The EBRD is supporting the expansion of broadband internet services in eastern regions of Turkey with a €100 million loan to Türk Telekomünikasyon AS (TT), the leading telecommunications group in Turkey providing integrated telecoms services from traditional phone and mobile to broadband internet.
With its fast-growing economy and young population, Turkey needs significant investment to catch up with western Europe in terms of availability of broadband internet services. On average Turkey’s total broadband penetration, both fixed and mobile, is less than 15 per cent of the country’s population, compared with 40 per cent in western Europe. High speed broadband coverage varies significantly from region to region, with considerable discrepancies between the Istanbul area and the eastern regions.
Expanding internet broadband infrastructure beyond the large cities of Turkey is critical for the growth of the Turkish economy and for further development of the country’s information and communication technology sector and will support its efforts towards developing a knowledge economy.
Originally established as a postal company in 1840 and privatised in 2005, Türk Telekomünikasyon AS’s main shareholders are Oger Telecom and the Turkish Treasury, with 15 per cent of its shares listed on the Istanbul Stock Exchange.
The EBRD’s financing will support Türk Telekomünikasyon AS’s ambitious strategy to extend broadband infrastructure in all provinces of Turkey, including the most remote ones, by 2016. The proceeds of the loan will be used to finance capital expenditures for fixed broadband network expansion in the regions of Adana, Diyarbakir, Erzurum, Kayseri, Samsun and Trabzon in Turkey.
“Supporting economies through innovation and technology is one of the EBRD’s priorities and we are very pleased to finance this important project in Turkey implemented by a strong and reliable partner such as Türk Telekomünikasyon AS. The EBRD’s financing will enable Türk Telekomünikasyon AS to bring modern, high speed internet services to households and businesses in the remote regions of the country where such services are limited or currently do not exist. Türk Telekomünikasyon AS’s capacity to undertake such a country-wide broadband development project was essential in the EBRD’s decision to provide this financing,” said Sevki Acuner, the EBRD’s Deputy Director for Turkey.
Mr. Mustafa Uysal, Türk Telekom Group CFO, stated: “Türk Telekomünikasyon AS believes in the future of the country and that Turkish economy will be ranked among the world's top 10 economies by 2023. Technology and innovation will be the main instruments to achieve this ambitious vision. Therefore, Türk Telekomünikasyon AS, by carrying out its investment program all throughout Turkey, assumes an important role in shaping Turkey's future and makes it clear that it will be a leading contributor to and part of that future. As technological infrastructure is essential for eliminating the development level differences between regions, the partnership between EBRD and TT is very important due to its economic and social dimensions. We see EBRD as a partner in this journey rather than just a lending institution and our investment has a value above a monetary contribution. EBRD vision overlaps with TT's and we hope to continue this partnership in the long term.”
Since the beginning of its operations in Turkey, the EBRD has committed close to €2 billion to various sectors of the country’s economy, mobilising additional investment of over €5 billion.