Explanation regarding the news about Türk Telekom
Türk Telekom CEO Dr. Paul Doany attended the “new business models developed with 5G” panel during the 14th 5G World Summit, which was held at London this year and also met with some journalists as he gave information regarding the new fixed infrastructure leasing protocol that will be applied in Turkey. Dr. Doany also mentioned the main strategies that Turk Telekom has turned its attention to and following the journalists’ questions regarding CMB’s alteration in the Share Purchase Communique(1) and the draft regulation published by the BRSA (2), Doany touched upon the latest developments within the company. We respectfully present the following explanation in order to further enlighten the public regarding this interview that was published in various newspapers’ economy pages on 20-21 June 2018:
Fixed infrastructure leasing protocol:
As part of the scope of the protocol; Turk Telekom, the franchisee of the fixed infrastructure, will lease the current fiber infrastructure to interested operators who are committed to use for a long time under better conditions. When new infrastructure is needed, a collaboration with the operator will take place; Turk Telekom will lay down the infrastructure but the capital expenditure will be covered by the operator who made the demand for the extra infrastructure. In return, said operator will have the right to use the newly laid down infrastructure for a certain amount of time and benefit from the current infrastructure at a reduced price. Even though the infrastructure continues to be operated within the Turk Telekom body, when you keep in mind that Turk Telekom is executing its activities as a result of the concession right given by the government, the eventual owner of all the infrastructure will be the government, not the operators. Benefits of the new model:
- Operators’ capital expenditures will decrease,
- Regions without infrastructure will be provided with infrastructure investment,
- The extensity of fiber infrastructure will increase even more,
- By providing a better quality fixed infrastructure access, product variety will increase,
- Turkey’s broadband penetration will increase,
- The rights that the public have over infrastructure will be protected,
- Repetitive investments will be blocked, national resources will be used more efficiently,
- A sustainable infrastructure policy will be put in place,
- Within the frame of the current concession agreements, the infrastructure – whose coverage area is widening with this protocol – will belong to the government at the end of the day.
Latest developments regarding main shareholder OTAS:
As stated by Türk Telekom in the public disclosure dated 28.05.2013, OTAŞ used the propriety rights the company has over Türk Telekom’s shares to sign loan agreements with certain financial institutions in order to refinance and extend the terms of its current debts. OTAŞ used Türk Telekom’s shares as collateral of the aforementioned loan and pledged the shares under the condition that all share rights remain with OTAŞ. As our company is not a party to this debt in question, no official information regarding OTAS’s debt or the meetings that took place between OTAS and the banks have been divulged to us. According to information we receive from media, OTAS has failed to meet the financial obligations regarding this debt and certain processes may be applied as per the agreement OTAS has with the banks. As we have previously stated in our company’s 22 May 2018 dated public disclosure, an official statement has not been made to our company regarding the outcome of the process and/or plan. During the meeting with journalists, our CEO Dr. Paul Doany gave general information regarding possibilities of similar situations like this with examples from applications around the world. According to the press reports, the banks are currently executing their processes in frame with the credit agreement they have with OTAS and no information regarding the maturity of this process has officially reached us. It has been observed that the maturity mentioned in the interview has been misinterpreted by certain circles. These maturities have been used to describe the exit periods of investments carried out by special purpose companies around the world; not for describing the process of the credit restructuring that the banks are in talks with OTAS. In the event of an official notification to our Company on this matter, the public will be promptly informed within the scope of the related legislation.
The managements share purchases:
Our companies’ General Manager and Vice General Managers have made public disclosures on 8 June 2018 regarding their personal share purchases. They have carried out personal share purchases as an indication of the faith they have in our company’s five year strategy and proof that they will show the utmost commitment for the company’s performance to be at its best. Sources:
