champion of the
Middle and Eastern Europe
region.
120
TURKCELL ANNUAL REPORT 2019 Stevies Awards
Thanks to our GNÇYTNK employment program
and campaign communications, we garnered
three awards in total in Achievement in
Recruitment HR and Best Youth Employment
Strategy categories at Stevie’s that rewards the
most successful employers around the world.
OCTOBER
SAP Executive Summit
Turkcell garnered the “Intelligent Enterprise
of the Year” Quality Award at SAP Executive
Summit with the project IPOS (Integrated Retail
Automation System) that automatizes and
digitalizes the supply management processes of
our sales channels.
Golden Drum
Turkcell’s “Unreachables” project received the
Grand Prix Award in the “Voice” category at
Golden Drum, one of Europe’s biggest advertising
competitions.
The Loeries
Turkcell’s “Unreachables” project garnered the
Gold award in Media category as well as a Silver
award in the “Branded Content” category.
W3 Awards
Our 2019 GNÇYTNK video and Flex Chats video
series project were rewarded by the Academy
of Interactive and Visual Arts headquartered
in New York in the Social Content & Marketing
- Corporate Communications category of W3
Awards.
Digital Impact
At Digital Impact Awards which rewards
excellence in digital communications and is held
by Communicate Magazine headquartered in
London;
• Our #BirKalpMama project carried out by
MarCom and Event teams deemed worthy
of Gold award in Social Responsibility Project,
Silver award in Viral Campaign and Platin
Award in Online Video category.
• GNÇYTNK 2019 advertising campaign
conducted by our IntCom & Employer Brand
team was rewarded by the Silver award in
Social Media category, Bronze award in the
Online Video category. Flex Chats project
was evaluated as “Highly Commended” in the
Digital Employee Communication category.
Red Dot
The opening performance of our 2019 Technology
Summit was selected as Brands & Communication
Design Winner in the live performance category
at Red Dot Awards, one of the biggest design
competitions with its creative content and
outstanding quality around the world.
121
AUGUST
Brandon Hall Awards
Digital Transformation Program and Leadership
Development Program developed by Turkcell
Academy received three excellence awards
at Brandon Hall Excellence Awards, one of
the most prestigious corporate organizations
around the globe:
•
The Digital Operator Journey: The Digital
Business Transformation Program garnered
a Gold award in Best Learning Program
Supporting a Change Transformation
Business Strategy category.
Turkcell Akademi & IMD Business
School: Turbocharging a Digital Business
Transformation training program received
a Gold award in Best Unique or Innovative
Learning and Development Program
category.
The “Building Leaders Mini MBA Program,”
created in collaboration with Turkcell
Academy and Koç University, garnered
the Bronze award in the "Best Advance in
Leadership Development" category.
•
•
SEPTEMBER
IPRA Golden World Awards
We won two Gold awards at IPRA
(International Public Relations Awards)
organized in Armenia for fizy High School
Music contest in the Sponsorship category, and
Tango without Borders project in Digital Media
Relations category.
CIPS Supply Management Awards 2019
Our Supply Chain Process Development Team
received an award at the London Grosvenor
House in the Technology Innovation category.
We received three excellence
awards at Brandon Hall
Excellence Awards, one of
the most prestigious global
events, for the Digital
Transformation Program
and Leadership Development
Program developed by
Turkcell Academy.
2019 OPERATIONSTURKCELL ANNUAL REPORT 2019 AWARDS
Turkcell returned with 11 awards from MMA Turkey & MMA
EMEA 2019 competition of MMA, which operates in more
than 50 countries around the globe and rewards the most
prestigious projects of the mobile marketing world annually.
•
Silver Award for MMA EMEA BiP “Bi Sohbet
- It’s Just a Chat” in Social Impact/Not For
Profit category
• Gold Award for MMA Turkey BiP “Who
Wants 1 GB? - Newest Way to Entertain” in
Mobile Social category
• Gold Award for MMA EMEA BiP “Who
•
•
Wants 1 GB? - Newest Way to Entertain” in
the Messaging category
Silver Award for MMA Turkey BiP “Who
Wants 1 GB? - Newest Way to Entertain” in
the Messaging category
Bronze Award for MMA Turkey BiP “Win
Win - Be Aware, Have Fun” in Messaging
category
NOVEMBER
TAPOST TestHackaton
Our Test Automation team came in second
at TAPOST 2019 TestHackaton competition
organized by Accenture to assess the technical
test automation know-how of companies.
Marketing Turkey - Cool Brand Awards
According to Marketing Turkey’s “COOL Brands
Preferred by Youngsters” index research, Turkcell
was selected as the “COOL Brand of the Year.”
MMA Smarties Awards
Turkcell returned with 11 awards from MMA
Turkey & MMA EMEA 2019 competition of MMA,
which operates in more than 50 countries
around the globe and rewards the most
prestigious projects of the mobile marketing
world annually:
•
Silver Award for Media MMA EMEA BiP
Translate in Product/Services Launch
category
Bronze Award for Media MMA Turkey
BiP Translate in Product/Services Launch
category
Bronze Award for Media MMA Turkey
“Yaani - Let Tree be What You Search for”
in Mobile Search category
Silver Award for MMA Turkey BiP “It’s Just
a Chat” in Social Impact/Not For Profit
category
•
•
•
ECHO Summit 2019
Turkcell was rewarded as the “Best
E-Commerce Customer Experience Provider”
company price in the Telecommunications
category by the public survey.
HIMSS Eurasia
Turkcell Digital Business Services showcased the
digital infrastructure established for the health
industry at HIMSS Eurasia’19 Health IT Exhibition.
We garnered HIMSS 6 for Adana City Hospital
and HIMSS 7 for Yozgat City Hospital at the
event.
IDC AI, Advanced Analytics & RPA Conference
2019
Turkcell received two awards in Innovation and
AI & Advanced Analytics categories for artificial
intelligence projects at Technology Awards held
as part of IDC AI, Advanced Analytics & RPA
Conference 2019.
Turkcell was rewarded
as the “Best E-Commerce
Customer Experience
Provider” company price
in the Telecommunications
category by the public survey
at ECHO Summit 2019.
• Gold Award for MMA Turkey BiP “It’s Just a
•
Chat” in Messaging category
Silver Award for MMA EMEA BiP “It’s Just a
Chat” in Messaging category
122
TURKCELL ANNUAL REPORT 2019 Lovemarks Award
Turkcell was selected as the most loved brand in
the GSM operator category at Lovemarks award
ceremony held by Mediacat.
Golden Spider
The TURKSPORU site received the Jury award
in the category “Sports” and the People’s
Favorite award in the “Magazine & News & Blog”
category at the 17th Golden Spider Competition.
Moreover, our website on Turkey’s application
garnered the second Jury award in the
“Information & Technology” category.
DECEMBER
Top 30 Successful Marketing Executives of Turkey
Capital Magazine conducted the top 30
successful marketing executives of Turkey
research for the 19th times. Chief Marketing
Officer of Turkcell, Ömer Barbaros Yiş, was
one of the names standing out by marketing
projects making difference in 2019. Moreover,
our Company was the most appreciated one in
marketing, communications and sales strategies.
IDC Cloud and Data Center Awards
Turkcell came in first in the Private Cloud
category with Special Cloud Automation project
as well as SaaS - Cloud Software Service
category with Turkcell Data Science Platform
project.
Istanbul Marketing Awards
Our Company garnered six Golden awards at
Istanbul Marketing Awards, organized taking
into consideration the marketing processes of
corporations and brands in the Turkish business
world: Did You Notice? / My Gem Inside
project in Consumer Communication category;
Tango without Boundaries and Metin Oktay
projects in Social Responsibility Projects
Communication category; Sugar Engineer and
He/She Projects in Social Gender Inequality
Communication category and the Cat Drops off
from Upstairs project in the Traditional Brand
Communication category.
Turkey Golden Brand Awards
Turkcell named as the Communication Brand of
the Year at the 3rd Turkey Golden Brand Awards
and Career Summit participated by the top
people of the Turkish economy, business, press
and television world.
Crystal Apple Awards
Our Company garnered a total of 29 awards
-11 Crystal, 9 Silver, and 9 Bronze- at Crystal
Apple, almost a festive event hosting the
most significant names of marketing and
communications since 2013.
123
Turkcell was selected as
the most loved brand in the
GSM operator category at
Lovemarks award ceremony
held by Mediacat in
November 2019.
Global Glotel Telecom Awards
With our Customer Focused Fault Management
application, we were rewarded at the 2019
Global Telecom (Glotel) Awards, the reputable
competition of the telecom industry held for
the 7th time in London, in the Fixed Network
Development category.
Productivity Award
Our new application OneDesk, that enables us to
manage our demands at our company through a
single point, rewarded at the Productivity Awards
competition organized by the Ministry of Industry
and Technology.
Buyer Network Istanbul
Our Purchasing and Supply Chain Management
department was rewarded at the “Purchasing and
Supply Chain Management Conference” organized
by Buyer Network for the 13th time this year and
participated by more than 500 companies and
managers. The department garnered awards for
the SCM Digital Transformation Journey story in
Supply Chain Management and Young Purchasing
Manager category.
Mediacat Felis Awards
Turkcell received 19 awards at Felis 2019 which
rewards the most successful works in the
categories: Outdoor, Press, Digital, Mobile, Media,
Health Communication, Social Responsibility and
Sustainability and Creative Utilization of Data.
2019 OPERATIONSTURKCELL ANNUAL REPORT 2019 INVESTOR RELATIONS
ÜSTÜN TEKNOLOJİMİZ
As the only Turkish company listed on both the BIST and
NYSE, Turkcell became the 7th largest company trading on the
BIST as of December 31, 2019 with a market capitalization of
TRY 30.4 billion.
CAPITAL MARKET INSTRUMENTS
PERFORMANCE
SHARE AND BOND BUYBACK
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 under the TKC ticker at
the NYSE as American Depository Shares (ADS).
Two ADSs represent five shares.
Turkcell’s issued capital has a nominal value
of TRY 2,200 million and includes 2,200 million
shares each with a nominal value of TRY 1. As
the only Turkish company listed on both the
BIST and NYSE, Turkcell became the 7th largest
company trading on the BIST as of December
31, 2019 with a market capitalization of TRY 30.4
billion.
The size of Turkcell’s American Depositary
Shares reached 69.5 million by the end of 2019.
On October 15, 2015, Turkcell issued bonds
with a nominal value of USD 500 million
and a maturity of 10 years. On April 11, 2018,
Turkcell issued bonds with a nominal value of
USD 500 million, maturity of 10 years, coupon
rate of 5.80% and also traded on the Irish
Stock Exchange (Euronext Dublin). In 2019, our
subsidiary Superonline issued three sukuks in
total of TRY 325 million at February 13, June 14
and October 8.
Turkcell’s institutional investors constitute 77.8%
of the shareholder base. Moreover, 36.6% of
institutional investors are located in North
America, 35.3% in the United Kingdom and
Ireland, 19.5% in Europe (including Turkey).
While 54.2% of institutional investors are “value”
focused investors, 90% of them are invested in
Turkcell for more than a year. (Source: IPREO,
January, 2020) The share of foreigners in
Turkcell’s free float was 87.19%. In the same
period, the foreign share in BIST was 60.82%.
Turkcell Board of Directors decided to execute
share buyback transactions, and to buy 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/or due to the potentially
negative reflection of global macroeconomic
volatility on 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
to authorize the Company management to
execute share buyback transactions, and to buy
our Company’s bonds, with a maximum fund
amount of TRY 150 million. The maximum fund
amount was raised to TRY 300 million in 2017.
Within this context, 16,077,517 shares (for TRY
170.2 million) and bonds with a nominal value
of USD 43.5 million have been purchased since
2016. Of these bonds, USD 18 million and USD
10 million nominal value were sold in 2017 and
2019, respectively.
OUR BUSINESS PRINCIPLES
We Adopt Corporate Governance Principles.
The basic working principles of Turkcell’s
Investor Relations Department include
accessibility, rapid feedback to stakeholders,
and informing stakeholders transparently,
consistently and on a timely basis. In this
respect, all shareholders are regularly informed
over platforms including primarily the Turkcell
Investor Relations website, LinkedIn and Twitter.
Each member of Investor Relations team has
deep understanding of the company and sector
dynamics, and are proactive in communicating
the company’s story comprehensively. While
Turkcell Investor Relations team has an accurate
understanding of the company and analyzes
the business model and opportunities, the
team also makes a difference by effectively
Turkcell’s institutional
investors constitute
77.8% of the shareholder
base. Moreover, 36.6% of
institutional investors are
located in North America,
35.3% in the United Kingdom
and Ireland, 19.5% in Europe
(including Turkey).
124
TURKCELL ANNUAL REPORT 2019 We organized the Capital
Markets Day meeting in
London on November 12 to
present Turkcell’s strategic
priorities and medium-term
targets.
communicating company’s strategies to
the investors. The team aims to establish
long lasting relationships with investors. The
questions and requests of investors and
analysts are responded in the fastest and
most accurate manner within the framework
of related legislation and regulations. As the
Investor Relations Department, throughout 2019:
• We performed 415 meetings with
institutional investment funds.
• We participated in 15 investor conferences
and 1 roadshow.
• We shared our financial results in
4 teleconferences during the year.
• We shared our strategy and medium-term
outlook on the Capital Markets Day that we
organized in London on November 12 with
around 80 participants.
• Over a thousand phone and email requests
were received throughout the year, and we
replied all of them.
The top 10 topics of questions most frequently
asked to Turkcell Investor Relations in 2019:
• Medium-term financial expectations
Regulations and tax arrangements
•
Impact of macroeconomic conditions on
•
Turkcell business model and financials
• Change of CEO and its effects on strategy
• Competitive environment, our pricing policy
•
and operational data trends
Potential 5G license auction, roadmap and
effects on Turkcell
• Hedging instruments and their use
Strategic focus areas and priorities
•
International operations
•
Shareholder structure and dividend policy
•
We Strive to Provide Maximum Benefit and
Create Value for Turkcell and Our Stakeholders.
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 scope, 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. At
this point, the implementation of any practice
that carries a publicly-traded company one
step ahead of others, will create a difference
that add strategic value to the companies and
contribute to the Turkish Capital Markets.
We organized the Capital Markets Day meeting
in London on November 12 to present Turkcell’s
strategic priorities and medium-term targets
to our stakeholders in detail and to disclose
three-year guidance. During the half-day
meeting attended by nearly 80 institutional
investors, analysts and business partners in
total, participants had the opportunity to ask
questions directly to Turkcell’s management
team to better understand management’s
perspective. We organized a similar meeting
for analysts and portfolio managers based in
Turkey at Turkcell headquarters on December
16.
125
CORPORATE GOVERNANCETURKCELL ANNUAL REPORT 2019 INVESTOR RELATIONS
Turkcell has been included in the Borsa Istanbul Sustainability
Index since the date of the creation of the Index. Turkcell,
meeting the necessary criteria set, has been entitled to be
included in the Sustainability Index for the period covering
November 2019-October 2020.
Specially for our 25th year
anniversary, we held our
first quarter announcement
meeting with the opening
session gong ceremony in
Borsa Istanbul. During the
meeting with journalists, we
discussed our 2019 outlook
and quarterly performance
in detail.
126
WE MAKE A DIFFERENCE WITH OUR
COMMUNICATION.
Turkcell believes in simultaneous and open
communication with its stakeholders. In order
to provide comprehensive, accurate and timely
information to our investors worldwide, as Turkcell
Investor Relations we actively use communication
channels such as our website and the Public
Disclosure Platform.
Specially for our 25th year anniversary, we held
our first quarter announcement meeting with the
opening session gong ceremony in Borsa Istanbul.
During the meeting with journalists, we discussed
our 2019 outlook and quarterly performance in
detail.
WE ATTACH IMPORTANCE TO
SUSTAINABILITY.
In 2014, Borsa Istanbul launched the Sustainability
Index. The index indicates each company’s
approach to vital sustainability-related issues
for both Turkey and the wider world which
include global warming, depletion of natural
resources, water scarcity, healthcare, safety, and
employment among others. In this respect, the
index enables the activities and decisions of
companies to be assessed from an independent
perspective, and subsequently to be confirmed by
Borsa Istanbul. Turkcell has been included in the
Sustainability Index since the date of the creation
of the Index. Turkcell, meeting the necessary
criteria set, has been entitled to be included in
the Sustainability Index for the period covering
November 2019-October 2020. In January 2020,
Turkcell’s Sustainability rating was graded ‘A’ by
MSCI (Morgan Stanley Capital International).
Turkcell is the only telecommunications sector
company to receive this grade in Turkey. Moreover,
Turkcell is the only Turkish telecommunications
company in the FTSE’s FTSE4Good Emerging
Markets Index, which measures and integrates
the ESG (Environmental, Social and Governance)
performance. FTSE is an independent organization
in partnership with the London Stock Exchange
and the Financial Times.
WE STRENGTHENED OUR LEADING
POSITION IN DEBT MARKETS OBTAINING
“SUSTAINABILITY LINKED LOAN".
We firmly believe in the importance of contributing
to sustainable growth with the aim to transfer
natural resources to future generations. Through
the EUR 50 million “Sustainability Linked Loan”
agreement with BNP Paribas with 3-year maturity,
which we signed in May, we expanded our
sustainability efforts to the financing activities. As
part of the loan agreement, while we will fulfill
our responsibility for environment decreasing our
carbon footprint we will also be able to reduce our
financing costs. As Turkcell we aim to pioneer the
increasing use of similar funding resources.
TURKCELL ANNUAL REPORT 2019 SHARE INFORMATION*
TCELL (TRY)
Lowest
Highest
Closing
TKC (USD)
Lowest
Highest
Closing
*Share prices are adjusted for dividend payments.
Source: Bloomberg
STOCK EXCHANGE SYMBOLS
Country
Share
ADR
Bond
Bond
2015
7.98
10.92
7.98
2015
6.76
11.58
6.85
2016
7.17
10.04
7.86
2016
5.14
8.72
5.57
2017
7.56
13.85
13.85
2017
5.38
9.14
9.14
2018
9.41
15.09
11.74
2018
3.66
9.97
5.42
2019
10.80
14.57
13.80
2019
4.48
6.78
5.80
Stock Exchange
Borsa Istanbul
NYSE
Irish Stock Exchange
Irish Stock Exchange
Ticker Symbol
TCELL
TKC
ISIN: XS1298711729
ISIN: XS1803215869
SHARE PERFORMANCE (RELATIVE) (2019)
ANALYST RECOMMENDATIONS
TCELL
BIST 100
1,3
1,2
1,1
1,0
0,9
BUY 69%
HOLD 31%
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Turkcell is actively covered by 26 brokerage houses, half of which
are foreign institutions. As of the end of 2019, there were 18 analysts
with a “buy,” 8 analysts with a “hold,” and no analysts with a “sell”
recommendation.
127
CORPORATE GOVERNANCETURKCELL ANNUAL REPORT 2019 CREDIT RATINGS
ÜSTÜN TEKNOLOJİMİZ
Turkcell, Superonline and Turkcell Finans receive ratings from
leading international credit rating agencies.
TURKCELL:
S&P
Fitch
Fitch Ulusal
SUPERONLINE:
JCR-ER
JCR-ER Ulusal
TURKCELL FİNANSMAN:
Fitch
Fitch Ulusal
Long-term Credit Rating
BB-
BB-
AA+ (tur)
Long-term Credit Rating
BBB-
AA (Trk)
Outlook
Stable
Stable
Stable
Outlook
Negative
Stable
Date
August 2018
November 2019
October 2019
Date
May 2019
May 2019
Long-term Credit Rating
B+
AA- (tur)
Outlook
Stable
Stable
Date
December 2019
December 2019
INVESTOR RELATIONS CONTACT INFORMATION
Tel
Fax
E-mail
Web
Address
: +90 (212) 313 18 88
: +90 (216) 504 40 58
: investor.relations@turkcell.com.tr
: https://www.turkcell.com.tr/en/aboutus/investor-relations
: Turkcell Küçükyalı Plaza, Aydınevler Mahallesi İnönü Caddesi No: 20 B Blok Küçükyalı Ofispark, 34854 - Maltepe/Istanbul
128
TURKCELL ANNUAL REPORT 2019 SUBSEQUENT EVENTS AFTER THE REPORTING PERIOD
15.01.2020
Announcement Regarding the Signing of a Binding Termsheet to Transfer Inteltek Shares
Our Company’s subsidiaries Turktell Bilişim Servisleri A.Ş., Global Bilgi Paz. Dan. ve Çağrı Servisi Hizm. A.Ş. and Turkcell Satış ve Dijital İş
Servisleri A.Ş. signed a binding termsheet on January 14, 2020 to transfer their total shareholding of 55% in İnteltek İnternet Teknoloji Yatırım
ve Danışmanlık Ticaret A.Ş. (“Inteltek”) including all rights and liabilities to the other shareholder of Inteltek, Intralot Iberia Holding SAU. The
respective transaction is expected to be completed within the first half of 2020 once the final share sale and purchase agreement (“SPA”) is
signed and necessary legal approvals are obtained. The final value of the transaction will be determined based on IFRS net book value of
Inteltek and no material impact is expected on our financial statements.
11.02.2020
Announcement Regarding the Prepayment of the Loan Agreement
Our company has decided to prepay the loan, which was utilized under the credit agreement disclosed on September 17, 2015 and which
is to mature on September 16, 2020. Accordingly, the last two principal payments of the loan, which are due in June 2020 and September
2020 as per the credit agreement and which in total amount to EUR148.4 million and US$166.7 million, will be performed on March 23, 2020.
The transaction will be conducted in accordance with our long-term financing strategies on the back of our strong balance sheet and
strong cash balance, and will increase the average borrowing maturity of Turkcell İletişim Hizmetleri A.Ş. to 5 years from 4 years currently.
Our company differentiates positively from its peers in the sector with its 1.0x Net Debt/EBITDA ratio as per the latest financial statements
disclosed publicly.
21.02.2020
Announcement Regarding the Change in Organizational Structure
Our Customer Experience Management Division, which is managed under Customer Experience and Information Technologies function, is
organized under different functions of our company. Mr. Serkan Öztürk who has held the customer experience responsibility in addition to his
existing role since July 25, 2017, will continue to serve as Executive Vice President of Information and Communication Technologies.
129
CORPORATE GOVERNANCETURKCELL ANNUAL REPORT 2019 SUBSEQUENT EVENTS AFTER THE REPORTING PERIOD
21.02.2020
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 EUR 12,000,000. Our
Company’s pre-emption rights with respect to the capital increase is fully paid.
04.03.2020
Announcement Regarding the Incorporation of Lifecell Dijital Servisler ve Çözümler A.Ş.
Lifecell Dijital Servisler ve Çözümler A.Ş., which is 100% owned by our Company’s subsidiary Turktell Bilişim Servisleri A.Ş., has been
incorporated with a capital of TRY100,000. The company was registered on February 28, 2020 and its announcement was completed today.
The company will develop digital services, solutions and products.
The public disclosure regarding the incorporation of the company was postponed by respective board decision since it could have impacted
investment decision of investors and stock price.
Board Decision Date for Acquisition
Were Majority of Independent Board Members’ Approved the Board
Decision for Acquisition
30.01.2020
-
Title of Non-current Financial Asset Acquired
Lifecell Dijital Servisler ve Çözümler A.Ş.
Field of Activity of Non-current Financial Asset whose Shares were being
Acquired
Development and provision of digital services, solutions and
products
Capital of Noncurrent Financial Asset
Acquirement Way
TRY 100,000
Establishment
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 (%)
¼ of capital subscribed as per the articles of association of
the company is paid before registry, remaining ¾ will be paid
in the following 24 months after registry
Timed
-
-
-
-
130
TURKCELL ANNUAL REPORT 2019 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 the Latest Annual Financial
Statements of the 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 Counter Party a 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?
Reason for not Preparing Valuation Report if it was not Prepared
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
-
-
-
-
-
No
No
-
No
-
-
-
Not Prepared
Not required by the legislation
-
-
-
-
131
CORPORATE GOVERNANCETURKCELL ANNUAL REPORT 2019 2019 FINANCIAL YEAR CORPORATE GOVERNANCE
PRINCIPLES COMPLIANCE REPORT
STATEMENT OF COMPLIANCE WITH CORPORATE GOVERNANCE PRINCIPLES
Turkcell İletişim Hizmetleri A.Ş. (“Turkcell” or the “Company”) is aware of its responsibilities towards its stakeholders, with the belief that
high standards of corporate governance are key to maintain successful business practices and to provide long-term economic value
to the company’s shareholders. Within this framework, having adopted the principles of “equality,” “transparency,” “accountability” and
“responsibility” that constitute the basis of corporate governance in its activities, the Company exercises due diligence with regard to
compliance with the Capital Markets Law (“CML”) and the secondary regulations and resolutions of the Capital Markets Board (“CMB”).
In parallel with corporate governance efforts established with the creation of the Investor Relations Department at the time of the IPO, and
gained momentum in 2003, corporate governance mechanisms are being implemented in line with the corporate governance principles.
Turkcell İletişim Hizmetleri A.Ş. places a great importance on the full compliance with Corporate Governance Principles.
In the activity period that ended as of 31 December 2019, our company has given great importance to achieve full compliance to the
mandatory corporate governance principles set forth in the annexes of the Corporate Governance Communiqué and the relevant legislation.
Moreover, as a positive development, partial compliance has been achieved with respect to the principle no. 4.3.7 as a result of the fact
that the 2 members sitting in the board of directors beside the independent members were elected by the general assembly in the ordinary
general assembly meeting. Full compliance is aimed at the following general assembly meetings.
Although full compliance with non-mandatory corporate governance principles provided for in the relevant legislation is aimed, it has yet to
be achieved due to the challenges in the implementation of certain principles, the incompatibilities between some principles and the current
structure of the Company and the market.
Currently, the principles yet to be fully complied with so far have not led to any conflicts of interest between the stakeholders.
In the activity period that ended as of 31 December 2019, necessary explanations are provided in the annual report; (i) the Corporate
Governance Compliance Report (“CGCR”) and (ii) the Corporate Governance Fact Sheet (“CGFS”) and (iii) other relevant sections of the
annual report as to the corporate governance principles in the annexes of the Communiqué on Corporate Governance with which the
compliance is achieved as well as the ones that are not yet complied with.
Taking into account the amendments of the regulations and the practices, future efforts will continue to improve our corporate governance
practices including the limited number of unimplemented principles and, to ensure, within the framework of these principles, the better
operation of the mechanisms with respect to the corporate governance practices of the partnership.
Should the CGCR or CGFS be amended within the activity period, a material event disclosure will be made, and this amendment will be
included in the interim activity reports.
132
TURKCELL ANNUAL REPORT 2019 CORPORATE GOVERNANCE COMPLIANCE REPORT
Company Compliance Status
Explanation
Yes
Partial
No
Exempted
Not
Applicable
1.1. FACILITATING THE EXERCISE OF
SHAREHOLDER RIGHTS
1.1.2 - Up-to-date information and disclosures
which may affect the exercise of shareholder
rights are available to investors at the
corporate website.
1.2. RIGHT TO OBTAIN AND REVIEW
INFORMATION
1.2.1 - Management did not enter into any
transaction that would complicate the
conduct of special audit.
1.3. GENERAL ASSEMBLY
1.3.2 - The company ensures the clarity of the
General Assembly agenda, and that an item
on the agenda does not cover multiple topics.
1.3.7 - Insiders with privileged information
have informed the board of directors about
transactions conducted on their behalf within
the scope of the company’s activities in order
for these transactions to be presented at the
General Shareholders’ Meeting.
1.3.8 - Members of the board of directors who
are concerned with specific agenda items,
auditors, and other related persons, as well
as the officers who are responsible for the
preparation of the financial statements were
present at the General Shareholders’ Meeting.
1.3.10 - The agenda of the General
Shareholders’ Meeting included a separate
item detailing the amounts and beneficiaries
of all donations and contributions.
1.3.11 - The General Shareholders’ Meeting
was held open to the public, including the
stakeholders, without having the right to
speak.
1.4. VOTING RIGHTS
1.4.1 - There is no restriction preventing
shareholders from exercising their shareholder
rights.
1.4.2 - The company does not have shares
that carry privileged voting rights.
1.4.3 - The company withholds from exercising
its voting rights at the General Shareholders’
Meeting of any company with which it
has cross-ownership, in case such cross-
ownership provides management control.
1.5. MINORITY RIGHTS
1.5.1 - The company pays maximum diligence
to the exercise of minority rights.
1.5.2 - The Articles of Association extend the
use of minority rights to those who own
less than one twenthieth of the outstanding
shares, and expand the scope of the minority
rights.
X
X
X
X
X
X
X
X
X
X
No information regarding this
kind of activities were received
from such person following the
routine information requests
made before the general
assembly meetings.
Results of general assembly
meeting has been shared with
the media through press release.
Tresholds determined by the
respective legislation are in
effect.
133
X
X
CORPORATE GOVERNANCETURKCELL ANNUAL REPORT 2019 2019 FINANCIAL YEAR CORPORATE GOVERNANCE PRINCIPLES COMPLIANCE REPORT
Company Compliance Status
Explanation
Yes
Partial
No
Exempted
Not
Applicable
X
Turkcell distributed dividend in
2019.
Without prejudice to 137/3, due
to Article 7.2 of the AoA we
ticked the “partial” box.
X
(Communique on Material
Events Disclosure Article- 16/2)
Central Securities Depository
is updating the respective
information available in PDP
under the General Information
heading.
Parts of corporate web site
which are related to public
interest are available in English,
Arabic and Russian language
in addition to that Investor
Relations page is provided both
in Turkish and in English.
X
X
1.6. DIVIDEND RIGHT
1.6.1 - The dividend policy approved by the
General Shareholders’ Meeting is posted on
the company website.
1.6.2 - The dividend distribution policy
comprises the minimum information to ensure
that the shareholders can have an opinion
on the procedure and principles of dividend
distributions in the future.
1.6.3 - The reasons for retaining earnings, and
their allocations, are stated in the relevant
agenda item.
1.6.4 - The board reviewed whether the
dividend policy balances the benefits of the
shareholders and those of the company.
1.7. TRANSFER OF SHARES
1.7.1 - There are no restrictions preventing
shares from being transferred.
2.1. CORPORATE WEBSITE
2.1.1 - The company website includes all
elements listed in Corporate Governance
Principle 2.1.1.
2.1.2 - The shareholding structure (names,
privileges, number and ratio of shares, and
beneficial owners of more than 5% of the
issued share capital) is updated on the
website at least every 6 months.
2.1.4 - The company website is prepared in
other selected foreign languages, in a way to
present exactly the same information with the
Turkish content.
2.2. ANNUAL REPORT
2.2.1 - The board of directors ensures that the
annual report represents a true and complete
view of the company’s activities.
2.2.2 - The annual report includes all elements
listed in Corporate Governance Principle 2.2.2.
3.1. CORPORATION’S POLICY ON
STAKEHOLDERS
3.1.1 - The rights of the stakeholders are
protected pursuant to the relevant regulations,
contracts and within the framework of bona
fides principles.
3.1.3 - Policies or procedures addressing
stakeholders’ rights are published on the
company’s website.
3.1.4 - A whistleblowing programme is in place
for reporting legal and ethical issues.
3.1.5 - The company addresses conflicts of
interest among stakeholders in a balanced
manner.
134
X
X
X
X
X
X
X
X
X
X
TURKCELL ANNUAL REPORT 2019 Company Compliance Status
Explanation
Yes
Partial
No
Exempted
Not
Applicable
X
X
3.2. SUPPORTING THE PARTICIPATION OF
THE STAKEHOLDERS IN THE CORPORATION’S
MANAGEMENT
3.2.1 - The Articles of Association, or the
internal regulations (terms of reference/
manuals), regulate the participation of
employees in management.
3.2.2 - Surveys/other research techniques,
consultation, interviews, observation method
etc. were conducted to obtain opinions from
stakeholders on decisions that significantly
affect them.
3.3. HUMAN RESOURCES POLICY
3.3.1 - The company has adopted an
employment policy ensuring equal
opportunities, and a succession plan for all
key managerial positions.
3.3.2 - Recruitment criteria are documented.
3.3.3 - The company has a policy on human
resources development, and organises
trainings for employees.
3.3.4 - Meetings have been organised to
inform employees on the financial status of
the company, remuneration, career planning,
education and health.
3.3.5 - Employees, or their representatives,
were notified of decisions impacting them.
The opinion of the related trade unions was
also taken.
3.3.6 - Job descriptions and performance
criteria have been prepared for all employees,
announced to them and taken into account to
determine employee remuneration.
3.3.7 - Measures (procedures, trainings, raising
awareness, goals, monitoring, complaint
mechanisms) have been taken to prevent
discrimination, and to protect employees
against any physical, mental, and emotional
mistreatment.
3.3.8 - The company ensures freedom
of association and supports the right for
collective bargaining.
3.3.9 - A safe working environment for
employees is maintained.
3.4. RELATIONS WITH CUSTOMERS AND
SUPPLIERS
3.4.1 - The company measured its customer
satisfaction, and operated to ensure full
customer satisfaction.
3.4.2 - Customers are notified of any delays in
handling their requests.
3.4.3 - The company complied with the
quality standards with respect to its products
and services.
3.4.4 - The company has in place adequate
controls to protect the confidentiality of
sensitive information and business secrets of
its customers and suppliers.
X
X
X
X
X
X
X
X
X
X
X
X
X
Employees' participation to
the management is facilitated
through internal regulations
of the company and various
company practices.
We do not have a syndicate.
135
CORPORATE GOVERNANCETURKCELL ANNUAL REPORT 2019 2019 FINANCIAL YEAR CORPORATE GOVERNANCE PRINCIPLES COMPLIANCE REPORT
Company Compliance Status
Explanation
Yes
Partial
No
Exempted
Not
Applicable
3.5. ETHICAL RULES AND SOCIAL
RESPONSIBILITY
3.5.1 - The board of the corporation has
adopted a code of ethics, disclosed on the
corporate website.
3.5.2 - The company has been mindful of
its social responsibility and has adopted
measures to prevent corruption and bribery.
4.1. ROLE OF THE BOARD OF DIRECTORS
4.1.1 - The board of directors has ensured
strategy and risks do not threaten the long
term interests of the company, and that
effective risk management is in place.
4.1.2 - The agenda and minutes of board
meetings indicate that the board of directors
discussed and approved strategy, ensured
resources were adequately allocated, and
monitored company and management
performance.
4.2. ACTIVITIES OF THE BOARD OF DIRECTORS
4.2.1 - The board of directors documented
its meetings and reported its activities to the
shareholders.
4.2.2 - Duties and authorities of the members
of the board of directors are disclosed in the
annual report.
4.2.3 - The board has ensured the company
has an internal control framework adequate
for its activities, size and complexity.
4.2.4 - Information on the functioning and
effectiveness of the internal control system is
provided in the annual report.
4.2.5 - The roles of the Chairman and Chief
Executive Officer are separated and defined.
4.2.7 - The board of directors ensures that
the Investor Relations department and the
corporate governance committee work
effectively. The board works closely with them
when communicating and settling disputes
with shareholders.
4.2.8 - The company has subscribed to a
Directors and Officers liability insurance
covering more than 25% of the capital.
4.3. STRUCTURE OF THE BOARD OF DIRECTORS
4.3.9 - The board of directors has approved
the policy on its own composition, setting a
minimal target of 25% for female directors.
The board annually evaluates its composition
and nominates directors so as to be
compliant with the policy.
4.3.10 - At least one member of the audit
committee has 5 years of experience in audit/
accounting and finance.
136
X
X
X
X
X
X
X
X
X
X
X
X
X
Since duties and responsibilities
of the Board of Directors are
determined by the Commercial
Code we do not have specific
chapter in our annual report
regarding this topic.
The roles of chairman and
chief executive officer of our
Company is seperate.
The company has subscribed to
a Directors and Officers liability
insurance with a policy limit
more than 25% of the capital.
We do not have a policy which
restrains female candidates
from being appointed as a
board member.
TURKCELL ANNUAL REPORT 2019 Company Compliance Status
Explanation
Yes
Partial
No
Exempted
Not
Applicable
4.4. BOARD MEETING PROCEDURES
4.4.1 - Each board member attended the
majority of the board meetings in person.
4.4.2 - The board has formally approved a
minimum time by which information and
documents relevant to the agenda items
should be supplied to all board members.
4.4.3 - The opinions of board members
that could not attend the meeting, but did
submit their opinion in written format, were
presented to other members.
4.4.4 - Each member of the board has one
vote.
4.4.5 - The board has a charter/written
internal rules defining the meeting procedures
of the board.
4.4.6 - Board minutes document that all
items on the agenda are discussed, and
board resolutions include director’s dissenting
opinions if any.
4.4.7 - There are limits to external
commitments of board members.
Shareholders are informed of board members’
external commitments at the General
Shareholders’ Meeting.
4.5. BOARD COMMITTEES
4.5.5 - Board members serve in only one of
the Board’s committees.
4.5.6 - Committees have invited persons to
the meetings as deemed necessary to obtain
their views.
4.5.7 - If external consultancy services are
used, the independence of the provider is
stated in the annual report.
4.5.8 - Minutes of all committee meetings are
kept and reported to board members.
4.6. FINANCIAL RIGHTS
4.6.1 - The board of directors has conducted
a board performance evaluation to
review whether it has discharged all its
responsibilities effectively.
4.6.4 - The company did not extend any
loans to its board directors or executives, nor
extended their lending period or enhanced
the amount of those loans, or improve
conditions thereon, and did not extend loans
under a personal credit title by third parties or
provided guarantees such as surety in favour
of them.
4.6.5 - The individual remuneration of board
members and executives is disclosed in the
annual report.
X
X
X
X
X
X
X
X
X
X
X
X
X
There is no rule which restricts
board member to serve outside
the company.
Due to the number of the board
of members, they are serving as
a committee member in more
than one comittee.
X
No service has been received
from an outside counsel in 2019.
Board of Directors’ performance
has not been evaluated.
Aggregate amount of the
remuneration of board members
and executives is disclosed in
the annual report.
137
CORPORATE GOVERNANCETURKCELL ANNUAL REPORT 2019 2019 FINANCIAL YEAR CORPORATE GOVERNANCE PRINCIPLES COMPLIANCE REPORT
CORPORATE GOVERANCE INFORMATION FORM
1. SHAREHOLDERS
1.1. Facilitating the Exercise of Shareholders Rights
The number of investor meetings (conference, seminar/etc.) organised
by the company during the year
1.2. Right to Obtain and Examine Information
The number of special audit request(s)
The number of special audit requests that were accepted at the
General Shareholders' Meeting
1.3. General Assembly
Link to the PDP announcement that demonstrates the information
requested by Principle 1.3.1. (a-d)
Whether the company provides materials for the General Shareholders'
Meeting in English and Turkish at the same time
The links to the PDP announcements associated with the transactions
that are not approved by the majority of independent directors or by
unanimous votes of present board members in the context of Principle
1.3.9
The links to the PDP announcements associated with related party
transactions in the context of Article 9 of the Communique on
Corporate Governance (II-17.1)
The links to the PDP announcements associated with common and
continuous transactions in the context of Article 10 of the Communique
on Corporate Governance (II-17.1)
In 2019, Investor Relations Department attended 15 investor
conferences and 1 road shows, and organized Capital Markets
Day and held 415 meetings in total with analysts and corporate
investors.
0
0
https://www.turkcell.com.tr/en/aboutus/investor-
relations/corporate-governance/general-assembly-information
Provided in English as well.
No transaction has been executed in the context of Principle 1.3.9
No related party transactions has been executed above the
tresholds.
No related party transactions has been executed above the
treshold.
The name of the section on the corporate website that demonstrates
the donation policy of the company
https://www.turkcell.com.tr/en/aboutus/investor-
relations/corporate-governance/donation-policy
The relevant link to the PDP with minute of the General Shareholders'
Meeting where the donation policy has been approved
The number of the provisions of the articles of association that discuss
the participation of stakeholders to the General Shareholders' Meeting
Identified stakeholder groups that participated in the General
Shareholders' Meeting, if any
1.4. Voting Rights
Whether the shares of the company have differential voting rights
In case that there are voting privileges, indicate the owner and
percentage of the voting majority of shares
The percentage of ownership of the largest shareholder
1.5. Minority Rights
Whether the scope of minority rights enlarged (in terms of content or
the ratio) in the articles of the association
If yes, specify the relevant provision of the articles of association
1.6. Dividend Right
The name of the section on the corporate website that describes the
dividend distribution policy
Minutes of the relevant agenda item in case the board of directors
proposed to the general assembly not to distribute dividends, the
reason for such proposal and information as to use of the dividend
PDP link to the related general shareholder meeting minutes in case the
board of directors proposed to the general assembly not to distribute
dividends
https://www.kap.org.tr/en/Bildirim/517918
Not available.
Not available.
No
There is no preferential share class.
51%
No
Not available.
https://www.turkcell.com.tr/en/aboutus/investor-
relations/corporate-governance/dividend-policy
Dividends are distributed in 2019.
Dividends are distributed in 2019.
138
TURKCELL ANNUAL REPORT 2019 General Assembly Meetings
The number
of information
requests
received by
the company
regarding the
clarification
of the agenda
of the General
Shareholders'
Meeting
General Meeting
Date
Shareholder
participation
rate to the
General
Shareholders'
Meeting
Percentage
of shares
directly
present at
the GSM
Percentage
of shares
represented
by proxy
Specify the name of the page of the corporate website
that contains the General Shareholders' Meeting minutes,
and also indicates for each resolution the voting levels
for or against
Specify the name
of the page of the
corporate website
that contains all
questions asked in
the general assembly
meeting and all
responses to them
The number of
the relevant item
or paragraph
of General
Shareholders'
Meeting minutes in
relation to related
party transactions
The number of
declarations by
insiders received by
the board of directors
The link to the related PDP general shareholder meeting
notification
12.09.19
0
80.21%
0.01%
80.2%
https://s3.turkcell.com.tr/SiteAssets/Hakkimizda/yatirimci-
iliskileri/documents/pdf/meetingminutes_16092019.pdf
No question
submitted.
N/A
0
https://www.kap.org.tr/en/Bildirim/787222
2. DISCLOSURE AND TRANSPARENCY
2.1. Corporate Website
Specify the name of the sections of the website providing the information
requested by the Principle 2.1.1.
If applicable, specify the name of the sections of the website providing the
list of shareholders (ultimate beneficiaries) who directly or indirectly own
more than 5% of the shares.
List of languages for which the website is available
2.2. Annual Report
The page numbers and/or name of the sections in the Annual Report that
demonstrate the information requested by principle 2.2.2.
a) The page numbers and/or name of the sections in the Annual Report that
demonstrate the information on the duties of the members of the board of
directors and executives conducted out of the company and declarations on
independence of board members
b) The page numbers and/or name of the sections in the Annual Report
that demonstrate the information on committees formed within the board
structure
c) The page numbers and/or name of the sections in the Annual Report that
demonstrate the information on the number of board meetings in a year
and the attendance of the members to these meetings
ç) The page numbers and/or name of the sections in the Annual Report that
demonstrate the information on amendments in the legislation which may
significantly affect the activities of the corporation
d) The page numbers and/or name of the sections in the Annual Report
that demonstrate the information on significant lawsuits filed against the
corporation and the possible results thereof
e) The page numbers and/or name of the sections in the Annual Report that
demonstrate the information on the conflicts of interest of the corporation
among the institutions that it purchases services on matters such as
investment consulting and rating and the measures taken by the corporation
in order to avoid from these conflicts of interest
f) The page numbers and/or name of the sections in the Annual Report that
demonstrate the information on the cross ownership subsidiaries that the
direct contribution to the capital exceeds 5%
g) The page numbers and/or name of the sections in the Annual Report that
demonstrate the information on social rights and professional training of the
employees and activities of corporate social responsibility in respect of the
corporate activities that arises social and environmental results
3. STAKEHOLDERS
3.1. Corporation’s Policy on Stakeholders
The name of the section on the corporate website that demonstrates the
employee remedy or severance policy
The number of definitive convictions the company was subject to in
relation to breach of employee rights
The position of the person responsible for the alert mechanism (i.e.
whistleblowing mechanism)
The contact detail of the company alert mechanism
https://www.turkcell.com.tr/en/aboutus/investor-relations,
https://www.kap.org.tr/en/sirket-bilgileri/genel/1103-turkcell-iletisim-
hizmetleri-a-s
https://www.turkcell.com.tr/en/aboutus/investor-relations/corporate-
governance/shareholder-structure, https://www.kap.org.tr/en/sirket-
bilgileri/genel/1103-turkcell-iletisim-hizmetleri-a-s
Turkish and English
Information provided in the Annual Report under Other Issues
Regarding Corporate Governance section.
Information provided in our website under "Investor
Relations>Corporate Governance>Board Committees" heading and in
the Corporate Governance Information Filings under section 4 which
is attached to our annual report.
Information provided in the Corporate Governance Information Filings,
which is attached to our annual report, under Section 4.
Information provided in the Annual Report under Telecommunications
in Turkey Sector and Developments in Our Company
Information provided under note 38 of IFRS report which is attached
to our Annual Report.
We do not receive such services in 2019.
Information provided under note 40 of IFRS report which is attached
to our Annual Report.
Information provided in the Annual Report under section Social
Responsibility and Sustainability and Human Resources
It is not disclosed in the website of the Company.
38
Ethics Committee
E-mail: ethicscommittee@turkcell.com.tr Address: Turkcell İletişim
Hizmetleri A.Ş. Etik Kurulu Aydınevler Mah. İnönü Cad. No.20,
Küçükyalı / Istanbul
139
CORPORATE GOVERNANCETURKCELL ANNUAL REPORT 2019
2019 FINANCIAL YEAR CORPORATE GOVERNANCE PRINCIPLES COMPLIANCE REPORT
3.2. Supporting the Participation of the Stakeholders in the
Corporation’s Management
Name of the section on the corporate website that demonstrates
the internal regulation addressing the participation of employees on
management bodies.
Corporate bodies where employees are actually represented
3.3. Human Resources Policy
The role of the board on developing and ensuring that the company
has a succession plan for the key management positions
The name of the section on the corporate website that
demonstrates the human resource policy covering equal
opportunities and hiring principles. Also provide a summary of
relevant parts of the human resource policy.
Whether the company provides an employee stock ownership
programme
The name of the section on the corporate website that
demonstrates the human resource policy covering discrimination
and mistreatments and the measures to prevent them. Also provide
a summary of relevant parts of the human resource policy.
The number of definitive convictions the company is subject to in
relation to health and safety measures
3.5. Ethical Rules and Social Responsibility
The name of the section on the corporate website that
demonstrates the code of ethics
The name of the section on the company website that
demonstrates the corporate social responsibility report. If such a
report does not exist, provide the information about any measures
taken on environmental, social and corporate governance issues.
Any measures combating any kind of corruption including
embezzlement and bribery
140
Not available.
Not available.
Board of Directors, when necessary, get involved in the procees
through Nomination Committee within the framework of the
Committee’s roles&responsibilities.
Hiring process is carried out by taking Equal Opportunities Policy into
consideration under the responsibility of the HR Department. During
the hiring process objective criteria such as; a.Being Turkish citizen or
having work permit in Turkey b.Termination of military service c.Not
to be deprived from civil rights d.Not to have a disease that will
prevent him/her from working or pose a threat to the environment
e.Not to be sentenced for an infamous crime f.Not under obligation
of an involuntary servitude g.To have a graduate degree h.To have
required skills determined specifically to the title and role (such as
experience, field of graduation, certificate etc.) ı."Close Relatives”
(Spouses, brothers/sisters, children, father, mother, uncle, maternal
aunt, paternal aunt) of people working in Turkcell Group companies
may not be employed in Turkcell Group Companies. Employees with
no past experience are assessed within the special hiring programs
such as GNÇYTNK. External candidate applications are made
through My Career www.turkcell.com.tr
There isn’t an employee stock ownership programme.
https://www.turkcell.com.tr/todiek/english.html
Not available.
https://www.turkcell.com.tr/todiek/english.html
Corporate Social Responsibility
For our Company it is essential to carry out its activities in a fair,
honest, legal and ethical manner. Turkcell Group Anti-Bribery and
Corruption (“ABC”) Policy demonstrates and reflects our Company’s
Board of Director’s commitment to the highest prevailing national
and international anti-corruption and bribery standards. Turkcell
expects the same degree of commitment from group companies
as well. Within the main framework of the ABC Policy; in April
2018 Corporate Governance & ABC Program Office has been
established and an ABC program which provides necessary risk
based trainings and establishes internal communication, and takes
necessary preventive measures to ensure compliance with the rules
has been initiated. With the establishment of the ABC Office, direct
and efficient channels have been designed to access the Board
of Directors, its committees and Senior Management with respect
to ABC compliance related matters. ABC Office is the first contact
point so that values and processes set by the
ABC Program to be understood well and set these in
motion along with Company’s dynamics. (Please see
https://www.turkcell.com.tr/en/aboutus/investor-
relations/corporate-governance/anti-bribery-and-corruption-policy
to obtain more information on our ABC Policy.)
TURKCELL ANNUAL REPORT 2019 4. BOARD OF DIRECTORS-I
4.2. Activity of the Board of Directors
Date of the last board evaluation conducted
Whether the board evaluation was externally facilitated
Whether all board members released from their duties at the GSM
No evaluation has been conducted.
No
Yes
Name(s) of the board member(s) with specific delegated duties and
authorities, and descriptions of such duties
There is no executive member within the Board of Directors and all
board members have A group signature authorization.
Number of reports presented by internal auditors to the audit
committee or any relevant committee to the board
Specify the name of the section or page number of the annual
report that provides the summary of the review of the effectiveness
of internal controls
Name of the Chairman
Name of the CEO
If the CEO and Chair functions are combined: provide the link to
the relevant PDP announcement providing the rationale for such
combined roles
Link to the PDP notification stating that any damage that may
be caused by the members of the board of directors during the
discharge of their duties is insured for an amount exceeding 25% of
the company's capital
The name of the section on the corporate website that
demonstrates current diversity policy targeting women directors
The number and ratio of female directors within the Board of
Directors
Composition of Board of Directors
Information provided in the Annual Report under Review of Risk
Assessments section.
13
Ahmet Akça
Murat Erkan
CEO and Chair functions are not combined.
No disclosure has been made in PDP.
Not available.
1 - 14%
Name, Surname of
Board Member
Whether
Executive
Director or Not
Whether
Independent
Director or Not
The First
Election
Date to
Board
Link to PDP Notification that Includes the
Independency Declaration
Whether the
Independent Director
Considered by the
Nomination Committee
Whether She/He is
the Director Who
Ceased to Satisfy the
Independence or Not
Whether the Director
Has at Least 5 Years’
Experience on Audit,
Accounting and/or
Finance or Not
Ahmet Akça
Non-Executive
Atilla Koç
Non-Executive
Mehmet Hilmi Güler
Non-Executive
Christopher James
Powell
Non-Executive
Ingrid Maria Stenmark
Non-Executive
Bülent Aksu
Non-Executive
Hüseyin Aydın
Non-Executive
Independent
Director
Independent
Director
Independent
Director
Not Independent
Director
Not Independent
Director
Not Independent
Director
Not Independent
Director
11.Mar.13
https://www.kap.org.tr/en/Bildirim/266009
Not considered.
11.Mar.13
https://www.kap.org.tr/en/Bildirim/266009
Not considered.
11.Mar.13
https://www.kap.org.tr/en/Bildirim/266009
Not considered.
No
No
No
13.Dec.19
Not available.
Not considered.
Not applicable
29.Mar.18
Not available.
Not considered.
Not applicable
7.Mar.19
Not available.
Not considered.
Not applicable
8.Mar.19
Not available.
Not considered.
Not applicable
Yes
Yes
Yes
Yes
No
Yes
Yes
141
CORPORATE GOVERNANCETURKCELL ANNUAL REPORT 2019
2019 FINANCIAL YEAR CORPORATE GOVERNANCE PRINCIPLES COMPLIANCE REPORT
4. BOARD OF DIRECTORS-II
4.4. Meeting Procedures of the Board of Directors
Number of physical board meetings in the reporting period
(meetings in person)
Director average attendance rate at board meetings
Whether the board uses an electronic portal to support its work or
not
Number of minimum days ahead of the board meeting to provide
information to directors, as per the board charter
The name of the section on the corporate website that
demonstrates information about the board charter
Number of maximum external commitments for board members
as per the policy covering the number of external duties held by
directors
4.5. Board Committees
Page numbers or section names of the annual report where
information about the board committees are presented.
10
99.9%
No
5 days before the meeting
We do not disclose the charter in the company's website.
We do not have such policy.
Information provided in our website under "Investor
Relations>Corporate Governance>Board Committees" heading and
in the Corporate Governance Information Filings under section
4 which is attached to our annual report.
Link(s) to the PDP announcement(s) with the board committee
charters
https://www.turkcell.com.tr/en/aboutus/investor-
relations/corporate-governance/board-committees
Composition of Board Committees-I
Names of the Board Committees
Name of Committees Defined As
"Other" in the First Column
Name-Surname of
Committee Members
Whether Committee
Chair or Not
Whether Board Member
or Not
Audit Committee
Audit Committee
Audit Committee
Corporate Governance Committee
Corporate Governance Committee
Corporate Governance Committee
Corporate Governance Committee
Nomination Committee
Nomination Committee
Nomination Committee
Early Detection of Risk Committee
Early Detection of Risk Committee
Audit Committee
Audit Committee
Audit Committee
Corporate Governance
Committee
Corporate Governance
Committee
Corporate Governance
Committee
Corporate Governance
Committee
Nomination Committee
Nomination Committee
Nomination Committee
Early Detection of Risk
Committee
Early Detection of Risk
Committee
Remuneration Committee
Remuneration Committee
Ahmet Akça
Mehmet Hilmi Güler
Atilla Koç
Mehmet Hilmi Güler
Ingrid Maria Stenmark
Zeynel Korhan Bilek
Emre Alpman
Ahmet Akça
Mehmet Hilmi Güler
Atilla Koç
Mehmet Hilmi Güler
Atilla Koç
Atilla Koç
Remuneration Committee
Remuneration Committee
Mehmet Hilmi Güler
Yes
No
No
Yes
No
No
No
Yes
No
No
Yes
No
Yes
No
Board member
Board member
Board member
Board member
Board member
Not board member
Not board member
Board member
Board member
Board member
Board member
Board member
Board member
Board member
142
TURKCELL ANNUAL REPORT 2019
4. BOARD OF DIRECTORS-III
4.5. Board Committees-II
Specify where the activities of the audit committee are presented in
your annual report or website (Page number or section name in the
annual report/website)
Specify where the activities of the corporate governance committee
are presented in your annual report or website (Page number or
section name in the annual report/website)
Specify where the activities of the nomination committee are
presented in your annual report or website (Page number or section
name in the annual report/website)
Specify where the activities of the early detection of risk committee
are presented in your annual report or website (Page number or
section name in the annual report/website)
Specify where the activities of the remuneration committee are
presented in your annual report or website (Page number or section
name in the annual report/website)
4.6. Financial Rights
Specify where the operational and financial targets and their
achievement are presented in your annual report (Page number or
section name in the annual report)
Specify the section of website where remuneration policy for
executive and non-executive directors are presented.
Specify where the individual remuneration for board members and
senior executives are presented in your annual report (Page number
or section name in the annual report)
Composition of Board Committees-II
Not available in the annual report. Please see:
https://www.turkcell.com.tr/en/aboutus/investor-
relations/corporate-governance/board-committees
Not available in the annual report. Please see:
https://www.turkcell.com.tr/en/aboutus/investor-
relations/corporate-governance/board-committees
Not available in the annual report. Please see:
https://www.turkcell.com.tr/en/aboutus/investor-
relations/corporate-governance/board-committees
Not available in the annual report. Please see:
https://www.turkcell.com.tr/en/aboutus/investor-
relations/corporate-governance/board-committees
Not available in the annual report. Please see:
https://www.turkcell.com.tr/en/aboutus/investor-
relations/corporate-governance/board-committees
Information provided in the Annual Report under Turkcell Group:
2019 Operational and Financial Review section.
https://www.turkcell.com.tr/en/aboutus/investor-
relations/corporate-governance/compensation-policy
Information provided under note 39 of IFRS report which is
attached to our Annual Report.
Names of the Board
Committees
Audit Committee
Corporate Governance
Committee
Nomination Committee
Early Detection of Risk
Committee
Remuneration Committee
Name of Committees
Defined As "Other" in the
First Column
The Percentage
of Non-executive
Directors
Audit Committee
Corporate Governance
Committee
Nomination Committee
Early Detection of Risk
Committee
Remuneration
Committee
100%
50%
100%
100%
100%
The Percentage
of Independent
Directors in the
Committee
100%
25%
100%
100%
100%
The Number of
Meetings Held in
Person
The Number of
Reports on its Activities
Submitted to the Board
8
1
0
5
6
8
1
0
6
6
143
CORPORATE GOVERNANCETURKCELL ANNUAL REPORT 2019 OTHER ISSUES REGARDING CORPORATE GOVERNANCE
Board Member Name-Surname
Duties Outside The Group: Company Name
Akça Lojistik Hizmetleri ve Ticaret A.Ş.
Duties Outside The Group: Title/Position
Chairman of the Board of Directors
Ahmet Akça
BİM A.Ş
Member of the Board of Directors (Independent)
Bezmialem Vakıf Üniversitesi
Chairman of the Board of Trustees
Atilla Koç
-
Ordu Belediyesi
-
Mayor
Mehmet Hilmi Güler
Ordu Organize Sanayi Bölgesi
OSKİ
Principal Member Under the Presidency of the
Entrepreneurs Committee
Chairman of the Board of Directors - Natural
Member
Bülent Aksu
Hüseyin Aydın
Ingrid Maria Stenmark
Ministry of Treasury and Finance of Republic of
Turkey
Deputy Minister
T. Eximbank A.Ş.
World Bank
Chairman of the Board of Directors
Turkey Deputy Governor at the World Bank
Asian Infrastructure Investment Bank (AIIB)
Turkey Deputy Governor at AIIB
European Bank for Reconstruction and
Development (EBRD)
Islamic Development Bank (IDB)
Asian Development Bank (ADB)
African Development Bank (AfDB)
Economic Cooperation Organization Trade and
Development Bank (ECOBANK)
Turkey Deputy Governor at EBRD
Turkey Executive Director at IDB
Turkey Governor at ADB
Turkey Governor at AfDB
Turkey Governor at ECOBANK
Black Sea Trade and Development Bank (BSTDB)
Turkey Governor at BSTDB
KOSGEB Executive Committee
Hüda Gıda San. Tic. Ltd. Şti
TC Ziraat Bankası
Türkiye Bankalar Birliği Başkanlığı
Türkiye Varlık Fonu Yönetimi A.Ş.
Telia Company
TeliaSonera Asia Holding B.V.
TeliaSonera UTA Holding B.V.
Sonera Holding B.V.
Telia Resurs AB
Telia Netherland Holding AB
Turkcell Holdings AS
Telia Holding AB
TV4 AB
MTV OY
ATTL Holdings UK Limited
Committee Member
Founding Partner
CEO
Chairman of the Board of Directors
Member of the Board of Directors
Head of CEO Office Strategy & Combined
Assurance
Member of the Board of Directors
Member of the Board of Directors
Managing Director
Member of the Board of Directors
Member of the Board of Directors
Member of the Board of Directors
Member of the Board of Directors
Chair of the Board of Directors
Chair of the Board of Directors
Director
Director
Director
Christopher James Powell
Cukurova Telecom Holdings
Turkcell Holdings A.S.
144
TURKCELL ANNUAL REPORT 2019 CONCLUSION OF THE SUBSIDIARY REPORT
01.01.2019 - 31.12.2019 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:
Details of the legal transactions of our Company with Turkcell Holding A.Ş. and its subsidiaries during the fiscal year 2019 are given in the
above tables. There is neither any legal transaction made in favor of Turkcell Holding A.Ş or one of its subsidiaries nor any action taken or
avoided in favor of Turkcell Holding A.Ş. or one of its subsidiaries upon directive by Turkcell Holding A.Ş.
Details of services provided and/or fixed asset purchases/sales performed under operational activities carried out between our Company
and Turkcell Holding A.Ş. and/or its subsidiaries that are fully in conformity with the market during the fiscal year 2019 are included in this
Report.
145
CORPORATE GOVERNANCETURKCELL ANNUAL REPORT 2019 TELECOMMUNICATIONS SECTOR IN TURKEY
According to the Information and Communication Technologies
Authority (“ICTA”) Market Data report, published by the regulatory
authority of our sector, the number of players operating in the
Turkish electronic communications sector was 460 as of the 3rd
quarter of 2019, and the number of authorizations granted to these
players was 825.
In the first 3 quarters of 2019, the total net sales revenues of mobile
operators; Turkcell İletişim Hizmetleri A.Ş. (“Turkcell”), Vodafone
Telekomünikasyon A.Ş. (“Vodafone”), TT Mobil İletişim Hizmetleri A.Ş.
(“TT Mobil”) and Türk Telekomünikasyon A.Ş. (“Türk Telekom”) were
approximately TRY 37.3 billion, while the net sales revenues of other
operators were realized at TRY 11.8 billion. The total amount of
investments made by Turkcell, Türk Telekom, TT Mobil, and Vodafone
in the same period was realized as TRY 6.1 billion.
MOBILE MARKET
THE BROADBAND INTERNET MARKET
The number of broadband internet subscribers, which was around 6
million in 2008, had exceeded 77 million (14.1 million fixed broadband,
63.0 million mobile broadband subscribers) as of the end of the
third quarter of 2019. Meanwhile, the annual rate of increase in the
total number of internet subscribers was 4.4%. The number of xDSL
subscribers reached to 9.7 million and fiber subscribers reached to
3.1 million. The total length of the fiber infrastructure of alternative
operators had reached 76,627 km.
The total amount of revenue in relation to internet service providers
in the first third quarter of 2019 exceeded TRY 6.9 billion. The average
monthly usage of fixed broadband internet subscribers reached
113.2 GB. Approximately 68.5% of fixed broadband subscribers in
Turkey were seen to prefer packages offering a connection of
10-35 Mbit/sec. speed.
As of the third quarter of 2019, there are 82.9 million mobile
subscribers in Turkey, corresponding to approximately 101.1%
penetration rate. (Mobile penetration rate excluding M2M and 0-9
age population: 115.4%).
As of the third quarter of 2019, the share of the service offered
by alternative operators with xDSL technology in the broadband
market was 17.7% and 25.6% for xDSL subscribers that are more than
9.7 million.
TV MARKET
As of the third quarter of 2019, there are 17 operators, which have
the Cable Broadcast Service (CBS) authorization. While the number
of Türksat’s Cable TV subscribers is 1.26 million; among the operators
providing IPTV services, Superonline has 683 thousand and TTNet
has 760 thousand subscribers.
Among those operators authorized to provide satellite platform
services, Dijital Platform Teknoloji Hizmetleri A.Ş. (Digitürk), Demirören
TV Digital Platform İşletmeciliği A.Ş. (DSmart) and TTNET A.Ş. (Tivibu)
are actively providing services.
FIXED VOICE MARKET
As of the end of the 3rd quarter of 2019, there are 11.5 million fixed
telephone subscribers in our country, while the penetration ratio of
the population is around 14%.
In the third quarter of 2019, the number of 4.5G subscribers was 76
million while the number of 3G subscribers decreased to 5 million.
With the 3G and 4.5G services, the number of mobile broadband
subscribers receiving Internet services from mobile computers and
mobile phones increased to 63 million.
As of the 3rd quarter of 2019, 58.7% of mobile subscribers were on
postpaid tariffs, while 41.3% were on prepaid tariffs. The number
of prepaid mobile broadband subscribers was 24.7 million and the
number of postpaid mobile broadband subscribers was 38.2 million,
while the number of M2M subscribers reached 5.7 million.
In the third quarter of 2019, the number of mobile number portability
increased by 15.5% compared to the previous quarter and was
realized as 3.3 million. As of 1 November 2019, 132.3 million mobile
number portability transactions were carried out.
In terms of market share distribution based on the number of
subscribers, Turkcell has a 41.5%, Vodafone a 31.1% and TT Mobil a
27.5% market share. Approximately 87.5% of mobile subscribers are
consumer and 12.5% are corporate subscribers.
Monthly average data usage in mobile broadband was 6.4 GB,
while the monthly average data usage of the subscribers who were
eligible for the device and SIM card 4.5G service was 8.3 GB. In the
third quarter of 2019, total mobile traffic volume increased by 1.8%
compared to the same period of the previous year and reached
70.2 billion minutes.
In terms of the revenues obtained from subscribers, Turkcell’s market
share stood at 45.2%, Vodafone’s at 30.1% and TT Mobil’s at 24.8%
146
TURKCELL ANNUAL REPORT 2019 DEVELOPMENTS IN OUR COMPANIES
REGULATORY DEVELOPMENTS- SECTORAL REGULATIONS
Presidential Circular on Information and Communication Security
Measures
Presidential Circular No. 30823 on Information and Communication
Security Measures (“Circular”) was published in the Official Gazette
as of July 6, 2019 and entered into force. The Circular sets out
information and communication security measures to be taken
for different security levels by public institutions and enterprises
providing critical infrastructure services to eliminate security risks
resulting from digitalization of information and ease of access to
data.
The Circular, which consists of 21 Articles, is a framework regulation
to ensure safety of critical data which may cause a threat to
national security and/or disrupt public order in the event there
is degradation in reducing or removing security risks or failure in
protecting the privacy, integrity or accessibility of data.
The Circular features critical regulations also affecting our industry.
These include setting up internet exchange points in Turkey;
transmitting data in regions where critical institutions are located,
by fiber optic cables instead of radio link or similar methods; storing
information pertaining to public institutions on relevant institutions’
private systems or on cloud storage systems furnished by local
service providers.
The Information and Communication Security Guide is being
prepared to outline different security levels related to organizations
and data. The guide provides detailed information within the
framework of information security criteria and national and
international standards regarding measures to be imposed for
relevant security standards by public institutions and operators
providing critical infrastructure services. The guide’s content is
expected to be updated every six months following publication.
Mobile Electronic Communication Services Price Cap
Maximum tariffs (concerning call & SMS fees, name/change title
fee, account takeover fee, MSISDN change fee, SIM card change
fee, deactivating fee, detail bill information and directory assistance
service fee) are regulated by the Retail Price Cap Regulation
adopted by the ICTA and updated every six months.
The price caps have been increased about 8% by April 1, 2019 and
about 5.8% by October 1, 2019.
Cancellation of Implicit Rejection of Application to ICTA for the
Removal of Asymmetry in Mobile Termination Rates
The mobile termination rates (MTRs) of operators have been set
asymmetrically by ICTA since 2006, to the detriment of Turkcell. The
removal of the asymmetry in MTRs has been requested from ICTA
due to the changes in industry conditions such as mobile subscriber
shares, technological differences, traffic and revenue distributions
which were cited originally as justifications of asymmetry by ICTA. A
lawsuit has been filed after ICTA rejected our application implicitly
by not responding to our request. The court accepted the case
and decided the cancellation of implicit rejection subjected to the
case according to claims of our Company, with its decision dated
18.07.2019. By this means, ICTA shall re-evaluate the elimination of
mentioned asymmetry and determine equal (symmetric) termination
rates among all mobile operators.
Legal and Regulatory Developments Regarding Mobile Access and Call
Origination Market
ICTA Board Decision dated 3 April 2019 with No. 2019/DK-SRD/097
has extended the transition period for the deregulation of Mobile
Access and Call Origination Market until December 31st, 2019 for the
last time and removed Significant Market Power (SMP) obligations of
Turkcell in this market by the end of 2019.
Besides, in the lawsuit filed against ICTA for the cancellation of the
Board decision dated 18 February 2013 with No. 2013/DK-SRD/105
regarding the acknowledgment of the Final Document about
“Mobile Access and Call Origination Market” by ICTA, the Market
Analysis Final Document of the Authority subjected to the decision,
the transaction regarding declaration of our Company as the
operator with Significant Market Power in Mobile Access and Call
Origination Market and thereby imposing some obligations to our
Company, the Court has justified the claims of our Company and
cancelled the transaction and the decisions subjected to the case.
ICTA appealed the court decision. The 13th Chamber of the Council
of State found the claims and arguments unfair and rejected ICTA’s
appeal request with the decision dated 22 February 2019.
Reporting of Domestic Goods Investment Rate Regarding 4.5G
Turkcell was authorized to provide IMT services on October
27, 2015 with the decision of Board of Information Technologies and
Communication dated August 27, 2015 and No. 2015/YK-YED/390.
Each year, Turkcell is required to provide a certain percentage of
its network investments - hardware and software products related
to the network and communication services without limitation to
products such as base stations, switching, routers - from products
determined to be domestic goods within the scope of Law No. 4734
and related legislation.
In this context, domestic goods certification was obtained in
December 2018 for Turkcell Teknoloji A.Ş.’s products and services
to fulfil this obligation and within the framework of our vision of
contributing to the domestic and national ecosystem. Currently,
Turkcell has the highest utilization rate of domestic goods in the 4.5G
network.
Self-Regulation Practices to Reduce Collection Risks
Thanks to the following self-regulation practices implemented
in 2019 in accordance with relevant legislation that the sector is
subject to, Turkcell has achieved improvements in its collection risk
management and collection performance.
147
SECTORAL AND FINANCIAL INFORMATIONTURKCELL ANNUAL REPORT 2019
DEVELOPMENTS IN OUR COMPANIES
Agreement on the Transfer of Uncollectible Wireless Usage Fee
Receivables from Prepaid Subscribers:
An agreement signed by the mobile operators has made possible
for operators to mutually transfer among themselves the wireless
usage fees that could not be collected from prepaid subscribers
who port out their numbers to another operator, within the scope of
mobile number portability. As part of this practice, all receivables as
of January 2019 are hereby transferred.
Sharing of Information on Subscribers with High Debt Risk among
Operators:
In line with the exception provided in Article 51 of the Electronic
Communication Law, information sharing commenced on April 14,
2019 with the use of blockchain technology. The objective is to make
subscriber information with questionable high debt risk available
among operators and to use results of these queries during the
process of selling devices to subscribers and in new subscription
processes.
Law on Making Amendments on Some Laws with Revenue Tax
Law No. 7186
Regarding the Law on Making Amendments on Some Laws with
Revenue Tax Law No. 7186 published on July 19, 2019:
Amendment of Law on Device Collection Risk:
An amendment was made to Electronic Communication Law No.
5809 regarding sharing of debt information among operators and
the use of debtor devices only with paired numbers. The regulation
made it possible to register and shut down devices owing financing
via a central system to be operated by ICTA. The scope of data that
can be shared among operators under anti-counterfeiting efforts
has been expanded. Thus, it is aimed to reduce collection risk related
to device sales and to prevent malicious use.
Central Equipment Identity Register (CEIR):
Electronic communication services shall not be provided to devices
that do not comply with ICTA’s international roaming regulations or
that are found to be clones. It is stated that for these devices to be
used again, TRY 250 registry fee shall be paid within one year via
the e-government portal after enforcement of Provisional Clause
6 brought by the Law. The devices shall be used by matching the
related subscriber number to the electronic identification data of
the device. All devices that have not received service from electronic
communication networks for a continuous 7-year period shall be
closed for use in 2019. Devices with outstanding debt shall only
be open for use with matched subscriber numbers as long as the
debt is due. Limitation of the matched numbers shall be ceased by
operators after the remaining debt is paid, which will be notified to
CEIR. It is also stated that procedures and principles related to this
practice will be regulated by ICTA.
Finally, as of May 30, 2019, as per President’s Decree No. 1111, for
devices brought from abroad together with the passenger, only one
device right has been granted within three calendar years provided
that the passenger uses the device with the lines registered in TRID
and corporate users are also provided with the opportunity to
register.
Regulations for Updating Subscriber Records
With the ICTA’s related Board Decisions, which were implemented
in 2019:
Subscriber Information Patterns
Some requirements went into effect, including providing requested
data for current subscriptions, namely TRID for Turkish citizens,
foreign identification number (FIN) for foreign nationals and tax
identification number (TIN) for legal persons; restrictions on use and
suspension of lines unless individual users or relevant authorities/
line users verify their ID information, SMS notifications regarding
subscriptions in accordance with the resolution, checking current
subscriber information periodically from relevant officials.
Passport Confirmation System
As of 31 January 2019, confirmation of information contained in the
relevant document in the subscription process of foreign nationals
who have a passport or equivalent document with international
validity must be carried out through the Passport Confirmation
Service (PTS). Subscribers whose subscriptions are made through the
PTS should make application within 90 days to FIN; if not, operators
shall restrict the use of or suspend closure of said lines.
Cancellation of TRY 138 Million Administrative Fines Applied by Ministry
of Commerce
Under the Law on Consumer Protection Ministry of Trade imposed
an administrative fine amounting TRY 138 million on our Company
as a result of investigation initiated against our Company on
distance contracts, instalment sales contracts and subscription
agreements for the year 2015. Our Company filed a lawsuit for the
cancellation of those administrative fine and act. With its decision
dated 19.09.2019, the court accepted the lawsuit and cancelled
the administrative fine according to claims of our Company. The
defendant appealed the decision and the appeal process is
pending.
Amendment of Administrative Fines Given by Competition Board
within the Scope of Turkcell’s Appeals
The Competition Board imposed an administrative fine of
TRY 92 million on the grounds that Turkcell violated competition by
setting the re-sale price of the subscriber’s meter. An application
was filed with the Competition Board for withdrawal of the penalty
mentioned by Turkcell and a lawsuit has been filed.
The Competition Board adopted some of Turkcell’s objections and
changed its previous decision. The new decision eliminated
TRY 92 million of the fine and ruled for an administrative fine of
TRY 61 million. Following notification of the justified decision, it is
considered to apply to legal remedies for the respective fine.
148
TURKCELL ANNUAL REPORT 2019 Cases Regarding Use of 444 Numbers
Turkcell filed three different lawsuits for the stay of execution and
cancellation of ICTA decisions regarding the act that restrict/prevent
the use of numbers starting with 444. The Court accepted all three
cases in favor of Turkcell and cancelled the ICTA decisions based
on they were against the law. The decisions of the courts were
finalized. After all these cancellation decisions, Turkcell filed another
lawsuit for the cancellation of administrative act regarding the
implicitly rejection of the application made by Turkcell, requesting
to the ICTA to fulfill the requirements of the Court decisions and to
eliminate the unlawful practices. The Court accepted the case in
favor of Turkcell on 14.01.2019. The defendant appealed the decision.
The appeal process is pending. At present, ICTA is conducting legal
research and making assessments on this conflict.
Cancellation of Board Decision Increasing ICTA’s Obligation for 3G
Coverage
In the lawsuit filed by Turkcell against ICTA for the stay of execution
and the cancellation of the Board decision dated July 21, 2014 and
numbered 2014/DK-YED/376 and the administrative act of ICTA
dated August 14, 2014 and numbered 151.99/50991 regarding the
notification of the respective Board decision in which Information
and Communications Technologies Authority increased the
Company’s coverage obligations, defined in the Company’s
concession agreement, on the grounds of the amendment of the
Law for Metropolitan Municipalities numbered 5216 which was
amended by the codes numbered 6360 and 6447, the Court has
justified the claims of Turkcell with its decision taken on 17.04.2019
and decided to cancel the decision of the case in favor of the
Turkcell. The defendant appealed the decision and the appeal
process is pending.
Amendment of Concession Agreements and Authorization Certificate
within the Law on Amending Some Tax Laws No. 7061 and Some Other
Laws
Law No. 7061 made it possible to restructure disputes related to
some financial liabilities. In addition, amendments were made
to tax laws and other laws concerning the sector in order to
eliminate problems related to calculation, collection and follow-
up of taxes and other financial liabilities received from the
electronic communication sector. The Law stipulates that operators
applying for restructuring shall be deemed to have applied to
ICTA for amendment of Concession Agreements and Authorization
Certificate under these amendments.
Draft texts have been signed by Turkcell and ICTA and forwarded
to the Council of State for consultation. Following the remarks of
the Council of State, the regulation regarding the time extension
was added to the draft Authorization Certificate. The signature
processes regarding amendment of the Concession Agreements and
Authorization Certificate is expected to be completed soon.*
Circular on Amending the Circular on Obligatory Provisions of the
Central Bank of Turkey
The Central Bank of Turkey (TCMB) published the “Circular on
Amending the Circular on Obligatory Provisions” in Official Gazette
Issue: 2013/15. According to Article 6 of the Circular on Obligatory
Provisions published in the Official Gazette of December 25, 2013
and No. 28862 (Number: 2013/15) the clause “(3) the obligatory
provision ratios specified in the first and second paragraphs for
financing companies is applied as 0 percent” has been added.
The Circular went into effect as of June 14, 2019. Decreasing the
obligatory provision ratio made a positive contribution to Turkcell’s
cash flow.
Limiting the Number of Installments and Increasing the Permission Fee
for Telephone Use
As per article 26/7 of the Regulation on Bank Cards and Credit
Cards and as announced by the press release dated June 12, 2019,
BRSA has decided to restrict the number of installments on credit
cards with 6 (six) months for electronic appliances, 12 (twelve)
months for television purchases up to TRY 3,500, 18 (eighteen)
months for electrical appliances and 18 (eighteen) months on
corporate credit cards in general.
The Regulation on Amendment of the Regulation on Principles and
Rules to be Applied to in Retail Trade was published in the Official
Gazette of June 22, 2019 (the “Regulation”). As per the Regulation,
the number of installments, for sales of tablet computers and
electronic appliances such as video camera and sound systems,
television and mobile phone with a value of more than TRY 3,500
are restricted with 6 (six) months, for sales of electrical goods such
as refrigerators, washing machines, dishwashers and household
electrical appliances, are restricted with 18 (eighteen) months.
Pursuant to the Regulation Amending the Regulation on
Establishment and Operating Principles of Financial Leasing,
Factoring and Financing Companies published in the Official Gazette
of February 26, 2019, “The maturity of consumer loans cannot exceed
60 (sixty) months, the maturity of loans granted for computer
purchases cannot exceed 12 (twelve) months, the maturity of loans
granted for tablet computers cannot exceed 6 (six) months, the
maturity of the loans granted for purchase of mobile phones up to
three thousand five hundred Turkish Lira (TRY 3,500) cannot exceed
12 (twelve) months, and loans granted for purchase of mobile
phones exceeding three thousand five hundred Turkish Lira (TRY
3,500) cannot exceed 6 (six) months. The same maturities shall be
applied in the restructuring of these loans.” The ruling was issued as
above-mentioned.
*Signature processes regarding the amendment of the Concession Agreements and
Authorization Certificate were completed on 16.01.2020.
149
SECTORAL AND FINANCIAL INFORMATIONTURKCELL ANNUAL REPORT 2019 DEVELOPMENTS IN OUR COMPANIES
It shall be further noted that the maturity of loans granted for the
purchase of mobile phones exceeding TRY 3,500 has been limited
to 3 (three) months with the Regulation Amending the Regulation
on Establishment and Operating Principles of Financial Leasing,
Factoring and Financing Companies published in the Official Gazette
of 14 January 2020. In line with this new regulation, the number
of installments for sales of mobile phones exceeding TRY 3,500
has also been restricted to 3 (three) months by the Regulation on
Amendment of the Regulation on Principles and Rules to be Applied
to Retail Trade published in the Official Gazette of January 20, 2020.
entities who only provide hosting services to these services, media
service providers willing to broadcast radio, television and on-demand
broadcast services on the internet via mobile applications and other
medium including integrated television receivers, computers, smart
phones, tablets and similar shall obtain an “INTERNET-RD Broadcast
License” from RTÜK for radio broadcasting; “INTERNET-TV Broadcast
License” for television broadcasting; “INTERNET-IBYH Broadcast
License” for on-demand broadcasting; and platform operators willing
to transmit these broadcast services via internet and/or mobile
applications must obtain “Broadcast Transmission Authorization” from
RTÜK.
In addition, in the Official Gazette dated July 19, 2019, the “Decision
on Determination of the Amount of Allowance for Use of Telephone
with Passenger” was published and the said fixed amount was
increased from TRY 618 to TRY 1,500.
Turkcell’s activities within the scope of the Regulation are under review
and discussions with RTÜK are being held for the actions required to
be taken.
Price Tag Regulations
The Regulation on Amendment of the Price Label Regulation was
published in the Official Gazette of 27 July 2019. In accordance with
the regulations brought by the relevant regulation, affixing eligible,
digital or electronic labels on goods or packaging or containers
readily available and readable by the seller is necessary. If it is not
possible to add these labels, lists containing the same information
should be displayed and be readable in suitable places. However,
lists showing tariffs and prices of services should also be posted. It is
sufficient to specify the distinctive feature of the service, sales price
including all taxes and the date on which this price is applied. It is
not necessary to specify the manufacturing site on labels with local
production logo and price lists.
Regulation on Broadcasting on the Radio, Television and Optional
Broadcasts on the Internet
It has been regulated with article 29/A, which has been added to
the Law No. 6112 on the Establishment and Broadcasting Services
of Radios and Televisions (“Law”) by article 82 of the Law No. 7103
on Amendment of Tax Laws and Certain Laws and Decree Laws
published in the second consecutive Official Gazette of March
27, 2018, that media service providers providing radio, television
and on-demand broadcast services on the internet are required
to obtain a broadcast license and platform operators transmitting
these broadcasts on the internet are required to obtain broadcast
transmission authorization from the Radio and Television Supreme
Council (“RTÜK”) and that the principles and procedures regarding
application of the article will be regulated in a regulation to be
issued jointly by RTÜK and the Information and Communication
Technologies Authority (“ICTA”).
In this respect, the Regulation on Presentation of Radio, Television
and On-demand Broadcast Services on the Internet (the
“Regulation”) prepared by RTÜK and ICTA entered into force after
being published in the Official Gazette of August 1, 2019. As per the
Regulation, which excludes individual communication, platforms that
are not dedicated to transmitting radio, television and on-demand
broadcast services through internet and real persons and legal
Amendments to the Communiqué on the Data Controller Registry,
Regulation on Deletion, Destruction or Anonymization of Personal Data
and Procedures and Principles regarding to Enlightenment Obligation
With the amendment published in Official Gazette No. 30758 of
28 April 2019, the definitions of “Contact Person,” “Personal Data
Processing Inventory” and “Data Controller Representative,” registry of
the regulation, management, supervision and access to the registry
in Clauses 5 and 7, and the registration obligation mentioned in
Clauses 11, 13 and 16 were amended. With the amendment published
in the Official Gazette of 28 April 2019 and No. 30758, the definition
of “Personal data processing inventory” in the Regulation on Deletion,
Destruction or Anonymization of Personal Data and principles
regarding deletion, destruction or anonymization of the personal
data contained in Article 7 of the Regulation were amended. With
the amendment published in the Official Gazette of 28 April 2019
and No. 30758, the definitions of “Data Processing System” and “Data
Controller Representative” in the Procedures and Principles regarding
to Enlightenment Obligation stated in Article 5 were amended.
Developments in Payment and Electronic Money Services
Authorized in 2016 for the first time to serve as a payment institution
and having obtained the first activity permit in Turkey in this area with
the status of “payment institution,” TURKCELL ÖDEME VE ELEKTRONİK
PARA HİZMETLERİ A.Ş. (“TÖHAŞ”) was authorized to act as an
“electronic money institution” in 2017. Under this authorization, TÖHAŞ
currently provides brokerage services under the “Paycell” brand for
payment of purchases of goods and services through prepaid and
post-paid lines of the mobile payment and electronic communication
operator, corporate payments and via POS for card payments.
Sofra Kurumsal ve Ödüllendirme Hizmetleri A.Ş. (“Sofra A.Ş.”) was
established on 27 July 2018 by registration at Istanbul Trade Registry
Office. TÖHAŞ, Posta ve Telgraf Teşkilatı A.Ş., and Belbim Ödeme
Hizmetleri ve Elektronik Para A.Ş. each holds an equal stake in Sofra
A.Ş. Sofra A.Ş. provides brokerage services for payments of food
purchases from member stores contracted with the Paye Card issued,
which can be used at istanbulkart points with the istanbulkart feature
that can be integrated with this card.
150
TURKCELL ANNUAL REPORT 2019 TURKCELL GROUP: 2019 FINANCIAL & OPERATIONAL REVIEW
Our audited annual consolidated financial statements including our consolidated statements of financial position as of December 31,
2019 and 2018 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, 2019 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 2019 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 2019 refer to the same item
for the year end of 2018 unless otherwise stated.
In the tables totals may not foot due to rounding differences, The same applies to the calculations in the text.
TURKCELL GROUP: FINANCIAL SUMMARY
Profit & Loss Statement (million TRY)
Revenue
Cost of revenue1
Gross Margin1
Administrative expenses
Selling and marketing expenses
Net impairment loses on financial and contract assets
EBITDA2
EBITDA Margin
Depreciation and amortization
EBIT3
EBIT Margin
Net finance income/(costs)
Finance income4
Finance costs4
Other income/(expense)
Non-controlling interests
Share of profit of equity accounted investees
Income tax expense
Discontinued operations
Net Income
FY18
21,292.5
(9,858.0)
53.7%
(673.4)
(1,626.7)
(346.4)
8,788.0
41.3%
(4,288.0)
4,500.0
21.1%
(1,687.0)
1,677.1
(3,364.1)
(140.1)
(156.3)
(0.1)
(495.5)
-
2,021.1
FY19
25,137.1
(12,036.9)
52.1%
(779.8)
(1,555.2)
(338.9)
10,426.4
41.5%
(5,046.6)
5,379.9
21.4%
(1,727.7)
297.5
(2,025.1)
(346.6)
(30.2)
(15.7)
(785.6)
772.4
3,246.5
CHANGE%
18.1%
22.1%
(1.6pp)
15.8%
(4.4%)
(2.2%)
18.6%
0.2pp
17.7%
19.6%
0.3pp
2.4%
(82.3%)
(39.8%)
147.4%
(80.7%)
n.m
58.5%
n.a
60.6%
(1) Excluding depreciation and amortization expenses,
(2) EBITDA is a non-GAAP financial measure,
(3) EBIT is a non-GAAP financial measure and is equal to EBITDA minus depreciation and amortization expenses,
(4) Fair value loss and interest expense regarding derivative instruments and the respective fair value gain and interest income regarding derivative instruments are represented on a net
basis, Starting from Q219, interest income on financial assets and interest expenses for financial liabilities, both measured at amortized cost, are represented on a net basis, Historical
periods were restated to reflect this change.
Consolidated Balance Sheet Data (Year End) (million TRY)
Cash and cash equivalents
Total assets
Long-term debt
Total debt
Total liabilities
Total equity
2018
7,419.2
42,765.3
13,119.6
20,155.5
26,711.7
16,053.6
2019
10,238.7
45,715.0
12,677.4
20,305.7
27,632.0
18,082.9
CHANGE %
38.0%
6.9%
(3.4%)
0.7%
3.4%
12.6%
151
SECTORAL AND FINANCIAL INFORMATIONTURKCELL ANNUAL REPORT 2019 TURKCELL GROUP: 2019 FINANCIAL & OPERATIONAL REVIEW
Summary Consolidated Cash Flow Statement (million TRY)
Net cash inflow from operating activities
Net cash outflow from investing activities
Net cash (outflow)/inflow from financing activities
Effects of exchange rate changes on cash and cash
equivalents
Cash and Cash Equivalents
Profitability and Solvency Ratios (%)
Gross Profit Margin
EBITDA Margin
EBIT Margin
Net Income Margin
Total Liability/Equity Ratio
Net Debt/EBITDA Multiple
EXPLANATIONS:
Revenue1: Turkcell Group revenues rose by 18.1% to TRY 25,137 million
(TRY 21,292 million).
•
Turkcell Turkey revenues, grew by 18.8% to TRY 21,487 million
(TRY 18,093 million).
2018
5,829.9
(4,535.6)
(534.4)
1,947.0
7,419.2
2018
53.7%
41.3%
21.1%
9.5%
166.4%
1.4x
2019
9,026.6
(3,027.3)
(3,478.0)
298.2
10,238.7
2019
52.1%
41.5%
21.4%
12.9%
152.8%
1.0x
CHANGE%
54.8%
(33.3%)
550.8%
(84.7%)
38.0%
CHANGE%
(1.6pp)
0.2pp
0.3pp
3.4pp
(13.6pp)
(0.4x)
Administrative expenses: Administrative expenses were at 3.1% (3.2%)
as a percentage of revenues.
Selling and marketing expenses: Selling and marketing expenses
declined to 6.2% (7.6%) as a percentage of revenues driven by the
decline in selling expenses (1.2pp) and other cost items (0.2pp).
- Consumer business grew by 17.0% to driven by strong ARPU
performance.
Net impairment loses on financial and contract assets: Net impairment
loses on financial and contract assets was at 1.3% (1.6%) as a
percentage of revenues in 2019.
- Corporate revenues rose by 32.4% supported by digital
business solutions revenue growth of 44%.
EBITDA: EBITDA grew by 18.6% resulting in an EBITDA margin of 41.5%
(41.3%).
•
Standalone digital services revenues from consumer and
corporate businesses reached TRY 1 billion in FY19.
- Wholesale revenues grew by 26.0% to TRY 1,154 million
(TRY 916 million).
•
Turkcell International revenues rose by 37.5% to TRY 2,003 million
(TRY 1,457 million).
•
•
•
Turkcell Turkey’s EBITDA rose by 18.7% to TRY 8,789 million
(TRY 7,404 million) with an EBITDA margin of 40.9% (40.9%).
Turkcell International EBITDA rose by 47.5% to TRY 904 million
(TRY 613 million) with an EBITDA margin of 45.1% (42.1%).
The EBITDA of other subsidiaries was at TRY 733 million (TRY 771
million).
• Other subsidiatries’ revenues were at TRY 1,647 million (TRY 1,743
million).
Depreciation and amortization expenses: In 2019, depreciation and
amortization expenses increased 17.7%.
Cost of revenue (excluding the depreciation and amortization): Cost
of revenue (excluding depreciation and amortization) increased to
47.9% (46.3%) as a percentage of revenues. This was due mainly to
the rise in cost of goods sold (3.0pp) and other cost items (0.1pp),
despite the decline in cost of revenue of financial services (0.8pp)
and interconnection costs (0.7pp) as a percentage of revenues.
Net finance expense: The net finance expense increased to
TRY 1,728 million (TRY 1,687 million). This was due mainly to lower
interest income on bank deposits and higher interest expenses
resulting from borrowings and lease obligations, despite lower
foreign exchange losses after hedging.
1 Please refer to the notes to the consolidated financial statements for the definition of Turkcell Turkey, Turkcell International and other subsidiaries.
152
TURKCELL ANNUAL REPORT 2019
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.
On December 12, 2018, Turkcell signed a binding agreement and on
April 2, 2019 completed the transfer of its shares in Fintur to Sonera
Holding B.V., the majority shareholder of Fintur. The final value of
the transaction was EUR 352.9 million. As the conditions precedent
required for the share transfer were completed within Q119,
TRY 772 million profit generated from the transaction was
reflected in the Q119 financial statements.
- Our consumer finance company had a debt balance of
TRY 1,733 million, of which TRY 1,194 million (USD 201 million)
was denominated in USD, and TRY 214 million (EUR 32 million)
in EUR with the remaining TRY 325 million in TRY.
-
The debt balance of lifecell was TRY 1,044 million, all
denominated in UAH.
TRY 735 million of lease obligations is denominated in TRY, TRY 19
million (USD 3 million) in USD, TRY 163 million (EUR 24 million) in EUR
and the remaining balance in other local currencies (please note that
the figures in parentheses refer to USD or EUR equivalents).
We booked a provision of TRY 60 million in Q219 for the recognition
of liability in relation to the Kcell Share Purchase Agreement
regarding the past Kcell transaction and performed the respective
payment in Q319.
TRY 10,117 million of our consolidated debt is set at a floating rate.
Excluding consumer finance business borrowings, TRY 6,206 million
of consolidated debt will mature within less than a year.
Income tax expense: The income tax expense increased 58.5% in
2019.
Net income: Net income rose 60.6% to an all-time high level of
TRY 3,246 million. This was driven mainly by a solid operational
performance, lower net foreign exchange losses after hedging
and the contribution of the Fintur sale, despite the lower interest
income on bank deposits and higher interest expenses resulting from
borrowings and lease obligations.
Net debt as of December 31, 2019 was at TRY 10,067 million with a
net debt to EBITDA ratio of 0.97 times. Excluding consumer finance
company consumer loans, our telco only debt was at TRY 7,658
million with a leverage of 0.77 times.
Turkcell Group has a long FX position of USD 115 million as at the
end of the year. (Please note that this figure takes advance payments
and hedging into account, but excludes FX swap transactions for TRY
borrowing. Derivatives (VIOP) and forward transactions are included).
Total cash & debt: Consolidated cash as of December 31, 2019
declined to TRY 10,239 million from TRY 10,975 million as of
September 30, 2019, due mainly to the dividend payment as well as
debt repayments. Excluding FX swap transactions for TRY borrowing,
81% of our cash is in USD 12% in EUR and 7% in TRY.
Capital expeditures: Capital expenditures including non-operational
items were at TRY 7,225 million. In 2019, operational capital
expenditures (excluding license fees) at the Group level was at 18.0%
of total revenues.
Consolidated debt as of December 31, 2019 declined to TRY 20,306
million from TRY 20,675 million as of September 30, 2019, mainly on
the back of debt repayments despite the negative impact of FX
movements. Please note that TRY 1,533 million of our consolidated
debt is comprised of lease obligations.
• Consolidated debt breakdown excluding lease obligations:
-
Turkcell Turkey’s debt was at TRY 15,994 million, of which TRY
9,096 million (USD 1,531 million) was denominated in USD, TRY
5,425 million (EUR 816 million) in EUR, TRY 201 million (CNY 237
million) in CNY and the remaining TRY 1,272 million in TRY.
Capital expenditures (million TRY)
Operational capital expenditures
License and related costs
Non-operational capital expenditures
(including IFRS15 & IFRS16)
Total capital expenditures
2018
3,943.1
414.1
3,286.9
7,644.0
2019
4,525.1
1.8
2,697.8
7,224.7
153
SECTORAL AND FINANCIAL INFORMATIONTURKCELL ANNUAL REPORT 2019 TURKCELL GROUP: 2019 FINANCIAL & OPERATIONAL REVIEW
OPERATIONAL REVIEW (TURKEY):
Summary of Operational Data
Number of subscribers (million)
Mobile Postpaid (million)
Mobile M2M (million)
Mobile Prepaid (million)
Fiber (thousand)
ADSL (thousand)
Superbox (thousand)1
Cable(thousand)
IPTV (thousand)
Churn (%)2
Mobile Churn (%)3
Fixed Churn (%)
ARPU (Average Monthly Revenue per User) (TRY)
Mobile ARPU, blended
Mobile ARPU, blended (excluding M2M)
Postpaid
Postpaid (excluding M2M)
Prepaid
Fixed Residential ARPU, blended
Residential Fiber ARPU
Average mobile data usage per user (GB/user)
Mobile MoU (Avg, Monthly Minutes of usage per subs) blended
2018
36.7
18.8
2.4
14.9
1,385.6
905.6
33.5
-
613.4
2.1%
1.8%
33.9
36.2
48.2
54.9
16.9
55.7
57.0
5.2
359.5
2019
35.7
20.4
2.6
12.4
1,484.7
719.1
323.2
49.2
719.7
2.7%
2.1%
39.8
42.6
56.4
64.1
18.3
64.5
67.0
7.4
415.3
CHANGE %
(2.7%)
8.5%
8.3%
(16.8%)
7.2%
(20.6%)
864.8%
n.a
17.3%
0.6pp
0.3pp
17.4%
17.7%
17.0%
16.8%
8.3%
15.8%
17.5%
42.3%
15.5%
(1) Superbox subscribers are included in mobile subscribers.
(2) Presentation of churn figures has been changed to demonstrate average monthly churn figures for the respective quarters.
(3) 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
TRY 10). Additionally, under our revised policy, prepaid customers who last topped up before March will be disconnected at the latest by year-end. As a regulatory requirement, we started
to disconnect prepaid lines in accordance with new ICTA regulation, which requires deactivation of prepaid lines which lack residency documents by the 6th month of subscription.
Our mobile subscriber base was at 32.7 million as at the year end.
Our postpaid subscriber base expanded by 1.5 million net annual
additions in FY19, the highest of the past 10 years. Accordingly,
postpaid subscribers, whose ARPU generation on average is
more than three times that of prepaid subscribers, reached 62.2%
(55.7%) of the subscriber base. We were able to achieve this sound
performance on the back of our microsegment layered approach
and regional offers enabled by our strong data analytics capabilities.
Meanwhile, our prepaid customers declined by 2.6 million in FY19,
due mainly to 1.9 million disconnections in accordance with the new
ICTA regulation that requires deactivation of prepaid lines which
lack residency documents by the 6th month of subscription, and
deactivation of 580 thousand inactive prepaid customers in line with
our churn policy.
On the fixed front, our fiber subscriber base grew by 99 thousand
annual net additions. Our fixed wireless access product, Superbox,
continued its growth momentum expanding its customer base
on 290 thousand annual net additions. Meanwhile, our cable
subscribers had reached 49 thousand by year end. IPTV customers
numbered 720 thousand on 106 thousand annual net additions.
The average monthly mobile churn rate was at 2.7% in FY19. Average
monthly fixed churn rate was at 2.1% in FY19.
Mobile ARPU (excluding M2M) grew 17.7% year-on-year in FY19,
driven mainly by a favorable customer mix, upsell efforts, increased
data consumption and price adjustments.
Fiber residential ARPU grew by 17.5% year-on-year in FY19, mainly
on upsell performance, price adjustments as well as with higher
revenue generating subscriber acquisitions. Multiplay subscribers
with TV4, reaching 53.3% of total residential fiber subscribers, also
helped strong ARPU performance.
Average monthly mobile data usage per user increased 42.3% year-
on-year in FY19, driven by the increasing data consumption of 4.5G
users and increased digital services usage. Accordingly, the average
mobile data usage of 4.5G users reached 10.8 GB in Q419.
The number of 4.5G compatible smartphones on our network was
at 19.2 million comprising 87% of the smartphones on our network.
Excluding the impact of regulatory disconnections, 4.5G compatible
smartphones on our network would have reached nearly 20.2
million by year end.
(4) Multiplay subscribers with TV: Fiber internet + IPTV users & fiber internet + IPTV + fixed
voice users.
154
TURKCELL ANNUAL REPORT 2019
FORWARD LOOKING STATEMENTS
ÜSTÜN TEKNOLOJİMİZ
In 2020, we target Group revenue growth of 13%-16%, an
EBITDA margin of 39%-42%, an EBIT Margin of 18%-21% and
an operational capex to sales ratio(1) of 16%-18%.
2020 GUIDANCE
13%-16%
Revenue Growth
39%-42%
EBITDA Margin
18%-21%
EBIT Margin
16%-18%
Op. Capex/
Sales(1)
(1) Excluding license fee
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 2018 filed with U.S. Securities
and Exchange Commission, and in particular, the risk factor section therein.
155
SECTORAL AND FINANCIAL INFORMATIONTURKCELL ANNUAL REPORT 2019 REVIEW OF RISK ASSESSMENT
• Competition in the Turkish telecommunications market may
•
adversely affect the growth of our business and our financial
condition and the competition that we face may evolve with our
business strategy.
• 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.
• Any instability in the political environment and/or downturn
•
•
•
•
in the economy, as well as volatile international markets and
events and the threat of terrorism, in Turkey and internationally
may have an adverse effect on our business and financial
condition.
Foreign exchange rate risks could affect the Turkish
macroeconomic environment and could significantly affect
our results of operation and financial position in future periods
if hedging tools are not available at commercially reasonable
terms.
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.
Regulatory decisions and changes in the regulatory environment
could adversely affect our business and financial condition.
If we, our local partners with whom we enter into cooperation
agreements or similar agreements, or one of our key suppliers
fail to comply with laws and regulations regarding unethical
business practices, including bribery and corruption, and
international sanctions, this could adversely affect 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 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 IT and NT services are exposed to hacking, sabotage and
other cyber security threats, and terrorist or other destructive
acts, any of which could have an adverse effect on our
operations, damage our reputation and affect our relationships
with our customers, lead to substantial additional costs, result in
a fine under relevant data protection legislation and/or lawsuits
from affected customers.
• We are subject to a variety of risks with respect to our Base
Transceiver Stations performance.
•
Spectrum limitations and frequency costs may adversely
affect our ability to provide services to our subscribers and
the cost to us of providing such services.
Potential increase in coverage requirements or failure to
abide by the requirements of our licenses or applicable
regulations may have an adverse effect on our business and
financial condition.
•
156
There are alleged health risks and zoning limitations related
to our BTS may adversely affect our ability to provide
services at certain areas. The fiber business is also affected
by local limitations.
• We are dependent on a small number of suppliers for
network equipment, information systems and handsets
and for the provision of data and services. We also rely
on a small number of distributors. The failure of any of our
counterparty such as suppliers or distributors may have an
adverse effect on our business and financial condition.
•
Turkcell’s complex ownership structure and ongoing
disagreements among our main shareholders have adversely
impacted in the past and may impact decision making on
important matters in the future. These ongoing disputes may
lead to further regulatory or legal actions, and affect the
ownership and control of our company.
• 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.
• Our business, consolidated financial results and/or operational
performance could be adversely affected unless we retain our
key personnel, our partners and their employees.
• Our ADS price may be volatile, and purchasers of ADSs could
incur substantial losses.
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
September 12, 2019 PwC Bağımsız Denetim ve Serbest Muhasebeci
Mali Müşavirlik A.Ş. was appointed as the Company auditor for
auditing our Company’s financial statements of 2019 as per the
Turkish Commercial Code (TCC).(1)
Moreover, the Internal Audit Function operates with the Board
of Directors and is responsible for the auditing of Turkcell İletişim
Hizmetleri A.Ş. 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.
(1) Başaran Nas Bağımsız Denetim ve Serbest Muhasebeci Mali Müşavirlik A.Ş.’s (Başaran
Independent Audit & Financial Consultancy Inc.) commercial name was changed as of 12th
of December 2016 to PwC Bağımsız Denetim ve Serbest Muhasebeci Mali Müşavirlik A.Ş.
(PwC Independent Audit & Financial Consultancy Inc.).
TURKCELL ANNUAL REPORT 2019 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, provides assurance to Board of Directors
and Audit Committee. Thereby, helps Turkcell to 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 identified 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
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.
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 detection 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.
It is the responsibility of the Enterprise Risk Management team
to assess the risks and to report the risk prevention activities to
the Early Detection of Risk Committee and to coordinate the risk
prevention activities with the directors and group companies
in Turkcell and Global Bilgi. Each director is responsible for the
Enterprise Risk Management activities in her/his unit. Enterprise Risk
Management team carries out the corporate risk management
duties together with directors, managers who directly reports
to vice presidents, and risk contacts. Turkcell Enterprise Risk
Management team 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. Group-
wide risks are categorized establishing a risk library and standard
risk definitions are created for each category. The risks that may
be encountered in the business processes with functions are
determined by taking into account the worst case scenario of
each risk identified and included in the risk library with the business
owners. By making the internal audit of the business owners, the
controls they made to reduce the risk, the findings that caused the
weaknesses and the action plans to eliminate these weaknesses
were worked with the business owners. One-to-one meetings were
held with each risk contact to create and develop the risk universe.
The risk universe is created for each function / department with the
inputs provided by the directors and the risk contacts. Turkcell Group
has created awareness on the common risk culture in order to
standardize its corporate risk management efforts. Regular synergy
meetings were held with central and support functions such as
Strategy, Law, Finance, Network Technologies, Customer Experience
and Information Technologies, Global Bilgi etc.
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.
157
SECTORAL AND FINANCIAL INFORMATIONTURKCELL ANNUAL REPORT 2019 158
TURKCELL ANNUAL REPORT 2019 TURKCELL İLETİŞİM HİZMETLERİ A.Ş.
CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
AND INDEPENDENT AUDITOR’S REPORT
This report is 110 pages.
159
SECTORAL AND FINANCIAL INFORMATIONTURKCELL ANNUAL REPORT 2019 Report of Independent Registered Public Accounting Firm
To the Shareholders and Board 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, 2019 and 2018, and the related
consolidated statements of profit or loss, other comprehensive income, changes in equity and the cash
flows for each of the three years in the period ended December 31, 2019, 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, 2019, 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, 2019 and 2018, and the results of its
operations and its cash flows for each of the three years in the period ended December 31, 2019 in
conformity with International Financial Reporting Standards 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, 2019, based on criteria established in Internal
Control - Integrated Framework (2013) issued by the COSO.
Change in Accounting Principle
As discussed in Note 2 to the consolidated financial statements, the Company changed the manner in
which it accounts for revenues from contracts with customers and the manner in which it accounts for
leases in 2018.
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 2019 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.
PwC Bağımsız Denetim ve Serbest Muhasebeci Mali Müşavirlik A.Ş.
BJK Plaza, Süleyman Seba Caddesi No:48 B Blok Kat:9 Akaretler Beşiktaş 34357 İstanbul-Turkey
T: +90 212 326 6060, F: +90 212 326 6050, www.pwc.com.tr
Mersis Numaramız: 0-1460-0224-0500015
160
TURKCELL ANNUAL REPORT 2019
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.
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.
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current period audit of the
consolidated financial statements that were communicated or required to be communicated to the audit
committee and that (i) relate to accounts or disclosures that are material to the consolidated financial
statements and (ii) involved our especially challenging, subjective, or complex judgments. The
communication of critical audit matters does not alter in any way our opinion on the consolidated financial
statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing
separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
161
SECTORAL AND FINANCIAL INFORMATIONTURKCELL ANNUAL REPORT 2019 Litigation Contingencies
As described in Notes 2(d) and 38 to the 2019 consolidated financial statements, the Company recognizes
liabilities in the consolidated financial statements for the resolution of pending litigation when
management determines that a loss is probable and the amount of the loss can be reasonably estimated.
No liability for an estimated loss is accrued in the consolidated financial statements for unfavorable
outcomes when, after assessing the information available, (i) management concludes that it is not
probable that a loss has been incurred in any of the pending litigation; or (ii) management is unable to
estimate the loss or range of loss for any of the pending matters. The Company also discloses the
contingency in circumstances where management concludes no loss is probable or reasonably estimable
but it is reasonably possible that a loss may be incurred.
The principal considerations for our determination that performing procedures relating to litigation
contingencies is a critical audit matter are there was significant judgment by management when assessing
the likelihood of a loss being incurred and when determining whether a reasonable estimate of the loss or
range of loss for each claim can be made, which in turn led to a high degree of auditor judgment and effort
in evaluating management’s assessment of the loss contingencies associated with litigation claims and the
audit effort involved the use of professionals with specialized skills and knowledge.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with
forming our overall opinion on the consolidated financial statements. These procedures included testing
the effectiveness of controls relating to management’s evaluation of litigation claims, including controls
over determining whether a loss is probable and whether the amount of loss can be reasonably estimated,
as well as financial statement disclosures. These procedures also included, among others, obtaining and
evaluating the letters of audit inquiry with internal legal counsel, evaluating the reasonableness of
management’s assessment regarding whether an unfavorable outcome is reasonably possible or probable
and reasonably estimable, and evaluating the sufficiency of the Company’s litigation contingency
disclosures. Professionals with specialized skill and knowledge were also used to assist in the evaluation of
Company’s assessment towards ongoing legal cases.
Valuation of derivative instruments
As described in Notes 2(i) and 35 to the consolidated financial statements, the Company uses participating
cross currency swap contracts to hedge its currency risk and interest risk. Management makes significant
judgment to value derivative instruments and uses prices in the bid- ask price range that are considered the
most appropriate are used instead of mid prices in valuation model. For the year ended December 31, 2019, as
a result of valuation of participating cross currency swaps fair value change, derivative assets of
TRY495,436 thousand are recognized in the consolidated financial statements.
162
TURKCELL ANNUAL REPORT 2019
The principal considerations for our determination that performing procedures relating to management’s
valuation of the derivative instruments is a critical audit matter are there was significant judgment by
management to determine the fair value of these instruments due to the use of an internally-developed
model, which included significant judgment related to the bid-ask price range. This in turn led to a high
degree of auditor subjectivity and judgment to evaluate the audit evidence obtained related to the
valuation, and the audit effort involved the use of professionals with specialized skill and knowledge.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with
forming our overall opinion on the financial statements. These procedures included testing the
effectiveness of controls relating to participating cross currency swaps’ valuation, testing the completeness
and accuracy of data provided by management and evaluating management’s judgments related to the bid-
ask price range. Professionals with specialized skill and knowledge were also used to assist in the valuation
of Company’s participating cross currency swaps.
PwC Bağımsız Denetim ve
Serbest Muhasebeci Mali Müşavirlik A.Ş.
Gökhan Yüksel, SMMM
Partner
Istanbul, 1 April 2020
We have served as the Company’s auditor since 2016.
163
SECTORAL AND FINANCIAL INFORMATIONTURKCELL ANNUAL REPORT 2019 F1
TURKCELL ILETISIM HIZMETLERI AS
TURKCELL ILETISIM HIZMETLERI AS
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 31 December 2019
(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.)
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 31 December 2019
(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.)
31 December 2019
Note
31 December 2018
Assets
Total non-current assets
Profit for the year including discontinued operations
Property, plant and equipment
Cash flows from operating activities:
Profit for the year from
Right-of-use assets
Continuing operations
Intangible assets
Discontinued operations
Investment properties
Trade receivables
Adjustments for:
Receivables from financial services
Depreciation and impairment of property, plant and equipment and investment properties
Contract assets
Amortization of intangible assets
Deferred tax assets
Net finance expense
Fair value adjustments to derivatives
Investments in equity accounted investees
Income tax expense
Other non-current assets
(Gain) on sale of property, plant and equipment
Unrealized foreign exchange losses on operating assets
Provisions
Share of equity accounted investees
Inventories
Adjustments to (earnings) due to disposal of assets held for sale
Trade receivables
(Gain) on sale of subsidiary
Non-cash other adjustments
Due from related parties
Receivables from financial services
Change in operating assets/liabilities
Contract assets
Change in trade receivables
Change in due from related parties
Derivative financial instruments
Change in receivables from financial services
Financial asset at amortized cost
Change in inventories
Financial asset at fair value through other comprehensive income
Change in other current assets
Cash and cash equivalents
Change in other non-current assets
Change in due to related parties
Other current assets
Change in trade and other payables
Subtotal
Change in other non-current liabilities
Change in employee benefit obligations
Assets classified as held for sale
Change in short term contract asset
Change in long term contract asset
Change in deferred revenue
Change in short term contract liability
Change in long term contract liability
Changes in other working capital
Cash generated from operations
Total current assets
Total assets
Equity
Interest paid
Income tax paid
Net cash inflow from operating activities
Share capital
Share premium
Treasury shares
Cash flows from investing activities:
Acquisition of property, plant and equipment
Additional paid-in capital
Acquisition of intangible assets
Reserves
Proceeds from sale of property, plant and equipment
Remeasurements of employee termination benefit
Proceeds from/(payments for) advances given for acquisition of property, plant and equipment
Contribution of increase of share capital in joint ventures/associates
Retained earnings
Proceeds from sale of subsidiary
Payments for held to maturity investment
Cash inflows from financial asset at fair value through other comprehensive income
Cash outflows from financial asset at fair value through other comprehensive income
Interest received
Net cash outflow from investing activities
Total equity attributable to equity holders of
Turkcell Iletisim Hizmetleri AS (“the Company”)
Non-controlling interests
Total equity
Cash flows from financing activities:
Dividends received for treasury share
Proceeds from derivative instruments
Repayments of derivative instruments
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
Payments of lease liabilities
Net cash outflow from financing activities
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at 1 January
11
15
12
14
19
20
21
18
17
22
19
39
20
21
35
25
24
23
16
26
26
Note
11-14
12-15
9
19
39
20
22
23
17
39
34
28
30
21
21
32
32
11
12
2019
2,504,254
772,436
3,276,690
2,199,830
2,846,735
1,442,773
(570,204)
785,630
(47,169)
1,832,636
920,924
15,712
(772,436)
-
(15,557)
11,915,564
(881,333)
10,025
1,651,180
2,035
(299,790)
(38,112)
(33,135)
92,427
(8,122)
(36,231)
(223,146)
(6,778)
45,402
34,652
10,292
(506,303)
11,728,627
(2,090,718)
(611,354)
9,026,555
(3,195,069)
(2,821,111)
81,192
156,936
(38,000)
2,219,644
-
84,655
(369,591)
854,018
(3,027,326)
7,380
1,924,363
(1,101,876)
29,060,490
311,649
(31,297,901)
(225,794)
(1,010,000)
(125,027)
(9,998)
204,077
(1,215,320)
(3,477,957)
2018
12,458,491
1,783,096
2,177,335
11,308,062
-
16,283
2,177,335
148,159
123,136
1,894,445
10,291
2,393,529
189,342
983,881
(1,719,610)
41,701
495,481
304,270
(43,727)
26,382,831
2,954,304
796,520
87
178,399
-
3,133,975
(110,308)
-
4,477
9,821,937
2,319,122
933,969
273,110
(5,870)
845,513
(69,991)
5,368
(76,883)
345,602
53,957
10,238,715
142,133
40,072
1,327,004
(501,980)
19,332,144
(242,384)
(32,764)
-
(711,928)
(3,513)
54,391
255,756
131,598
(981,764)
8,145,877
19,332,144
45,714,975
(1,658,308)
(657,715)
2,200,000
5,829,854
269
(144,152)
(2,960,648)
35,026
(2,264,912)
2,816,359
103,864
(63,539)
(204,817)
(19,500)
13,202,526
118,528
-
-
(39,877)
731,793
36,455
(4,535,569)
18,046,489
18,082,944
9,399
1,054,345
(710,522)
44,341,070
2,188,313
(43,987,127)
(191,312)
(1,900,000)
(58,778)
(94,620)
(20,272)
(1,164,879)
(534,383)
2,037,759
-
2,037,759
2017
11,116,316
1,649,602
10,050,172
15,425
115,001
884,686
3,513
152,732
19,413
421,306
24,428,166
1,501,579
1,095,401
165,387
(562,562)
571,758
(33,837)
966,340
980,040
-
180,434
-
2,473,978
-
-
13,533
6,721,865
3,318,255
711,928
1,356,062
9,409
42,454
7,419,239
1,091,512
16,616,804
1,720,305
613,404
1,107
(1,931,538)
27,871
(198,268)
15,012
(4,099)
(507,043)
(82,018)
(18,627)
-
-
131,486
-
-
(265,518)
4,503,634
18,337,109
42,765,275
(909,881)
(492,487)
3,101,266
2,200,000
269
(141,534)
(2,937,195)
35,026
(1,172,847)
2,503,537
58,740
(34,871)
205,580
-
11,359,317
-
(11,992)
-
-
553,066
(3,304,648)
15,921,744
131,810
16,053,554
-
-
-
24,102,643
209,808
(22,265,088)
(379,660)
(2,990,706)
(60,222)
-
(183,518)
-
(1,566,743)
2,521,272
759,902
(1,770,125)
7,419,239
4,712,333
6,052,352
Effects of exchange rate changes on cash and cash equivalents
298,204
1,947,004
430,106
Cash and cash equivalents at 31 December
24
10,238,715
7,419,239
4,712,333
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.
6
164
TURKCELL ANNUAL REPORT 2019
The above consolidated statement of financial position should be read in conjunction with the accompanying notes.
1
TURKCELL ILETISIM HIZMETLERI AS
F2
TURKCELL ILETISIM HIZMETLERI AS
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 31 December 2019
(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.)
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 31 December 2019
(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.)
Borrowings
Employee benefit obligations
Provisions
Cash flows from operating activities:
Profit for the year from
Deferred tax liabilities
Continuing operations
Contract liabilities
Discontinued operations
Other non-current liabilities
Profit for the year including discontinued operations
29
30
Note
33
18
32
28
2,177,335
-
2,177,335
2,504,254
772,436
3,276,690
31 December 2019
Liabilities
Note
2019
2018
31 December 2018
12,677,394
294,331
337,404
1,165,630
141,890
359,857
14,976,506
11-14
29
12-15
34
9
39
31
33
32
35
19
39
20
22
23
17
39
34
28
30
21
21
32
32
11
12
Total non-current liabilities
Adjustments for:
Depreciation and impairment of property, plant and equipment and investment properties
Borrowings
Amortization of intangible assets
Net finance expense
Current tax liabilities
Fair value adjustments to derivatives
Trade and other payables
Income tax expense
Due to related parties
(Gain) on sale of property, plant and equipment
Unrealized foreign exchange losses on operating assets
Deferred revenue
Provisions
Provisions
Share of equity accounted investees
Contract liabilities
Adjustments to (earnings) due to disposal of assets held for sale
(Gain) on sale of subsidiary
Derivative financial instruments
Non-cash other adjustments
Total current liabilities
Total liabilities
Change in operating assets/liabilities
Change in trade receivables
Change in due from related parties
Change in receivables from financial services
Total equity and liabilities
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
Change in short term contract asset
Change in long term contract asset
Change in deferred revenue
Change in short term contract liability
Change in long term contract liability
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/(payments for) advances given for acquisition of property, plant and equipment
Contribution of increase of share capital in joint ventures/associates
Proceeds from sale of subsidiary
Payments for held to maturity investment
Cash inflows from financial asset at fair value through other comprehensive income
Cash outflows from financial asset at fair value through other comprehensive income
Interest received
Net cash outflow from investing activities
Cash flows from financing activities:
Dividends received for treasury share
Proceeds from derivative instruments
Repayments of derivative instruments
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
Payments of lease liabilities
Net cash outflow from financing activities
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at 1 January
13,119,636
224,747
2017
268,722
862,360
2,037,759
131,598
-
364,610
2,037,759
14,971,673
1,501,579
7,035,909
1,095,401
165,387
133,597
(562,562)
3,788,174
571,758
45,331
(33,837)
966,340
8,948
980,040
307,068
-
255,756
-
-
165,265
-
11,740,048
6,721,865
613,404
26,711,721
1,107
(1,931,538)
42,765,275
27,871
(198,268)
15,012
(4,099)
(507,043)
(82,018)
(18,627)
-
-
131,486
-
-
(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)
-
-
-
24,102,643
209,808
(22,265,088)
(379,660)
(2,990,706)
(60,222)
-
(183,518)
-
(1,566,743)
2,199,830
7,628,333
2,846,735
1,442,773
121,258
(570,204)
4,117,471
785,630
12,082
(47,169)
1,832,636
56,544
920,924
342,812
15,712
290,408
(772,436)
-
86,617
(15,557)
12,655,525
11,915,564
1,894,445
2,393,529
983,881
(1,719,610)
495,481
(43,727)
2,954,304
796,520
87
-
(110,308)
-
9,821,937
27,632,031
45,714,975
(881,333)
10,025
1,651,180
2,035
(299,790)
(38,112)
(33,135)
92,427
(8,122)
(36,231)
(223,146)
(6,778)
45,402
34,652
10,292
(506,303)
11,728,627
273,110
(5,870)
(69,991)
(76,883)
53,957
142,133
40,072
(501,980)
(242,384)
(32,764)
(711,928)
(3,513)
54,391
255,756
131,598
(981,764)
8,145,877
(2,090,718)
(611,354)
9,026,555
(1,658,308)
(657,715)
5,829,854
(3,195,069)
(2,821,111)
81,192
156,936
(38,000)
2,219,644
-
84,655
(369,591)
854,018
(3,027,326)
7,380
1,924,363
(1,101,876)
29,060,490
311,649
(31,297,901)
(225,794)
(1,010,000)
(125,027)
(9,998)
204,077
(1,215,320)
(3,477,957)
(2,960,648)
(2,264,912)
103,864
(204,817)
(19,500)
118,528
-
-
(39,877)
731,793
(4,535,569)
9,399
1,054,345
(710,522)
44,341,070
2,188,313
(43,987,127)
(191,312)
(1,900,000)
(58,778)
(94,620)
(20,272)
(1,164,879)
(534,383)
2,521,272
759,902
(1,770,125)
7,419,239
4,712,333
6,052,352
Effects of exchange rate changes on cash and cash equivalents
298,204
1,947,004
430,106
Cash and cash equivalents at 31 December
24
10,238,715
7,419,239
4,712,333
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.
6
165
The above consolidated statement of financial position should be read in conjunction with the accompanying notes.
2
SECTORAL AND FINANCIAL INFORMATIONTURKCELL ANNUAL REPORT 2019
F3
TURKCELL ILETISIM HIZMETLERI AS
TURKCELL ILETISIM HIZMETLERI AS
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
For the year ended 31 December 2019
(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.)
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 31 December 2019
(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
Cash flows from operating activities:
Total revenue
Profit for the year from
20,173,354
2019
1,119,121
21,292,475
23,996,262
Note
1,140,873
25,137,135
Note
2019
2018
5
5
2018
Continuing operations
Discontinued operations
10
10
Profit for the year including discontinued operations
Cost of revenue
Cost of revenue from financial services
Adjustments for:
Depreciation and impairment of property, plant and equipment and investment properties
Total cost of revenue
Amortization of intangible assets
Net finance expense
Fair value adjustments to derivatives
Gross profit
Income tax expense
(Gain) on sale of property, plant and equipment
Gross profit from financial services
Unrealized foreign exchange losses on operating assets
Provisions
Total gross profit
Share of equity accounted investees
Adjustments to (earnings) due to disposal of assets held for sale
(Gain) on sale of subsidiary
Non-cash other adjustments
Other income
Selling and marketing expenses
Change in operating assets/liabilities
Change in trade receivables
Administrative expenses
Change in due from related parties
Change in receivables from financial services
Net impairment losses on financial and contract
Change in inventories
assets
Change in other current assets
Change in other non-current assets
Other expenses
Change in due to related parties
Change in trade and other payables
Operating profit
Change in other non-current liabilities
Change in employee benefit obligations
Change in short term contract asset
Change in long term contract asset
Change in deferred revenue
Change in short term contract liability
Change in long term contract liability
Changes in other working capital
Cash generated from operations
Finance income
Finance costs
Net finance costs
6
10
10
10
6
8
8
(16,816,705)
(266,775)
11-14
(17,083,480)
12-15
9
7,179,557
874,098
8,053,655
140,705
(1,555,189)
19
(779,755)
39
20
22
(338,857)
23
17
(487,295)
39
34
5,033,264
28
30
21
297,450
21
(2,025,118)
(1,727,668)
32
32
2,504,254
772,436
3,276,690
2,199,830
2,846,735
1,442,773
(570,204)
785,630
(47,169)
1,832,636
920,924
15,712
(772,436)
-
(15,557)
11,915,564
(881,333)
10,025
1,651,180
2,035
(299,790)
(38,112)
(33,135)
92,427
(8,122)
(36,231)
(223,146)
(6,778)
45,402
34,652
10,292
(506,303)
11,728,627
(13,751,195)
(394,798)
(14,145,993)
6,422,159
724,323
7,146,482
2,177,335
-
2,177,335
1,894,445
2,393,529
983,881
(1,719,610)
495,481
(43,727)
2,954,304
796,520
87
-
(110,308)
-
9,821,937
241,435
(1,626,714)
(673,370)
(346,390)
(381,582)
4,359,861
1,677,114
(3,364,072)
(1,686,958)
273,110
(5,870)
(69,991)
(76,883)
53,957
142,133
40,072
(501,980)
(242,384)
(32,764)
(711,928)
(3,513)
54,391
255,756
131,598
(981,764)
8,145,877
Share of loss of equity accounted investees
Profit before income tax
Interest paid
Income tax paid
Net cash inflow from operating activities
(15,712)
3,289,884
(2,090,718)
(611,354)
9,026,555
(87)
(1,658,308)
(657,715)
2,672,816
5,829,854
Cash flows from investing activities:
Income tax expense
Acquisition of property, plant and equipment
Acquisition of intangible assets
Profit from continuing operations
Proceeds from sale of property, plant and equipment
Proceeds from/(payments for) advances given for acquisition of property, plant and equipment
Contribution of increase of share capital in joint ventures/associates
Proceeds from sale of subsidiary
Payments for held to maturity investment
Cash inflows from financial asset at fair value through other comprehensive income
Cash outflows from financial asset at fair value through other comprehensive income
Interest received
Net cash outflow from investing activities
Gain from discontinued operations
(attributable to owners of the Company)
Profit for the year
9
(785,630)
11
12
2,504,254
772,436
3,276,690
(3,195,069)
(2,821,111)
81,192
156,936
(38,000)
2,219,644
-
84,655
(369,591)
854,018
(3,027,326)
(495,481)
2,177,335
(2,960,648)
(2,264,912)
103,864
(204,817)
(19,500)
118,528
-
-
-
(39,877)
731,793
(4,535,569)
2,177,335
Cash flows from financing activities:
Dividends received for treasury share
Profit for the year is attributable to:
Proceeds from derivative instruments
Owners of the Company
Repayments of derivative instruments
Proceeds from issues of loans and borrowings
Non-controlling interests
Proceeds from issues of bonds
Repayment of borrowings
Total
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
Payments of lease liabilities
Net cash outflow from financing activities
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 per share for profit from
discontinued operations attributable to owners of the
Company (in full TL)
Effects of exchange rate changes on cash and cash equivalents
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at 1 January
27
27
27
3,246,487
30,203
3,276,690
1.49
7,380
1,924,363
(1,101,876)
29,060,490
311,649
(31,297,901)
(225,794)
(1,010,000)
(125,027)
(9,998)
204,077
(1,215,320)
(3,477,957)
2,021,065
156,270
2,177,335
9,399
1,054,345
(710,522)
44,341,070
2,188,313
(43,987,127)
(191,312)
(1,900,000)
(58,778)
(94,620)
0.93
(20,272)
(1,164,879)
(534,383)
1.14
2,521,272
0.93
759,902
(1,770,125)
0.90
7,419,239
4,712,333
6,052,352
0.35
298,204
1,947,004
-
430,106
-
Cash and cash equivalents at 31 December
24
10,238,715
7,419,239
4,712,333
The above consolidated statement of profit or loss should be read in conjunction with the accompanying notes.
3
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.
6
166
TURKCELL ANNUAL REPORT 2019
2017
16,917,064
2017
715,000
17,632,064
2,037,759
-
2,037,759
(11,058,346)
(291,828)
1,501,579
(11,350,174)
1,095,401
165,387
(562,562)
5,858,718
571,758
(33,837)
423,172
966,340
980,040
6,281,890
-
-
-
-
74,438
6,721,865
(2,005,420)
613,404
(645,196)
1,107
(1,931,538)
27,871
-
(198,268)
15,012
(773,329)
(4,099)
(507,043)
2,932,383
(82,018)
(18,627)
-
597,246
-
131,486
(920,112)
-
(322,866)
-
(265,518)
4,503,634
-
(909,881)
(492,487)
2,609,517
3,101,266
(571,758)
(2,937,195)
(1,172,847)
2,037,759
58,740
205,580
-
-
(11,992)
-
-
553,066
2,037,759
(3,304,648)
-
-
-
1,979,129
-
24,102,643
58,630
209,808
(22,265,088)
2,037,759
(379,660)
(2,990,706)
(60,222)
-
0.90
(183,518)
-
(1,566,743)
TURKCELL ILETISIM HIZMETLERI AS
F4
TURKCELL ILETISIM HIZMETLERI AS
CONSOLIDATED STATEMENT OF OTHER COMPREHENSIVE INCOME
For the year ended 31 December 2019
(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.)
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 31 December 2019
(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.)
2018
Note
2019
Profit for the year
Other comprehensive income/(expense):
Cash flows from operating activities:
Profit for the year from
Continuing operations
Discontinued operations
Items that will not be reclassified to profit or loss:
Profit for the year including discontinued operations
Remeasurements of employee termination benefits
Income tax relating to remeasurements of employee termination benefits
Adjustments for:
Depreciation and impairment of property, plant and equipment and investment properties
Amortization of intangible assets
Net finance expense
Fair value adjustments to derivatives
Income tax expense
Items that may be reclassified to profit or loss:
(Gain) on sale of property, plant and equipment
Unrealized foreign exchange losses on operating assets
Exchange differences on translation of foreign operations
Provisions
Exchange differences arising from discontinued operations
Share of equity accounted investees
Adjustments to (earnings) due to disposal of assets held for sale
Fair value reserve
(Gain) on sale of subsidiary
Cash flow hedges - effective portion of changes in fair value
Non-cash other adjustments
Cash flow hedges - reclassified to profit or loss
Change in operating assets/liabilities
Change in trade receivables
Cost of hedging reserve - changes in fair value
Change in due from related parties
Cost of hedging reserve - reclassified to profit or loss
Change in receivables from financial services
Change in inventories
Loss on hedges of net investments in foreign operations
Change in other current assets
Income tax relating to these items
Change in other non-current assets
Change in due to related parties
-Income tax relating to exchange differences
Change in trade and other payables
-Income tax relating to fair value reserve
Change in other non-current liabilities
Change in employee benefit obligations
-Income tax relating to hedges of net investments
Change in short term contract asset
-Income tax relating to cost of hedging reserve
Change in long term contract asset
Change in deferred revenue
-Income tax relating to cash flow hedges
Change in short term contract liability
Change in long term contract liability
Changes in other working capital
Cash generated from operations
Other comprehensive income/(loss) for the year, net of income tax
Total comprehensive income for the year
Interest paid
Income tax paid
Net cash inflow from operating activities
Total comprehensive income for the year is attributable to:
Total
Cash flows from investing activities:
Owners of the Company
Acquisition of property, plant and equipment
Non-controlling interests
Acquisition of intangible assets
Proceeds from sale of property, plant and equipment
Proceeds from/(payments for) advances given for acquisition of property, plant and equipment
Contribution of increase of share capital in joint ventures/associates
Proceeds from sale of subsidiary
Payments for held to maturity investment
Total comprehensive income for the year attributable to owners of
Cash inflows from financial asset at fair value through other comprehensive income
Cash outflows from financial asset at fair value through other comprehensive income
the Company arises from:
Interest received
Continuing operations
Net cash outflow from investing activities
Discontinued operations
Total
Note
30
11-14
12-15
9
35
19
39
20
22
23
17
39
34
28
30
21
21
9
35
32
32
11
12
Cash flows from financing activities:
Dividends received for treasury share
Proceeds from derivative instruments
Repayments of derivative instruments
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
Payments of lease liabilities
Net cash outflow from financing activities
3,276,690
2019
2,504,254
772,436
3,276,690
(36,385)
8,005
2,199,830
2,846,735
(28,380)
1,442,773
(570,204)
785,630
(47,169)
1,832,636
431,810
920,924
104,986
15,712
(772,436)
4,451
-
221,488
(15,557)
11,915,564
(439,365)
(881,333)
97,373
10,025
(21,768)
1,651,180
2,035
(55,389)
(299,790)
(56,728)
(38,112)
(33,135)
(99,234)
92,427
(979)
(8,122)
(36,231)
12,186
(223,146)
(16,634)
(6,778)
45,402
47,933
34,652
10,292
286,858
(506,303)
258,478
11,728,627
3,535,168
(2,090,718)
(611,354)
9,026,555
3,505,496
(3,195,069)
29,672
(2,821,111)
81,192
3,535,168
156,936
(38,000)
2,219,644
-
84,655
(369,591)
854,018
2,628,074
(3,027,326)
877,422
3,505,496
7,380
1,924,363
(1,101,876)
29,060,490
311,649
(31,297,901)
(225,794)
(1,010,000)
(125,027)
(9,998)
204,077
(1,215,320)
(3,477,957)
2,177,335
2018
2,177,335
-
2,177,335
12,699
(2,794)
1,894,445
2,393,529
9,905
983,881
(1,719,610)
495,481
(43,727)
2,954,304
424,817
796,520
425,371
87
-
-
(110,308)
630,191
-
9,821,937
(611,035)
273,110
(390,267)
(5,870)
42,665
(69,991)
(76,883)
-
53,957
(154,409)
142,133
40,072
(226,667)
(501,980)
-
(242,384)
(32,764)
-
(711,928)
76,472
(3,513)
54,391
(4,214)
255,756
131,598
367,333
(981,764)
377,238
8,145,877
2,554,573
(1,658,308)
(657,715)
5,829,854
2,398,930
(2,960,648)
155,643
(2,264,912)
103,864
2,554,573
(204,817)
(19,500)
118,528
-
-
(39,877)
731,793
1,957,396
(4,535,569)
441,534
2,398,930
9,399
1,054,345
(710,522)
44,341,070
2,188,313
(43,987,127)
(191,312)
(1,900,000)
(58,778)
(94,620)
(20,272)
(1,164,879)
(534,383)
2017
2,037,759
2017
2,037,759
-
2,037,759
(3,738)
748
(2,990)
1,501,579
1,095,401
165,387
(562,562)
571,758
(33,837)
966,340
27,959
980,040
72,190
-
-
-
-
-
-
6,721,865
-
613,404
-
1,107
-
(1,931,538)
27,871
-
(198,268)
(107,299)
15,012
(4,099)
(107,299)
(507,043)
-
(82,018)
(18,627)
-
-
-
-
131,486
-
-
-
(7,150)
(265,518)
(10,140)
4,503,634
2,027,619
(909,881)
(492,487)
3,101,266
1,968,102
(2,937,195)
59,517
(1,172,847)
58,740
2,027,619
205,580
-
-
(11,992)
-
-
553,066
1,903,109
(3,304,648)
64,993
1,968,102
-
-
-
24,102,643
209,808
(22,265,088)
(379,660)
(2,990,706)
(60,222)
-
(183,518)
-
(1,566,743)
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at 1 January
2,521,272
759,902
(1,770,125)
7,419,239
4,712,333
6,052,352
Effects of exchange rate changes on cash and cash equivalents
298,204
1,947,004
430,106
Cash and cash equivalents at 31 December
24
10,238,715
7,419,239
4,712,333
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.
The above consolidated statement of comprehensive income should be read in conjunction with the accompanying
6
notes.
4
167
SECTORAL AND FINANCIAL INFORMATIONTURKCELL ANNUAL REPORT 2019
F5
7
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168
TURKCELL ANNUAL REPORT 2019
F6
2017
TURKCELL ILETISIM HIZMETLERI AS
TURKCELL ILETISIM HIZMETLERI AS
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 31 December 2019
(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.)
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 31 December 2019
(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.)
Cash flows from operating activities:
Profit for the year from
Note
2019
2018
2017
Continuing operations
Discontinued operations
2,504,254
772,436
3,276,690
2,177,335
-
2,177,335
2019
2018
2,037,759
-
2,037,759
11-14
12-15
9
Note
11-14
12-15
9
19
39
20
22
23
17
39
34
28
30
21
21
32
32
11
12
19
39
20
22
23
17
39
34
28
30
21
21
32
32
11
12
Profit for the year including discontinued operations
Cash flows from operating activities:
Profit for the year from
Profit for the year including discontinued operations
Adjustments for:
Depreciation and impairment of property, plant and equipment and investment properties
Continuing operations
Amortization of intangible assets
Discontinued operations
Net finance expense
Fair value adjustments to derivatives
Income tax expense
Adjustments for:
(Gain) on sale of property, plant and equipment
Depreciation and impairment of property, plant and equipment and investment properties
Unrealized foreign exchange losses on operating assets
Amortization of intangible assets
Provisions
Net finance expense
Share of equity accounted investees
Fair value adjustments to derivatives
Adjustments to (earnings) due to disposal of assets held for sale
Income tax expense
(Gain) on sale of subsidiary
(Gain) on sale of property, plant and equipment
Non-cash other adjustments
Unrealized foreign exchange losses on operating assets
Provisions
Change in operating assets/liabilities
Share of equity accounted investees
Change in trade receivables
Adjustments to (earnings) due to disposal of assets held for sale
Change in due from related parties
(Gain) on sale of subsidiary
Change in receivables from financial services
Non-cash other adjustments
Change in inventories
Change in other current assets
Change in operating assets/liabilities
Change in other non-current assets
Change in trade receivables
Change in due to related parties
Change in due from related parties
Change in trade and other payables
Change in receivables from financial services
Change in other non-current liabilities
Change in inventories
Change in employee benefit obligations
Change in other current assets
Change in short term contract asset
Change in other non-current assets
Change in long term contract asset
Change in due to related parties
Change in deferred revenue
Change in trade and other payables
Change in short term contract liability
Change in other non-current liabilities
Change in long term contract liability
Change in employee benefit obligations
Changes in other working capital
Change in short term contract asset
Cash generated from operations
Change in long term contract asset
Change in deferred revenue
Interest paid
Change in short term contract liability
Income tax paid
Change in long term contract liability
Net cash inflow from operating activities
Changes in other working capital
Cash generated from operations
Cash flows from investing activities:
Acquisition of property, plant and equipment
Interest paid
Acquisition of intangible assets
Income tax paid
Proceeds from sale of property, plant and equipment
Net cash inflow from operating activities
Proceeds from/(payments for) advances given for acquisition of property, plant and equipment
Contribution of increase of share capital in joint ventures/associates
Proceeds from sale of subsidiary
Payments for held to maturity investment
Cash inflows from financial asset at fair value through other comprehensive income
Cash outflows from financial asset at fair value through other comprehensive income
Interest received
Net cash outflow from investing 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/(payments for) advances given for acquisition of property, plant and equipment
Contribution of increase of share capital in joint ventures/associates
Proceeds from sale of subsidiary
Payments for held to maturity investment
Cash inflows from financial asset at fair value through other comprehensive income
Cash outflows from financial asset at fair value through other comprehensive income
Interest received
Net cash outflow from investing activities
Cash flows from financing activities:
Dividends received for treasury share
Proceeds from derivative instruments
Repayments of derivative instruments
Proceeds from issues of loans and borrowings
Proceeds from issues of bonds
Cash flows from financing activities:
Repayment of borrowings
Dividends received for treasury share
Repayment of bonds
Proceeds from derivative instruments
Dividends paid to shareholders
Repayments of derivative instruments
Dividends paid to non-controlling interest in subsidiaries
Proceeds from issues of loans and borrowings
Acquisition of treasury shares
Proceeds from issues of bonds
(Increase)/decrease in cash collateral related to loans
Repayment of borrowings
Payments of lease liabilities
Repayment of bonds
Net cash outflow from financing activities
Dividends paid to shareholders
Dividends paid to non-controlling interest in subsidiaries
Acquisition of treasury shares
(Increase)/decrease in cash collateral related to loans
Cash and cash equivalents at 1 January
Payments of lease liabilities
Net cash outflow from financing activities
Net increase/(decrease) in cash and cash equivalents
Effects of exchange rate changes on cash and cash equivalents
2,504,254
772,436
3,276,690
2,199,830
2,846,735
1,442,773
(570,204)
785,630
(47,169)
2,199,830
1,832,636
2,846,735
920,924
1,442,773
15,712
(570,204)
(772,436)
785,630
-
(47,169)
(15,557)
1,832,636
11,915,564
920,924
15,712
(772,436)
-
(15,557)
11,915,564
(881,333)
10,025
1,651,180
2,035
(299,790)
(38,112)
(33,135)
92,427
(8,122)
(36,231)
(223,146)
(6,778)
45,402
34,652
10,292
(506,303)
11,728,627
(881,333)
10,025
1,651,180
2,035
(299,790)
(38,112)
(33,135)
92,427
(8,122)
(36,231)
(223,146)
(6,778)
45,402
34,652
10,292
(506,303)
11,728,627
(2,090,718)
(611,354)
9,026,555
2,177,335
-
2,177,335
1,894,445
2,393,529
983,881
(1,719,610)
495,481
(43,727)
1,894,445
2,954,304
2,393,529
796,520
983,881
87
(1,719,610)
-
495,481
(110,308)
(43,727)
-
2,954,304
9,821,937
796,520
87
-
(110,308)
-
9,821,937
273,110
(5,870)
(69,991)
(76,883)
53,957
142,133
40,072
(501,980)
(242,384)
(32,764)
(711,928)
(3,513)
54,391
255,756
131,598
(981,764)
8,145,877
273,110
(5,870)
(69,991)
(76,883)
53,957
142,133
40,072
(501,980)
(242,384)
(32,764)
(711,928)
(3,513)
54,391
255,756
131,598
(981,764)
8,145,877
(1,658,308)
(657,715)
5,829,854
2,037,759
-
2,037,759
1,501,579
1,095,401
165,387
(562,562)
571,758
(33,837)
1,501,579
966,340
1,095,401
980,040
165,387
-
(562,562)
-
571,758
-
(33,837)
-
966,340
6,721,865
980,040
-
-
-
-
6,721,865
613,404
1,107
(1,931,538)
27,871
(198,268)
15,012
613,404
(4,099)
1,107
(507,043)
(1,931,538)
(82,018)
27,871
(18,627)
(198,268)
-
15,012
-
(4,099)
131,486
(507,043)
-
(82,018)
-
(18,627)
(265,518)
-
4,503,634
-
131,486
-
-
(265,518)
4,503,634
(909,881)
(492,487)
3,101,266
(2,090,718)
(611,354)
9,026,555
(3,195,069)
(2,821,111)
81,192
156,936
(38,000)
2,219,644
(3,195,069)
-
(2,821,111)
84,655
81,192
(369,591)
156,936
854,018
(38,000)
(3,027,326)
2,219,644
-
84,655
(369,591)
854,018
(3,027,326)
7,380
1,924,363
(1,101,876)
29,060,490
311,649
(31,297,901)
(225,794)
(1,010,000)
(125,027)
(9,998)
204,077
(1,215,320)
(3,477,957)
7,380
1,924,363
(1,101,876)
29,060,490
311,649
(31,297,901)
(225,794)
(1,010,000)
(125,027)
(9,998)
204,077
(1,215,320)
(3,477,957)
(1,658,308)
(657,715)
5,829,854
(2,960,648)
(2,264,912)
103,864
(204,817)
(19,500)
118,528
(2,960,648)
-
(2,264,912)
-
103,864
(39,877)
(204,817)
731,793
(19,500)
(4,535,569)
118,528
-
-
(39,877)
731,793
(4,535,569)
9,399
1,054,345
(710,522)
44,341,070
2,188,313
(43,987,127)
(191,312)
(1,900,000)
(58,778)
(94,620)
(20,272)
(1,164,879)
(534,383)
9,399
1,054,345
(710,522)
44,341,070
2,188,313
(43,987,127)
(191,312)
(1,900,000)
(58,778)
(94,620)
(20,272)
(1,164,879)
(534,383)
(909,881)
(492,487)
3,101,266
(2,937,195)
(1,172,847)
58,740
205,580
-
-
(2,937,195)
(11,992)
(1,172,847)
-
58,740
-
205,580
553,066
-
(3,304,648)
-
(11,992)
-
-
-
-
553,066
-
(3,304,648)
24,102,643
209,808
(22,265,088)
-
(379,660)
-
(2,990,706)
-
(60,222)
24,102,643
-
209,808
(183,518)
(22,265,088)
-
(379,660)
(1,566,743)
(2,990,706)
(60,222)
-
(183,518)
-
(1,566,743)
(1,770,125)
6,052,352
430,106
2,521,272
759,902
7,419,239
4,712,333
298,204
1,947,004
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at 31 December
Cash and cash equivalents at 1 January
24
2,521,272
10,238,715
759,902
7,419,239
(1,770,125)
4,712,333
7,419,239
4,712,333
6,052,352
Effects of exchange rate changes on cash and cash equivalents
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.
6
Cash and cash equivalents at 31 December
10,238,715
298,204
24
1,947,004
7,419,239
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.
6
430,106
4,712,333
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SECTORAL AND FINANCIAL INFORMATIONTURKCELL ANNUAL REPORT 2019
F7
TURKCELL ILETISIM HIZMETLERI AS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at and for the year ended 31 December 2019
(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.)
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. Right of use assets
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. Contract assets
22. Inventory
23. Other current assets
24. Cash and cash equivalents
25. Financial assets
26. Equity
27. Earnings per share
28. Other non-current liabilities
29. Loans and borrowings
30. Employee benefit
31. Deferred revenue
32. Contract liabilities
33. Provisions
34. Trade and other payables
35. Derivative financial instruments
36. Financial instruments
37. Guarantees and purchase obligations
38. Commitments and contingencies
39. Related parties
40. Subsidiaries
41. Cash flow information
42. Subsequent events
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TURKCELL ANNUAL REPORT 2019
7
Page
8
9
40
42
45
47
48
48
49
52
54
56
59
59
61
62
63
63
64
65
65
65
66
66
67
68
69
70
70
73
74
74
75
76
77
88
99
99
103
107
109
109
TURKCELL ILETISIM HIZMETLERI AS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at and for the year ended 31 December 2019
(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.)
Reporting entity
1.
F8
Turkcell Iletisim Hizmetleri Anonim Sirketi (the “Company”) was
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.
incorporated
In April 1998, the Company signed a license agreement (the “2G License”) with the Ministry of Transport
and Infrastructure of Turkey (the “Turkish Ministry”), under which it was granted a 25-year GSM license in
exchange for a license fee of USD 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 license, the Company pays in cash the Undersecretariat
of the Treasury (the “Turkish Treasury”) a monthly tax levy, namely a '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.
The Company is obliged to pay the ICTA a monthly treasury share equal to 90% of 15% of gross revenue and
10% is paid for a universal service fund. In addition, the Company pays annual contributions in an amount
equal to 0.35% of net revenue to the ICTA’s expenses and 5% of net revenue to ICTA as a frequency fee
(TRx).
The Company's parent is Turkcell Holding A.S. (“Turkcell Holding”), which holds 51% of the Company's
shares as of 31 December 2019. The main shareholders of Turkcell Holding are Telia Finland Oy (“Telia”),
Cukurova Group and Alfa Telecom Turkey Limited (“Alfa”) according to the information obtained from
public sources.
In order to ensure compliance with corporate governance principles of the Capital Markets Board (“CMB”),
three independent board members were appointed in 2013. Additionally, two board members were appointed
at the General Assembly dated 29 April 2013 as per the resolution of CMB. Also in 2013, two members were
chosen from the independent nominees list submitted by Telia to CMB. On 29 March 2018, in accordance
with the shareholder proposal at the Ordinary General Assembly, three new members were elected to serve
for 3 years instead of three members who are not among independent members appointed by the CMB. Two
new board members were appointed on 7 and 8 March 2019 in lieu of board members who had resigned at
various dates in 2019. These two board members were reappointed for 3 years in Ordinary General Assembly
Meeting which was held on 12 September 2019. One of the board members resigned on 27 November 2019,
and on 13 December 2019 a new board member was appointed for the vacant seat. The Company’s Board of
Directors consists of a total of seven non-executive members including three independent members as of
31 December 2019.
8
171
SECTORAL AND FINANCIAL INFORMATIONTURKCELL ANNUAL REPORT 2019
F9
1.
TURKCELL ILETISIM HIZMETLERI AS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at and for the year ended 31 December 2019
(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.)
Reporting entity (continued)
The consolidated financial statements of the Company as at and for the year ended 31 December 2019 comprise
the Company and its subsidiaries (together referred to as the “Group”) and the Group’s interest in associates
and a joint venture. Subsidiaries of the Company, their locations and their nature of operations are disclosed
in Note 40. The Company’s and each of its subsidiaries’ and associate’s financial statements are prepared as
at and for the year ended 31 December 2019.
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 the Company and its subsidiaries and the Group’s interest in
associates and a joint venture.
(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 accounting policies, presentation and methods of computation are consistent with those of the previous
financial year and corresponding reporting period, unless otherwise stated.
The Group adopted IFRS 9, “Financial Instruments” and IFRS 15, “Revenue from Contracts with Customers”
for the first time for the year commencing 1 January 2018. The Group also elected to early adopt IFRS 16,
“Leases” for the first time for the year commencing 1 January 2018.
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 2018 were authorized for issue by the Board of Directors
on 20 February 2019.
The consolidated financial statements as at and for the year ended 31 December 2019 were authorized for issue
by the Board of Directors on 20 February 2020 and updated to reflect subsequent events after the original date
of authorization for inclusion in its annual report on Form 20-F.
(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,
- Financial asset at fair value through other comprehensive income
172
TURKCELL ANNUAL REPORT 2019
9
F10
TURKCELL ILETISIM HIZMETLERI AS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at and for the year ended 31 December 2019
(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.)
Basis of preparation and summary of significant accounting policies (continued)
2.
(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 on assets and liabilities carried at fair value are reported as part of the fair value gain
or loss. For example, translation differences on non-monetary assets and liabilities such as equities held at fair
value through profit or loss are recognized in profit or loss as part of the fair value gain or loss and translation
differences on non-monetary assets such as equities classified as at fair value through other comprehensive
income 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 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,
• Equity for each balance sheet presented is translated at historic cost at the date of transaction,
•
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 borrowings and other financial
instruments designated as hedges of any net investment in foreign entities are recognized in other
comprehensive income. When a foreign operation is sold or 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.
10
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SECTORAL AND FINANCIAL INFORMATIONTURKCELL ANNUAL REPORT 2019
F11
2.
TURKCELL ILETISIM HIZMETLERI AS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at and for the year ended 31 December 2019
(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.)
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 judgment in applying the Group’s accounting policies. Actual results may differ from
these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Alterations 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 receivables, receivables from financial services and other receivables;
when there was objective evidence of impairment as a result of one or more events that occurred after the
initial recognition of asset a loss event and that loss event had an impact on the estimated future cash flows of
the financial asset or group of financial assets that could be reliably estimated. 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 progresses.
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.
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 customers and costs related to 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 judgments impact
the amount of reported revenue and costs but do not impact reported assets, liabilities or cash flows.
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 factors below:
- The Company is not the 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 compatibility of equipment delivered to customers
- The responsibility after sale belongs to the distributor and
- The Company does not make any modification on the equipment.
174
TURKCELL ANNUAL REPORT 2019
11
F12
TURKCELL ILETISIM HIZMETLERI AS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at and for the year ended 31 December 2019
(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.)
2.
Basis of preparation and summary of significant accounting policies (continued)
(d) Use of estimates and judgments (continued)
Multiple performance obligations and price allocation
In arrangements which include multiple performance obligations where the Group acts as principal, the Group
considers that these bundled elements involve consideration in the form of a fixed fee or a fixed fee coupled
with a continuing payment stream. A good or service is distinct if both of the following criteria are met:
• The good or service is capable of being distinct
• The promise to transfer the good or service is distinct within the context of the contract.
The arrangement consideration is allocated to each performance obligation identified in the contract on a
relative stand-alone selling prices. If an element of a transaction is not distinct, then it is accounted for as an
integral part of the remaining elements 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 it operates. 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 recognition of deferred tax assets is based upon whether it is probable that future taxable income will be
available, against which the temporary differences can be utilized to the extent the recovery from future taxable
income is not considered probable the deferred asset is adjusted accordingly. 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
litigations are evaluated by
As detailed and disclosed in Note 38, 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
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.
the Group Management
The Group recognizes liabilities in the consolidated financial statements for the resolution of pending litigation
when management determines that a loss is probable and the amount of the loss can be reasonably estimated.
No liability for an estimated loss is accrued in the consolidated financial statements for unfavorable outcomes
when, after assessing the information available, (i) management concludes that it is not probable that a loss
has been incurred in any of the pending litigation; or (ii) management is unable to estimate the loss or range
of loss for any of the pending matters. The Group also discloses the contingency in circumstances where
management concludes no loss is probable or reasonably estimable but it is reasonably possible that a loss may
be incurred.
12
175
SECTORAL AND FINANCIAL INFORMATIONTURKCELL ANNUAL REPORT 2019
F13
TURKCELL ILETISIM HIZMETLERI AS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at and for the year ended 31 December 2019
(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.)
2.
Basis of preparation and summary of significant accounting policies (continued)
(d) Use of estimates and judgments (continued)
Annual impairment review
The Company 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
Company’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.
Fair value measurements and valuation processes
Some of the Company’s assets and liabilities are measured at fair value for financial reporting purposes. In
estimating the fair value of an asset or liability, the Company uses market-observable data to the extent it is
available. Where Level 1 and 2 inputs are not available, the Company can engage third party qualified experts
to perform the valuation, if necessary. The management works closely with the qualified external experts 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 is disclosed in
Note 36.
(e) Changes in accounting policies
Other than the adoption of the new and revised standards as explained in Note 2(ab), the Group did not make
any significant changes to its accounting policies during the current year.
As at 31 December 2019, interest income and expense on financial assets measured at amortized cost are
shown netted of on consolidated statement of profit or loss (Note 8). The Company has presented financials
of 31 December 2018 and 2017 accordingly which amount is TL 255,019 and TL 221,190.
As at 31 December 2018 revenue and cost of revenue from Turkcell Odeme Hizmetleri A.S. (“Turkcell
Odeme”) has been classified under financial services which amounted to TL 177,203 (2017: TL 109,337) and
TL (34,253) (2017: TL (15,119)) respectively, and trade receivables from Turkcell Odeme has been classified
under receivables from financial services which amounted to TL 32,012 (Note 19). This classification has no
impact on operating profit, profit for the year and cash flow statement.
(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.
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TURKCELL ANNUAL REPORT 2019
13
TURKCELL ILETISIM HIZMETLERI AS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at and for the year ended 31 December 2019
(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.)
2.
Basis of preparation and summary of significant accounting policies (continued)
(h) Principles of consolidation and equity accounting
(i)
Business combinations
F14
Business combinations are accounted for using the acquisition method. The consideration transferred in a
business combination comprises:
• The fair value of the assets transferred,
• Liabilities incurred to the former owners of the acquired business,
• 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.
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 acquiree is remeasured to fair value at the acquisition date. Any gains or
losses arising from such remeasurement are recognized in profit or loss.
14
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SECTORAL AND FINANCIAL INFORMATIONTURKCELL ANNUAL REPORT 2019
F15
2.
TURKCELL ILETISIM HIZMETLERI AS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at and for the year ended 31 December 2019
(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.)
Basis of preparation and summary of significant accounting policies (continued)
(h) Principles of consolidation and equity accounting (continued)
(ii) Subsidiaries
Subsidiaries comprise 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 on
14 April 2017 to Aktif Yatırım Bankası A.Ş. Turkcell Varlık Finansmanı Fund (the “Fund”) founded by Aktif
Yatırım Bankası A.Ş. in order to create funds for the 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 similarly sold second financial loans amounting to TL 89,607 on 22 August 2017, third financial
loans amounting to TL 90,272 on 16 February 2018, fourth financial loans amounting to TL 56,716 on
20 December 2018, fifth financial loans amounting to TL 45,983 on 24 July 2019, and sixth financial loans
amounting to TL 69,183 on 30 December 2019. The first four-ABS programs where Turkcell Finansman acted
as the source organization, were completed as of 31 December 2019. 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 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.
178
TURKCELL ANNUAL REPORT 2019
15
F16
TURKCELL ILETISIM HIZMETLERI AS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at and for the year ended 31 December 2019
(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.)
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.
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.
(v) 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.
16
179
SECTORAL AND FINANCIAL INFORMATIONTURKCELL ANNUAL REPORT 2019
F17
2.
TURKCELL ILETISIM HIZMETLERI AS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at and for the year ended 31 December 2019
(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.)
Basis of preparation and summary of significant accounting policies (continued)
(h) Principles of consolidation and equity accounting (continued)
(vi) Investments in associates and joint ventures
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.
A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement have rights
to the net assets of the joint arrangement. The results and assets and liabilities of joint ventures are incorporated
in these consolidated financial statements using the equity method of accounting.
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 recognize 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 16). 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.
Financial instruments
(i)
Classification
From 1 January 2018, the Group classifies its financial assets in the following measurement categories:
- Those to be measured subsequently at fair value (either through OCI or through profit or loss) and
- Those to be measured at amortized cost.
The classification depends on the Group’s business model for managing the financial assets and the contractual
terms of the cash flows.
For assets measured at fair value, gains and losses will either be recorded in profit or loss or OCI. For
investments in equity instruments that are not held for trading, this will depend on whether the Group has made
an irrevocable election at the time of initial recognition to account for the equity investment at fair value
through other comprehensive income (FVOCI).
The Group reclassifies debt investments when and only when its business model for managing those assets
changes.
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TURKCELL ANNUAL REPORT 2019
17
TURKCELL ILETISIM HIZMETLERI AS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at and for the year ended 31 December 2019
(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.)
Basis of preparation and summary of significant accounting policies (continued)
F18
Financial instruments (continued)
Recognition and derecognition
2.
(i)
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.
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 (FVPL), transaction costs that are directly attributable to the acquisition
of the financial asset. Transaction costs of financial assets carried at FVPL are expensed in profit or loss.
Financial assets with embedded derivatives are considered in their entirety when determining whether their
cash flows are solely payment of principal and interest.
(i) Debt instruments
Subsequent measurement of debt instruments depends on the Group’s business model for managing the asset
and the cash flow characteristics of the asset. There are three measurement categories into which the Group
classifies its debt instruments:
- Amortized cost: Assets that are held for collection of contractual cash flows where those cash flows represent
solely payments of principal and interest are measured at amortized cost. Interest income from these financial
assets is included in finance income using the effective interest rate method. Any gain or loss arising on
derecognition is recognized directly in profit or loss.
- FVOCI: Assets that are held for collection of contractual cash flows and for selling the financial assets, where
the assets’ cash flows represent solely payments of principal and interest, are measured at FVOCI. Movements
in the carrying amount are taken through OCI, except for the recognition of impairment gains or losses, interest
income and foreign exchange gains and losses which are recognized in profit or loss. When the financial asset
is derecognized, the cumulative gain or loss previously recognized in OCI is reclassified from equity to profit
or loss. Interest income from these financial assets is included in finance income using the effective interest
rate method.
- FVPL: Assets that do not meet the criteria for amortized cost or FVOCI are measured at FVPL. A gain or
loss on a debt instruments that is subsequently measured at FVPL is recognized in profit or loss in the period
in which it arises.
18
181
SECTORAL AND FINANCIAL INFORMATIONTURKCELL ANNUAL REPORT 2019
F19
2.
(i)
TURKCELL ILETISIM HIZMETLERI AS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at and for the year ended 31 December 2019
(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.)
Basis of preparation and summary of significant accounting policies (continued)
Financial instruments (continued)
Measurement (continued)
(ii) Equity instruments
The Group subsequently measures all equity investments at fair value. Where the Group’s management has
elected to present fair value gains and losses on equity investments in OCI, there is no subsequent
reclassification of fair value gains and losses to profit or loss following the derecognition of the investment.
Dividends from such investments continue to be recognized in profit or loss as other income when the Group’s
right to receive payments is established.
Changes in the fair value of financial assets at FVPL are recognized in the statement of profit or loss as
applicable. Impairment losses (and reversal of impairment losses) on equity investments measured at FVOCI
are not reported separately from other changes in fair value.
Impairment
From 1 January 2018, the Group assesses on a forward looking basis the expected credit losses associated with
its debt instruments carried at amortized cost and FVOCI. The impairment methodology applied depends on
whether there has been a significant increase in credit risk.
Loss allowances are measured on either of the following bases.
• 12 month expected credit losses (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.
The Group applies lifetime ECL measurement for all group companies except Turkcell Finansman which
applies both 12 month and lifetime ECL (general approach).
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 enforceable 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. This policy had also been
applied before 1 January 2018.
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 and 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.
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 36 for a description of the Group’s
impairment policies.
182
TURKCELL ANNUAL REPORT 2019
19
F20
TURKCELL ILETISIM HIZMETLERI AS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at and for the year ended 31 December 2019
(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.)
Basis of preparation and summary of significant accounting policies (continued)
Financial instruments (continued)
Trade and other payables
2.
(i)
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.
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.
Derivatives and hedging activities
Derivatives are initially recognized at fair value on the date a derivative contract is entered into and are
subsequently remeasured to their fair value at the end of each reporting period.
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 the value of the discounted future value of the 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 the 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.
The accounting for subsequent changes in fair value depends on whether the derivative is designated as a
hedging instrument, and if so, the nature of the item being hedged. The Group designates certain derivatives
as hedges of a particular risk associated with the cash flows of recognized assets and liabilities and highly
probable forecast transactions (cash flow hedges).
At inception of the hedge relationship, the Group documents the economic relationship between hedging
instruments and hedged items including whether changes in the cash flows of the hedging instruments are
expected to offset changes in the cash flows of hedged items. The Group documents its risk management
objective and strategy for undertaking its hedge transactions.
(i)
Cash flow hedges that qualify for hedge accounting
The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow
hedges is recognized in the cash flow hedge reserve within equity. The gain or loss relating to the ineffective
portion is recognized immediately in profit or loss.
20
183
SECTORAL AND FINANCIAL INFORMATIONTURKCELL ANNUAL REPORT 2019
F21
2.
TURKCELL ILETISIM HIZMETLERI AS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at and for the year ended 31 December 2019
(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.)
Basis of preparation and summary of significant accounting policies (continued)
(i)
Financial instruments (continued)
Derivatives and hedging activities (continued)
(i)
Cash flow hedges that qualify for hedge accounting (continued)
Gains or losses relating to the effective portion of the change in intrinsic value of the options are recognized
in the cash flow hedge reserve within equity. The changes in the time value of the options that relate to the
hedged item (“aligned time value”) are recognized within OCI in the costs of hedging reserve within equity.
Amounts accumulated in equity are reclassified in the periods when the hedged item affects profit or loss, as
follows:
- Where the hedged item subsequently results in the recognition of a non-financial asset, both the deferred
hedging gains and losses and the deferred time value of the option contracts or deferred forward points, if any,
are included within the initial cost of the asset. The deferred amounts are ultimately recognized in profit or
loss as the hedged item affects profit or loss.
- The gain or loss relating to the effective portion of the interest rate swaps hedging variable rate borrowings
is recognized in profit or loss within finance cost at the same time as the interest expense on the hedged
borrowings.
When a hedging instrument expires, or is sold or terminated, or when a hedge no longer meets the criteria for
hedge accounting, any cumulative deferred gain or loss and deferred costs of hedging in equity at that time
remains in equity until the forecast transaction occurs, resulting in the recognition of a non-financial asset.
When the forecast transaction is no longer expected to occur, the cumulative gain or loss and deferred costs of
hedging that were reported in equity are immediately reclassified to profit or loss.
Certain derivative instruments do not qualify for hedge accounting. Changes in the fair value of any derivative
instrument that does not qualify for hedge accounting are recognized immediately in profit or loss.
The Group has started to apply hedge accounting as of 1 July 2018 for existing participating cross currency
swap and cross currency swap transactions in accordance with IFRS 9 hedge accounting requirement. IFRS 9
includes new hedge accounting rules aiming alignment with risk management activities.
The Group enters into participating cross currency swap and cross currency swap transactions in order to hedge
the changes in cash flows of foreign exchange denominated fixed and floating rate financial instruments. While
applying cash flow hedge accounting, the effective portion of the changes in the fair value of the hedging
instrument is accounted for under “other comprehensive income/expense items to be reclassified to profit or
loss” as a “hedging reserve” in equity, and the ineffective portion is recognized in profit or loss. The changes
recognized in equity is reclassified and included in profit or loss in the same period when the hedged cash
flows effect the profit or loss. In addition, time value of options included in participating cross currency swaps
are accounted for cost of hedging and recognized under other comprehensive income.
The new effectiveness test model may be qualitative depending on the complexity of hedging relationship
provided that it is prospective only. The 80-125% range in IAS 39 is replaced by an objectives-based test that
focuses on the economic relationship between the hedged item and the hedging instrument, and the effect of
credit risk on that economic relationship.
Under IFRS 9, a hedging relationship is discontinued in its entirety when as a whole it ceases to meet the
qualifying criteria after considering the rebalancing of the hedging relationship. Voluntary discontinuation
when the qualifying criteria are met is prohibited. Hedge accounting is discontinued when the risk management
objective for the hedging relationship has changed, the hedging instrument expires or is sold, terminated or
exercised, there is no longer an economic relationship between the hedged item and hedging instrument or
when the effect of credit risk starts dominating the value changes that result from the economic relationship.
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TURKCELL ANNUAL REPORT 2019
21
TURKCELL ILETISIM HIZMETLERI AS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at and for the year ended 31 December 2019
(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.)
Basis of preparation and summary of significant accounting policies (continued)
F22
Financial instruments (continued)
Derivatives and hedging activities (continued)
2.
(i)
(i)
Cash flow hedges that qualify for hedge accounting (continued)
When the Group discontinues hedge accounting for a cash flow hedge it shall account for the amount that has
been accumulated in the cash flow hedge reserve in accordance as follows;
-if the hedged future cash flows are still expected to occur, that amount shall remain in the cash flow hedge
reserve until the future cash flows occur.
-When a hedging instrument expires, or is sold or terminated, or when a hedge no longer meets the criteria for
hedge accounting, any cumulative deferred gain or loss and deferred costs of hedging in equity at that time
remains in equity until the forecast transaction occurs, resulting in the recognition of a non-financial asset.
When the forecast transaction is no longer expected to occur, the cumulative gain or loss and deferred costs of
hedging that were reported in equity are immediately reclassified to profit or loss.
(ii) Foreign currency hedge of net investments in foreign operations
The Company designates its foreign currency bank loans to hedge its net investment in a foreign operation.
Foreign exchange gains or losses on the hedging instrument relating to the effective portion of the foreign
currency hedge of net investments in foreign operations are recognized in other comprehensive income while
any gains or losses relating to the ineffective portion is recognized in the income statement. Tax effects of
foreign exchange gains or losses on the hedging instrument relating to the effective portion of the foreign
currency hedge of net investments in foreign operations is recognized under other comprehensive income as
well.
On disposal of the foreign operation, the cumulative value of any such gains or losses recorded in equity is
transferred to the income statement (Note 16).
Financial instruments - Accounting policies applied until 31 December 2017
The Group has applied IFRS 9 retrospectively, but has elected not to restate comparative information for prior
periods. As a result, the comparative information provided continues to be accounted for in accordance with
the Group’s previous accounting policy. Accounting policies that changed on adoption of IFRS 9 are as
follows. The Group’s new accounting policies are explained above.
i)
Classification
Until 31 December 2017, the Group classified its financial assets in the following categories:
• Financial assets at fair value through profit or loss,
• Loans and receivables,
• Held-to-maturity investments, and
• Available-for-sale financial assets.
The classification depended on the purpose for which the investments were acquired. Management determined
the classification of its investments at initial recognition and, in the case of assets classified as held-to-maturity,
re-evaluated this designation at the end of each reporting period.
22
185
SECTORAL AND FINANCIAL INFORMATIONTURKCELL ANNUAL REPORT 2019
F23
2.
(i)
TURKCELL ILETISIM HIZMETLERI AS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at and for the year ended 31 December 2019
(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.)
Basis of preparation and summary of significant accounting policies (continued)
Financial instruments (continued)
Financial instruments - Accounting policies applied until 31 December 2017 (continued)
(ii) Reclassification
The Group could choose to reclassify a non-derivative trading financial asset out of the held for trading
category if the financial asset was no longer held for the purpose of selling it in the near term. Financial assets
other than loans and receivables were permitted to be reclassified out of the held for trading category only in
rare circumstances arising from a single event that was unusual and highly unlikely to recur in the near term.
In addition, the Group could 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 had the intention and ability
to hold these financial assets for the foreseeable future or until maturity at the date of reclassification.
Reclassifications were made at fair value as of the reclassification date. Fair value became the new cost or
amortized cost as applicable, and no reversals of fair value gains or losses recorded before reclassification date
were subsequently made. Effective interest rates for financial assets reclassified to loans and receivables and
held-to-maturity categories were determined at the reclassification date. Further increases in estimates of cash
flows adjusted effective interest rates prospectively.
(iii) Subsequent measurement
The measurement at initial recognition did not change on adoption of IFRS 9.
Subsequent to initial recognition, loans and receivables and held-to-maturity investments were carried at
amortized cost using the effective interest method.
Available-for-sale financial assets and financial assets at fair value through profit or loss were subsequently
carried at fair value. Gains or losses arising from changes in the fair value were recognized as follows:
• For ‘financial assets at fair value through profit or loss’ - in profit or loss
• For available-for-sale
financial assets
in a
foreign currency - translation differences related to changes in the amortized cost of the security were
recognized in profit or loss and other changes in the carrying amount were recognized in other
comprehensive income
that are monetary securities denominated
• For other monetary and non-monetary securities classified as available-for-sale - in other
comprehensive income
Details on how the fair value of financial instruments is determined are disclosed in Note 36.
(iv)
Impairment
The Group assessed at the end of each reporting period whether there was objective evidence that a financial
asset or group of financial assets was impaired. A financial asset or a group of financial assets was impaired
and impairment losses were incurred only if there was 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 had an
impact on the estimated future cash flows of the financial asset or group of financial assets that could 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 was considered an indicator that the assets were impaired.
186
TURKCELL ANNUAL REPORT 2019
23
TURKCELL ILETISIM HIZMETLERI AS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at and for the year ended 31 December 2019
(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.)
Basis of preparation and summary of significant accounting policies (continued)
Financial instruments (continued)
Financial instruments - Accounting policies applied until 31 December 2017 (continued)
2.
(i)
(iv)
Impairment (continued)
For loans and receivables, the amount of the loss was 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
was reduced and the amount of the loss was recognized in profit or loss. If a loan or held-to-maturity investment
had a variable interest rate, the discount rate for measuring any impairment loss was the current effective
interest rate determined under the contract. As a practical expedient, the Group could 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 decreased and the decrease could 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 was recognized in profit or loss.
Impairment testing of trade receivables is described in Note 36.
If there was 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 - was removed from equity and recognized
in profit or loss.
Impairment losses on equity instruments that were recognized in profit or loss were not reversed through profit
or loss in a subsequent period.
If the fair value of a debt instrument classified as available-for-sale increased in a subsequent period and the
increase could be objectively related to an event occurring after the impairment loss was recognized in profit
or loss, the impairment loss was reversed through profit or loss.
(j) 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, the 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 as transitioning out of hyperinflationary status and in 2015 it was 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. These are
recognized included in profit or loss.
24
F24
187
SECTORAL AND FINANCIAL INFORMATIONTURKCELL ANNUAL REPORT 2019
F25
2.
TURKCELL ILETISIM HIZMETLERI AS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at and for the year ended 31 December 2019
(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.)
Basis of preparation and summary of significant accounting policies (continued)
(j) Property, plant and equipment (continued)
(i) Recognition and measurement (continued)
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 recognized 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 derecognized when replaced. All other repairs and maintenance are charged to profit or loss during the
reporting period in which they are incurred.
(iii) Depreciation
Depreciation is calculated using the straight-line method to allocate their cost, net of their residual values, over
their estimated useful lives.
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
Leasehold improvements
21 – 25 years
4 – 20 years
3 – 25 years
4 – 8 years
2 – 10 years
4 – 6 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.
Other borrowing costs are expensed in the period in which they are incurred.
188
TURKCELL ANNUAL REPORT 2019
25
F26
TURKCELL ILETISIM HIZMETLERI AS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at and for the year ended 31 December 2019
(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.)
Basis of preparation and summary of significant accounting policies (continued)
2.
(k)
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
(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 programs 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 recognized as intangible assets when the following criteria are met:
It is technically feasible to complete the software such 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
It can be demonstrated how the software will generate probable future economic benefits,
software are available and
• The expenditure attributable to the software during its development can be reliably measured.
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
3 – 8 years
Amortization methods, useful lives and residual values are reviewed, and adjusted if appropriate, at the end of
each reporting period.
26
189
SECTORAL AND FINANCIAL INFORMATIONTURKCELL ANNUAL REPORT 2019
F27
2.
TURKCELL ILETISIM HIZMETLERI AS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at and for the year ended 31 December 2019
(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.)
Basis of preparation and summary of significant accounting policies (continued)
(k)
Intangible assets (continued)
(iii) Other intangible assets
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.
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:
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.
(l)
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.
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
Depreciation methods, useful lives and residual values are reviewed, and adjusted if appropriate, at the end
of each reporting period.
25 - 45 years
27
190
TURKCELL ANNUAL REPORT 2019
F28
TURKCELL ILETISIM HIZMETLERI AS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at and for the year ended 31 December 2019
(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.)
Basis of preparation and summary of significant accounting policies (continued)
2.
(m) 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 2019 and 2018, inventories mainly consisted of mainly
mobile phones, modem, tablet, sim-cards, and tower construction materials.
(n)
Impairment of assets
Goodwill and intangible assets that have an indefinite useful life are not subject to amortization and are tested
annually for impairment, or more frequently if events or changes in circumstances indicate that they might be
impaired. Other assets are tested for impairment whenever events or changes in circumstances indicate that the
carrying amount may not be recoverable. 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 and its value in use. Fair value is the price that would be received to sell an asset or paid
to transfer a liability in an orderly transaction between market participants at the measurement date. Value in
use is the present value of the future cash flows expected to be derived from an asset or cash-generating unit.
For the purposes of assessing impairment, assets are grouped at the lowest levels (cash-generating units) for
which there are separately identifiable cash inflows which are largely independent of the cash inflows from
other assets or groups of assets. 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.
(o) 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 6,380 as at 31 December 2019
(31 December 2018: TL 5,434), 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. Discount rate used for calculating employee termination benefit as of 31 December 2019 is
3.60% (31 December 2018: 4.41%). 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.
28
191
SECTORAL AND FINANCIAL INFORMATIONTURKCELL ANNUAL REPORT 2019
F29
2.
TURKCELL ILETISIM HIZMETLERI AS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at and for the year ended 31 December 2019
(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.)
Basis of preparation and summary of significant accounting policies (continued)
(o) 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.
(p) 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 outflow 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.
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.
192
TURKCELL ANNUAL REPORT 2019
29
TURKCELL ILETISIM HIZMETLERI AS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at and for the year ended 31 December 2019
(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.)
Basis of preparation and summary of significant accounting policies (continued)
2.
(r) Revenue
F30
Revenue is recognized at the amount of the transaction price that is allocated to the performance obligation.
The transaction price is the amount of consideration to which an entity expects to be entitled in exchange for
transferring promised goods or services to a customer. Revenue is recognized when control is transferred to
the customer.
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. An
entity transfers control of a service over time and, therefore, satisfies a performance obligation and recognizes
revenue from telecommunication services over time.
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.
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. A good or service is distinct
if both of the following criteria are met:
• The good or service is capable of being distinct,
• The promise to transfer the good or service is distinct within the context of the contract.
The arrangement consideration is allocated to each performance obligation identified in the contract on a
relative stand-alone selling price. If an element of a transaction is not a distinct, then it is accounted for as an
integral part of the remaining elements of the transaction.
Revenue from device sales is recognized when control of the device has transferred, being the time when
delivered to the end customer. For device sales made to intermediaries, revenue is recognized the time when
control of the device has transferred, being when the products are delivered to the intermediary and the
intermediary has no general right to return the device to receive a refund. If control is 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 Group, 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 Group. In certain
campaigns, dealers make the handset sale to the subscribers, the instalments of which will be collected by the
Group based on the letters of undertaking signed by the subscribers. With the letter of undertaking, the dealer
assigns its receivables from handset sales to the distributor and the distributor assigns its receivables to the
Group.
The Group pays the distributor the 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 Group 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 Group collects the contracted receivables
in installments during the contract period and does not recognize any revenue for the handset in these
transactions as the Group does not act as principal for the sale of handset.
Starting from 2014, subscribers have the option to buy handsets using bank loans, the instalments of which are
collected by the Group on behalf of the bank. The Group does not bear any credit risk in these transactions.
Since the Group collects receivables during the contract period and acts as agent for the sale of handset, the
Group does not recognize any revenue for the handset in these transactions.
30
193
SECTORAL AND FINANCIAL INFORMATIONTURKCELL ANNUAL REPORT 2019
F31
2.
TURKCELL ILETISIM HIZMETLERI AS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at and for the year ended 31 December 2019
(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.)
Basis of preparation and summary of significant accounting policies (continued)
(r) Revenue (continued)
Starting from 2016 the Group and distributors started to offer the option to buy a device through consumer
financing loan, which will be collected by Turkcell Finansman. 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
in telecommunication services revenues.
Revenues from the betting business comprise of mainly the 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 the 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 QSC (“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 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 the agreement between Azerinteltek and Azerlotereya. Commission revenues are recognized at
the time all services related to the games are fully rendered.
Call center revenues are recognized at the time services are rendered during the contractual period.
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 described below and such judgments impact the amount
of reported revenue and operating costs but do not impact reported assets, liabilities or cash flows:
Indicators that an entity is a principal:
• The entity is primarily responsible for fulfilling the promise to provide the specified good or service,
• The entity has inventory risk before the specified good or service has been transferred to a customer
or after transfer of control to the customer,
• The entity has discretion in establishing the price for the specified good or service.
194
TURKCELL ANNUAL REPORT 2019
31
F32
TURKCELL ILETISIM HIZMETLERI AS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at and for the year ended 31 December 2019
(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.)
Basis of preparation and summary of significant accounting policies (continued)
2.
(r) Revenue (continued)
The Company and the Ministry of Transport and Infrastructure of Turkey, Directorate General of
Communications mutually agreed to extend the contract, to establish and operate mobile communication
infrastructure and operation in uncovered areas, until 30 June 2020 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. As of 31 December 2019, the Company has recognized TL 191,235
(31 December 2018: TL 376,765) 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.
Contract costs eligible for capitalization as incremental costs of obtaining a contract comprise commission on
sale relating to postpaid contracts with acquired or retained subscribers. Contract costs are capitalized in the
month of service activation if the Group expects to recover those costs. Contract costs comprise sales
commissions to dealers and to own salesforce which can be directly attributed to an acquired or retained
contract. Contract costs are classified as intangible assets in the consolidated financial statements. The asset is
amortized on a straight-line basis over the customer lifetime it relates to consistent with the pattern of
recognition of the associated revenue.
Revenue - Accounting policies applied until 31 December 2017
The Group adopted 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 1 January 2018, to
retained earnings and not restate prior years. As a result, the comparative information provided continues to
be accounted for in accordance with the Group’s previous accounting policy. Accounting policies that changed
on adoption of IFRS 15 are as follows. The Group’s new accounting policies are explained above.
Contract cost
Contract costs were capitalized under prepaid expenses and amortized on a straight line basis over the contact
term.
(s)
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.
32
195
SECTORAL AND FINANCIAL INFORMATIONTURKCELL ANNUAL REPORT 2019
F33
2.
(s)
TURKCELL ILETISIM HIZMETLERI AS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at and for the year ended 31 December 2019
(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.)
Basis of preparation and summary of significant accounting policies (continued)
Income taxes (continued)
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 recognized 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.
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.
(t) 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.
196
TURKCELL ANNUAL REPORT 2019
33
F34
TURKCELL ILETISIM HIZMETLERI AS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at and for the year ended 31 December 2019
(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.)
Basis of preparation and summary of significant accounting policies (continued)
2.
(u) 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.
(v) 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, whereby 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 coordinated 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.
(w) 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.
34
197
SECTORAL AND FINANCIAL INFORMATIONTURKCELL ANNUAL REPORT 2019
F35
2.
TURKCELL ILETISIM HIZMETLERI AS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at and for the year ended 31 December 2019
(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.)
Basis of preparation and summary of significant accounting policies (continued)
(y) Dividends
Provision is made for the amount of any dividend declared, being appropriately authorized 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.
(z) 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, the Group 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.
(aa) Leases
At inception of a contract, the Group assesses whether a contract is, or contains a lease. 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. To assess whether a contract conveys the right to control the use of
an identified asset, The Group assesses whether:
- The contract involved the use of an identified asset - this may be specified explicitly or implicitly;
- The asset should be physically distinct or represent substantially all of the capacity of a physically
distinct asset. If the supplier has a substantive substitution right, the asset is not identified;
- The Group has the right to obtain substantially all of the economic benefits from the use of an asset
throughout the period of use and
- The Group has the right to direct use of the asset. The Group has the right when it has the
decision-making rights that are most relevant to changing the how and for what purpose the asset
is used. If these decision are predetermined;
- The Group has the right to operate the asset or,
- The Group designed the asset in a way that predetermines how and for what purpose it is
used.
At inception or on reassessment of a contract that contains a lease component, the Group allocates the
consideration in the contract to each lease component on the basis of their relative stand-alone prices.
Right of use asset
The Group recognizes a right-of use asset and a lease liability at the lease commencement date.
The right of use asset is initially recognized at cost comprising of:
-
-
-
-
Amount of the initial measurement of the lease liability,
Any lease payments made at or before the commencement date, less any lease incentives received,
Any initial direct costs incurred by the Group and
An estimate of costs to be incurred by the lessee in dismantling and removing the underlying asset,
restoring the site on which it is located or restoring the underlying asset to the condition required
by the terms and conditions of the lease, unless those costs are incurred to produce inventories. The
lessee incurs the obligation for those costs either at the commencement date or as a consequence of
having used the underlying asset during a particular period.
The right-of-use asset is subsequently depreciated using the straight-line method from the
commencement date to the earlier of the end date of the useful life of the right-of-use asset or the end
date of the lease term. The estimated useful lives of right-of-use assets are determined on the same basis
as those property and equipment. In addition, the right-of-use asset is periodically reduced by
impairment losses, if any, and adjusted for certain remeasurements of the lease liability (Note 29).
35
198
TURKCELL ANNUAL REPORT 2019
F36
TURKCELL ILETISIM HIZMETLERI AS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at and for the year ended 31 December 2019
(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.)
Basis of preparation and summary of significant accounting policies (continued)
2.
(aa) Leases (continued)
Lease Liability
The lease liability is initially measured at the present value of the lease payments that are not paid at the
commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily
determined, the Group’s incremental borrowing rate. The Group uses its incremental borrowing rate as
the discount rate.
Lease payments included in the measurement of the lease liability comprise the following:
-
-
-
-
Fixed payments, including in-substance fixed payments,
Variable lease payments that depend on an index or a rate, initially measured using the index or
rate as the commencement date,
Amounts expected to be payable under a residual value guarantee and
The exercise price under a purchase option that the Group is reasonably certain to exercise, lease
payments in an optional renewable period if the Group is reasonably certain to exercise an extension
option, and penalties for early termination of a lease if the Group is reasonably certain to terminate
early.
After initial recognition, the lease liability is measured (a) increasing the carrying amount to reflect
interest on lease liability; (b) reducing the carrying amount to reflect the lease payments made, and (c)
remeasuring the carrying amount to reflect any reassessment or lease modifications or to reflect revised
in-substance fixed lease payments.
Where, (a) there is a change in the lease term as a result of reassessment of certainty to exercise an
extension option, or not to exercise a termination option as discussed above; or (b) there is a change in
the assessment of an option to purchase the underlying asset, assessed considering the events and
circumstances in the context of a purchase option, the Group remeasures the lease liabilities to reflect
changes to lease payments by discounting the revised lease payments using a revised discount rate. The
Group determines the revised discount rate as the interest rate implicit in the lease for the remainder of
the lease term, or the its incremental borrowing rate at the date of reassessment, if the interest rate implicit
in the lease cannot be readily determined.
Where, (a) there is a change in the amounts expected to be payable under a residual value guarantee; or
(b) there is a change in the future lease payments resulting from a change in an index or a rate used to
determine those payments, including change to reflect changes in market rental rates following a market
rent review, the Group remeasures the lease liabilities by discounting the revised lease payments using an
unchanged discount rate, unless the change in lease payments results from a change in floating interest
rates. In such case, the Group uses the revised discount rate that reflects changes in the interest rate.
The Group recognizes the amount of the remeasurement of lease liability as an adjustment to the right of
use asset. Where the carrying amount of the right of use asset is reduced zero and there is further reduction
in the measurement of the lease liability, the Group recognizes any remaining amount of the
remeasurement in profit or loss.
The Group accounts for a lease modification as a separate lease if both:
The modification increases the scope of the lease by adding the right to use one or more
-
underlying assets and
-
The consideration for the lease increases by an amount commensurate with the stand-alone price
for the increase in scope and any appropriate adjustments to that stand-alone price to reflect the
circumstances of the particular contract.
36
199
SECTORAL AND FINANCIAL INFORMATIONTURKCELL ANNUAL REPORT 2019
F37
2.
TURKCELL ILETISIM HIZMETLERI AS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at and for the year ended 31 December 2019
(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.)
Basis of preparation and summary of significant accounting policies (continued)
(aa) Leases (continued)
The Group as a Lessor
When the Group acts an intermediate lessor, it accounts for its interests in the head lease and the sub-lease
separately. It assesses the lease classification of a sub-lease with reference to the right-of-use-asset arising
from the head lease, not with reference to the underlying asset.
If an arrangement contains lease and non-lease components, the Group applies IFRS 15 to allocate the
consideration in the contract.
Leases - Accounting policies applied until 31 December 2017
The Group adopted IFRS 16 using modified retrospective approach - option 2 application under which the
cumulative effect of initially applying the Standard recognized at the date of initial application at
1 January 2018. As a result, the comparative information provided continues to be accounted for in accordance
with the Group’s previous accounting policy. Accounting policies that changed on adoption of IFRS 16 are as
follows. The Group’s new accounting policies are explained above.
Leases of property, plant and equipment where the Group, as lessee, had substantially all the risks and rewards
of ownership were classified as finance leases. Finance leases were 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, were included in other short-term and long-term
payables. Each lease payment was allocated between the liability and finance cost. The finance cost was
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 and equipment acquired under finance leases
was depreciated over the asset’s useful life or over the shorter of the asset’s useful life and the lease term if
there was 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 were not transferred to the Group
as lessee were classified as operating leases. Payments made under operating leases (net of any incentives
received from the lessor) were charged to profit or loss on a straight-line basis over the period of the lease.
(ab) New standards and interpretations
i) Amendments to IFRSs affecting amounts reported and/or disclosures in the consolidated financial
statements
The Group has elected to early adopt the ‘Amendments to IFRS 9, IAS 39 and IFRS 7 Interest Rate Benchmark
Reform’ issued in September 2019. In accordance with the transition provisions, the amendments have been
adopted retrospectively to hedging relationships that existed at the start of the reporting period or were
designated thereafter.
The amendments provide temporary relief from applying specific hedge accounting requirements to hedging
relationships directly affected by IBOR reform. The reliefs have the effect that IBOR reform should not
generally cause hedge accounting to terminate. However, any hedge ineffectiveness should continue to be
recorded in the income statement. Furthermore, the amendments set out triggers for when the reliefs will end,
which include the uncertainty arising from interest rate benchmark reform no longer being present.
200
TURKCELL ANNUAL REPORT 2019
37
F38
TURKCELL ILETISIM HIZMETLERI AS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at and for the year ended 31 December 2019
(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.)
Basis of preparation and summary of significant accounting policies (continued)
2.
(ab) New standards and interpretations (continued)
i)
Amendments to IFRSs affecting amounts reported and/or disclosures in the consolidated financial
statements (continued)
In summary, the reliefs provided by the amendments that apply to the Group are:
•
•
•
When considering the ‘highly probable’ requirement, the Group has assumed that the USD
LIBOR interest rate on which our hedged debts are based does not change as a result of IBOR
reform.
In assessing whether the hedge is expected to be highly effective on a forward-looking basis the
Group has assumed that the USD LIBOR interest rate on which the cash flows of the hedged debt
and the interest rate swap that hedges it are based is not altered by IBOR reform.
The Group has not recycled the cash flow hedge reserve relating to the period after the reforms
are expected to take effect.
Note 3 provides the required disclosures of the uncertainty arising from IBOR reform for hedging relationships
for which the Group applied the reliefs.
Standards, amendments and interpretations applicable as at 31 December 2019
ii)
-
-
-
Amendment to IFRS 9, “Financial instruments”; effective from annual periods beginning on or after
1 January 2019. This amendment confirmed two points: (1) that reasonable compensation for
prepayments can be both negative or positive cash flows when considering whether a financial asset
solely has cash flows that are principal and interest and (2) that when a financial liability measured at
amortized cost is modified without this resulting in de-recognition, a gain or loss should be recognized
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.
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 recognize
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:
38
201
SECTORAL AND FINANCIAL INFORMATIONTURKCELL ANNUAL REPORT 2019
F39
2.
TURKCELL ILETISIM HIZMETLERI AS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at and for the year ended 31 December 2019
(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.)
Basis of preparation and summary of significant accounting policies (continued)
(ab) New standards and interpretations (continued)
ii)
Standards, amendments and interpretations applicable as at 31 December 2019 (continued)
-
Annual
1 January 2019. These amendments include minor changes to:
improvements 2015-2017; effective from annual periods beginning on or after
•
•
•
•
IFRS 3, “Business combinations”, - a company remeasures its previously held interest in a joint
operation when it obtains control of the business.
IFRS 11, “Joint arrangements”, - a company does not remeasure its previously held interest in a
joint operation when it obtains joint control of the business.
IAS 12, “Income taxes” - a company accounts for all income tax consequences of dividend
payments in the same way.
IAS 23, “Borrowing costs” - a company treats as part of general borrowings any borrowing
originally made to develop an asset when the asset is ready for its intended use or sale.
-
Amendments to IAS 19, “Employee benefits” on plan amendment, curtailment or settlement;
effective from annual periods beginning on or after 1 January 2019. These amendments require an entity
to:
•
•
Use updated assumptions to determine current service cost and net interest for the reminder of the
period after a plan amendment, curtailment or settlement; and
Recognize in profit or loss as part of past service cost, or a gain or loss on settlement, any
reduction in a surplus, even if that surplus was not previously recognized because of the impact
of the asset ceiling.
iii) Standards, amendments and interpretations that are issued but not effective as at 31 December 2019
-
Amendments to IAS 1 and IAS 8 on the definition of material; effective from Annual periods
beginning on or after 1 January 2020. These amendments to IAS 1, “Presentation of financial
statements”, and IAS 8, “Accounting policies, changes in accounting estimates and errors”, and
consequential amendments to other IFRSs:
i) Use a consistent definition of materiality throughout IFRSs and the Conceptual Framework for
Financial Reporting,
ii) Clarify the explanation of the definition of material, and
iii) Incorporate some of the guidance in IAS 1 about immaterial information
This amendment has no material effect on the Group’s financial statements.
-
-
Amendments to IFRS 3 - definition of a business; effective from Annual periods beginning on or after
1 January 2020. This amendment revises the definition of a business. According to feedback received
by the IASB, application of the current guidance is commonly thought to be too complex, and it results
in too many transactions qualifying as business combinations. This amendment has no material effect
on the Group’s financial statements.
IFRS 17, “Insurance contracts”; effective from annual periods beginning on or after
1 January 2021. This standard replaces IFRS 4, which currently permits a wide variety of practices in
accounting for insurance contracts. IFRS 17 will fundamentally change the accounting by all entities
that issue insurance contracts and investment contracts with discretionary participation features. This
amendment has no material effect on the Group’s financial statements.
39
202
TURKCELL ANNUAL REPORT 2019
F40
TURKCELL ILETISIM HIZMETLERI AS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at and for the year ended 31 December 2019
(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.)
Financial risk management
3.
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 policies are set to determine and analyze the risks faced, to establish the
appropriate risk limits and to observe the commitment to those limits. These policies are constantly reviewed
to make sure they reflect the Group’s operations and the changes in market conditions.
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, financial asset at fair value through
other comprehensive income, financial asset at amortize cost, derivative financial instruments, trade
receivables, receivables from financial services, due from related parties and other assets (Note 36).
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 and 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 comprises the general provision which
is determined based on a loss event.
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.
The Group signs local and international derivate agreements in order to be able to execute financial derivative
transactions with financial institutions that are believed to have sufficient credit ratings.
The Group’s policy is to provide financial guarantees only to subsidiaries and distributors. At
31 December 2019, guarantees of TL 3,323,318 were outstanding (31 December 2018: TL 4,988,580).
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 632,022
(31 December 2018: TL 587,007) that are expected to readily generate cash inflows for managing liquidity
risk. Due to the dynamic nature of the underlying businesses, the Group Treasury maintains flexibility in
funding by maintaining availability under committed credit lines.
Management monitors rolling forecasts of the Group’s liquidity reserve (Note 36) and cash and cash
equivalents (Note 24) 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.
40
203
SECTORAL AND FINANCIAL INFORMATIONTURKCELL ANNUAL REPORT 2019
F41
3.
TURKCELL ILETISIM HIZMETLERI AS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at and for the year ended 31 December 2019
(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.)
Financial risk management (continued)
Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity
prices 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, EUR and RMB. 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 currencies in order to manage
foreign exchange risk. In addition, derivative financial instruments are used to manage exposure to fluctuations
in foreign exchange rates and as of 1 July 2018 the Company applies hedge accounting.
Details of the Company’s foreign exchange risk is disclosed in Note 36.
(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 36) and to that extent are also exposed to the risk of future changes in market
interest rates.
Effect of IBOR reform
Following the financial crisis, the reform and replacement of benchmark interest rates such as USD LIBOR
and other interbank offered rates (‘IBORs’) has become a priority for global regulators. There is currently
uncertainty around the timing and precise nature of these changes. The Group’s risk exposure that is directly
affected by the interest rate benchmark reform is its USD 65,338 7-year floating-rate debt. The Group has
hedged this debt with participating cross currency swap, and it has designated the participating cross currency
swap in a cash flow hedge of the variability in cash flows of the debt, due to changes in 6-month USD LIBOR
that is the current benchmark interest rate. The nominal amount of the hedging instruments in those hedging
relationships is USD 65,338.
The Group treasury department oversees The Group’s USD LIBOR transition plan. This transition project will
include changes to systems, processes, risk and valuation models, as well as managing related tax and
accounting implications. The Group currently anticipates that the areas of greatest change will be amendments
to the contractual terms of USD LIBOR-referenced floating-rate debt and participating cross currency swap,
and updating hedge designations.
Effect of IBOR reform – significant assumptions
In calculating the change in fair value attributable to the hedged risk of floating-rate debt, the Group has made
the following assumptions that reflect its current expectations:
- The floating-rate debt will move to an alternative benchmark rate during 2022, and the spread will be similar
to the spread included in the participating cross currency swap used as the hedging instrument;
41
204
TURKCELL ANNUAL REPORT 2019
F42
TURKCELL ILETISIM HIZMETLERI AS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at and for the year ended 31 December 2019
(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.)
Financial risk management (continued)
3.
Market risk (continued)
(ii)
Interest rate risk (continued)
Effect of IBOR reform – significant assumptions (continued)
- No other changes to the terms of the floating-rate debt are anticipated; and
- The Group has incorporated the uncertainty over when the floating-rate debt will move to an alternative
benchmark rate, the resulting adjustment to the spread, and the other aspects of the reform that have not yet
been finalized by adding an additional spread to the discount rate used in the calculation.
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 the Company, Turkcell Superonline Iletisim
Hizmetleri A.S. (“Turkcell Superonline”), Turkcell Satis ve Dijital Is Servisleri Hizmetleri A.S. (“Turkcell
Satis”), group call center operations of Global Bilgi Pazarlama Danismanlık 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”) 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”), Lifecell LLC (“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”) and Lifecell Digital Limited (“Lifecell Digital”). 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. The 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 Özel Finansman A.Ş. (“TÖFAŞ”), Turkcell Enerji Cozumleri ve Elektrik Satıs
Ticaret A.S (“Turkcell Enerji”) Paycell LLC, Turkcell Odeme, Turkcell Sigorta Aracılık Hizmetleri A.Ş
(“Turkcell Sigorta”), Türkiye’nin Otomobili Girişim Grubu Sanayi ve Ticaret A.Ş.(“Türkiye’nin Otomobili”)
and Sofra Kurumsal ve Ödüllendirme Hizmetleri A.Ş.(“Sofra”).
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.
42
205
SECTORAL AND FINANCIAL INFORMATIONTURKCELL ANNUAL REPORT 2019
F43
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206
TURKCELL ANNUAL REPORT 2019
F44
TURKCELL ILETISIM HIZMETLERI AS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at and for the year ended 31 December 2019
(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.)
Segment information (continued)
4.
Profit for the period
3,276,690
2,177,335
2,037,759
2019
2018
2017
Add(Less):
(Profit)/loss from discontinued
operations
Profit from continuing operations
Income tax expense
Finance income
Finance costs
Other income
Other expenses
Depreciation and amortization
Share of loss of equity accounted
investees
Consolidated adjusted EBITDA
Geographical information
(772,436)
2,504,254
785,630
(297,450)
2,025,118
(140,705)
487,295
5,046,565
15,712
10,426,419
-
-
2,177,335
495,481
(1,677,114)
3,364,072
(241,435)
381,582
4,287,974
87
8,787,982
2,037,759
571,758
(597,246)
920,112
(74,438)
773,329
2,596,980
-
6,228,254
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.
Revenues
Turkey
Ukraine
Belarus
Turkish Republic of Northern Cyprus
Netherlands
Germany
Azerbaijan
Non-current assets
Turkey
Ukraine
Belarus
Turkish Republic of Northern Cyprus
Unallocated non-current assets
2019
2018
2017
23,229,046
1,322,116
366,314
209,109
8,396
2,154
-
25,137,135
19,636,682
923,181
293,181
169,014
366
1,580
268,471
21,292,475
16,431,863
664,643
209,884
148,637
-
3,016
174,021
17,632,064
31 December
2019
22,737,468
3,030,095
219,281
198,732
197,255
26,382,831
31 December
2018
21,037,351
2,751,277
293,622
177,380
168,536
24,428,166
44
207
SECTORAL AND FINANCIAL INFORMATIONTURKCELL ANNUAL REPORT 2019
F45
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7
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i
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i
t
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o
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f
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i
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a
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f
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v
e
R
s
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i
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e
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i
t
a
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i
n
u
m
m
o
c
e
l
e
T
s
e
u
n
e
v
e
r
t
n
e
m
p
i
u
q
E
s
e
u
n
e
v
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T
5
4
TURKCELL ILETISIM HIZMETLERI AS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at and for the year ended 31 December 2019
(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 (continued)
5.
F46
2019
Turkcell
International
Other
Intersegment
eliminations
Consolidated
Telecommunication Services
At a point in time
Over time
Equipment Related
At a point in time
Over time
Revenue from financial operations
At a point in time
Over time
Call Center
At a point in time
Over time
Commission fees on betting business
At a point in time
Over time
Revenue from betting business
At a point in time
Over time
All other segments
At a point in time
Over time
Total
At a point in time
Over time
Turkcell
Turkey
19,157,657
198,734
18,958,923
2,130,135
2,050,055
80,080
-
-
-
1,780,793
10,555
1,770,238
115,905
115,905
-
-
-
-
21,851
-
21,851
17,008
-
17,008
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,141,712
222,930
918,782
308,126
-
308,126
132,300
-
132,300
-
-
-
(60,147)
-
(60,147)
-
-
-
(839)
(839)
-
(34,542)
-
(34,542)
-
-
-
-
-
-
177,513
37,726
139,787
21,487,156
2,286,515
19,200,641
89,083
19,300
69,783
2,002,789
145,760
1,857,029
635,841
2,306
633,535
2,217,979
225,236
1,992,743
(475,261)
(657)
(474,604)
(570,789)
(1,496)
(569,293)
20,878,303
209,289
20,669,014
2,246,040
2,165,960
80,080
1,140,873
222,091
918,782
312,443
-
312,443
132,300
-
132,300
-
-
-
427,176
58,675
368,501
25,137,135
2,656,015
22,481,120
46
209
SECTORAL AND FINANCIAL INFORMATIONTURKCELL ANNUAL REPORT 2019
F47
5.
TURKCELL ILETISIM HIZMETLERI AS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at and for the year ended 31 December 2019
(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 (continued)
Telecommunication Services
At a point in time
Over time
Equipment Related
At a point in time
Over time
Revenue from financial operations
At a point in time
Over time
Call Center
At a point in time
Over time
Commission fees on betting business
At a point in time
Over time
Revenue from betting business
At a point in time
Over time
All other segments
At a point in time
Over time
Total
At a point in time
Over time
Turkcell
Turkey
16,636,497
102,524
16,533,973
1,209,745
1,203,058
6,687
-
-
-
12,954
-
12,954
-
-
-
-
-
-
233,390
142,504
90,886
18,092,586
1,448,086
16,644,500
6. Other income and expense
2018
Turkcell
International
Other
Intersegment
eliminations
Consolidated
1,281,595
-
1,281,595
101,350
101,350
-
-
-
-
-
-
1,121,768
254,383
867,385
211,195
-
211,195
200,315
-
200,315
268,470
-
-
-
-
9,763
-
9,763
-
-
-
-
-
-
-
268,470
311,933
7,576
304,357
1,456,980 2,113,681
64,272
8,556
55,716
109,906
261,959
1,347,074 1,851,722
(58,335)
(11,504)
(46,831)
-
-
-
(2,647)
(2,647)
-
(30,740)
-
(30,740)
-
-
-
-
-
-
(279,050)
-
(279,050)
(370,772)
(14,151)
(356,621)
17,859,757
91,020
17,768,737
1,311,095
1,304,408
6,687
1,119,121
251,736
867,385
203,172
-
203,172
200,315
-
200,315
268,470
-
268,470
330,545
158,636
171,909
21,292,475
1,805,800
19,486,675
income amounted
Other
31 December 2019, 2018 and 2017, respectively.
to TL 140,705, TL 241,435 and TL 74,438 for
the years ended
Other income for the year ended 31 December 2019 comprises gain on sale of fixed assets amounted to
TL 47,169, rent income amounted to TL 6,522 and other miscellaneous expenses. Other income for the year
ended 31 December 2018 consists of gain on sale of fixed assets amounted to TL 43,727, reversal of legal
provisions amounted to TL 21,054 and other miscellaneous expenses. Other income for the year ended
31 December 2017 comprises gain on sale of fixed assets amounted to TL 33,837 and other miscellaneous
expenses.
Other expenses amounted
31 December 2019, 2018 and 2017, respectively.
to TL 487,295, TL 381,582 and TL 773,329
for years ended
Other expenses for the year ended 31 December 2019 mainly consist of tax settlements, restructuring costs
and litigation expenses amounted to TL 199,000, TL 91,710 and TL 29,444, respectively. Other expenses for
the years ended 31 December 2018 and 2017 mainly consist of donations and litigation expenses amounted to
TL 176,321 (2017: TL 113,085) and TL 87,099 (2017: TL 585,585).
47
210
TURKCELL ANNUAL REPORT 2019
TURKCELL ILETISIM HIZMETLERI AS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at and for the year ended 31 December 2019
(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.)
Employee benefit expenses
7.
Wages and salaries (*)
Employee termination benefits (**)
Defined contribution plans
2019
2,503,611
31,799
12,785
2,548,195
2018
2,030,641
29,140
9,361
2,069,142
2017
1,746,147
32,862
8,107
1,787,116
(*) Wages and salaries include compulsory social security contributions, bonuses and share based payments.
(**) Remeasurements of employee termination benefits for the years ended 31 December 2019, 2018 and 2017 amounting to
TL 36,385, TL (12,699) and TL 3,738 respectively are reflected in other comprehensive income.
Employee benefit expenses are recognized in cost of revenue, selling and marketing expenses and administrative expenses.
8.
Finance income and costs
Recognized in the statement of profit or loss:
Interest income
Net fair value gains on derivative financial
instruments and interest (*)
Cash flow hedges - reclassified to profit or loss (*)
Other
Finance income
2019
288,010
-
-
9,440
297,450
2018
395,045
654,933
568,370
58,766
1,677,114
2017
278,599
317,542
-
1,105
597,246
Net foreign exchange losses
Net interest expenses for financial assets and
liabilities measured at amortized cost
Net fair value losses on derivative financial
instruments and interest (*)
Cash flow hedges - reclassified to profit or loss (*)
Other
Finance costs
Net finance costs
(1,039,618)
(2,695,045)
(718,501)
(864,492)
(552,101)
(193,311)
(550,438)
461,133
(31,703)
(2,025,118)
(1,727,668)
-
-
(116,926)
(3,364,072)
(1,686,958)
-
-
(8,300)
(920,112)
(322,866)
(*) Interest expense/income and fair value of derivative financial instruments are shown netted off in the
consolidated statement of profit or loss.
Finance incomes for the years ended 31 December 2019, are mainly attributable to interest income on
bank deposits.
Finance income for the years ended 31 December 2018 and 2017 are mainly attributable to interest
income on contracted handset sales, changes in fair value of derivative financial instruments, interest
income on bank deposits and cash flow hedge.
Net foreign exchange losses mainly include foreign exchange losses on borrowings, bonds issued and
cash and cash equivalents.
Finance costs for year ended 31 December 2019, 2018 and 2017 are mainly attributable to the financing
costs of borrowings, foreign exchange losses from operating and financing activities.
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.
48
F48
211
SECTORAL AND FINANCIAL INFORMATIONTURKCELL ANNUAL REPORT 2019
F49
9.
TURKCELL ILETISIM HIZMETLERI AS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at and for the year ended 31 December 2019
(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.)
Income tax expense
Current income tax expense
Deferred income tax (expense)/credit
Total income tax expense
(570,509)
(215,121)
(785,630)
(654,953)
159,472
(495,481)
(437,967)
(133,791)
(571,758)
2019
2018
2017
Income tax expense is attributable to profit from continuing operations.
Income tax relating to each component of
other comprehensive income
2019
Foreign currency translation differences
Change in cash flow hedge reserve
Change in cost of hedging reserve
Fair value reserve
Hedges of net investments in foreign
operations
Remeasurements of employee termination
benefits
2018
Foreign currency translation differences
Change in cash flow hedge reserve
Change in cost of hedging reserve
Remeasurements of employee termination
benefits
2017
Foreign currency translation differences
Remeasurements of employee termination
benefits
Before tax
536,796
(217,877)
75,605
4,451
(55,389)
(36,385)
307,201
850,188
19,156
(347,602)
12,699
534,441
Tax (expense)/
credit
(99,234)
47,933
(16,634)
(979)
Net of tax
437,562
(169,944)
58,971
3,472
12,186
(43,203)
8,005
(48,723)
(28,380)
258,478
(226,667)
(4,214)
76,472
(2,794)
(157,203)
623,521
14,942
(271,130)
9,905
377,238
100,149
(107,299)
(7,150)
(3,738)
96,411
748
(106,551)
(2,990)
(10,140)
212
TURKCELL ANNUAL REPORT 2019
49
TURKCELL ILETISIM HIZMETLERI AS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at and for the year ended 31 December 2019
(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.)
Income tax expense (continued)
9.
F50
Reconciliation of income tax expense
Profit from continuing operations before income tax
expense
(Loss) 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 and
permanent differences
Tax exemption from subsidiary sale (**)
Change in unrecognized deferred tax assets (***)
Adjustments for current tax of prior years
Tax effect of investment in associate and joint venture
Other
Total income tax expense
2019
2018
2017
3,289,884
2,672,816
2,609,517
772,436
4,062,320
-
2,672,816
-
2,609,517
(893,710)
(12,580)
123,878
(134,538)
169,936
(46,865)
3,880
2,592
1,777
(785,630)
(588,020)
7,617
198,160
(91,778)
24,268
(50,551)
2,510
-
2,313
(495,481)
(521,903)
4,133
73,916
(102,102)
-
(41,340)
11,280
-
4,258
(571,758)
(*) Mainly comprises of research and development tax credit exemption effect. For the year ended 31 December 2018, includes
the exemption effect of Fintur amounted to TL 76,164.
(**) For the years ended 31 December 2019 and 2018, includes the Group’s transfer of its total shareholding in Fintur and
Azerinteltek, respectively (Note 39).
(***) Mainly comprises of tax losses for which no deferred tax asset has been recognized.
The Turkish entities within the Group are subject to corporate tax at the rate of 20%. 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. On 5 December 2017, Turkey’s Law
No. 7061 on the Amendment of Certain Tax Laws and Some Other Laws, and which was adopted on
28 November 2017, was published in the Official Gazette. The Law increases the corporate tax rate under
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. The corporate tax rate is expected to decrease to 20%
from 2021 onwards.
In Turkey, there is no procedure for a final and definitive agreement on tax assessments. Companies file
their tax returns by the 25th day of the fourth month following the closing of the accounting year to which
they relate. Corporate tax payment is made by the end of the month in which the tax return is filed. The
tax authorities may, however, examine such returns and the underlying accounting records, and may revise
assessments within a five-year period. Advance tax returns are filed on a quarterly basis.
In Turkey, the transfer pricing provisions have been stated under 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 out the details of implementation.
50
213
SECTORAL AND FINANCIAL INFORMATIONTURKCELL ANNUAL REPORT 2019
F51
9.
TURKCELL ILETISIM HIZMETLERI AS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at and for the year ended 31 December 2019
(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.)
Income tax expense (continued)
If a taxpayer enters into transactions regarding the 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.
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 to 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, under the scope of provisions of an applicable double taxation
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 the 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% of the profits
arising from the sale of immovable properties included in the assets of corporations for two years are
exempted from corporate tax. The exemption rate had been 75% prior to this date. In order to benefit from
these exemptions, profits must be recorded under a passive fund account on the 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.
Pursuant to Article 10/13-h of Law No.7143 published in the Official Gazette dated 18 May 2018 and
numbered 30425;
• For the resident real persons and institutions,
-
Income from the sale of non-resident subsidiary shares,
- Participation income from non-resident subsidiaries,
- Commercial income through permanent establishment and permanent representatives abroad,
including those obtained until the date 31 October 2018, are exempted from income tax or corporation
tax under condition that incomes are transferred from the effective date of Article until
31 December 2018. In accordance with the Presidential Decree dated 29 August 2018 and numbered 48,
the terms of the Article have been extended for 6 months. In this way, including those obtained until the
date 30 April 2019, income from the sale of non-resident subsidiary’s shares are exempted from
corporation tax under condition that incomes are transferred until 30 June 2019.
• For the resident real persons and institutions, income from the liquidation of non-resident
institutions are exempt from income tax or corporation tax under condition that incomes are transferred
to Turkey until the date 31 December 2018. In accordance with the President Decision dated
29 August 2018 and numbered 48, the terms of the Article have been extended for 6 months. In this way,
income from the liquidation of non-resident institutions are exempted from corporation tax under
condition that incomes are transferred until 30 June 2019.
214
TURKCELL ANNUAL REPORT 2019
51
F52
TURKCELL ILETISIM HIZMETLERI AS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at and for the year ended 31 December 2019
(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.)
10. Expenses by nature
Breakdown of expenses by nature for the years ended 31 December 2019, 2018 and 2017 is as follows:
Cost of revenue:
Depreciation and amortization (*)
Cost of goods sold
Treasury share
Interconnection and termination expenses
Employee benefit expenses
Frequency expenses
Radio expenses
Transmission expenses
Universal service fund
Cost of revenue from financial services (**)
Roaming expenses
Billing and archiving expenses
Others
2019
(5,046,565)
(2,278,283)
(2,191,427)
(1,909,614)
(1,501,617)
(802,950)
(734,583)
(335,980)
(297,053)
(240,297)
(238,147)
(48,970)
(1,457,994)
(17,083,480)
2018
(4,287,974)
(1,284,180)
(1,884,556)
(1,763,414)
(1,193,953)
(622,390)
(508,884)
(326,080)
(256,454)
(378,477)
(226,806)
(50,929)
(1,361,896)
(14,145,993)
2017
(2,596,980)
(965,054)
(1,669,807)
(1,607,079)
(1,041,755)
(278,727)
(844,941)
(218,221)
(221,431)
(283,000)
(177,258)
(55,185)
(1,390,736)
(11,350,174)
(*) As at 31 December 2019, depreciation and amortization expenses include depreciation and amortization expenses related to
the financial services amounting to TL 26,478 (31 December 2018: TL 16,321; 31 December 2017: TL 8,828).
(**) As at 31 December 2019, cost of revenue from financial services includes employee benefit expenses related to the financial
services amounting to TL 11,358 (31 December 2018: TL 8,532; 31 December 2017: TL 4,789).
Selling and marketing expenses:
Marketing expenses
Employee benefit expenses
Selling expenses
Frequency usage fees related to prepaid
subscribers (**)
Others
2019
(554,538)
(551,801)
(349,269)
2018
(551,127)
(440,976)
(555,158)
2017
(532,989)
(394,421)
(898,936)
-
(99,581)
(1,555,189)
-
(79,453)
(1,626,714)
(82,994)
(96,080)
(2,005,420)
(**) Starting from 1 January 2018, frequency usage fees related to prepaid subscribers are shown under net impairment losses on
financial and contract assets according to IFRS 9.
52
215
SECTORAL AND FINANCIAL INFORMATIONTURKCELL ANNUAL REPORT 2019
F53
TURKCELL ILETISIM HIZMETLERI AS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at and for the year ended 31 December 2019
(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.)
10. Expenses by nature (continued)
Administrative expenses:
Employee benefit expenses
Collection expenses
Consultancy expenses
Travel and entertainment expenses
Maintenance and repair expenses
Rent expenses
Net impairment expense recognized on
receivables
Other
2019
(483,419)
(57,097)
(51,308)
(34,644)
(26,610)
-
-
(126,677)
(779,755)
2018
(425,681)
(37,525)
(38,252)
(38,406)
(26,867)
-
-
(106,639)
(673,370)
2017
(346,151)
(20,415)
(50,247)
(30,957)
(24,342)
(36,280)
(36,278)
(100,526)
(645,196)
Net impairment losses on financial and contract assets:
Net impairment losses on financial and
contract assets
2019
2018
2017
(338,857)
(338,857)
(346,390)
(346,390)
-
-
216
TURKCELL ANNUAL REPORT 2019
53
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217
SECTORAL AND FINANCIAL INFORMATIONTURKCELL ANNUAL REPORT 2019
F55
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218
TURKCELL ANNUAL REPORT 2019
TURKCELL ILETISIM HIZMETLERI AS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at and for the year ended 31 December 2019
(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.)
Intangible assets
12.
F56
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 149,443 at 31 December 2019
(31 December 2018: TL 195,425) 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 359,071 at 31 December 2019 (31 December 2018: TL 397,543) and is amortized
over 25 years.
Turkcell - 4.5G License
On 26 August 2015, the “Authorization Tender on IMT Services and Infrastructure” publicly known as
the 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.
The carrying amount of
(31 December 2018: TL 4,125,743).
the 4.5G License
is TL 3,723,232 at 31 December 2019
56
219
SECTORAL AND FINANCIAL INFORMATIONTURKCELL ANNUAL REPORT 2019
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F58
221
SECTORAL AND FINANCIAL INFORMATIONTURKCELL ANNUAL REPORT 2019
F59
13.
TURKCELL ILETISIM HIZMETLERI AS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at and for the year ended 31 December 2019
(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.)
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. At
31 December 2019, no impairment test has been carried out since there is no impairment indicator in any
of the Group’s CGUs.
14.
Investment properties
Cost
Opening balance
Addition
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
Closing balance
Net book amount
31 December
2019
31 December
2018
145,759
987
(100,463)
46,283
(130,334)
103,262
(2,928)
(30,000)
99,938
-
45,821
145,759
(98,958)
(25,765)
(5,611)
(130,334)
16,283
15,425
Determination of the fair values of the Group’s investment properties
The Group engages qualified external experts, authorized by the Capital Markets Board of Turkey, to
perform the valuation of investment properties. Management works closely with the qualified external
experts 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: income capitalization
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 2019 is TL 4,078
(31 December 2018: TL 3,092 and 31 December 2017: TL 2,821). There is TL 522 direct operating
expense for investment properties during the year ended 31 December 2019 (31 December 2018: None
and 31 December 2017: TL 22).
222
TURKCELL ANNUAL REPORT 2019
59
TURKCELL ILETISIM HIZMETLERI AS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at and for the year ended 31 December 2019
(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.)
Investment properties (continued)
14.
The Group’s investment properties and their fair values at 31 December 2019 and 2018 are as follows:
F60
31 December 2019
Level 1
Level 2
Level 3
Valuation Method
Investment properties in Gebze
Investment properties in Ankara
Investment properties in Istanbul
-
-
-
-
-
-
-
-
21,520
Income capitalization approach
14,400
14,585
50,505
Market approach
Market approach
31 December 2018
Level 1
Level 2
Level 3
Valuation Method
Investment properties in Gebze
Investment properties in Ankara
Investment properties in Istanbul
-
-
-
-
-
-
-
-
17,960
Income capitalization approach
15,915
13,800
47,675
Market approach
Market approach
Significant unobservable inputs and sensitivity of fair values of respective investment properties are as
follows:
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 current market conditions 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 similar areas with similar conditions will cause a significant increase/(decrease) in the fair
value.
60
223
SECTORAL AND FINANCIAL INFORMATIONTURKCELL ANNUAL REPORT 2019
F61
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224
TURKCELL ANNUAL REPORT 2019
F62
TURKCELL ILETISIM HIZMETLERI AS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at and for the year ended 31 December 2019
(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.)
16. Asset held for sale and discontinued operations
Disposal of Fintur
In 2016, the Group has committed to plan to exit from Fintur operations in relevant jurisdictions and
initiated an active program to locate a buyer for its associate. In this regard, Fintur has been classified as
held for sale and reported as discontinued operation starting from 1 October 2016.
Equity accounting for Fintur ceased as of from 1 October 2016, and in accordance with IFRS 5, Fintur
has been measured at the lower of the carrying amount and fair value less costs to sell.
The delay in the sales process during 2018 was caused by events and circumstances beyond the Company’s
control.
Fintur, has transferred its total shareholding in Azertel Telekomunikasyon Yatırım Dış Ticaret A.Ş.
the price of
(“Azertel”)
EUR 221,687 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.
International Telecom LLC
(“Azintelecom”) at
to Azerbaijan
Fintur has completed
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.
in Geocell LLC
transfer of all
its shares
the
Fintur, has transferred its total shareholding in Kcell JSC to Kazakhtelecom JSC (“Kazakhtelecom”),
established in Kazakhstan, a fixed line operator controlled by the government of the Republic of
Kazakhstan through sovereign wealth fund Samruk-Kazyna for a total consideration of USD 302,571.
The definitive agreement has been signed on 12 December 2018. The transfer of shares to Kazakhtelecom
and the transfer of proceeds to Fintur were completed simultaneously on 21 December 2018.
The Company signed the definitive agreement on 12 December 2018 to transfer its total shareholding in
Fintur to the other shareholder of Fintur, Sonera Holding B.V. (“Sonera Holding”). The transfer to Sonera
Holding and the transfer of proceeds completed on 2 April 2019 subsequent to obtainment of regulatory
is realized as TL 2,229,595
approvals on 29 March 2019. The final
(EUR 352,851). The share transfer has been completed in 2019, gain on sale of the associate, amounting
to TL 772,436 has been recognized under profit from discounting operations in the consolidated financial
statements.
transaction value
Reconciliation of Fintur sales for the period ended 31 December 2019 is stated as below:
Consideration received or receivable:
Cash
Total disposal consideration
Carrying amount of net assets sold
Gain on sale before income tax and reclassification of foreign
currency translation reserve
Reclassification of foreign currency translation reserve
Income tax expense on gain
Gain on sale after income tax
31 December
2019
2,229,595
2,229,595
(1,825,292)
404,303
368,133
-
772,436
Subsequent to recognition of Fintur disposal for the three months period ended 31 March 2019, the
Company has recognized compensation expense, which has been paid on 23 July 2019 according to Kcell
Share Purchase Agreement amounting to TL 59,224 (USD 10,448).
62
225
SECTORAL AND FINANCIAL INFORMATIONTURKCELL ANNUAL REPORT 2019
F63
17.
TURKCELL ILETISIM HIZMETLERI AS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at and for the year ended 31 December 2019
(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.)
Other non-current assets
Prepaid expenses
Receivables from the Public Administration
Advances given for property, plant and equipment
Deposits and guarantees given
VAT receivable
Others
18.
Deferred tax assets and liabilities
Recognized deferred tax assets and liabilities
2019
133,914
72,848
59,959
34,602
1,902
1,045
304,270
2018
89,603
72,848
216,894
27,071
2,318
12,572
421,306
Deferred tax assets and liabilities at 31 December 2019 and 2018 are attributable to the following:
Property, plant and equipment
and intangible assets
Investment
Derivative instruments
Reserve for employee
termination benefits and
provisions
Tax losses carried forward
Tax allowances
Other assets and liabilities (*)
Deferred tax assets/(liabilities)
Offsetting
Net deferred tax
assets/(liabilities)
Assets
Liabilities
Net
2019
2018
2019
2018
2019
2018
145,242
32,926
24,303
106,128
32,926
15,380
(1,915,567)
-
(349,797)
(936,167)
-
(429,162)
(1,770,325)
32,926
(325,494)
(830,039)
32,926
(413,782)
167,589
258,040
59,176
668,327
1,355,603
(1,166,261)
155,132
224,179
20,554
248,251
802,550
(649,818)
(36,289)
-
-
(30,238)
(2,331,891)
1,166,261
(45,581)
-
-
(101,268)
(1,512,178)
649,818
131,300
258,040
59,176
638,089
(976,288)
-
109,551
224,179
20,554
146,983
(709,628)
-
189,342
152,732
(1,165,630)
(862,360)
(976,288)
(709,628)
(*) Mainly comprises of loans, bonds, prepaid expenses and lease liabilities deferred tax assets.
Movement in deferred tax assets/ (liabilities) for the years ended 31 December 2019 and 2018 were as
follows:
Opening balance
IFRS 9 and 15 effects
Income statement charge
Tax charge relating to components of other comprehensive income
Prior year corporate tax base differences
Exchange differences
Closing balance, net
2019
2018
(709,628)
-
(215,121)
(48,723)
-
(2,816)
(976,288)
(555,062)
(141,213)
159,472
(157,203)
(8,608)
(7,014)
(709,628)
63
226
TURKCELL ANNUAL REPORT 2019
F64
TURKCELL ILETISIM HIZMETLERI AS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at and for the year ended 31 December 2019
(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.)
18. Deferred tax assets and liabilities (continued)
The Group did not recognize deferred income tax assets of TL 6,588,723 (31 December 2018: TL 5,310,000)
in respect of tax losses amounting to TL 1,199,670 (31 December 2018: TL 972,730) that can be carried
forward against future taxable income. The unused tax losses were incurred mainly 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
2020
2021
2022
2023
2024
2025
2026
2027
2028
Indefinite
Total
Amount
297
220,895
135,055
204,933
346,592
1,201,315
51,353
579,546
169,906
3,678,831
6,588,723
19. Trade receivables and accrued revenue
Receivables from subscribers
Accounts and notes receivable
Undue assigned contracted receivables
31 December
2019
2,090,242
745,442
298,291
3,133,975
31 December
2018
1,647,236
555,436
271,306
2,473,978
Trade receivables are shown net of provision for impairment amounting to TL 620,247, as at
31 December 2019 (31 December 2018: TL 728,830). Movements in provision for impairment of trade
receivables and due from related parties are disclosed in Note 36. 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 36.
Letters of guarantee received with respect to the accounts and notes receivable amounted to
TL 332,180 and TL 174,975 at 31 December 2019 and 2018, 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 by the Company
in instalments. When the 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. The undue assigned contracted receivables related to
handset campaigns, which will be billed after one year amounted
to TL 116,462
(31 December 2018: TL 115,001) is presented under non-current trade receivable amounted to TL
148,159 (31 December 2018: TL 115,001).
64
227
SECTORAL AND FINANCIAL INFORMATIONTURKCELL ANNUAL REPORT 2019
F65
TURKCELL ILETISIM HIZMETLERI AS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at and for the year ended 31 December 2019
(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.)
20. Receivables from financial services
Current receivables from financial services
Non-current receivables from financial services
31 December
2019
2,319,122
123,136
2,442,258
31 December
2018
3,318,255
884,686
4,202,941
Movements in provision for impairment of receivables from financial services are disclosed in Note 36.
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. Contract assets
Current contract assets:
Contract assets
Non-current contract assets:
Contract assets
31 December
2019
933,969
933,969
31 December
2018
711,928
711,928
31 December
2019
10,291
10,291
31 December
2018
3,513
3,513
The contract assets represent contract assets 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 long term contract assets.
22.
Inventory
As of 31 December 2019, inventories amounting to TL 178,399 which consist of mainly mobile phone,
modem, tablet, sim card and tower construction materials (31 December 2018: TL 180,434).
228
TURKCELL ANNUAL REPORT 2019
65
TURKCELL ILETISIM HIZMETLERI AS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at and for the year ended 31 December 2019
(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.)
23. Other current assets
F66
Receivables from the Ministry of Transport and
Infrastructure of Turkey
Prepaid expenses
VAT receivable
Receivables from tax office
Advances given to suppliers
Other advances given (Note 40)
Restricted cash
Other
31 December
2019
31 December
2018
669,621
135,881
109,777
99,882
90,454
65,263
-
156,126
1,327,004
415,524
79,149
65,123
83,392
92,715
-
204,077
151,532
1,091,512
As at 31 December 2018, restricted cash amounting to TL 204,077 represents the deposits as guarantees
in connection with the foreign currency loans utilized by Turkcell Finansman.
24. Cash and cash equivalents
Cash in hand
Banks
- Demand deposits
- Time deposits
Other cash and cash equivalents
Cash and cash equivalents
31 December
2019
131
31 December
2018
144
10,238,310
632,022
9,606,288
274
10,238,715
7,413,113
587,007
6,826,106
5,982
7,419,239
As at 31 December 2019, the average effective interest rates of TL, USD and EUR time deposits are
10.7%, 2.3% and 0.4% (31 December 2018: 22.5%, 5.9% and 3.3%) respectively.
As at 31 December 2019, average maturity of time deposits is 38 days (31 December 2018: 35 days).
66
229
SECTORAL AND FINANCIAL INFORMATIONTURKCELL ANNUAL REPORT 2019
F67
TURKCELL ILETISIM HIZMETLERI AS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at and for the year ended 31 December 2019
(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.)
25. Financial assets
Debt investments at fair value through other comprehensive income
Debt investments at FVOCI comprise the following investments in listed and unlisted securities:
Current Assets
Listed debt securities
31 December
2019
345,602
345,602
31 December
2018
42,454
42,454
Fair values
31 December
2019
31 December
2018
Fair value
hierarchy
Valuation technique
Financial assets at fair
value through other
comprehensive income
345,602
42,454
Level 1
Pricing models based
on quoted market
prices at the end of the
reporting period.
Total
345,602
42,454
As of 31 December 2019 and 2018, the nominal and fair value amounts of financial assets are as follows:
Currency
31 December 2019
Nominal amount
(original currency)
Fair value
(in TL)
EUR
EUR
USD
EUR
EUR
USD
Total financial assets
2,000
10,000
300
20,000
17,990
1,000
15,026
67,773
1,878
133,072
121,456
6,397
345,602
Currency
31 December 2018
Nominal amount
(original currency)
Fair value
(in TL)
EUR
Total financial assets
6,981
42,454
42,454
Maturity
16 February 2026
5 February 2021
21 February 2022
17 December 2021
29 May 2020
10 August 2024
Maturity
16 February 2026
During the year, the following gains (losses) were recognized in other comprehensive income.
Gains / (Losses) recognized in other comprehensive income
Related to debt securities
230
TURKCELL ANNUAL REPORT 2019
67
31 December
2019
31 December
2018
3,472
3,472
-
-
F68
TURKCELL ILETISIM HIZMETLERI AS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at and for the year ended 31 December 2019
(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.)
Equity
26.
Share capital
As at 31 December 2019, share capital represents 2,200,000,000 (31 December 2018: 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.
Each holder of shares is entitled to receive dividends as declared and is entitled to one vote at
a meeting in person or by proxy.
Companies with their shareholding percentage are as follows:
Turkcell Holding
Public Share
Other
31 December 2019
TL
(%)
1,122,000
51.00
1,077,004
48.95
996
0.05
31 December 2018
TL
(%)
1,122,000
51.00
1,077,004
48.95
996
0.05
Total
Inflation adjustment to share capital
Inflation adjusted capital
100.00
2,200,000
100.00
(52,352)
2,147,648
2,200,000
(52,352)
2,147,648
As at 31 December 2019, total number of shares pledged as security is 995,509 (2018: 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.
Treasury shares
During 2019, the Company purchased 827,750 of its shares on-market with prices ranging from full TL
11.89 to full TL 12.24. The buyback was approved by the Board of Directors on 27 July 2016 and
30 January 2017. Total amount of TL 9,998 was deducted from equity (2018: TL 94,620).
Dividends
Azerinteltek:
According to the two resolution of the General Assembly Meeting of Azerinteltek within 2018,
shareholders decided to pay dividend amounting to AZN 5,959 (TL 13,103) from the profit realized for
the last quarter of 2017, dividend payment was made in 2018. The share purchase agreement of
Azerinteltek was signed on 15 November 2018 and the transfer of proceeds to Inteltek was completed on
27 December 2018. The Group have lost the control over the subsidiary unconditionally on
27 December 2018 with transfer of money. The transfer of shares to Baltech was completed subsequently
on 11 January 2019.
68
231
SECTORAL AND FINANCIAL INFORMATIONTURKCELL ANNUAL REPORT 2019
F69
TURKCELL ILETISIM HIZMETLERI AS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at and for the year ended 31 December 2019
(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.)
26. Equity (continued)
Dividends (continued)
Inteltek:
According to the resolution of the Ordinary General Assembly Meeting of Inteltek dated 15 March 2019,
the shareholders resolved to pay a dividend amount equal to TL 232,875 out of profits for the year ended
31 December 2018 and a dividend out legal reserves amount equal to TL 9,742. The aggregate amount
of dividends has been paid on 29 April 2019.
According to Board of Directors Resolution of Inteltek dated 16 October 2019 the advanced dividend
payment has been made in 17 October 2019 amounting to TL 35,220 for the first six months of 2019
profit.
Turkcell:
On 12 September 2019, the Company’s General Assembly has approved a dividend distribution for the
year ended 31 December 2018 amounting to TL 1,010,000; this represents a gross cash dividend of full
TL 0.45909 per share. The dividend has been paid to the shareholders on 31 October 2019.
27. 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 26 - 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 26 - 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 discontinued operations
attributable to owners of the Company (in full
TL)
(*) Refer to Note 26 - Treasury shares
2019
2018
2017
3,246,487
2,021,065
1,979,129
2,183,922,483
2,184,750,233
2,193,184,437
1.49
0.93
0.90
2019
2018
2017
2,474,051
2,021,065
1,979,129
2,183,922,483
2,184,750,233
2,193,184,437
1.14
0.93
0.90
2019
2018
2017
772,436
-
-
2,183,922,483
2,184,750,233
2,193,184,437
0.35
-
-
232
TURKCELL ANNUAL REPORT 2019
69
TURKCELL ILETISIM HIZMETLERI AS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at and for the year ended 31 December 2019
(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.)
28. Other non-current liabilities
F70
Consideration payable in relation to
the acquisition of Belarusian Telecom
Deferred revenue
Deposits and guarantees received from dealers
2019
359,554
303
-
359,857
2018
358,304
2,497
3,809
364,610
A consideration payable in relation to the acquisition of Belarusian Telecom represents the present value
of the long-term contingent consideration payables to the seller. Payment of USD 100,000 (equivalent to
TL 594,020 as of 31 December 2019) is contingent on the financial performance of Belarusian Telecom,
and based on management’s estimations, where the amount is expected to be paid in instalments between
2026 and 2030 (31 December 2018: the first quarter of 2023). The discount rate used for calculating
present value of the consideration payable in relation to the acquisition of Belarusian Telecom as of
31 December 2019 is in a range from 5.2% to 6.1% (31 December 2018: 9.5%).
29. Loans and borrowings
Non-current liabilities
Unsecured bank loans
Secured bank loans
Lease liabilities
Debt securities issued
Current liabilities
Unsecured bank loans
Secured bank loans
Lease liabilities
Debt securities issued
31 December
2019
31 December
2018
6,092,170
-
1,101,303
5,483,921
12,677,394
6,712,297
2,415
431,752
481,869
7,628,333
7,244,992
1,862
1,026,955
4,845,827
13,119,636
6,281,855
2,318
387,001
364,735
7,035,909
70
233
SECTORAL AND FINANCIAL INFORMATIONTURKCELL ANNUAL REPORT 2019
F71
TURKCELL ILETISIM HIZMETLERI AS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at and for the year ended 31 December 2019
(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.)
29. Loans and borrowings (continued)
As at 31 December 2019, the Company has utilized, USD 225,000 (equivalent to TL 1,336,545 as at
31 December 2019) and EUR 35,000 (equivalent to TL 232,771 as at 31 December 2019) comparatively,
under loan agreement signed with China Development Bank (“CDB”).
The annual interest rates of the USD and EUR denominated loans utilized as part of the EUR 750,000
loan agreement between the Company and CDB, which were LIBOR + 2.22% and EURIBOR + 2.20%,
have been revised as LIBOR + 2.17% and EURIBOR + 2.15%, respectively. The updated rates are
effective as of 10 April 2019. There have been no changes to the maturity or the repayment terms of the
loan.
The Company signed a loan agreement of USD 150,000 with J.P.Morgan and AB Svensk Exportkredit
within the framework of the insurance of the Swedish Export Credit Agency (EKN). The availability
period of the loan is until April 2021, to be utilized in three equal tranches each with a maturity of 10
years. The total annual cost of the loan is LIBOR + 2.10% for the first tranche and fixed 5.35% for the
second and third tranches. As at 31 December 2019, the Company has utilized USD 50,000 under this
agreement.
The Company signed a loan agreement of EUR 50,000 with BNP Paribas Fortis SA/NV for general
corporate purposes. The respective loan has a maturity of 3 years and 1 week and its annual cost of funding
is in Euribor + 2.05% - 1.85% range. Cost of funding can potentially decline to Euribor + 1.85% subject
to meeting sustainability based environmental objectives set as part of the loan agreement. These
objectives include recycling of electronic waste, use of solar energy for electricity consumption and
reducing paper consumption through increased use of Dergilik application. As of 31 December 2019, the
Company has utilized EUR 50,000 under this agreement.
As at 31 December 2019, the Company sold their debt securities issued with a total nominal value of
USD 10,000 comprising portion of the debt securities issued previously added to its portfolio within the
scope of the buy-back decisions dated 27 July 2016 and 30 January 2017.
In 2019, CMB approval has been taken on issuance of management agreement based lease certificates in
accordance with capital markets legislation in the domestic market, in Turkish Lira terms, at an amount
of up to TL 500,000, on various dates and at various amounts without public offering, as private placement
and/or to be sold to institutional investors. As at 8 October 2019, the Company has issued management
agreement based lease certificates through Halk Yatırım amounting TL 150,000 with the maturity of 4
February 2020.
234
TURKCELL ANNUAL REPORT 2019
71
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T
SECTORAL AND FINANCIAL INFORMATIONTURKCELL ANNUAL REPORT 2019
F73
TURKCELL ILETISIM HIZMETLERI AS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at and for the years ended 31 December 2019
(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.)
30. Employee benefits
Retirement pay liability provision
Unused vacation provision
31 December
2019
222,164
72,167
294,331
31 December
2018
160,613
64,134
224,747
Provision for employee termination benefits
Movements in provision for employee termination benefits are as follows:
1 January
Service cost
Remeasurements
Interest expense
Benefit payments
31 December
2019
160,613
35,831
36,385
25,566
(36,231)
222,164
2018
149,449
26,971
(12,699)
16,957
(20,065)
160,613
The sensitivity of provision for employee termination benefits to changes in the significant actuarial
assumptions is:
31 December 2019
Sensitivity Level
Change in assumption
Impact on provision for employee
termination benefits
31 December 2018
Sensitivity Level
Change in assumption
Impact on provision for employee
termination benefits
Discount Rate
Inflation Rate
1% increase 1% decrease
1% increase
1% decrease
(14.2%)
17.4%
17.9%
(14.7%)
(31,547)
38,657
39,767
(32,658)
Discount Rate
Inflation Rate
1% increase 1% decrease
1% increase
1% decrease
(13.0%)
15.7%
16.5%
(13.7%)
(20,880)
25,216
26,501
(22,004)
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 12,785, TL 9,361 and TL 8,107 in relation
to defined contribution retirement plan for the years ended 31 December 2019, 2018 and 2017,
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 2019, the Group recognized expenses of TL 28,199 regarding this plan
(31 December 2018: TL 26,224).
236
TURKCELL ANNUAL REPORT 2019
73
F74
TURKCELL ILETISIM HIZMETLERI AS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at and for the years ended 31 December 2019
(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.)
31. Deferred revenue
Deferred revenue primarily consists of rent income and it is classified as current at 31 December 2019
and 2018. The amount of deferred revenue is TL 56,544 and TL 8,948 as at 31 December 2019 and 2018,
respectively.
32. Contract liabilities
Current contract liabilities:
Contract liabilities
Non-current contract liabilities:
Contract liabilities
31 December
2019
290,408
290,408
31 December
2018
255,756
255,756
31 December
2019
141,890
141,890
31 December
2018
131,598
131,598
Contract liabilities primarily consists of right of use sold but not used by prepaid subscribers.
Revenue recognized in the current reporting period relates to carried forward contract liabilities is TL
255,756 (2018: TL 181,710).
The following table shows unrealized performance obligation result as of 31 December 2019;
Telecommunications service
Other (*)
Total
(*) Consists of Hospital Revenue
31 December 2019
182,023
480,362
662,385
Management expects that 71% of the transaction price allocated to the unsatisfied contracts as of
31 December 2019 will be recognized as revenue during the next reporting period. The remaining
29% will be recognized in the 2020 financial year.
74
237
SECTORAL AND FINANCIAL INFORMATIONTURKCELL ANNUAL REPORT 2019
F75
TURKCELL ILETISIM HIZMETLERI AS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at and for the years ended 31 December 2019
(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.)
33. Provisions
Non-current provisions:
Balance at 1 January 2019
Provisions recognized
Unwinding of discount
Transfer to current provisions
Effect of changes in exchange rates
Balance at 31 December 2019
Balance at 1 January 2018
Provisions recognized
Unwinding of discount
Transfer to current provisions
Effect of changes in exchange rates
Balance at 31 December 2018
Legal
claims
9,364
12,187
-
(7,916)
-
13,635
Legal claims
8,887
5,859
-
(5,382)
-
9,364
Obligations for
dismantling,
removing and
site restoration
259,358
29,080
14,262
-
21,069
323,769
Obligations for
dismantling,
removing and
site restoration
188,531
47,580
9,760
-
13,487
259,358
Total
268,722
41,267
14,262
(7,916)
21,069
337,404
Total
197,418
53,439
9,760
(5,382)
13,487
268,722
Provision for legal claims are recognized for the probable cash outflows related to legal disputes. Refer
to Note 38.
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.
Obligations for dismantling, removing and site restoration are discounted using a discount rate of 6.1%
at 31 December 2019 (31 December 2018: 5.1%).
238
TURKCELL ANNUAL REPORT 2019
75
TURKCELL ILETISIM HIZMETLERI AS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at and for the years ended 31 December 2019
(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.)
F76
33. Provisions (continued)
Current provisions:
Balance at 1 January 2019
Provisions recognized
Payments
Transfers from non-current provisions
Effect of changes in exchange rates
Balance at 31 December 2019
Balance at 1 January 2018
Provisions recognized/(reversed)(**)
Payments
Unwinding of discount
Transfers from non-current provisions
Disposal of subsidiaries
Effect of changes in exchange rates
Balance at 31 December 2018
(*) Includes share-based payment (Note 30).
(**) Refer to Note 38.1 and 38.3 for legal claim.
34. Trade and other payables
Legal claims
8,593
4,369
(4,344)
7,916
1,306
17,840
Bonus(*)
298,475
521,647
(501,234)
-
6,084
324,972
Legal claims
605,679
(3,520)
(626,214)
26,185
5,381
-
1,082
8,593
Bonus(*)
229,520
408,740
(338,650)
-
-
(2,070)
935
298,475
Payable to suppliers
Accrued treasury share, universal service fund
contribution and contributions to the ICTA’s
expenses
Taxes payable
Accrued selling and marketing expenses
Other
2019
2,728,485
562,536
523,584
100,792
202,074
4,117,471
Total
307,068
526,016
(505,578)
7,916
7,390
342,812
Total
835,199
405,220
(964,864)
26,185
5,381
(2,070)
2,017
307,068
2018
2,372,512
455,496
465,966
91,747
402,453
3,788,174
Payable to suppliers arises in the ordinary course of business.
Taxes payables include VAT payables, special communications taxes payable, frequency usage fees
payable to the ICTA and personnel income taxes payable.
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.
76
239
SECTORAL AND FINANCIAL INFORMATIONTURKCELL ANNUAL REPORT 2019
F77
TURKCELL ILETISIM HIZMETLERI AS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at and for the years ended 31 December 2019
(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.)
35. Derivative financial instruments
The fair value of derivative financial instruments at 31 December 2019 and 2018 are attributable to the
following:
31 December 2019
31 December 2018
Held for trading
Derivatives used for hedging
Total
Assets
443,880
483,448
927,328
Liabilities
72,539
-
72,539
Assets
709,617
730,924
1,440,541
Liabilities
131,097
-
131,097
At 31 December 2019, the total held for trading derivative financial assets of TL 845,513
(31 December 2018: TL 1,356,062) also includes a net accrued interest expense of TL 81,815
(31 December 2018: TL 84,479) and the total held for trading derivative financial liabilities of TL 86,617
(31 December 2018: TL 165,265) also includes a net accrued interest expense of TL 14,078
(31 December 2018: TL 34,168).
Derivatives used for hedging
Participating cross currency swap and cross currency swap contracts
The notional amount and the fair value of participating cross currency swap and cross currency swap
contracts for hedging purposes at 31 December 2019 are as follows:
Sell
Buy
Currency
Notional
amount
Currency
Notional
amount Fair Value
Maturity
Participating cross currency swap contracts
TL
TL
TL
TL
TL
TL
TL
TL
1,820,280
257,478
85,593
145,000
128,833
97,833
64,667
245,951
Cross currency swap contracts
EUR
EUR
USD
USD
USD
USD
USD
USD
433,400
56,004
18,668
50,000
33,333
33,333
16,667
46,670
148,066
7,675
21,581
97,030
57,280
63,358
28,394
9,893
23 October 2025
22 April 2026
22 April 2026
16 September 2020
16 September 2020
16 September 2020
16 September 2020
22 April 2026
TL
115,628
RMB
189,107
50,171
22 April 2026
Derivatives used for hedge accounting financial assets
483,448
EUR 489,404 participating cross currency swap contracts includes TL 833,786 guarantees after the CSA
agreement.
240
TURKCELL ANNUAL REPORT 2019
77
F78
TURKCELL ILETISIM HIZMETLERI AS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at and for the years ended 31 December 2019
(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.)
35. Derivative financial instruments (continued)
Held for trading
Cross currency swap, participating cross currency swap, FX swap and option contracts
The notional amount and the fair value of cross currency swap, participating cross currency swap, FX
swap and option contracts for hedging purposes at 31 December 2019 are as follows:
Sell
Buy
Currency
Notional
amount
Currency
Notional
amount
Fair Value
Maturity
Cross currency swap contracts
TL
TL
TL
TL
TL
TL
TL
242,873
269,451
137,952
138,816
84,224
91,008
35,818
USD
USD
USD
USD
EUR
EUR
RMB
Participating cross currency swap contracts
EUR
EUR
EUR
EUR
172,772
171,092
227,750
77,520
TL
TL
TL
TL
TL
TL
TL
TL
TL
TL
261,912
108,349
135,051
215,354
174,000
186,050
FX swap contracts (*)
USD
USD
Option contracts
20,000
20,000
USD
USD
USD
USD
USD
USD
TL
TL
EUR
USD
USD
TL
Held for trading derivative financial assets
25,000
50,000
70,500
70,500
24,000
24,000
15,040
14,400
45,259
28,002
28,002
37,336
12,000
46,670
18,668
23,335
37,336
30,000
32,669
178,968
148,452
5,625
5,044
10,691
5,141
944
16 September 2020
22 December 2020
20 March 2023
23 March 2023
23 September 2021
23 September 2021
22 April 2026
9,904
21,355
8,705
1,097
12,195
3,930
4,674
7,813
1,506
9,936
22 April 2026
22 April 2026
22 April 2026
16 September 2020
22 April 2026
22 April 2026
22 April 2026
22 April 2026
15 June 2026
22 April 2026
117,860
117,900
67
51
27 February 2020
27 February 2020
28,038
275,000
186
11
436,295
3 January 2020
3 January 2020
(*) There will be a purchase of USD 40,000 on 27 May 2020 in exchange for TL 241,046 in terms of the FX swap contract dated
27 November 2019.
78
241
SECTORAL AND FINANCIAL INFORMATIONTURKCELL ANNUAL REPORT 2019
F79
TURKCELL ILETISIM HIZMETLERI AS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at and for the years ended 31 December 2019
(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.)
35. Derivative financial instruments (continued)
Currency forward contracts
The notional amount and the fair value of currency forward contracts for trading purposes at
31 December 2019 are as follows:
Buy
Currency
USD
USD
USD
USD
USD
USD
USD
Notional
amount
30,000
7,500
7,500
10,000
10,000
7,500
7,500
Held for trading derivative financial assets
Held for trading
Fair Value
2,081
952
916
1,038
1,016
797
785
7,585
Maturity
28 February 2020
30 March 2020
29 June 2020
30 March 2020
29 June 2020
30 March 2020
29 June 2020
FX swap, interest swap and participating cross currency swap contracts
The notional amount and the fair value of FX swap, interest swap and participating cross currency swap
contracts for hedging purposes at 31 December 2019 are as follows:
Sell
Buy
Currency
Notional amount
Currency
Notional
amount Fair Value
Maturity
FX swap contracts
EUR
EUR
EUR
EUR
EUR
EUR
EUR
EUR
EUR
EUR
EUR
EUR
EUR
TL
Interest swap contracts
USD
USD
USD
USD
50,000
75,000
175,000
50,000
50,000
85,000
90,000
20,000
175,000
50,000
70,000
90,000
50,000
11,211
93,340
46,670
37,336
32,669
Participating cross currency swap contracts
TL
TL
105,848
162,552
USD
USD
USD
USD
USD
USD
USD
USD
USD
USD
USD
USD
USD
USD
USD
USD
USD
USD
USD
USD
Total held for trading derivative financial liabilities
242
TURKCELL ANNUAL REPORT 2019
79
55,488
83,232
194,560
55,588
55,588
94,397
100,492
22,332
195,346
55,825
78,154
100,484
55,825
1,860
93,340
46,670
37,336
32,669
18,668
28,002
(3,005)
(4,512)
(8,508)
(2,432)
(2,434)
(4,748)
(2,301)
(510)
(4,875)
(1,448)
(2,036)
(2,612)
(1,448)
(3)
(7,802)
(3,101)
(959)
(849)
(14,265)
(4,691)
(72,539)
07 January 2020
07 January 2020
08 January 2020
08 January 2020
08 January 2020
08 January 2020
21 January 2020
21 January 2020
22 January 2020
28 January 2020
28 January 2020
28 January 2020
28 January 2020
28 February 2020
22 April 2026
22 April 2026
22 April 2026
22 April 2026
22 April 2026
22 April 2026
F80
TURKCELL ILETISIM HIZMETLERI AS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at and for the years ended 31 December 2019
(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.)
35. Derivative financial instruments (continued)
Derivatives used for hedging
Participating cross currency swap and cross currency swap contracts
The notional amount and the fair value of participating cross currency swap and cross currency swap
contracts for hedging purposes at 31 December 2018 are as follows:
Sell
Notional
amount
Currency
Buy
Currency
Notional
amount Fair Value
Maturity
Participating cross currency swap contracts
TL
TL
TL
TL
TL
TL
TL
1,650,000
275,850
435,000
293,500
194,000
386,500
91,700
Cross currency swap contracts
EUR
EUR
USD
USD
USD
USD
USD
500,000
60,000
150,000
100,000
50,000
100,000
20,000
208,462
64,670
167,116
108,777
39,394
79,688
9,234
23 October 2025
22 April 2026
16 September 2020
16 September 2020
16 September 2020
16 September 2020
22 April 2026
TL
123,878
RMB
202,600
53,583
22 April 2026
Derivatives used for hedge accounting financial assets
730,924
EUR 500,000 participating cross currency swap contracts includes TL 690,146 guarantees after CSA
agreement.
80
243
SECTORAL AND FINANCIAL INFORMATIONTURKCELL ANNUAL REPORT 2019
F81
TURKCELL ILETISIM HIZMETLERI AS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at and for the years ended 31 December 2019
(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.)
35. Derivative financial instruments (continued)
Held for trading
FX swap, cross currency swap and participating cross currency swap contracts
The notional amount and the fair value of FX swap, cross currency swap, participating cross currency
swap contracts for hedging purposes at 31 December 2018 are as follows:
Sell
Buy
Currency
Notional
amount
Currency
Notional
amount
Fair Value
Maturity
FX swap contracts
TL
TL
TL
TL
TL
TL
TL
TL
TL
USD
USD
266,760
266,510
719,996
212,736
265,925
1,366
4,199
5,681
6,040
68,654
11,462
Cross currency swap contracts
TL
TL
TL
TL
TL
TL
6,159
6,159
130,488
268,200
128,436
169,368
USD
USD
USD
USD
USD
USD
USD
USD
EUR
EUR
EUR
USD
USD
USD
USD
USD
EUR
TL
TL
TL
TL
118,800
111,732
185,100
183,300
EUR
EUR
EUR
EUR
Participating cross currency swap contracts
EUR
193,800
TL
TL
113,400
USD
Total Held for trading derivative financial liabilities
50,000
50,000
135,000
40,000
50,000
253
680
920
1,000
60,000
10,000
1,000
1,000
24,000
50,000
24,000
24,000
18,000
18,867
30,000
30,000
30,000
20,000
(3,715)
(3,465)
(9,774)
(2,300)
(2,880)
(48)
(939)
(1,277)
(41)
(861)
(4)
(912)
(910)
(9,365)
(5,791)
(2,652)
(24,895)
(22,051)
1,920
(8,296)
(8,642)
2 January 2019
2 January 2019
2 January 2019
2 January 2019
2 January 2019
19 March 2019
16 January 2019
22 January 2019
2 January 2019
15 January 2019
8 January 2019
28 January 2019
24 January 2019
20 March 2023
14 June 2019
19 June 2019
8 January 2019
23 September 2021
14 February 2019
22 April 2026
22 April 2026
(7,148)
16 September 2020
(17,051)
(131,097)
22 April 2026
244
TURKCELL ANNUAL REPORT 2019
81
F82
TURKCELL ILETISIM HIZMETLERI AS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at and for the years ended 31 December 2019
(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.)
35. Derivative financial instruments (continued)
Held for trading
Cross currency swap contracts
The notional amount and the fair value of cross currency swap contracts for hedging purposes at 31
December 2018 are as follows:
Sell
Buy
Currency
Notional amount
Currency
Notional
amount Fair Value
Maturity
Cross currency swap contracts
TL
TL
TL
TL
TL
TL
TL
TL
TL
TL
TL
USD
USD
USD
USD
USD
USD
USD
EUR
EUR
EUR
EUR
Total held for trading derivative financial assets
67,410
95,550
52,164
69,744
242,873
269,451
191,300
98,625
203,600
97,997
105,280
18,000
25,000
14,620
19,780
70,500
70,500
50,000
25,000
50,000
21,500
18,800
27,928
36,751
27,870
38,636
28 January 2019
24 January 2019
16 July 2019
22 July 2019
160,594 16 September 2020
22 December 2020
131,437
13 February 2019
74,095
13 June 2019
57,161
23 July 2019
109,610
37,825
19 December 2019
7,710 23 September 2021
709,617
82
245
SECTORAL AND FINANCIAL INFORMATIONTURKCELL ANNUAL REPORT 2019
F83
TURKCELL ILETISIM HIZMETLERI AS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at and for the years ended 31 December 2019
(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.)
35. Derivative financial instruments (continued)
Fair value of derivative instruments and risk management
This section explains the judgments 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 of 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.
Fair values
a) Participating cross
currency swap
contracts (*)
31 December
2019
31 December
2018
Fair Value
hierarchy
Valuation Techniques
495,436
653,142
Level 3
Pricing models based on
discounted cash Present value of
the estimated future cash flows
based on unobservable yield
curves and end period FX rates
-Held for trading
62,159
(24,199)
-Derivatives used for
hedging
433,277
677,341
b) FX swap, currency,
interest swap and
option contracts
351,768
656,302
Level 2
Present value of the estimated
future cash flows based on
observable yield curves and end
period FX rates
-Held for trading
301,597
602,719
-Derivatives used for
hedging
c) Currency forward
contracts
-Held for trading
50,171
53,583
7,585
7,585
-
-
Level 2
Forward exchange rates at the
balance sheet date
(*) Since the bid-ask spread is unobservable input; in the valuation of participating cross currency swap contracts, prices in the
bid- ask price range that 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 116,684 lower as at
31 December 2019 (31 December 2018: TL 123,995).
There were no transfers between fair value hierarchy levels during the year.
246
TURKCELL ANNUAL REPORT 2019
83
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TURKCELL ANNUAL REPORT 2019
F86
TURKCELL ILETISIM HIZMETLERI AS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at and for the years ended 31 December 2019
(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.)
35. Derivative financial instruments (continued)
Fair value of derivative instruments and risk management (continued)
Movements in the participating cross currency swap contracts for the years ended 31 December 2019 and
31 December 2018 are stated below:
Opening balance
Cash flow effect
Total gain/loss:
Gains recognized in profit or loss
Closing balance
Net off / Offset
31 December
2019
653,142
(582,580)
31 December
2018
950,862
(612,466)
424,874
495,436
314,746
653,142
The Company signed a Credit Support Annex (CSA) against the default risk of parties in respect of a
EUR 433,400 participating cross currency swap transaction executed on 15 July 2016 and restructured
respectively on 26 May 2017 and 9 August 2018. Additionally, in the 25 June 2019, The Company signed
a new CSA to EUR 56,004 participating cross currency swap transaction. As per the CSA, the swap’s
current (mark-to-market) value will be determined on the 10th and 24th calendar day of each calendar
month, and if the mark-to-market value is positive and exceeds a certain threshold, the bank will be
posting cash collateral to the Company which will be equal to an amount exceeding the threshold (i.e. if
the mark-to-market value is negative, the Company would be required to post collateral to the bank by an
amount exceeding the threshold).
With respect to valuations, on a bi-weekly basis, a transfer will take place between the parties only if the
mark-to-market value changes by at least EUR 1,000. Following the execution of CSA, the bank
transferred to the Company EUR 224,843 as collateral (31 December 2019: TL 1,495,341) which was the
amount exceeding the threshold and the Company transferred EUR 99,473 as collateral to the bank
(31 December 2019: TL 661,555) which was the amount exceeding the threshold. The Company clarified
this with the derivative assets included in the statement of financial position because it has the legal right
to offset the collateral amount TL 833,786 that it recognizes under the borrowings and intends to pay
according to the net fair value. This amount was netted from the borrowings and deducted from the
derivative instruments in the balance sheet. As of 31 December 2019, were this transaction not conducted,
derivative financial instruments assets would have been TL 1,679,299 and current borrowings
TL 8,462,119.
Market risk
The Group uses various types of derivatives to manage market risks. All such transactions are carried out
within the guidelines set by the treasury and risk management department. Generally, the Group seeks to
apply hedge accounting to manage volatility in profit or loss.
86
249
SECTORAL AND FINANCIAL INFORMATIONTURKCELL ANNUAL REPORT 2019
F87
TURKCELL ILETISIM HIZMETLERI AS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at and for the years ended 31 December 2019
(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.)
35. Derivative financial instruments (continued)
Fair value of derivative instruments and risk management (continued)
Currency risk
The Group’s risk management policy is to hedge its estimated foreign currency exposure in respect of
borrowing payments with various maturities at any point in time. The Group uses participating cross
currency contracts to hedge its currency risk, mostly with a maturity of over one year from the reporting
date. These contracts are generally designated as cash flow hedges.
The Group designates the hedge ratio, between the amount of the hedged item and the hedging instrument
is 1:1 to hedge its currency risk.
The time value of options in participating cross currency swap contracts are included in the designation
of the hedging instrument and are separately accounted for as a cost of hedging, which is recognized in
equity in a cost of hedging reserve. The Group’s policy is for the critical terms of the participating cross
currency contracts to align with the hedged item.
The Group determines the existence of an economic relationship between the hedging instruments and
hedged item based on the currency, amount and timing of their respective cash flows. The Group assesses
whether the derivative designated in each hedging relationship is expected to be and has been effective in
offsetting changes in cash flows of the hedged item using the hypothetical derivative method.
In these hedge relationships, the main sources of ineffectiveness are;
- The effect of the counterparties’ credit risk on the fair value of the swap contracts, which is not part of
the hedged risk and associated credit risk considered to be very low at inception in the fair value of the
hedged cash flows attributable to the change in exchange rates;
- The entire fair value of the derivative contracts including currency basis was designated as the hedging
instrument in cash flow hedge. The hypothetical derivative is modelled to exclude the impact of currency
basis.
Interest rate risk
The Group adopts a policy of ensuring that its interest rate risk exposure is at a fixed rate. This is achieved
partly by entering into fixed-rate instruments and partly by borrowing at a floating rate and using cross
currency and interest rate swaps as hedges of the variability in cash flows attributable to movements in
interest rates. The Group applies a hedge ratio of 1:1.
The Group determines the existence of an economic relationship between the hedging instrument and
hedged item based on the reference interest rates, tenors, repricing dates and maturities and the notional
or par amounts.
The Group assesses whether the derivative designated in each hedging relationship is expected to be
effective in offsetting changes in cash flows of the hedged item using the hypothetical derivative method.
In these hedge relationships, the main sources of ineffectiveness are:
- The effect of the counterparties’ credit risk on the fair value of the swap contracts, which is not part of
the hedged risk and associated credit risk considered to be very low at inception in the fair value of the
hedged cash flows attributable to the change in interest rates;
250
TURKCELL ANNUAL REPORT 2019
87
F88
TURKCELL ILETISIM HIZMETLERI AS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at and for the years ended 31 December 2019
(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.)
35. Derivative financial instruments (continued)
Fair value of derivative instruments and risk management (continued)
Cash flow sensitivity analysis for variable-rate instruments
A reasonable potential change of 100 basis points in interest rates and 10% change in foreign exchange
currency at the reporting date would have increased (decreased) equity and profit or loss by the amounts
shown below. This analysis assumes that all other variables remain constant.
31 December 2019
Participating cross currency swap
contracts
Cross currency swap contracts
Cash Flow sensitivity (net)
Profit or Loss
100 bp
increase
100 bp
decrease
Equity, net of tax
100 bp
increase
100 bp
decrease
376,920
17,631
394,551
519,967
16,516
536,483
(102,693)
(16,644)
(119,337)
(180,974)
(18,114)
(199,088)
Profit or Loss
100 bp
increase
100 bp
decrease
Equity, net of tax
100 bp
increase
100 bp
decrease
31 December 2018
Participating cross currency swap
contracts
Cross currency swap contracts
Cash Flow sensitivity (net)
937,845
31,584
969,429
9,455
320
9,775
36. Financial instruments
Credit risk
Exposure to credit risk:
(360,596)
(259,066)
1,452 4,765
(254,301)
(359,144)
The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure
to credit risk at the reporting date is:
Trade receivables
Contract assets
Receivables from financial services
Cash and cash equivalents (*)
Participating cross currency swap and FX swap
contracts
Other current assets (**)
Financial asset at fair value through profit or loss
Financial asset at fair value through other
comprehensive income
Due from related parties
19
21
20
24
35
23
25
39
2019
3,282,134
944,260
2,442,258
10,238,584
845,513
99,882
5,368
2018
2,588,979
715,441
4,202,941
7,419,095
1,356,062
287,469
9,409
345,602
4,477
18,208,078
42,454
13,533
16,635,383
(*) Cash in hand is excluded from cash and cash equivalents.
(**) Prepaid expenses, VAT receivable, receivable from the Ministry of Transport and Infrastructure of
Turkey, other and advances given are excluded from other current assets and other non-current assets.
88
251
SECTORAL AND FINANCIAL INFORMATIONTURKCELL ANNUAL REPORT 2019
F89
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252
TURKCELL ANNUAL REPORT 2019
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T
SECTORAL AND FINANCIAL INFORMATIONTURKCELL ANNUAL REPORT 2019
F91
TURKCELL ILETISIM HIZMETLERI AS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at and for the years ended 31 December 2019
(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.)
36. 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 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 reorganization, 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 net impairment losses on financial and contract
assets (Note 10). Subsequent recoveries of amounts previously written off are credited against Net
impairment losses on financial and contract assets (Note 10).
Movements in the provision for impairment of trade receivables, contract assets, other assets and due from
related parties are as follows:
Opening balance
Provision for impairment recognized during the year
Amounts collected
Transfer
Receivables written off during the year as uncollectible
Exchange differences
Closing balance
Opening balance
Provision for impairment recognized during the year
Amounts collected
Unused amount reversed (*)
Receivables written off during the year as uncollectible
Exchange differences
Disposal of subsidiaries
Closing balance
31 December
2019
Contract Asset
7,370
1,105
-
(3,785)
-
-
4,690
31 December
2019
Other Asset
730,811
376,107
(147,858)
3,785
(346,049)
10,782
627,578
31 December
2018
Contract Asset
5,128
2,242
-
-
-
-
-
7,370
31 December
2018
Other Asset
661,928
416,557
(166,641)
(73,023)
(118,553)
10,540
3
730,811
(*) 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 for.
254
TURKCELL ANNUAL REPORT 2019
91
F92
TURKCELL ILETISIM HIZMETLERI AS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at and for the years ended 31 December 2019
(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.)
36. Financial instruments (continued)
Impairment losses (continued)
Movements in the provision for impairment of trade receivables, subscriber receivables, other assets and
cash and cash equivalents from financial services are as follows:
Opening balance
Provision for impairment recognized during the year
Amounts collected
Receivables written off during the year as uncollectible
Exchange differences
Unused amount reversed (*)
Closing balance
31 December
2019
200,273
245,365
(135,862)
(147,067)
791
-
163,500
31 December
2018
125,943
190,509
(96,278)
-
-
(19,901)
200,273
(*) 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 for.
92
255
SECTORAL AND FINANCIAL INFORMATIONTURKCELL ANNUAL REPORT 2019
F93
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256
TURKCELL ANNUAL REPORT 2019
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F94
TURKCELL ILETISIM HIZMETLERI AS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at and for the years ended 31 December 2019
(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.)
36. 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:
Foreign currency denominated assets
Other non-current assets
Financial asset at fair value through other
comprehensive income
Due from related parties - current
Trade receivables and contract assets
Other current assets
Cash and cash equivalents
Foreign currency denominated liabilities
Loans and borrowings - non-current
Debt securities issued - non-current
Lease obligations - non-current
Other non-current liabilities
Loans and borrowings - current
Debt securities issued - current
Lease obligations - current
Trade and other payables - current
Due to related parties
31 December 2019
EUR
USD
RMB
71
5,412
1,393
152
17,383
10,602
173,376
202,977
(351,444)
(923,188)
(2,399)
(60,529)
(402,507)
(55,060)
(725)
(156,320)
(1,022)
(1,953,194)
50,721
581
38,496
4,979
1,203,574
1,303,763
(577,675)
-
(19,282)
-
(385,371)
-
(5,178)
(44,103)
(51)
(1,031,660)
-
-
-
-
-
-
-
(192,367)
-
-
-
(44,880)
-
-
(555)
-
(237,802)
Loans defined as hedging instruments (*)
Exposure related to derivative instruments
Participating cross currency swap and FX swap contracts
Net exposure
-
145,105
-
1,830,226
80,009
(430,816)
(13,608)
234,367
(3,435)
(*) The Company designated EUR 145,105 of bank loan, as hedging instruments in order to hedge the
foreign currency risk arising from the translation of net assets of the subsidiaries operating in Europe from
EUR to Turkish Lira. Foreign exchange gains/losses of the related loans are recognized under equity as
“gains/(losses) on net investment hedges” in order to offset the foreign exchange gains/(losses) arising
from the translation of the net assets of investments in foreign operations to Turkish Lira.
The table above shows the Company’s distribution of balance sheet and derivative foreign exchange
position should be taken into account with nominal values of the option transactions. The Company
monitors the delta adjusted position of the option transactions. As of 31 December 2019, the Company
has USD 129,825 net foreign currency position.
94
257
SECTORAL AND FINANCIAL INFORMATIONTURKCELL ANNUAL REPORT 2019
F95
TURKCELL ILETISIM HIZMETLERI AS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at and for the years ended 31 December 2019
(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.)
36. Financial instruments (continued)
Foreign exchange risk (continued)
Foreign currency denominated assets
Other non-current assets
Financial asset at fair value through other
comprehensive income
Due from related parties-current
Trade receivables and contract assets
Other current assets
Cash and cash equivalents
Foreign currency denominated liabilities
Loans and borrowings – non-current
Debt securities issued - non-current
Lease obligations - non-current
Other non-current liabilities
Loans and borrowings - current
Debt securities issued - current
Lease obligations - current
Trade and other payables - current
Due to related parties
31 December 2018
EUR
USD
RMB
222
-
1,965
15,786
70,710
786,322
875,005
(481,438)
(921,102)
(4,719)
(68,107)
(390,876)
(55,074)
(2,951)
(233,805)
(686)
(2,158,758)
11
7,043
223
52,140
18,977
384,800
463,194
(748,142)
-
(24,068)
-
(523,595)
-
(8,223)
(32,946)
(52)
(1,337,026)
-
-
-
-
-
-
-
(224,519)
-
-
-
(29,244)
-
-
(70,553)
-
(324,316)
Exposure related to derivative instruments
Participating cross currency swap and FX swap contracts
Net exposure
1,082,036
(201,717)
811,167
(62,665)
202,600
(121,716)
258
TURKCELL ANNUAL REPORT 2019
95
TURKCELL ILETISIM HIZMETLERI AS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at and for the years ended 31 December 2019
(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.)
F96
36. Financial instruments (continued)
Exposure to currency risk
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.
A 10% strengthening/weakening of the TL, UAH, BYN against the following currencies as at
31 December 2019 and 31 December 2018 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.
Sensitivity analysis
31 December 2019
Profit/(Loss)
Equity
Appreciation of
foreign currency
Depreciation of
foreign currency
Appreciation of
foreign currency
Depreciation of
foreign currency
1- USD net asset/liability
2- Hedged portion of USD risk (-)
3- USD net effect (1+2)
4- EUR net asset/liability
5- Hedged portion of EUR risk (-)
6- EUR net effect (4+5)
7- Other foreign currency net asset/liability
(RMB)
8- Hedged portion of other foreign currency risk
(-) (RMB)
9- Other foreign currency net effect (7+8)
Total (3+6+9)
47,527
-
47,527
(9,050)
-
(9,050)
(290)
-
(290)
38,187
(47,527)
-
(47,527)
9,050
-
9,050
290
-
290
(38,187)
-
(6,135)
(6,135)
-
(39,558)
(39,558)
-
(1,379)
(1,379)
(47,072)
-
6,135
6,135
-
39,558
39,558
-
1,379
1,379
47,072
1- USD net asset/liability
2- Hedged portion of USD risk (-)
3- USD net effect (1+2)
4- EUR net asset/liability
5- Hedged portion of EUR risk (-)
6- EUR net effect (4+5)
7- Other foreign currency net asset/liability
(RMB)
8- Hedged portion of other foreign currency risk
(-) (RMB)
9- Other foreign currency net effect (7+8)
Total (3+6+9)
Sensitivity analysis
31 December 2018
Profit/(Loss)
Equity
Appreciation of
foreign currency
Depreciation of
foreign currency
Appreciation of
foreign currency
Depreciation of
foreign currency
(106,121)
-
(106,121)
(37,775)
-
(37,775)
(9,275)
-
(9,275)
(153,171)
96
106,121
-
106,121
37,775
-
37,775
9,275
-
9,275
153,171
-
(9,596)
(9,596)
-
(23,613)
(23,613)
-
364
364
(32,845)
-
9,596
9,596
-
23,613
23,613
-
(364)
(364)
32,845
259
SECTORAL AND FINANCIAL INFORMATIONTURKCELL ANNUAL REPORT 2019
F97
TURKCELL ILETISIM HIZMETLERI AS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at and for the years ended 31 December 2019
(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.)
36. Financial instruments (continued)
Interest rate risk
As at 31 December 2019 and 2018 the interest rate profile of the Group’s variable rate interest-bearing
financial instruments was:
31 December 2019
31 December 2018
Effective
Interest
Note
Rate
Effective
interest
Carrying
Amount
rate
4.3%
2.1%
Carrying
Amount
(4,589,157)
(6,975,890)
Variable rate instruments
USD floating rate loans
EUR floating rate loans
29
29
4.4%
2.2%
(4,478,622)
(5,638,725)
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 2019 and 2018:
Profit or loss
Equity
100 bps
increase
100 bps
decrease
100 bps
increase
100 bps
decrease
(225,528)
(225,528)
225,528
225,528
(234,196)
(234,196)
234,196
234,196
-
-
-
-
-
-
-
-
31 December 2019
Variable rate instruments (financial
liability)
Cash flow sensitivity (net)
31 December 2018
Variable rate instruments (financial
liability)
Cash flow sensitivity (net)
Fair values
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 judgments 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.
260
TURKCELL ANNUAL REPORT 2019
97
F98
TURKCELL ILETISIM HIZMETLERI AS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at and for the years ended 31 December 2019
(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.)
36. 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
31
December
2019
31
December
2018
359,554
358,304
Contingent
consideration
Unobservable
Inputs
Risk-adjusted
discount rate
Expected
settlement
date
Inputs
31
December
2019
31
December
2018
5.2% - 6.1%
9.5%
in
instalments
between
2026-2030
first
quarter of
2023
Relationship of unobservable inputs to
fair value
An increase/decrease in the discount rate
by 100 bps would change FV by TL
(28,622) and TL 31,460, respectively.
If expected settlement date
increase/decrease by 1-year, FV would
change by TL (19,588) and TL 20,720,
respectively.
Changes in the consideration payable in relation to acquisition of Belarusian Telecom for the years ended
31 December 2019 and 31 December 2018 are stated below:
Opening balance
Gains recognized in profit or loss
Closing balance
Financial assets:
2019
358,304
1,250
359,554
2018
323,691
34,613
358,304
Carrying values of a significant portion of financial assets do not differ significantly from their fair
values due to their short-term nature. Fair values of financial assets are presented in Note 25.
Financial liabilities:
As at 31 December 2018, fair values of financial liabilities 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.
As at 31 December 2019, 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. Material differences are identified only for the following
borrowings:
Bank loans
Carrying
amount
4,149,275
Fair
value
4,192,304
As at 31 December 2019, the fair value of debt securities issued by the Company in 2015 with a nominal
value
3,058,366
interest
and
(31 December 2018: TL 2,380,855).
of USD
500,000
is TL
(Note
fixed
29),
rate
As at 31 December 2019, the fair value of debt securities issued by the Company in 2018 with a nominal
value
2,961,300
interest
and
(31 December 2018: TL 2,329,011).
of USD
500,000
is TL
(Note
fixed
29),
rate
Fair value of cash and cash equivalents and debt securities issued are classified as level 1 and fair value
of other financial assets and liabilities are classified as level 2.
98
261
SECTORAL AND FINANCIAL INFORMATIONTURKCELL ANNUAL REPORT 2019
F99
TURKCELL ILETISIM HIZMETLERI AS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at and for the years ended 31 December 2019
(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.)
37. Guarantees and purchase obligations
At 31 December 2019, outstanding purchase commitments with respect to property, plant and equipment,
inventory, advertising and sponsorship amount to TL 819,508 (31 December 2018: TL 1,353,789).
Payments for these commitments will be made within 4 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 4,842,015 at 31 December 2019 (31 December 2018: TL 6,530,374).
38. Commitments and Contingencies
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 USD 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. The Company acquired the A license providing the widest frequency band for a
consideration of EUR 358,000 (excluding VAT). The license is effective for a duration of 20 years starting
from 30 April 2009. According to the agreement, the Company has provided IMT 2000/UMTS services
starting from 30 July 2009.
4.5G License
The 4.5G licensing process is finalized by the signing of the IMT License Commitments Document by
the Company, whereby, ICTA granted the Company a 4.5G License on 27 October 2015. The 4.5G
License is effective for 13 years until 30 April 2029. According to the License, the Company 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, which was valid
till 28 August 2018. However, in accordance with the Edict of the President of the Republic of Belarus
dated 26 November 2015, numbered 475, the license is 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 had been provided
with additional time by the license authority to fulfill all 2G signal coverage requirements regarding the
settlements until the end of 2019. As of 31 December 2019, the Group considers that terms and obligations
of the license agreement has been met.
262
TURKCELL ANNUAL REPORT 2019
99
TURKCELL ILETISIM HIZMETLERI AS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at and for the years ended 31 December 2019
(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.)
F100
38. Commitments and Contingencies (continued)
License Agreements (continued)
lifecell:
lifecell owns eleven activity licenses, for GSM 900, 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 31 December 2018, lifecell owned 27 frequency use licenses for IMT (LTE-2600, LTE-1800,
IMT-2000 (UMTS), GSM-900, GSM-1800, CDMA-800. Wi-fi and microwave Radio relay and
Broadband Radio Access, which are regional and national. Licenses for IMT (LTE-2600, LTE-1800) and
GSM-1800 were issued on 4G tenders, held in Q1’2018. Additionally, lifecell holds a specific number
range - three NDC codes for mobile networks, twenty two 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”.
Inteltek:
Our affiliate, Inteltek, on which the Company holds 55% of its shares, has been incorporated in order to
establish and operate central system for games of chance through multi-access electronic platforms.
Inteltek operated games of chance and assigned mobile sub agencies to operate the fixed odds and
paramutual betting games basing on the agreements executed with Spor Toto. The term of the agreement
executed between Spor Toto and Inteltek has been expired on 29 August 2019. In this context, activities
of Inteltek ceased on 29 August 2019.
As at 31 December 2019, Inteltek provided to Spor Toto letters of guarantee amounting TL 25,000
(31 December 2018: TL 184,752).
Subsequent to year end, the Company signed a binding termsheet on 14 January 2020 to transfer its
shareholding of 55% in Inteltek (Note 42).
Kibris Telekom:
On 27 April 2007, Kibris Telekom signed the License Agreement for the Installation and Operation of a
Digital, Cellular and, Mobile Telecommunication System (“Mobile Communication License
Agreement”) with the Ministry of Communications and Public Works of the Turkish Republic of Northern
Cyprus, effective from 1 August 2007, and 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 and 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. In 2012, Kibris Telekom acquired Internet Service Provider and Infrastructure establishment and
operation licenses.
Lifecell Digital:
In December 2018, Lifecell Digital acquired an infrastructure license in order to operate as an Internet
Service Provider in Turkish Republic of Northern Cyprus.
100
263
SECTORAL AND FINANCIAL INFORMATIONTURKCELL ANNUAL REPORT 2019
F101
TURKCELL ILETISIM HIZMETLERI AS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at and for the years ended 31 December 2019
(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.)
38. Commitments and Contingencies (continued)
The following disclosures comprise of material legal lawsuits, investigations and in-depth investigations
against the Company.
Disputes on Special Communication Tax and Value Added Tax
a) Disputes on SCT for the year 2011
The Large Taxpayers Office levied Special Communication Tax (SCT) and tax penalty on the Company
as a result of the Tax Investigation for the year 2011. The Company filed lawsuits for the cancellation of
the notification regarding the aforementioned SCT assessment. The court partially accepted and partially
rejected the cases and the parties appealed the decisions regarding the parts against them. The Large
Taxpayers 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.
While the cases are pending before the court of appeal the Company filed application for the restructuring
as per Law no. 6736. The tax Office has rejected the application. The Company has also filed a case for
the cancellation of aforementioned rejection act of the Tax Office. The hearing was held in this case and
it is expected that the court will grant a decision. In the cases regarding the cancellation of the SCT
assessment for the year 2011, Council of State accepted our appeal and decided to reverse the first instance
court decision in favor of the Company, on the ground that; in the case filed for the cancellation of the
rejection act regarding our Company’s request to restructure the cases filed for the year 2011, the court
decided in favor of the Company (decision has not been notified to the Company yet) and since the
mentioned case will affect these cases, finalization of the respective decision should be waited.
Based on the management opinion, an outflow of resources embodying economic benefits is deemed as
less than probable on aforementioned transactions, thus, no provision is recognized in the consolidated
financial statements as at and for the year ended 31 December 2019 (31 December 2018: None).
b) Disputes on SCT and VAT for the years 2015, 2016 and 2017
Turkish telecom sector players including the Company have been subjected to a limited tax audit with
respect of VAT and SCT for 2015 and 2016. At the end of the tax audit process for the Company no
issues to be criticized were identified for 2015. However, certain bundle offers and services offered by
the Company are subject to dispute by the tax authority for 2016.
As of 31 December 2019, respectively tax claims arising from SCT and VAT amounting to TL 134,537
and TL 113,367 including the principal and penalty amounts have been notified to the Company.
The Large Taxpayers Office levied Special Communication Tax (SCT) and tax penalty on the Company
amounting to TL 85,125 in total, of which SCT amounting to TL 34,050 and penalty amounting to
TL 51,075 based on the claim stated on Tax Investigation Reports prepared for the year 2015, that the
Company should pay Special Communication Tax over the prepaid card sales made by the distributors.
Tax investigation closing minute has been signed for the year 2016 and the Tax Investigation Reports
delivered for the year 2016. Special Communication Tax (SCT) and tax penalty on the Company
amounting to TL 61,733 in total, of which SCT amounting to TL 24,693 and penalty amounting to
TL 37,040 based on the claim stated on Tax Investigation Reports prepared for the year 2016.
As a result of the settlement made with Tax Authority, an amount included late payment interest was
settled as TL 199,000 for assessments above. Settled amount has been paid within the legal term and
assessments were closed in 2019.
The investigation regarding SCT for prepaid card sales made by the distributors for the year 2017 is still
ongoing.
264
TURKCELL ANNUAL REPORT 2019
101
TURKCELL ILETISIM HIZMETLERI AS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at and for the years ended 31 December 2019
(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.)
38. Commitments and Contingencies (continued)
Disputes regarding the Law on the Protection of Competition
F102
The investigation initiated by the Competition Board with respect to the practices of the Company
regarding the distributors and their dealers in the distribution network. With this decision The Competition
Board rejected the claims that the Company determined the resale price. But with the same decision, The
Competition Board decided to apply administrative fine on the Company amounting to TL 91,942, on the
ground that the Company forced its sub dealers to actual exclusivity. The Company filed a lawsuit for the
stay of execution and cancellation of the aforementioned Board decisions regarding the parts against itself.
The Court rejected the case. The Company appealed the decision with the request of the stay of the
execution. The appeal process is ongoing.
Three private companies filed a lawsuits against the Company in relation with this case claiming in total
of TL 112,084 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. Among these cases, in the case filed for the
compensation of total TL 110,484 material damages together with compensation amounting to 3 times of
the damage and interest, the court decided to reject the case in favor of the Company, at the hearing on
12 June 2019. The reasoned decision was notified to the Company. The plaintiff appealed the case before
Regional Administrative Court. The Company replied to plaintiff’s appeal request in due time. The appeal
process, before Regional Administrative Court, is pending.
On the other hand, a lawsuit was filed by a third party, for the cancellation of the part of the
aforementioned Competition Board decision, regarding the rejection of the claims that the Company
determined the resale price. The Council of State cancelled this part of the aforementioned Competition
Board decision. Therewith Competition Board launched a new investigation. As a result of the new
investigation The Competition Board decided to apply administrative fine amounting to TL 91,942 on the
Company. The reasoned decision was received to the Company on 12 June 2019. The Company has taken
all legal actions by requesting the cancellation of the aforementioned decision and its withdrawal by the
Competition Authority. Subsequently, the Competition Authority accepted some of the claims of the
Company and reduced the administrative fine to 61,294 TL with its decision. Short decision was notified
to the Company. The reasoned decision was also notified to the Company. All necessary legal actions
shall be taken against this decision in legal term. Following this decision, in the case filed for the
cancellation of the Competition Board administrative fine of 91,942 TL, the court decided that there is no
need to render a decision because of devoid of essence.
Based on the management opinion, the probability of an outflow of resources embodying economic
benefits is less than probable, thus, no provision is recognized in the consolidated financial statements as
at and for the year ended 31 December 2019 (31 December 2018: None).
Ministry of Trade Administrative Fine
The Ministry of Trade prepared a report upon the investigation initiated against the Company regarding
subscriber agreements, distance contracts, value added services and commitment campaigns including
device procurement for the year 2015. The Company filed a lawsuit for a stay of execution and
cancellation of the Notice of Administrative Fine imposed by Istanbul Governorship Directorate of
Commerce based on the aforementioned Ministry report, amounting to TL 138,173 and the Decision of
Administrative Fine of Istanbul Governorship Directorate of Commerce. The Court rejected the stay of
execution request of the Company. The Company objected to the decision, objection was rejected. The
hearing was held on 17 September 2019. The Court accepted the case in favor of the Company and
cancelled the administrative fine. İstanbul Governorship appealed the case before Regional
Administrative Court. The Company replied to the appeal request in due time.
Based on management opinion, the probability of an outflow of resources embodying economic benefits
is less than probable, and thus, no provision is recognized in the consolidated financial statements as at
and for the year ended 31 December 2019 (31 December 2018: None).
102
265
SECTORAL AND FINANCIAL INFORMATIONTURKCELL ANNUAL REPORT 2019
F103
TURKCELL ILETISIM HIZMETLERI AS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at and for the years ended 31 December 2019
(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.)
38. Commitments and Contingencies (continued)
Other ongoing lawsuits and tax investigations
In addition to the aforementioned SCT investigation for prepaid card sales, the following tax and treasury
share investigations in the Company have commenced: (i) for 2017 fiscal year regarding SCT for other
transactions, (ii) 2018 fiscal year regarding SCT, Corporate Income Tax and Value Added Tax and, (iii)
treasury share investigation regarding July-August-September 2019 period.
31 December 2019
Anticipated Maximum
Risk
(excluding accrued
interest)
31 December 2018
Anticipated Maximum
Risk
(excluding accrued
interest)
Subject
31 December 2019
Provision
31 December 2018
Provision
Other Disputes
18,763
-
-
-
JSC Kazakhtelecom initiated arbitration proceedings against the Company related to its acquisition of
JSC Kcell shares, which was subsidiary of the Fintur. JSC Kazakhtelecom presented its claim. The
arbitration proceeding is in a very early stage.
Based on management opinion, an outflow of resources embodying economic benefits for the cases above
mentioned is deemed to be less than probable, and thus, no provision is recognized in the consolidated
financial statements as at and for the year ended 31 December 2019 (31 December 2018: None).
Due to probability of an outflow of resources embodying economic benefits with regards to notification
of Information and Communication Technologies Authority for wireless fee related to 2018 fiscal year;
based on management opinion in accordance with the relevant legislation while reserving right to take
legal action, totally TL 128,429 paid in November 2019 with reservation for 2018 and 2019 fiscal years
and legal actions has been taken. This payment is reflected in current year income statement.
39. Related parties
Transactions with key management personnel
Key management personnel comprise the Group's members of the Board of Directors and chief officers.
There are no loans to key management personnel as of 31 December 2019 and 2018.
The Group provides additional benefits to key management personnel and contributions to retirement
plans based on a pre-determined ratio of compensation.
Short-term benefits
Termination benefits
Share based payments
Long-term benefits
31 December
2019
78,775
56,720
6,247
653
142,395
31 December
2018
80,868
31 December
2017
62,187
121
11,473
755
93,217
604
12,509
548
75,848
266
TURKCELL ANNUAL REPORT 2019
103
F104
TURKCELL ILETISIM HIZMETLERI AS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at and for the years ended 31 December 2019
(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.)
39. Related parties (continued)
The following balances are outstanding at the end of the reporting period in relation to transactions with
related parties:
Due from related parties
Telia Carrier Germany GmbH (“Telia Carrier”)
Emt Estonia (“Emt”)
Vimpelcom OJSC (“Vimpelcom”)
Kyivstar GSM JSC (“Kyivstar”)
Other
31 December
2019
3,588
110
-
-
779
4,477
31 December
2018
1,741
99
9,138
210
2,345
13,533
There is no net of allowance for doubtful receivables of due from related parties at 31 December 2019
(31 December 2018: None).
Due from Telia Carrier, Emt, Vimpelcom and Kyivstar are resulting from telecommunications services.
Due to related parties
Turkcell Vakfı
Sofra
Telia
Kyivstar GSM JSC (“Kyivstar”)
Wind Telecomunicazioni S.P.A. (“Wind”)
Teliasonera International Carrier Switzerland Ag
Other
31 December
2019
9,145
1,942
331
-
-
-
664
12,082
31 December
2018
39,544
-
469
3,591
886
523
318
45,331
Due to Sofra mainly resulting from meal coupon and card services received.
Due to Telia, Kyivstar and Wind mainly resulting from telecommunications services received.
The Group’s exposure to currency risk related to outstanding balances with related parties is disclosed in
Note 36.
The following transactions occurred with related parties:
Revenue from related parties
Sales to Sonera Holding
Revenue from sales of discontinued operations
(Note 16)
Sales to Kyivstar (*)
Telecommunications services
Sales to Telia Carrier
Telecommunications services
Sales to Vimpelcom (*)
Telecommunications services
Sales to Azercell Telecom LLC (“Azercell”) (**)
Telecommunication services
Sales to other related parties
2019
2018
2017
772,436
-
-
27,050
52,946
30,875
12,934
7,941
10,020
6,191
5,418
7,230
-
7,004
825,615
256
7,920
74,481
1,583
11,324
61,032
104
267
SECTORAL AND FINANCIAL INFORMATIONTURKCELL ANNUAL REPORT 2019
F105
TURKCELL ILETISIM HIZMETLERI AS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at and for the years ended 31 December 2019
(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.)
39. Related parties (continued)
Related party expenses
Charges from Kyivstar (*)
Telecommunications services
Charges from Sofra
Meal coupons and cards
Charges from Telia Carrier
Telecommunications services
Charges from Vimpelcom (*)
Telecommunications services
Charges from Wind (*)
Telecommunications services
Charges from Turkcell Vakfı
Donation
Charges from Azercell (**)
Telecommunications services
Charges from Hobim (***)
Invoicing and archiving services
Charges from other related parties
2019
2018
2017
40,210
77,174
49,178
8,874
7,503
1,228
274
-
-
-
2,000
60,089
-
-
6,047
3,120
2,751
10,853
4,812
44,247
-
-
79
734
-
9,799
144,909
16,993
17,001
97,879
Transactions with Vimpelcom, Kyivstar and Wind include transactions until 18 June 2019,
Transactions with Azercell include transactions until 5 March 2018,
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:
The Company had entered into invoice printing and archiving agreements with Hobim under which Hobim
provided the Company with monthly invoice printing services, managed the archiving of invoices and
subscription documents. Prices of the agreements were determined through the evaluation of alternative
proposals.
Transactions with Vimpelcom:
Vimpelcom, an entity under common control with Alfa, is rendering and receiving telecommunications
services such as interconnection and roaming.
Transactions with Telia Carrier:
Telia Carrier, a subsidiary of Telia, is rendering and receiving telecommunications services such as
interconnection and roaming.
268
TURKCELL ANNUAL REPORT 2019
105
F106
TURKCELL ILETISIM HIZMETLERI AS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at and for the years ended 31 December 2019
(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.)
39. Related parties (continued)
Transactions with Azercell:
Azercell, a subsidiary of Telia, is rendering and receiving telecommunications services such as
interconnection and roaming.
Transactions with Turkcell Vakfı:
On 11 October 2018, Turkcell Vakfı, was incorporated for rendering social responsibility and donation
transactions.
Transactions with Wind:
Wind, an entity under common control with Alfa, is rendering and receiving telecommunications services
such as interconnection and roaming.
Transactions with Sofra:
Sofra, a joint venture entity of Turkcell Odeme, BELBİM Elektronik Para ve Ödeme Hizmetleri A.Ş. and
Posta ve Telgraf Teşkilatı A.Ş. ("PTT") is providing services via various means such as service coupons,
meal coupons, meal card, electronic coupon and/or smart card in vehicle payment.
106
269
SECTORAL AND FINANCIAL INFORMATIONTURKCELL ANNUAL REPORT 2019
F107
TURKCELL ILETISIM HIZMETLERI AS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at and for the years ended 31 December 2019
(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.)
40. Subsidiaries
The Group’s ultimate parent company is Turkcell Holding, while subsidiaries, associates and a joint
venture of the Company as at 31 December 2019 and 31 December 2018 are as follows:
Subsidiaries
Name
Kibris Telekom
Country of
Incorporation
Turkish Republic of
Northern Cyprus
Turkcell Global Bilgi
Turkey
Turktell
Turkcell Superonline
Turkcell Satis
Eastasia
Turkcell Teknoloji
Global Tower
Rehberlik
Lifecell Ventures
Beltel
Turkcell Gayrimenkul
Global LLC
UkrTower
Turkcell Europe
Turkcell Odeme
lifecell
Turkcell Finansman
Beltower
Turkcell Enerji
Paycell LLC
Lifecell Digital
TÖFAŞ
Turkcell Sigorta
Yaani Digital BV (*)
Belarusian Telecom
Lifetech
Inteltek
Associates
Name
Fintur (Note 16)
Turkey
Turkey
Turkey
Netherlands
Turkey
Turkey
Turkey
Netherlands
Turkey
Turkey
Ukraine
Ukraine
Germany
Turkey
Ukraine
Turkey
Republic of Belarus
Turkey
Ukraine
Turkish Republic of
Northern Cyprus
Turkey
Turkey
Netherlands
Republic of Belarus
Republic of Belarus
Turkey
Country of
Incorporation
Netherlands
Türkiye'nin Otomobili
Turkey
Business
Telecommunications
Customer relations and human
resources management
Information technology, value added
GSM services and entertainment
investments
Telecommunications, television
services and content services
Sales, delivery and digital sales
services
Telecommunications investments
Research and development
Telecommunications infrastructure
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
Consumer financing services
Telecommunications
Interest free consumer financing
services
Insurance agency activities
Internet search engine and browser
services
Telecommunications
Information technology,
programming and technical support
Information and Entertainment
Services
Business
Telecommunications investments
Electric passenger car development,
production and trading activities
Joint Venture
Name
Sofra
Country of
Incorporation
Turkey
Business
Meal coupons and cards
Effective Ownership Interest
31 December
2019 (%)
31 December
2018 (%)
100
100
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
100
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
Effective Ownership Interest
31 December
2019 (%)
-
31 December
2018 (%)
41
19
19
Effective Ownership Interest
31 December
2019 (%)
33
31 December
2018 (%)
33
(*) On 13 May 2019, the Company signed a share purchase agreement to acquire 100% of the shares of Yaani Digital BV (formerly
“NTENT Netherlands BV”). The transfer of legal shares was completed on 14 May 2019. The acquisition date on which all identifiable assets acquired
and liabilities assumed is expected to be realized in 2020. As of 31 December 2019, TL 65,263 was paid (Note 23). The outstanding payments are
expected to be completed by the end of 2020, depending on the seller's fulfillment of its obligations under the share purchase agreement.
107
270
TURKCELL ANNUAL REPORT 2019
F108
TURKCELL ILETISIM HIZMETLERI AS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at and for the years ended 31 December 2019
(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.)
40. Subsidiaries (continued)
Details of non-wholly owned subsidiaries that have material non-controlling interests in the Company are
disclosed below:
Name of subsidiary
Place of
incorporation
and principal
place of business
Proportion of ownership
interests and voting rights
held by non-controlling
interest
31
December
2019
31
December
2018
Profit/(loss) allocated to
non-controlling interests
31
December
2019
31
December
2018
Accumulated non-
controlling interests
31
December
2019
31
December
2018
Inteltek
Turkey
45.00%
45.00%
30,182
105,112
36,307
131,506
Individually immaterial
subsidiaries with non –
controlling interest
21
51,158
148
304
30,203
156,270
36,455
131,810
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) / Income (net)
Gain on Sale of Investments
Profit for the year
Other comprehensive income/(loss) for the year
Dividend paid to non-controlling interests
Net cash (outflow)/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
2019
31 December
2018
84,896
6,516
6,286
4,444
80,682
2019
141,783
(74,711)
-
67,072
640
(125,027)
(63,238)
20,001
(277,837)
14,979
(306,095)
403,427
9,043
115,080
5,154
292,236
2018
208,239
(93,133)
118,476
233,582
179
(31,283)
31,380
158,946
(69,518)
56,949
177,757
The Company signed a binding termsheet on 14 January 2020 to transfer its shareholding of 55% in
Inteltek (Note 42).
108
271
SECTORAL AND FINANCIAL INFORMATIONTURKCELL ANNUAL REPORT 2019
F109
TURKCELL ILETISIM HIZMETLERI AS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at and for the years ended 31 December 2019
(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.)
41. Cash flow information
Net financial liabilities reconciliation:
Debt
securities
issued
(5,210,562)
(311,649)
563,241
(1,006,820)
(5,965,790)
Debt
securities
issued
(1,875,521)
-
(2,188,313)
432,140
(1,578,868)
(5,210,562)
Loans
(13,531,027)
(29,060,490)
32,003,647
(2,219,012)
(12,806,882)
Lease
liabilities
(1,413,956)
-
1,215,320
(1,334,419)
(1,533,055)
Total
(20,155,545)
(29,372,139)
33,782,208
(4,560,251)
(20,305,727)
Derivative
Assets, net
1,190,797
1,924,363
(1,101,876)
(1,254,388)
758,896
Total
(18,964,748)
(27,447,776)
32,680,332
(5,814,639)
(19,546,831)
Loans
(10,537,908)
-
(43,728,604)
44,339,377
(3,603,892)
(13,531,027)
Lease
liabilities
(122,720)
(1,036,380)
-
1,164,879
(1,419,735)
(1,413,956)
Total
(12,536,149)
(1,036,380)
(45,916,917)
45,936,396
(6,602,495)
(20,155,545)
Derivative
Assets, net
871,288
-
1,054,345
(710,522)
(24,314)
1,190,797
Total
(11,664,861)
(1,036,380)
(44,862,572)
45,225,874
(6,626,809)
(18,964,748)
Balance at 1 January 2019
Cash inflows
Cash outflows
Other non-cash movements
Balance at 31 December 2019
Balance at 1 January 2018
Increase in lease
obligations (IFRS 16)
Cash inflows
Cash outflows
Other non-cash movements
Balance at 31 December 2018
42. Subsequent events
The Company signed a binding termsheet on 14 January 2020 to transfer its shareholding of 55% in
Inteltek including all rights and liabilities to the other shareholder of Inteltek, Intralot Iberia Holding SAU.
The respective transaction is expected to be completed within the first half of 2020, once the final share
sale and purchase agreement (“SPA”) is signed and necessary legal approvals are obtained. The final
value of the transaction will be determined based on IFRS net book value of Inteltek and no material
impact is expected on our financial statements.
The Company has decided to prepay the loan, which was utilized under the credit agreement disclosed on
17 September 2015 and which is to mature on 16 September 2020. Accordingly, the last two principal
payments of the loan, which are due in June 2020 and September 2020 as per the credit agreement and
which in total amount to EUR 148.4 million and USD 166.7 million, were performed on
23 March 2020.
Lifecell Dijital Servisler ve Çözümler A.Ş., which is 100% owned by Company's subsidiary Turktell
Bilişim Servisleri A.Ş., has been incorporated with a capital of TL 100. The company was registered on
28 February 2020 and its announcement was completed on the same day. The company will develop
digital services, solutions and products.
As per the resolution issued by CMB dated 5 March 2020, Nail Olpak, Afif Demirkıran and Tahsin Yazar
have been appointed to the Company’s Board as independent board members to replace Ahmet Akça,
Atilla Koç and Mehmet Hilmi Güler, who have been serving as independent board members at the
Company since 11 March 2013. Those newly appointed board members will serve until new independent
members are selected by the Company's general assembly in accordance with the relevant legislation or
other members are appointed by Capital Markets Board.
The marketing partnership between Turkcell Europe, the Company's subsidiary operating in Germany,
and Telekom Deutschland Multibrand GmbH, the subsidiary of Deutsche Telekom, will end on 30 April
2020 pursuant to the respective agreement.
272
TURKCELL ANNUAL REPORT 2019
109
F110
TURKCELL ILETISIM HIZMETLERI AS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at and for the years ended 31 December 2019
(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.)
42. Subsequent events (continued)
In March 2020, the World Health Organization declared the outbreak of COVID-19 as a pandemic, which
continues to be spread throughout Turkey and the world. The impact from the rapidly changing market
and economic conditions due to the COVID-19 outbreak is uncertain and will impact our business,
consolidated results of operations, and financial condition in the future. While we have not incurred
significant disruptions thus far from the COVID-19 outbreak, we are unable to accurately predict the
impact that COVID-19 will have due to numerous uncertainties, including the severity of the disease, the
duration of the outbreak, actions that may be taken by governmental authorities, the impact to the business
of our clients and other factors. We will continue to evaluate the nature and extent of the impact to our
business, consolidated results of operations, and financial condition.
110
273
SECTORAL AND FINANCIAL INFORMATIONTURKCELL ANNUAL REPORT 2019
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Eskişehir Yolu 9. Km No: 264 Söğütözü-Ankara
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Sincan-Ankara
Başkent İvedik Mah. 1323. Cadde No: 37 Yenimahalle-Ankara
Kızıltoprak Mah. 915 Sok. No: 3 Muratpaşa-Antalya
Organize Sanayi Bölge Müd. Kırmızı Cad. No: 4 Nilüfer-Bursa
DİYARBAKIR PLAZA
Urfa Blv. Bağcılar Mah. No: 184 Turkcell Plaza Bağlar-Diyarbakir
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BORNOVA NDC
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GEBZE DC
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KONYA OFİS
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MUĞLA NDC
SAKARYA OFİS
SAMSUN NDC
ÇORLU NDC
TRABZON NDC
VAN NDC
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Ilıca Yolu Organize Sanayi Bölgesi 4. Sok. Erzurum
Kocaoğlan Mah. Demokrasi Blv. No: 185/1 Şahinbey-Gaziantep
Güzelbirlik Mah. Yunus Emre Cad. No: 11-B Güzelburç-Hatay
Kazım Dirik Mah. 367/7 Sok. No: 12 Bornova-Izmir
İTOB 10005 Sok. No: 37 Torbalı-Izmir
Kazım Dirik Mah. 367/7 Sok. No: 12 Bornova-Izmir
Kayseri Organize Sanayi Bölgesi 13. Cadde No: 16 Melikgazi-Kayseri
Gebze OSB Tembelova Mevkii Mah. 3300 Sok. No: 3314 Gebze-Kocaeli
Yahya Kaptan Mah. Bahçeşehir Sok. No: 30 Izmit-Kocaeli
Horozluhan Mah. Sıhhıye Sok. No: 6 1. Org San. Selçuklu-Konya
Parsana Mah. Zümrütova Sok. No: 1 Selçuklu-Konya
Hoca Ahmet Yesevi Mah. 7. Sok. Mahrukatçılar Sitesi No: 34 Merkez-
Malatya
Portakal Mah. 80050 Sok. No: 3 Toroslar-Mersin
Musluhittin Mah. Atatürk Blv. No: 61 Muğla
Bahçelievler Mah. Cumhuriyet Cad. Kamelya Sok. No: 16 Serdivan-Sakarya
Mimar Sinan Mah. 160. Sok. No: 18 Atakum-Samsun
Yulaflı Mah. Hacı Şeremet Mevkii Karin-Balin Gıda Fab. Karşısı Çorlu-Tekirdağ
Mısırlı Mah. Hasan Turfanda Yolu No: 1 Çukurçayır-Trabzon
İpek Yolu 8 Km Yeni Mah. Sahil Sok. No: 27 Edremit-Van
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TURKCELL ANNUAL REPORT 2019
GLOSSARY
ABBREVIATION
EXPLANATION
3G
4.5G
5G
ARPU
Base Station
Beacon
C#
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 generation containing technologies having more advanced features than standard 4G technology
Average monthly revenue generated per mobile subscriber
A fixed transceiver device in each cell of a mobile communications network enabling communication
between mobile phones and radio signals within the cell
A location-based data provider utilized in My Dream Companion project
A Microsoft programming language developed for net technology
Carrier Aggregation
A technique allowing more bandwidth and consequently higher speeds to be obtained by joining
frequencies called carriers
CELTIC
DSS
ERP
ETSI
EUREKA (Exceptional
Unconventional Research
Enabling Knowledge
Acceleration)
FDD band
Gbps
EUREKA Cluster focusing on the Information and Communications Technology and Telecommunications
Digital Service Provider
Basically it is an integrated database, a repository for keeping various types of data.
ETSI is a European Standards Organization, the recognized regional standards body dealing with
telecommunications, broadcasting and other electronic communications networks and services.
It is an intergovernmental R&D organization financed by governments of more than forty countries.
Frequency Division Duplex: A duplex scheme in which uplink and downlink transmissions occur
simultaneously using different frequencies
A data transmission speed
GHz (Giga Hertz)
A frequency 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
IDC (International Data
Corporation)
IMS (IP multimedia
subsystem)
IMT Network
American market research company examine the development of technology
Platform to provide a new generation of wired, wireless service providers
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
IoT (Internet of Things)
The mobilization, interpretation and communication/interaction of the data received through sensors
IT (Information Technologies)
Tools for generating, collecting, accumulating, processing, recovering, disseminating, protecting, and assisting
275
SECTORAL AND FINANCIAL INFORMATIONTURKCELL ANNUAL REPORT 2019 GLOSSARY
ABBREVIATION
EXPLANATION
ITEA
IVR
IVVR
LTE
EUREKA Cluster program supporting innovative, industry-driven, pre-competitive R&D projects in the area of
Software-intensive Systems & Services
Interactive Voice Response
Interactive Voice & Video Response
Technology that ensures to achieve very high speeds by combining carriers in the same or different
frequency bands
LTE-Advanced
A mobile communications standard comprising advanced features such as carrier coupling, which enables
mobile broadband speed of over 150 MBps in LTE
M2M
MHz
Machine to Machine is the general name of the technology that allows devices to exchange information
and conduct transactions without human intervention.
A frequency unit
NB-IoT (Narrow Band Internet
of Things)
A technology defined by 3GPP for Internet of Things
NGMN
An organization (Next Generation Mobile Networks Association), of which Turkcell is a member, and which
several operators, suppliers and universities in the world are a part of, giving direction to technology
standards and technology producing companies in relation to operator requirements.
NPS (Net Promoter Score)
The score that measures whether or not customers recommend the products they use to others
NSA
O-RAN
PCRF
Non-standalone (NSA) is a network architecture, 5G track that mobile control channels are transferred from
4.5G and data channels are transferred over 5G.
An alliance (Open Radio Access Network) providing small vendors competitive capacity by standardizing
the interfaces to reduce reliance on proprietary platforms in radio access network
Policy and Charging Rules Function
RTM (Real Time Monitoring)
24/7 monitoring and reporting system on the system
SDK
SD-WAN
Scratch
SMS
Tbps
A software development kit (SDK) is a collection of software development tools in one installable package
offered to hardware and software developers.
Acronym for software-defined networking in a wide area network (WAN).
Scratch is a programming language developed by MIT (Massachusetts Institute of Technology), which has a
user-friendly interface, designed for the use of children between the ages 8 and 16.
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
One trillion bits or bytes per second (TeraBytes Per Second)
TIP (Telecom Infra Project)
An engineering-focused initiative which generates various alternatives to reduce network expenses of
operators
UHD
VoLTE
Ultra high definition broadcast
IP based high quality audio technology through a 4.5G network
276
TURKCELL ANNUAL REPORT 2019
With 25 years of achievements behind us as
Turkey’s Turkcell, we will continue to introduce
cutting-edge technologies to Turkey and our
people, while contributing to the nation's digital
transformation, and create value for each moment
of our customers' lives through our innovative,
value added services and solutions.
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 is the operator with the highest revenues among the integrated
telecom sector players in Turkey.
Turkcell Group companies operate in 5 countries - Turkey, Ukraine,
Belarus, Northern Cyprus and Germany.
Turkcell launched LTE services in its home country on April 1, 2016,
employing LTE-Advanced and 3 carrier aggregation technologies in
81 cities. Turkcell is providing fiber data access to households at
speeds up to 10 Gbps. Turkcell Group reported TRY 25.1 billion revenues
in FY19 with total assets of TRY 45.7 billion as of December 31, 2019.
Turkcell has been listed on the NYSE and the BIST since July 2000, and
is the only NYSE-listed Turkish company. Read more at www.turkcell.
com.tr/english-support
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.
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Turkcell İletişim Hizmetleri A.Ş.
Turkcell Küçükyalı Plaza, Aydınevler Mahallesi İnönü Caddesi No: 20 Küçükyalı Ofispark B Blok - Maltepe/Istanbul
Tel: +90 (212) 313 1000
Fax: +90 (216) 504 4058
Customer Services Tel: 532 or +90 (532) 532 0000
www.turkcell.com.tr
Trade Register Number: 304844
Turkcell Annual Report 2019