ELECTRONIC COMMUNICATIONS MARKET IN TURKEY MARKET DATA (2016 Q2)* (*) In the event of any discrepancy, the original report in Turkish shall prevail. AGENDA Chairman’s Note Executive Summary Market Overview Consumer Complaints Market Data Fixed Broadband Internet Mobile Other Services 2 CHAIRMAN’S NOTE On the other hand, compared with the previous periods, developments in the market during the 2nd quarter of 2016 imply important changes in the market which can be summarized as below. • While total net sales of operators is 39.6 billion ₺ for the year 2015 and 10.5 billion ₺ for the 1st quarter of 2016, it reached 11,14 billion ₺ in 2nd quarter of 2016. • As of the end of second quarter, there are 11.25 million fixed subscribers. Number of mobile subscribers is more than 73.65 million which corresponds to 93.5% mobile penetration. Excluded number of M2M subscribers and of 0-9 age range, mobile penetration is 106%. In the second quarter of 2016, Turkey has ranked first among the European countries with the average monthly mobile usage (MoU) of 426 minutes, as it was the case in the previous periods. During this period, 2.9 million mobile subscribers ported their numbers. Up to now over 96 million numbers have been ported. • As to broadband indicators, there are 55.3 million total broadband subscribers of which 9.9 million is fixed broadband and 45.3 million is mobile broadband. The On 15 July 2016, a coup originated by some military forces taking orders from increase rate between 2016 Q1 and 2016 Q2 is 24.6%. Increase rate in mobile Fetullahist Terrorist Organization (FETO) was attempted. Fortunately brave Turkish broadband (via cellphone) has been the highest one with 30.8% and then follows Fiber to the Home (FTTH) with 20.7%. citizens eliminated this attempt and finally saved our country. These traitors bombed and shoot not only policemen and citizen but also Presendential Campus at Beştepe, Turkish Parliament Building, military and police buildings and Martyrs (Bosphorus) Bridge. After the call of His Excellency President Recep Tayyip ERDOĞAN, unarmed millions of Turkish citizens just carrying Turkish flags met at the squares and in front of the bombed buildings to resist against the coup and defend democracy and the country despite the heavy bombing of traitors from helis and tanks. Thanks to Allah, in the leadership of His Excellency President Recep Tayyip ERDOĞAN and Prime Minister Binali YILDIRIM; Turkish citizens, policemen and soldiers defeated the coup attempt. We all remember our martyrs who lost their lives to defend our country during the coup attempt with respect. • After launching of 4,5G mobile services on 1st of April, the number of people using 4.5G mobile service reached nearly 30 million at the end of June. 13,3 million of those have 4.5G compatible device and SIM card. While monthly data usage of mobile broadband users is 1.9 Gbyte in average, this is 3.4 Gbyte/month for 4.5G subscribers with compatible device and SIM cards. • Length of fiber in Turkey reached 277,758 km in 2016 Q2 from 256,829 km in 2016 Q1 with and increase rate of more than 8%. As a very important progress for domestic production of IT equipments, the 4.5G base station produced by local vendors in the scope of «ULAK Project» is approved as «domestic product» by relevant body in April, 2016. It’s my pleasure to represent this valuable report containing the developments in Turkey’s electronic communications market in 2nd quarter of 2016 and I would like to During the heavy bombing, His Excellency President Recep Tayyip ERDOĞAN called take this opportunity to wish for a fruitful outcome of the forthcoming quarters. out to all Turkish people by using his mobile phone’s video call feature. 4.5G technology was widely used by broadcasting companies for live streaming. We are Yours sincerely happy to see both mobile and fixed electronic communications infrastructure worked properly and there was nearly no problem. Dr. Ömer Fatih SAYAN President of the Authority Chairman of the Board 3 EXECUTIVE SUMMARY (MARKET OVERVIEW) There are 622 operators providing service within a total of 1009 authorizations as of August 15th, 2016. Total net sales of Türk Telekom and mobile network operators approximately worth 8.7 billion ₺, while other operators’ total net sales approximately worth 2.44 billion ₺. Total investments of Türk Telekom and mobile network operators is around 1.37 billion ₺. Total investment of other operators has been realized as 302 million ₺ in the second quarter of 2016. Mobile traffic volume is 60.5 billion minutes and fixed traffic volume is 2.5 billion minutes in the second quarter of 2016. 4 EXECUTIVE SUMMARY (FIXED MARKET) There are approximately 11.3 million fixed telephony subscribers and penetration rate is 14.3%. However, considering the fact that average household size is around 3.60 in Turkey, we may assume fixed telephony services reach to a significant proportion of population. Number of Carrier Pre-Selection (CPS) users is 200,404, while the number of users having call-by-call carrier selection services is 47,626. Percentage of PSTN revenues on total revenues of Türk Telekom is 28.9%, while the proportion of access revenues is around 55%. “On-net traffic/total traffic” ratio for Türk Telekom is 62.2%. On the other hand; proportion of traffic to mobile networks is 30.8% of total traffic. 5 EXECUTIVE SUMMARY (FIXED MARKET) Market share of alternative operators for local calls is 16%, while Türk Telekom has a market share of 84%. Market share of alternative operators for national calls is 43%, while Türk Telekom has a market share of 57%. Market share of alternative operators for calls to mobile networks is 44%, while Türk Telekom has a market share of 56%. Market share of alternative operators for international call origination is 41.6%, while Türk Telekom has a market share of 58.6%. Market share of alternative operators for international calls terminated on fixed network is 68.5%, while Türk Telekom has a market share of 31.5%. 6 EXECUTIVE SUMMARY (FIXED MARKET) Market share of alternative operators for international calls terminated on mobile networks is 78.9%, while Türk Telekom has a market share of 21.1%. Market share of alternative operators for call origination from fixed network is 32.1% (share in total traffic), while Türk Telekom has a market share of 67.9%. Germany is the most frequently communicated country via fixed networks (outgoing and incoming). Fixed Minutes of Usage (MoU) is 136. Türk Telekom’s ARPU is 24.4 ₺. 7 EXECUTIVE SUMMARY (BROADBAND INTERNET) The number of broadband subscribers, which was 6 million in 2008, is around 55.3 million(*) Number of internet subscribers in Turkey increased by 6.8% as compared to the previous quarter thanks to the increase in number of mobile and fibre internet subscribers. Annual growth rate of total number of internet subscribers has reached to 24.6%. Number of xDSL subscribers in the first quarter is over 7.4 million. Number of mobile broadband subscribers (computer and mobile handset) is around 45.3 million. (*) Mobile broadband ratio given here is updated. Currently, it includes the subscribers who have used packages less than one month period, who have used packages longer than one month period and who have accessed internet without any packages. Previously, it was just consisted of the subscribers who had packages longer than one month period. 8 EXECUTIVE SUMMARY (BROADBAND INTERNET) Number of cable internet subscribers reached to 664,095. Nearly 70.2% of fixed broadband subscribers in Turkey prefer offers providing 10-30 Mbps download speeds. 81.7% of users connecting to mobile internet via computer have a data usage of 100 Mb and above. Almost 14.9% of subscribers are within the 0-50 Mb interval. 9 EXECUTIVE SUMMARY (MOBILE MARKET) There are around 73.65 million mobile subscribers corresponding to 93.5% penetration rate. Mobile penetration rate exceeds 100% when 0-9 year’s old population are excluded. After launching of 4.5G services on the 1st of April, 2016, number of 4.5G subscribers reaches to 38.6 million, while number of 3G subscribers falls to about 28.6 million in the second quarter. Turkcell has 44.2%, Vodafone has 31.3% and Avea has 24.5% market share according to the number of subscribers. Nearly 51.4% of total mobile subscribers are postpaid users. Almost 10.7% of total mobile subscribers are corporate subscribers while the rest are individuals. Churn rates are 2.4% for Turkcell, 2.6% for Vodafone and 2.4% for Avea. 10 EXECUTIVE SUMMARY (MOBILE MARKET) As of August 3rd, 2016 total number of ported numbers are around 96.2 million (cumulative). M2M subscribers reached almost 3.7 million in the second quarter of 2016. Germany is the most frequently communicated country via mobile networks (outgoing and incoming). Total number of SMS is around 23.7 billion and number of MMS is 21 million. With respect to revenues, market share of Turkcell is 39,3 % while market shares of Vodafone and Avea are 38,7 % and 22% respectively. 11 EXECUTIVE SUMMARY (MOBILE MARKET) Voice revenues make up 60.3% of Turkcell’s total revenues, 37.8% of Vodafone’s and 43% of Avea’s. SMS+MMS revenues make up 5.5% of Turkcell’s revenue and corresponding figures are 8.3% for Avea and 10.1% for Vodafone. Data revenues make up 49.5% for Vodafone, 43.4% for Avea and 27.9 % for Turkcell. ARPU is 25.4 ₺ for Turkcell, 26 ₺ for Vodafone and 24.8 ₺ for Avea. As of June 2016, Turkcell’s MoU is 339, Vodafone’s MoU is 460 and Avea’s MoU is 507. Overall MoU rate for Turkey is 426 minutes for 2016 Q2. 12 EXECUTIVE SUMMARY (OTHER OPERATORS) Alternative operators have fiber length of 58,956 km, while Türk Telekom has 218,802 km of fiber infrastructure. Nearly 124,560 km of this infrastructure is used for backbone and the remaining is used for access. Infrastructure operators’ total revenue is around 375,5 million ₺. TURKSAT, as an operator of cable broadcasting services, has 1,151,323 cable TV subscribers and has 854,719 digital cable TV subscribers. Number of subscribers having GMPCS mobile telephony services is 7,785 and corresponding revenue is approximately 2.2 million ₺. 13 EXECUTIVE SUMMARY (OTHER OPERATORS) Satellite communication operators provide services such as international internet connections, video conference and point-topoint international satellite data circuits, to 10,681 subscribers. Total revenue generated from these services is approximately 108 million ₺. Total number of calls for directory services is 5,296,889 and the corresponding call time is 8,898,131 minutes. Total revenue of DQ operators is approximately 18 million ₺. Number of subscribers having PMR/PAMR services is 2,868 , number of users is 115.983 and the total revenue is around 6.5 million ₺. 14 MARKET OVERVIEW Number of Authorizations Based on Authorization Type (As of August 15th, 2016) Authorization Type Services Number of Authorizations Authorization Agreement Satellite and Cable TV Services 1 GSM Services 3 IMT-2000/UMTS Services 3 Several Telecommunication Services 1 Satellite Telecommunication Services 44 Satellite Platform Services 19 Infrastructure Operation Services 173 Internet Service Providers 359 Fixed Telephony Services 0 Cable TV Services 22 GMPCS Mobile Telephony Services 9 GSM 1800 Services on Air Vehicles 3 Mobile Virtual Network Operator Services 51 IMT Services 3 GMPCS Mobile Telephony Services 3 PMR/PAMR Services 80 Infrastructure Operation Services 9 Fixed Telephony Services 179 Directory Enquiry Services 13 Mobile Virtual Network Operator Services 34 Concession Agreement Authorized by Notification Authorized by Right of Use TOTAL 1009 15 MARKET OVERVIEW Net Sales of Türk Telekom and Mobile Operators, ₺ IFRS 2011 2013 2014* 2015 Türk Telekom 7,191,004,808 7,846,543,953 7,774,326,701 7,698,705,632 Turkcell 8,030,300,214 8,723,533,175 9,123,141,855 9,371,204,954 10,060,441,508 Vodafone 4,333,479,363 4,917,505,698 5,734,389,736 6,747,411,285 8,427,327,284 Avea 3,080,495,071 3,474,743,736 3,838,111,740 4,312,489,175 4,966,653,570 Toplam TPL 2012 7,935,891,670 22,635,279,456 24,962,326,562 26,469,970,032 28,129,811,046 31,390,314,032 Türk Telekom 7,374,599,666 7,253,226,575 7,237,240,887 7,299,814,772 Turkcell 8,332,040,983 8,828,290,710 9,339,277,751 9,569,192,094 10,231,570,128 Vodafone 3,741,607,933 4,380,371,258 4,773,658,515 5,153,420,107 6,152,362,942 Avea 2,906,743,653 3,354,467,547 3,808,180,931 4,269,465,539 4,925,584,027 Toplam 7,551,953,946 22,354,992,235 23,816,356,090 25,158,358,084 26,291,892,512 28,861,471,043 IFRS: International Financial Reporting Standards, TPL: Tax Procedure Law (*) Vodafone updated its 2013 net sales data in 2014 Q4. Net Profit of Türk Telekom and Mobile Operators* , ₺ 2011 2012 2013 2014 2015 Türk Telekom 2,468,971,871 2,995,771,673 1,277,576,133 2,483,731,826 1,302,398,865 Turkcell 2,262,195,067 2,421,010,843 2,365,193,056 2,300,631,352 1,730,528,891 Vodafone -696,907,047 -91,669,117 40,981,479 53,634,967 -132,072,305 -1,054,556,808 -752,521,475 -726,954,492 -793,497,469 -935,100,076 Avea (*) Based on the income statements of operators notified to ICTA. 16 MARKET OVERVIEW Net Sales of Türk Telekom and Mobile Operators, ₺ 2015-2 2015-3 2015-4 2016-1 2016-2 Türk Telekom 1,951,343,398 2,013,618,731 2,107,941,130 2,042,943,943 2,254,795,294 Turkcell 2,459,377,063 2,675,461,611 2,575,156,931 2,494,371,584 2,537,609,144 Vodafone 2,041,958,118 2,225,064,392 2,249,175,575 2,392,685,504 2,494,942,004 Avea 1,219,400,904 1,298,685,471 1,282,125,997 1,333,879,407 1,416,221,978 TOTAL 7,672,079,484 8,212,830,205 8,214,399,633 8,263,880,437 8,703,568,419 2016-1 2016-2 Net Sales of Other Operators, ₺ Operator Type Internet Service Providers 2015-2 2015-3 2015-4 1,172,755,954 1,244,261,171 1,369,560,341 1,417,480,392 1,480,700,296 Fixed Telephony 312,922,030 356,565,792 323,165,266 305,506,599 326,413,150 Infrastructure 183,318,996 287,431,702 265,878,742 280,554,493 375,520,095 Satellite Telecommunication 91,223,658 95,412,128 86,335,030 105,174,642 108,083,108 Directory Information 18,334,603 18,625,267 20,046,004 17,279,778 18,214,664 Cable TV 132,264,966 130,944,904 125,414,280 118,701,179 120,659,070 GMPCS 2,085,250 1,908,760 4,053,900 1,981,717 1,734,509 PMR/PMAR 3,780,333 3,817,140 5,063,303 8,032,075 6,530,771 TOTAL 1,916,685,790 2,138,966,864 2,199,516,866 2,254,710,874 2,437,855,663 • Based on the quarterly notifications of operators to ICTA. 17 MARKET OVERVIEW Annual Investments of Türk Telekom and Mobile Operators*, ₺ 2011 Türk Telekom 2012 2013 2014 2015 1,371,661,333 1,430,588,567 1,372,029,459 1,012,532,009 1,219,033,242 Turkcell 894,292,037 947,118,055 1,057,753,655 1,360,000,236 6,772,281,657 Vodafone 799,790,150 588,602,244 621,412,373 942,973,136 3,853,415,613 Avea 799,871,481 756,699,109 705,706,896 782,085,603 4,112,035,110 3,865,615,001 3,723,007,975 3,756,902,383 4,097,590,985 15,956,765,623 TOTAL (*) Based on the income statements of operators notified to ICTA. Quarterly Investments of Türk Telekom and Mobile Operators, ₺ 2015-2 2015-3 Türk Telekom 194,667,540 214,079,059 Turkcell 428,714,634 Vodafone Avea TOTAL 2016-1 2016-2 734,729,622 60,091,525 276,610,582 277,381,660 5,845,131,870 470,329,809 482,145,327 201,143,309 262,192,992 3,021,626,741 400,624,937 311,574,623 192,428,722 233,125,848 3,528,162,177 471,044,240 295,683,698 986,779,559 13,129,650,410 1,402,090,512 1,366,014,230 1,016,954,205 2015-4 Quarterly Investment of Other Operators, ₺ 2015-2 Other Operators 179.944.099 2015-3 467.398.743 2015-4 507.851.338 2016-1 255.491.612 2016-2 302.004.363 18 MARKET OVERVIEW Annual Voice Traffic Volume, Billion Minutes 250 189,2 200 150 168,9 132,2 149,5 19,4 202,6 219,1 14,0 16,7 21,8 23,6 23,9 100 50 108,2 233,9 11,3 125,8 147,1 169,8 185,9 2012 2013 205,2 222,6 0 2009 2010 2011 Mobile Fixed 2014 2015 Total Quarterly Voice Traffic Volume, Billion Minutes 19 MARKET OVERVIEW Total Traffic Distribution, Million Minutes 2016-2 57.795 1.476 989 2.722 2016-1 54.016 1.479 934 2.749 2015-4 54.172 1.689 1.017 2.774 2015-3 54.230 1.603 972 2.827 2015-2 53.679 1.8751.024 2.725 2015-1 49.449 2.119 1.017 2.748 2014-4 49.927 2.173 1.046 2.802 2014-3 50.277 2.186 1.105 2.829 2014-2 49.493 2.503 1.198 2.610 2014-1 44.652 2.633 1.128 2.587 0% 10% 20% Mobile to Mobile% Total Traffic Distribution, 30% 40% 50% Fixed to Fixed 60% Fixed to Other 70% 80% 90% 100% Mobile to Other 2016-2 91,8 4,3 2,3 1,6 2016-1 91,3 4,6 2,5 1,6 2015-4 90,8 4,7 2,8 1,7 2015-3 90,9 4,7 2,7 1,6 2015-2 90,5 4,6 3,2 1,7 2015-1 89,7 5,0 3,8 1,5 2014-4 89,2 5,0 3,9 1,9 2014-3 89,1 5,0 3,9 2,0 2014-2 88,7 4,7 4,5 2,1 2014-1 87,6 0% 10% 20% Mobile to Mobile 30% 40% Mobil to Other 5,1 50% 60% Fixed to Fixed 70% 80% Fixed to Other 90% 5,2 2,2 100% 20 CONSUMER COMPLAINTS # and % of Consumer Complaints for Each Service, 2016 Q2 Satellite Platform Services 1497 5% Fixed Cable TV Telephony Services 59 Services 0% 3441 11% Mobile 13663 44% ISP 12450 40% # of Consumer Complaints per «1 million Subscribers» 1.600 1.400 1.338,6 1.200 1.000 800 600 826 544 400 200 0 384,6 305,9 185,5 51,2 154 97 2015-1 ISP 2015-2 Satellite Platform 2015-3 Mobile 2015-4 2016-1 Fixed Telephony 2016-2 Cable TV 21 FIXED MARKET Fixed-Line Subscribers and Penetration Rate 24 22,3 20,6 16 18,3 14 20 17,7 16,3 14,6 14,4 14,3 4 11,25 11,32 11,49 12,53 13,55 6 16 12 13,86 8 15,21 10 16,20 Millions 12 % 18 8 4 2 0 0 2010 2011 2012 2013 2014 Number of Subscribers 2015 2016-1 2016-2 Penetration 22 FIXED MARKET Number of Users of FTS Providers, 2016 Q2 Method 2015-2 2015-3 Carrier 151,565 161,503 Pre-selection Call-by-call 69,289 Carrier Selection 77,589 2015-4 2016-1 2016-2 180,462 194,981 200,404 61,326 57,730 47,626 Market Shares of FTS Providers Based on # of Users, 2016 Q2 Alternative Operators Market Share (%) TTNET 53.7 Superonline 14.5 Turknet 8.1 İş Net 5.0 Vodafone Net 3.8 Millenicom 3.4 Netgsm 2.4 TTM Telekom 1.8 Voys Telekom 1.5 Diğer 5.7 23 FIXED MARKET Breakdown of Annual Fixed Revenues of Türk Telekom, % 2015 34,8 2014 47,9 39,6 2013 42,1 47,7 2012 3,5 4,2 9,6 3,8 4,8 9,8 4,3 4,8 38,5 56,6 31,6 4,7 5,3 3,9 2,7 2011 60,6 27,0 6,4 2010 60,5 27,1 6,9 3,4 2,1 2009 61,4 24,3 0% 10% 20% 30% PSTN Access 40% 50% 60% Leased Lines 70% Interconnection 7,6 80% 90% 3,7 2,2 3,3 3,5 100% Others Breakdown of Quarterly Fixed Revenues of Türk Telekom, % 2016-2 28,9 55,0 2016-1 32,2 2015-4 31,6 2015-3 54,2 2015-1 10% 20% PSTN 3,5 49,0 38,4 0% 3,3 3,7 48,1 35,7 Access 40% 50% Leased Line 60% 14,0 4,5 9,9 3,5 4,4 47,0 30% 9,8 3,5 3,6 6,6 47,4 33,9 2015-2 3,0 3,3 4,3 3,8 70% Interconnection 80% 90% Other 7,5 6,6 100% 24 FIXED MARKET Breakdown of Türk Telekom’s Traffic, % 2016-2 62,2 2,1 30,8 4,7 2016-1 61,8 2,3 30,5 5,2 2015-4 65,3 2,3 27,6 4,8 2015-3 64,7 2,5 28,2 4,5 2015-2 67,5 2015-1 2,4 69,8 0% 2,2 20% 40% Onnet 60% International Mobile 25,9 4,2 23,7 4,3 80% FTS 100% Other Breakdown of Türk Telekom’s Traffic, Million Minutes 2015-2 2015-3 2015-4 2016-1 2016-2 On-net 1.385 1.165 1.229 1.015 1.042 International 531 507 519 502 515 Mobile 87 82 90 85 79 FTS 49 46 44 38 35 DQ Services - - - 3 3 TOTAL 2.052 1.800 1.881 1.643 1.675 25 FIXED MARKET Market Shares Based on Voice Revenues*, % 100% 90% 14 15 17 16 17 17 86 85 83 84 83 83 2015-1 2015-2 2015-3 2015-4 2016-1 2016-2 80% 70% 60% 50% 40% 30% 20% 10% 0% TT FTS (*) Calculated from minute-based voice revenues of TT and net sales of FTS providers. Call Origination Market Shares from Fixed Networks, % 100% 90% 80% 44 44 48 46 51 47 56 56 52 54 49 53 2015-1 2015-2 2015-3 2015-4 2016-1 2016-2 70% 60% 50% 40% 30% 20% 10% 0% TT FTS 26 FIXED MARKET FTS and TT Comparison for Local Calls, % 100 85,5 80 85,0 85,1 84,3 82,2 84,0 17,8 16,0 (%) 60 40 15,7 20 14,5 14,9 2015-1 2015-2 15,0 0 2015-3 TT 2015-4 2016-1 2016-2 FTS FTS and TT Comparison for National Calls, % 100 80 85,5 85,0 85,1 84,3 82,2 84,0 (*) Market Shares are based on traffic volume. (%) 60 40 15,7 20 14,5 14,9 2015-1 2015-2 17,8 16,0 15,0 0 2015-3 TT 2015-4 FTS 2016-1 2016-2 27 FIXED MARKET FTS and TT Comparison for F2M Calls, % 80 (%) (*) Market Shares are based on traffic volume. 56,4 56,4 60 54,5 40 45,5 43,6 43,6 2015-1 2015-2 2015-3 55,0 57,7 56,0 42,3 44,0 45,0 20 0 TT FTS and TT Comparison for International Calls, % (%) 80 60 54,5 40 45,5 56,4 43,6 56,4 43,6 55,0 45,0 57,7 56,0 42,3 44,0 2015-4 2016-1 2016-2 FTS Most Frequently Communicated Countries via Fixed Networks Highest Rate of Traffic Highest Rate of Traffic Sent to Received From Germany Germany Pakistan France UK UK Italy Greece Bulgaria KKTC 20 0 2015-1 2015-2 2015-3 TT 2015-4 FTS 2016-1 2016-2 28 FIXED MARKET FTS and TT Comparison for International Incoming Calls Terminated on Fixed Networks, % (%) 80 60 54,5 40 45,5 56,4 56,4 43,6 43,6 55,0 57,7 56,0 42,3 44,0 45,0 20 0 2015-1 2015-2 2015-3 TT 2015-4 2016-1 2016-2 FTS FTS and TT Comparison for International Incoming Calls Terminated on Mobile Networks, % (%) 80 56,4 56,4 60 54,5 40 45,5 43,6 43,6 2015-1 2015-2 2015-3 55,0 45,0 57,7 56,0 42,3 44,0 (*) Market Shares are based on traffic volume. 20 0 TT 2015-4 FTS 2016-1 2016-2 29 FIXED MARKET Fixed MoU, Minutes 160 145 137 134 139 134 136 2015-3 2015-4 2016-1 2016-2 120 80 40 0 2015-1 2015-2 ARPU, ₺ 25 20 24,37 23,89 23,63 23,47 23,27 10 23,17 15 5 30 0 2015-1 2015-2 2015-3 2015-4 2016-1 2016-2 BROADBAND INTERNET Number of Broadband Internet Subscribers* 60 55,3 55 48,6 50 41,2 45 9,9 9,5 40 32,6 Millions 35 27,6 30 7,9 20 14,3 15 5 0 8,4 22,3 25 10 8,9 6,0 8,8 7,1 14,7 6,0 6,4 2,5 7,2 2008 2009 2010 Fixed 45,3 39,1 7,6 2011 32,4 19,7 2012 24,2 2013 Mobile (*) Fixed, mobile, cable modem, fiber etc. all means of broadband access are included 2014 2015 Jun.2016 Total 31 BROADBAND INTERNET Breakdown of Number of Internet Subscriptions 2015-2 2016-1 2016-2 xDSL 6,864,772 7,340,576 7,444,432 Mobile Internet from Computer 1,661,824 1,465,689 1,329,239 Mobile Internet from Mobile Handset 33,636,811 40,482,100 43,992,910 Cable Internet 583,053 653,177 FTTH 551,144 FTTB Fibre (total) Other TOTAL Quarterly Growth Rate Annual Growth Rate (2016 Q1 – 2016 Q2) (2015 Q2 – 2016 Q2) 1.4% 8.4% -9.3% -20.0% 8.7% 30.8% 664,095 1.7% 13.9% 687,974 665,086 -3.3% 20.7% 1,005,080 1,044,767 1,110,507 6.3% 10.5% 1,556,224 1,732,741 1,775,593 2.5% 14.1% 92,676 93,831 99,479 6.0% 7.3% 44.395.360 51.768.114 55.305.748 6,8% 24,6% 32 BROADBAND INTERNET Data on 3G and 4.5G Subscribers 2015-2 2015-3 2015-4 2016-1 2016-2 61.076.640 63.066.580 64.256.311 65.949.652 28.599.109 - - - - 38.597.384 Mobile Internet from Computer (Total) 1.646.892 1.662.797 1.597.606 1.465.689 1.329.239 Mobile Internet from Computer (4.5G) - - - - 671.884 Mobile Internet from Mobile Handset (Total) 34.232.558 35.876.101 37.469.948 40.482.100 43.992.910 Mobile Internet from Mobile Handset (4.5G) - - - - 29.300.175 Mobil Internet Usage, Tbyte (Total) 126.027 156.669 165.366 194.558 255.376 Mobil Internet Usage, Tbyte (4.5G) - - - - 224.945 # of 3G Subscribers # of 4.5G Subscribers (*) 2015-Q2 data has been updated due to correction from operators Post-Paid and Pre-Paid Mobile Broadband Internet Subscriptions, 2016 Q2, % 100% 80% 60% 54% 53% 40% 46% 47% Avea Vodafone Turkcell 60% 40% 20% 0% Prepaid Postpaid 33 BROADBAND INTERNET Breakdown of Other Means of Internet (by subscriber) 2015-2 2016-1 2016-2 Dial Up 45.531 44.997 44.908 ISDN BA/PA 15.124 14.739 14.571 Satellite Communications 10.054 10.558 10.625 Metro Ethernet 12.319 13909 13.853 PLC, BPL 906 268 268 Frame Relay 38 32 31 ATM 14 13 13 Other 8.690 9.198 15.210 TOTAL 92.676 93.714 99.479 ISP Market Shares Based on # of Subscribers, 2016 Q2* Operator % TTNet 70,4 Superonline 18,2 Vodafone Net 4,5 Doğan TV Digital 3,4 Turknet 1,7 Millenicom 1,1 Others 0,7 (*) xDSL, Fiber, Metro, FR, PLC, ATM, etc. included cable and mobile connections are excluded. 34 BROADBAND INTERNET Distribution of Fixed Broadband Subscribers according to Technology and Operator, % 2016-2 58,0 16,9 6,7 17,9 0,5 2016-1 58,6 16,5 6,7 17,7 0,5 2015-4 59,3 16,0 6,6 17,6 0,5 2015-3 60,8 14,8 6,5 17,4 0,5 2015-2 61,7 14,2 6,4 17,2 0,5 2015-1 62,7 13,4 6,4 16,9 0,5 2014-4 63,8 6,3 16,4 0,6 2014-3 65,0 5,9 16,0 0,7 2014-2 66,1 11,8 5,8 15,6 0,7 2014-1 66,9 11,5 5,8 15,0 0,8 0 10 20 xDSL TTNet 30 12,8 12,4 40 50 xDSL Other ISPs 60 Cable 70 Fiber 80 Other 90 100 35 BROADBAND INTERNET Mobile Internet Usage Speeds from Computer, 2016 Q2, % 5,8 14,9 14,5 3,5 6,4 18,2 36,7 Connection Speeds for Fixed Broadband, 2016 Q2 0-50 MB 250 MB-1 GB >8 GB 50-100 MB 1-4 GB 100-250 MB 4-8 GB Mobile Internet Usage Speeds from Mobile Handsets, 2016 Q2, % %15,6 3,8 %8,2 10,8 %70,2 %0,2 16,2 1,0 1,6 %0,7 %2,4 %1,8 1,7 2,6 %0,7 5,6 37,5 x≤1 Mbps 4 Mbps < x ≤8 Mbps 30 Mbps < x ≤50 Mbps 1 Mbps < x ≤2 Mbps 8 Mbps < x ≤10 Mbps 50 Mbps < x ≤100 Mbps 19,3 2 Mbps < x ≤4 Mbps 10 Mbps < x ≤30 Mbps 100Mbps<x 0-5 MB 50-100 MB 5-10 MB 100-250 MB 10-25 MB 250 MB-1 GB 25-50 MB 1-4 GB 36 MOBILE MARKET Number of Mobile Subscribers and Penetration Rate 73.650.996 Millions 80 92,1% 86,5% 70 83,8% 87,4% 89,5% 90,9% 92,5% 93,5% 93,7% 93,5% 9,4 7,9 6,5 13,6 60 80% 20,4 25,9 50 28,6 60% 33,9 42,4 40 30 65,8 55,7 65,9 64,3 58,3 40% 49,3 41,8 20 38,6 31,4 10 0 100% 19,4 7,1 1,1 4.5G Abone Sayısı 4.5G M2M M2M Abone Sayısı 1,5 2,1 2,6 3,2 3,4 20% 3,7 0% 3G 3G Abone Sayısı MobilePenetrasyon Penetration Yüzdelik Mobil 2G Abone Sayısı 2G Total Number of Mobile Subscriptions, Million 80 72,04 72,17 73,24 73,64 73,81 73,65 34,26 33,97 34,24 34,01 33,34 22,75 32,57 23,04 60 40 21,14 21,46 22,01 22,37 16,64 16,74 16,98 17,26 17,72 18,03 2015-1 2015-2 2015-3 2015-4 2016-1 2016-2 Vodafone Turkcell 20 0 Avea Toplam Total 37 MOBILE MARKET Monthly Churn Rates of Mobile Operators, % 5% 4% 3% 2% 1% 0% Jul.15 Aug.15 Sep.15 Oct.15 Nov.15 Dec.15 Jan.16 Feb.16 Mar.16 Apr.16 May.16 Jun.16 Avea 2,7% 2,6% 2,4% 2,6% 2,6% 2,8% 2,6% 2,8% 3,0% 2,7% 2,7% 2,7% Vodafone 2,8% 2,6% 2,4% 2,8% 2,5% 2,9% 3,0% 2,8% 3,2% 2,7% 2,7% 2,6% Turkcell 2,5% 2,3% 2,3% 2,3% 2,2% 3,6% 2,3% 2,9% 2,5% 2,6% 3,3% 2,4% Distribution of Individual and Corporate Mobile Subscribers, % Pre-Paid and Post-Paid Mobile Subscriptions, % 100% 80% 10,7 54,5 53,4 53,0 51,8 51,0 49,6 45,5 46,6 47,0 48,2 49,0 50,4 2015-1 2015-2 2015-3 2015-4 2016-1 2016-2 60% 40% 20% 89,3 Individual Corporate 0% Prepaid Postpaid 38 MOBILE MARKET Mobile Number Portability, Quarterly 3.500.000 3.000.000 2.908.718 3.212.126 2.903.726 2015-4 1.000.000 2.651.835 1.500.000 2015-3 3.268.086 2.000.000 3.050.413 2.500.000 500.000 2016-2 2016-1 2015-2 2015-1 0 2016 Q2 Net Gaining Subscriber Numbers, Thousands Net Transferred Number, Thousand 500 376 400 300 200 100 0 -100 272 224 184 210 159 107 91 40 2015-1 137 116 2016-1 2016-2 44 2015-2 2015-3 2015-4 -200 -300 -400 -275 -312 -268 -266 -326 -500 -513 -600 Avea Vodafone Turkcell 39 MOBILE MARKET Market Shares according to Number of Subscribers, % Market Shares according to Traffic Volume, % 100% 100% 80% 60% 27,5 27,5 27,2 27,8 28,9 29,1 35,3 35,5 35,2 35,7 35,7 35,8 21,5 21,3 20,9 21,0 21,4 22,0 35,2 35,7 35,9 36,8 38,5 38,7 43,3 43,0 43,2 42,2 40,1 39,3 2015-1 2015-2 2015-3 2015-4 2016-1 2016-2 Vodafone Avea 80% 60% 40% 40% 20% Market Shares according to Revenue, % 37,2 37,0 37,6 36,5 35,4 35,1 20% 0% 0% 2015-1 2015-2 Avea 2015-3 2015-4 Vodafone 2016-1 Turkcell 2016-2 Turkcell 40 MOBILE MARKET Breakdown of Mobile Traffic, Million Minutes 2016-2 31.393 26.402 2.569 153 2016-1 29.667 24.348 2.556 193 2015-4 30.159 24.013 2.593 180 23.927 2.616 211 2015-3 30.302 2015-2 30.603 23.075 2.538 186 2015-1 28.587 20.862 2.564 184 0% 20% On-net 40% Other MNOs 60% Fixed 80% 100% International+DQ services+Satelite+others Breakdown of Mobile Traffic, % 2016-2 51,9 43,6 4,2 0,3 2016-1 52,3 42,9 4,5 0,3 2015-4 53,0 42,2 4,6 0,3 2015-3 53,1 41,9 4,6 0,4 2015-2 54,3 40,9 4,5 0,3 2015-1 54,8 40,0 4,9 0,4 0% 20% On-net 40% Other MNOs 60% Fixed 80% 100% International+DQ services+Satelite+others 41 MOBILE MARKET Most Frequently Communicated Countries via Mobile Networks, 2016 Q2 Highest Rate of Traffic Sent to Germany Highest Rate of Traffic Received From Germany UK Austria France Saudi Arabia Turkmenistan France Netherlands Switzerland Breakdown of Mobile Revenue, % 100% 6,4% 2,5% 5,4% 49,5% 43,4% 4,9% 90% 80% 27,9% 70% 60% 5,5% 7,5% 50% 8,3% 10,1% 40% 30% 38,0% 60,3% 20% 43,0% 37,8% 49,5% 10% 0% Turkcell Voice Vodafone SMS+MMS Data Avea Toplam Value Added Services 42 MOBILE MARKET 30.000 Mobile SMS and Mobile MMS, Million (*) 26.431 25.279 24.500 21,4 22,6 21,6 2015-1 2015-2 2015-3 24.473 22.894 23.713 17,5 17,7 21,0 2015-4 2016-1 2016-2 20.000 10.000 0 SMS MMS Number of SMS & MMS, Million 2015-1 2015-2 2015-3 2015-4 2016-1 2016-2 Service Avea Turkcell Vodafone SMS 8,825 6,730 9,724 MMS 9.1 9.1 3.2 SMS 8,657 6,262 9,581 MMS 10.2 9.1 3.3 SMS 8,940 6,797 10,694 MMS 10.2 8.5 2.9 SMS 8,245 6,103 10,123 MMS 8.0 7.1 2.4 SMS 7,825 5,453 9,615 MMS 9.6 5.9 2.1 SMS 8,219 5,626 9,867 MMS 11.6 6.5 2.9 43 MOBILE MARKET Mobile ARPU, ₺ 25 24,8 26,0 25,4 23,7 25,2 24,5 23,5 25,2 24,7 22,7 23,6 23,6 10 22,1 22,4 22,5 15 23,8 25,3 25,4 20 Avea Vodafone Turkcell 5 0 2015-1 2015-2 2015-3 2015-4 2016-1 2016-2 MoU values of Mobile Operators, Minutes (*) 600 550 500 450 500 495 479 477 465 458 434 400 501 499 454 437 453 524 488 487 337 333 317 320 422 250 310 337 325 460 460 350 300 507 470 469 436 541 513 340 356 335 (*)Data dedicated mobile subscriptions are deducted from total # and recalculated back to a full year. 339 300 200 Jul.15 Aug.15 Sep.15 Oct.15 Nov.15 Dec.15 Jan.16 Feb.16 Mar.16 Apr.16 May.16 Jun.16 Avea Vodafone Turkcell 44 MOBILE MARKET Pre-Paid Mobile ARPU, ₺ 15 2015-3 16,4 14,5 13,1 2015-2 15,3 14,0 12,1 15,8 14,8 13,3 2015-1 15,3 14,3 12,6 15,0 13,8 11,0 5 14,0 12,7 11,0 10 Avea Vodafone Turkcell 0 2015-4 2016-1 2016-2 Post-Paid Mobile ARPU, ₺ 45 40 35 30 31,8 38,5 39,1 31,6 38,7 38,0 32,0 38,3 37,2 32,9 38,8 37,4 15 30,5 36,4 37,2 20 30,1 35,3 36,7 25 2015-1 2015-2 2015-3 2015-4 2016-1 2016-2 Avea Vodafone Turkcell 10 5 0 45 OTHER SERVICES Revenue of Alternative Network Operators Market Shares of Alternative Network Operators, 2016 Q2 Period Revenue, ₺ 2015-1 177,774,738 2015-2 183,318,996 2015-3 287,431,701 Superonline 46,6 2015-4 265,878,742 Vodafone Net 27,2 2016-1 280,554,493 Kule Hizmetleri 12,0 2016-2 375,520,095 MTCTR Memorex 3,6 T-Systems 2,2 İş Net 2,1 BT Bilişim 1,9 AT&T Global 1,1 Turknet 0,9 Equant İstanbul 0,7 Mednautilus 0,7 BT Telekom 0,6 Others 0,3 Operators Fiber Optic Networks of Alternative Operators Total Total Access Total Backbone Length Length (km) Length Total Length Owned Total Length Leased 2015-1* 39,861 12,392 42,769 9,484 52,254 2015-2 41,295 13,435 44,609 10,121 54,730 2015-3 42,361 13,032 45,007 10,386 55,393 2015-4 43,067 13,525 45,710 10,882 56,592 2016-1 44,593 13,563 46,670 11,486 58,155 2016-2 45,384 13,573 47,066 11,890 58,956 (*) 2015-1 Total length data has been updated due to correction from operators Market Share based on Net Sales (%) 46 OTHER SERVICES Market Share of Satellite Communication Operators based on # of Subscribers Satellite Communications Services Period # of Subscribers Revenue, ₺ Operator % 2015-1 11,048 85,567,472 EserTelekom 45,1 2015-2 11,050 91,223,658 Superonline 19,2 2015-3 12,009 95,412,128 İş Net 15,3 2015-4 10,441 86,335,030 Türksat 9,5 2016-1 10,558 105,174,642 Others 10,9 2016-2 10,861 108,083,108 Cable Platform Services Period # of Cable TV Subscribers # of Cable Telephony Subscribers # of IPTV Subscribers 2015-1 1,170,459 575,461 37,737 2015-2 1,159,748 583,053 35,523 2015-3 1,156,133 596,056 36,353 2015-4 1,160,985 629,064 34,806 2016-1 1,163,041 653,177 36,205 2016-2 1,151,323 664,095 40,567 47 OTHER SERVICES Digital Platform Services; Number of Domestic Users 2015-1 2015-2 2015-3 2015-4 2016-1 2016-2 DIGITÜRK 2,931,394 2,891,305 2,944,664 2,869,995 2,801,276 2,720,029 D-SMART 1,737,340 1,734,322 1,724,633 1,701,540 1,000,753 992,572 FILBOX 4,880 7,627 10,418 18,978 28,765 34,983 TIVIBU - - 46,410 74,751 116,387 144,811 48 OTHER SERVICES Directory Information Services # of Calls Call Duration (Minutes) Total # of Enquiries Revenue, , ₺ 2015-2 7,610,163 13,213,921 15,315,949 18,334,603 2015-3 7,208,801 12,219,577 15,380,317 18,625,267 2015-4 6,130,254 11,604,322 13,956,810 20,052,948 2016-1 5,787,491 10,093,766 15,388,217 17,279,778 2016-2 5,296,889 9,441,829 12,522,898 18,214,664 Period Market Share of Directory Information Operators based on Number of Calls, 2016 Q2 % Average Call Duration (Min.) BN Telekom (11880 – 11810 - 11888) 82.80 1.51 11818 Rehberlik (11818-11820) 9.39 2.52 Plus Telekom (11870 – 11890 – 11899) 4.65 2.71 Infoline (11824) 1.56 2.08 Jan İletişim (11833 - 11860) 1.05 1.85 Callturk (11858) 0.27 2.69 Mega Telekom (11881-11883) 0.20 1.74 Rehberlik Hizmetleri Servisi (11850) 0.07 1.20 Operator 49 OTHER SERVICES Market Share of GMPCS Operators Based on # of subscribers, % Operator 2015-1 2015-2 2015-3 2015-4 2016-1 2016-2 Teknomobil 66.6 66.3 66.1 70.9 70.8 71.9 Globalstar 32.0 32.3 31.7 25.9 25.5 24.3 Mobilkom 1.4 1.4 2.2 3.2 3.6 3.7 Other - - - - 0.1 0.1 PMR/PAMR Services GMPCS Services Period # of Subscribers # of Users Revenue, ₺ Period # of Subscribers Revenue, ₺ 2015-2 2,710 89,043 3,780,333 2015-2 6,244 2,085,250 2015-3 2,777 95,981 3,817,140 2015-3 6,338 1,908,760 2015-4 2,799 97,984 5,063,303 2015-4 7,829 4,053,900 2016-1 2,784 110,840 8,032,075 2016-1 7,909 1,981,717 2016-2 2,868 115,983 6,530,771 2016-2 7,785 2,217,915 50 ELECTRONIC COMMUNICATIONS MARKET IN TURKEY MARKET DATA (2016 Q2)* * In the event of any discrepancy, the original report in Turkish shall prevail.
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