INDUSTRY

ANALYSIS OF
TELECOMMUNICATION
IN TURKEY

M. Murat NALCI

135711017

Ouzhan KARAPINAR
135711081
Sibel ZOR

Telecommunicatio
n means
communication
by phone,
radio,etc. and the
business
connected with
this according to
Cambridge

can examine telecommunication industry in Turkey un

e headlines:

fore mobile phones and the internet,

a of mobile phones and the internet

ter the state customizations on telecommunication

1.BEFORE MOBLE
PHONES AND THE
INTERNET
People in Turkey could use
just their home phones for
communication so
home phones are one of the
tool of telecommunication.
Pricing and billing for this
phones
were being done by the
government
required
by The first mobile
Those days as
are
not so far;
the policiy of state.
phone
was used by prime minister of the preiod in
1994 in Turkey. and again same

ERA OF MOBLE PHONES AND INTER

Many communications ways developed after the
launching of mobile phones and internet such as
online chat, sms, mobile call.
Trk Telekom (state-owned telecommunication
company) was the first servive provider of
Internet and Turkcell was the first private
company for service providing in this era in
Turkey. Secon private service provider was
announced as the company name of Telsim after
few months.

irst Logo of Turkcell February 28 1994)(First Logo of Telsim May 19 1994)

After all of them,

industry of
telecommunicatio
n continued like
this. The first
video chat
and first color
phone can be
shown as
significant events
of this period.

AFTER THE STATE CUSTOMIZATIONS

N TELECOMMUNICATION (GOLDEN AG
The new government came to power 2001
election have followed a different path on
telecommunication;
this path name was customizing. Trk Telekom
was customized in November 2005. After that; Trk
Telekom Divided into two company: Trk Telekom
and TTNET. Trk Telekom became part of home
phones and TTNET BECAME Part of thr internet
service providing.
Avea ,third service provider for mobile phones,
has announced in February 19 2004. They are using
platform
of the Trk Telekom for their service providing

did we name this period as golden a

3G Technology came in May
2008.
TTNET became tent of the world
in number of customers. (14.47
million in 2012)
About 31 billion people use
Internet regularly. (December
2014)
Turkey is the fourth facebook
using country at the moment in
World.
First domestic production

at is the current state of the industr

Now, there are many service provide
company in Turkey. Turkcell, Vodafone
and Avea are providing both mobile phone
service and internet service at the same
time. TTNET (Trk Telekom) is providing
just
internet service and home phone service.
They are 4 big players in the industry. The
We
areisgoing
to be for
talking
5th
one
preparing
launching. It will
about
telecommunication
come with
4G Technology. as
based on
Turkcell, Vodafone and Avea.

Competitive Rivalry
Worldwide and in Turkey, who entered the
market to serve the GSM service sector grew
rapidly in the early 90s was developed soon .
In 1994 Turkey began to operate before
Turkcell and Telsim GSM operators . The GSM
sector reached in the same year to 80,000
subscribers.

Concentration Market Share and Structure

In 2000, the number of

operators entering
enterprise of Aria and
the market has been four
In 2004 Aycell and Aria,
TT & time are united
under
the umbrella of the
Aveda brand .
Thus was reduced to
three number of
operators in the GSM
sector. Total 67,907,920
corresponding to a
penetration

Financial Analysis Past, Present, Future

Buyer Power - High

Buyers Price
Sensitivity

Relative Bargaining
Power

* Cost of Product
relative to total
cost
* Product
differentiation
* Competition
between buyers

* Size and
concentration of buyers
relative to products
* Buyers switching cost
* Buyers information

Buyer Power
Buyers in Telecom
industry generally land
in two categories:
Individual and Enterprise
Customers like IT
companies, Banks etc.
There are ample number
of telecom providers in
the market with big
product variance and
cheaper prices which
gives buyer many
options to select
operators and thus have

Buyer Power Analysis 1

Cost of product relative
total cost
Telecom products e.g.
Turkcell, 3G etc cots 100% of
the total cost of service and
buyers are more sensible to
pricing.
Turkcell, Vodafone,
Product
differentiation
Avea have
similar prices
for similar products and
less likely for any one to
maintain product
differentitation and
hence buyers have the
option to switch over.

uyer Power Analysis 2

Competition between buyer
The individual buyers dont have any
competition among themselves but
enterprise customers like IT or banks do
have.
Size and concentration of buyers relative
to products
Big size and low concentration of
consumption per individual gives lower
leverage to buyer power.

Buyer Power Analysis 3

Buyers switching cost
Low switching cost and low
connection cost. Some of the
operators have estimated the
charges can be lower than the
others.
Buyers information
Buyers information regarding the
availability of other options has
becom high.
Increased social networking, high
advertisements through TV,

Suppliers Power - Low

Price Sensitivity
Cost of product
relative to total cost
Product
differentiation
Competition between
suppliers
Bargainig Power
Size and
concetration of
suppliers relative to
products
Buyers swichting cost
Buyers information

Supplier Power Analysis 1

Suppliers for the
Telecom Operators
The suppliers
bargaining power has
increased influnce on
the profitability of the
company.
There is a price war
happening between
the different mobile
operators, so even the
suppliers are chosen
carfully so that they
do not drag down the
profitabilita of the

hreat of New Entrants

Capital intensive nature of industry

ownership of telecom licenses
requirement of specialized operating
skills.
but size of market opportunity and
access to finance is encouraging serious
entrants.

Firstly it was a very capital intensive

industry, entry into this industry meant
that the firms needed access to huge
amount of capital mainly to cover the
fixed costs to lay and maintain a physical
network (exchanges, fiber optic cables
etc) to the premises of customers.
, Companies in this industry mostly
tended to monopolies strictly regulated
by the government subject to price
controls and moderate to heavy taxation.
The technological changes also provided
impetus to the significant reduction of
barriers; Internet Telephony provided a
way for several firms to enter the market
and
compete with the incumbents without the
significant upfront fixed costs.

 It comes as no surprise that in the capitalintensive telecom industry the biggestbarrier to

entryis access to finance.
To cover high fixed costs, serious contenders
typically require a lot of cash. When capital
markets are generous, the threat of
competitive entrants escalates. When financing
opportunities are less readily available, the pace
of entry slows. Meanwhile,
ownership of a telecom license can represent a
huge barrier to entry. There is also a finite amount
of "good" radio spectrum
that lends itself to mobile voice and data
applications. In addition, it is important to
remember that solid operating skills and
management experience is fairly scarce, making
entry even more difficult.

huge
amount of fixed costs such as setting up an infrastructure
that will enable a superior service quality, a lot of money for
marketing
activities, very high customer acquisition costs etc.
Naturally, it is not possible to move the infrastructure
investment abroad which
makes the entry barrier even higher. Moreover, even if there
is enough cash investment, it might be not possible to get
licence from
regulation authority ICTA. In Turkey, there are 3 mobile
network operators; Turkcell, Vodafone and Avea. The
government has last
given two licences 11 years ago in 2000. It is very low
probability that new licenses would be given. Additionally,
there are physical
constraints for new entrants. There is no good radio
spectrum available in Turkey that will enable delivering voice
and data quality
with satisfactory quality. All in all, it seems like it is almost
impossible that a new mobile network operator enters to
Turkish mobile

Threat of Substitutes
Nowadays, its hard to keep up
with the fast pace of technological
advancements almost in
every part of mobile
communications value chain. New
transmission technologies are
evolving, smart phones
capabilities are increasing rapidly,
mobile operating systems war
is getting fiercer, more and more
mobile applications are available
every day. As a result,
competition results greater choice
and lower rates. The mobile
ecosystem is growing with
fast pace.

Satellite SATELLTE
phones, providing
a kind of connection
PHONE
and communication using satellites for
communication purposes in the Earth's orbit is a
mobile phone.
They serve a similar way to mobile phones;
speaking, they provide sms and low bandwidth
internet service. Unlike their mobile phone
communicates
with the satellite directly without the need for any
base station.
The force of gravity in a closed area of the satellite
phone is very low. To turn the front window to
make healthy in an interview by satellite
phone or go to the roof of a building may be
required. Learning about the company's satellite
phone coverage before you need to select a

TRK
TELEKOM
Turkeys leading communications
and convergence technologies
company, successfully continues its
mission to link Turkey with
the latest communication
technologies.
Trk Telekom with its group
companies is Turkeys leading
integrated telecommunications
and
technology services provider.
It is offers its clients a wide variety
of services from fixed voice to
mobile voice data, Internet and
innovative convergence
technologies.

SKYPE
Skypeis a telecommunicationsapplication
softwarethat specializes in providingvideo chatand
voice calls from computers, tablets and mobile
devices via the Internet to other devices or
telephones/smartphones
.Users can also sendinstant messages,exchange
files and images, send video , messages and
createconference calls.
Skype is available to download onto computers
runningMicrosoft Windows,MacorLinux, as well
asAndroid,Blackberry,
iOS andWindows Phonesmartphones andtablets.
Much of the service is free but users require Skype
Credit or a subscription
to calllandlineor mobile numbers. Skype is based on
afreemiummodel.

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