INFORMATION TECHNOLOGY IN TURKEY  -  INTRODUCTION

 

Information Technology & Communication

 

Turkey’s Information and Communication Technologies (ICT) market size was estimated at USD 33.5 billion as of 2016 yearend, with USD 23.7 billion in Telecommunications and USD 9.8 billion in Information Technologies. The Turkish ICT sector continues to be one of the key growth sectors in Turkey with an annual growth of over 10% due to its relatively low penetration levels of a growing population.

 

Internet in Turkey

 

According to the 2017 yearend statistics of BTK (Information Technologies and Communication Institute – www.btk.gov.tr ), the number of internet subscribers totalled 68.9 million, of which fixed broadband internet subscribers was 11.9 million and mobile internet users was totalled 56.9 million. The total internet subscribers was up from 6 million in 2008, and represented a 10.6% increase from the previous year.

The fixed broadband internet penetration per population was 14.7% compared to 30.6% average in OECD countries. Mobile internet penetration was 69.9% compared to 101.8% average in OECD countries.

 

Though the use of internet in Turkey compared with other developed countries is considered low, there has been a dramatic increase in recent years and the use of internet in the middle class segment for example is high. Current social media users in Turkey are in excess of 42 million.

 

Though there are other operators in Turkey providing broadband services, they are reliant on the incumbent Turk Telekom’s ADSL infrastructure, which has its own service company called TTNet. TTNet, with a 67.3% share, is by far the biggest player in the internet broadband market. Superonline, Vodafone Net, and Doğan TV Digital and Türknet follow.

 

IT Market in Turkey

 

A significant increase is expected in PC usage as the Ministry of Education plans to increase the number of computers and internet connections. The National Fatih Project is one such development project which aims to provide schools with 2 million tablets, thousands of smart boards and high speed internet connection. This project is worth an estimated USD 5 billion. Schools in remote areas are to be connected to the net via satellite with the cooperation of the Turkish satellite company Türksat.

 

The Turkish IT services market is expected to grow at least 10% annually. The consumer electronics market, estimated at USD 3 billion, has recently caught up with desktop and netbook sales, and registered an average 30% growth rate, compared with the world average of 10%. Turkey’s computer hardware sales are estimated at around USD 10.6 billion, and the software market at USD 1.5 billion in 2016.

 

Telecommunications Market in Turkey

 

According to the 2017 yearend statistics of BTK, in the telecommunications market, there were 77.8 million mobile subscribers, a 3.6% increase over the figure for 2016. There was a 96.3% penetration rate, which increases to 109.5% if the 0-9 age group is removed from the total population figure. Of broadband mobile subscribers, prepaid subscribers make up 45.9% and invoice subscribers make up 54.1%. 88.7% of mobile subscribers are individuals and 11.3% are corporate. Of the mobile operators, Turkcell has 43.7%, Vodafone has 31.1% and Avea has a 25.2% share of mobile subscribers.

 

As of 2017 yearend, the total number of fixed telephone line subscribers had fallen to around 11.3 million, down from 17.3 million at the end of 2008. The number of subscribers for fixed lines (current penetration is 14.3%) is expected to continue to fall as subscribers moved to GSM operators. The main player in the fixed telephone line market is again Telekom through its service company TTNet with a market share of 58.2%, followed by Türksat with 11.8%, Superonline with 8.1%,and Türknet with 4.9%.

 

Total net sales revenue of Telecom for 2017 was TL 9.7 billion. Revenues for the three GSM operators for the same period were Turkcell with TL 12.2 billion, Vodofone with TL 11 billion, and Avea with TL 6.7 billion.  Revenues of other operators in 2017 amounted to 10.5 billion Turkish liras, making a grand total of TL 51.1 billion for the sector. In 2017, total investment by Turk Telekom and the three GSM operators was TL 5.9 billion, a 2.6% increase on 2016. Total investment by other industry operators was TL 2.35. billion, a 34% increase on 2016.

 

Turk Telekom owns 99.9% of TTnet, Argela, Innova, Sebit, and AssisTT. Turk Telecom also owns 100% of AVEA, one of the three GSM mobile operators in Turkey. 55% of the shares of Turk Telekom belong to Oger Telecom Inc., 25% belong to the Turkish Treasury, 5% belong to the Turkish Wealth Fund, and the remaining 15% is floated on the Istanbul Stock Exchange (IMKB). Turk Telekom was valued at over USD 15 billion in 2011.

 

At the beginning of 2016, 4.5G services were introduced, and by the end of 2017, some 64.6 million subscribers, out of a total of 77.8 million subscribers, were using 4.5G services, 10.2 million were using 3G services, and 3 million were using 2G services. At the end of 2017, the number of phone handsets and sim cards which were compatible with 4.5G services was 30.1 million, whereas the number of compatible phone handsets was 37.1 million.

 

BTK (Turkish Telecom Authority) has registered over 60 million GSM cellular phone handsets in Turkey. BTK estimates that Turkey imports approximately 10 million mobile handsets every year. Many subscribers continuously change their cell phones with new models sustaining consistent growth in the handset market. Apple’s Iphone has been extremely successful in the market in the past three years.

 

In Turkey, Northern Telecom, Alcatel, Siemens, Ericsson and NEC supply majority of fixed lines switches, trans-multiplexers, and other telephony equipment. Motorola, Nokia, Ericsson and Siemens are the main GSM switch and base station suppliers.

 

The Turkish ICT market is far from being saturated and still has significant growth potential as the technology driven young population continues to invest in computers, consumer electronics, software and ICT services.

 

This attractive consumer electronics trend has seen international and national electronic retail supermarkets establish and greatly expand their outlets in the market. German Mediamarkt, and Turkish Teknosa, Bimeks, Vatan Bilgisayar and Gold Bilgisayar have been competing for many years now in Turkey.

 

The Future of the Turkish ICT Market

 

Turkey aims to become a regional ICT hub to make use of its advantageous geographical location, developed logistics, relatively advanced technological infrastructure, and young demographics. Indeed, many international technology companies have already chosen Turkey as a regional hub. However, if Turkey is to meet its targets in this vision, it must promote a venture capital culture, it must produce adequate numbers of qualified software developers and technicians to meet the needs of the industry, and it must allow employment of foreign executives and specialists from overseas. Turkey already has a well-developed and fast growing ICT sector, on which it can build a strong regional centre, and a platform for developing technological exports and providing support to other industries and the Turkish economy as a whole.