Turkcell (TKC) recently announced the deployment of communication infrastructure for eCall systems in connected automobiles. As the company brings together telecommunications and automotive industry in one system, eCall system will enable calling emergency lines and receiving incoming calls backed by Turkcell’s reliable and resilient network.
“Turkcell continues to convey its experience in the digital field to Turkey’s smart automobiles with its digital services and solutions that put customers first,” says Ceyhun Ozata, Turkcell Corporate and Residential Sales Executive Vice President. “The development of life-saving technologies for next generation automobiles holds vital importance as we enter a new era. Turkcell proudly undertakes the responsibility to provide the communication infrastructure for the first eCall system solution in Turkey.”
Turkcell’s operator interface will be used in the modules that satisfy the requirements of eCall system – and as the equipment will be installed abroad a Turkish operator’s SIM properties will be used in vehicles manufactured abroad for the first time.
Connected automobiles and vehicles with eCall systems will enable a new way of immediate interference for possible accidents. eCall systems will play a vital role in detecting the location of the automobile and its condition after the accident, the victim’s potential status and the risks involved with the accident.
The data collected during and after the accident will be transferred to the emergency line through the GSM network over the telematics control unit in the automobile. The system will serve as an instrument for gathering information about the passengers’ health, starting an automatic voice call – and save lives at scale.
Turkcell reported excellent earnings on July 31, 2019. The company reported revenues of TRY6,191 million which is up 21.3% year-on-year.
I really like the vision for the company that the CEO Murat Erkan set in the last earnings call:
“With a focus on the customer and our innovative solutions, we are growing at full speed.
As Turkcell Group, we continued our strong double-digit growth in the second quarter. Our consolidated revenues rose 21.3% to TRY6.2 billion, while EBITDA1 increased 19.6% to TRY2.6 billion, achieving a 41.2% EBITDA margin. Net income amounted to TRY465 million on a 12.1% increase. With these results, we generated TRY11.9 billion in revenues and the all-time-high first half net income of TRY1.7 billion.
Our solid financial results on the back of a larger customer base, strong ARPU growth, rising data demand, and the higher usage of our innovative products and services, coupled with our effective cost management, prompt us to revise our EBITDA margin guidance2 upwards to 39% – 41%. We reiterate our revenue growth guidance of 17% – 19% and operational capex to sales ratio3 guidance of 16% – 18%.
Those who prefer Turkcell’s broadband services at the speed of light now number 1.4 million
Our customer-focused innovative campaigns and value propositions were instrumental in the rise of postpaid, fiber and digital services subscribers during the quarter. Postpaid mobile subscribers, whose ARPU is 3 times that of prepaid, rose by 215 thousand in this quarter. Our residential fiber subscribers were at 1.4 million with 15 thousand net additions, while those who also use our TV+ services have reached 50.8%4 of our fiber residential subscriber base.
The strong demand for our innovative fixed wireless access (FWA) product Superbox, available only at Turkcell, has maintained its pace. Superbox, which provides fiber-like speeds at locations not covered by a fiber network, has earned customer appreciation and is now in around 130 thousand households.
Increasing data and digital services usage, upsell to higher tariffs and increased postpaid subscribers have reflected to our ARPU figures. Mobile ARPU5 rose 16.6% year-on-year, reaching TRY40.7. Starting this quarter, we have begun to offer “Comfortable Tariffs” that simplify our customers’ lives. With these hybrid tariffs, a first for the sector, our customers can subscribe as postpaid, and yet consume as if they were prepaid. This solution has gained traction within a short time frame. Half of the subscriptions to these tariffs were new to Turkcell. Meanwhile, our residential fiber ARPU rose by a record high of 17.2% to TRY66.1 on the back of our value proposition renewed early this year, upsell to higher tariffs, and higher multiplay ratio with TV.
We confidently advance in our three strategic focus areas:
We have continued to enrich and advance the user experience of our digital services, one of our strategic focus areas. Our digital communication and experience platform BiP, where average daily message traffic has increased fourfold to 300 million in a year, today offers innovative instant translation services in 106 languages. Our digital music platform fizy, where we focus on advertising and brand collaborations, now serves approximately 3.7 million active users. Furthermore, fizy, as well as our digital publication application Dergilik and TV+ offer personalized content recommendations by leveraging AI technology. We will continue to lead the digital transformation of Turkey with our digital services developed by over one thousand Turkcell engineers and developers with our strong infrastructure and data centers.
We have recorded strong revenue growth with our digital business solutions, our second area of strategic focus. In the first half of the year, this business line generated TRY693 million in revenues on 62% growth. We are confident of continuing this trend with our customized solutions for both the private and public sectors, thereby contributing to their digital transformation.
Regarding tech-fin, our third strategic focus area, we have launched a number of new products on Paycell where our aim is to become Turkey’s largest payment platform. Turkcell customers 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. Next, we have made things easier for parents by introducing a “pocket money” feature on Paycell Card, where active users of the latter have increased fourfold over the past six months. Further, by launching the “Cash Card” within the Paycell Card family, we have enabled cash withdrawals. Our Paycell app, downloaded 4 million times to date, has begun to offer 24/7 money transfer with just a phone number. In addition, Paycell has been part of the local meal card initiative, namely Paye Kart, which inherits both public transportation İstanbulKart and meal card features. Paye Kart is accepted at a steadily growing number of sales points.”
Disclosure: I do not hold any position in TKC stock.