Türk Telekomünikasyon (TRKN.F) Update / Briefing Transcript

Turk Telekom Conference Call Summary Company Overview - Company: Turk Telekom - Industry: Telecommunications Key Points Fixed Line Concession Agreement - Turk Telekom announced the successful amendment and extension of its fixed line services concession until February 2050, marking a significant milestone for the company and Turkey's digital future [3][4] - The new agreement allows Turk Telekom to reshape its fixed line services strategy, focusing on digital transformation and infrastructure development [5] Financial Commitments - Turk Telekom will pay a concession fee of USD 2,500,000,000 plus VAT over a ten-year period starting from 2026 [6] - The company commits to an investment plan of USD 17,000,000,000 through 2050, aimed at enhancing its fixed line services and digital offerings [7][8] Market Position and Growth - Turkey's broadband subscriptions have increased from less than 9 per 100 inhabitants in 2009 to nearly 23 recently, with a growth rate of 7%, outpacing the OECD average of 3% [9] - Turk Telekom leads the fixed broadband market, holding significant shares in both wholesale and retail segments, with fixed line investments averaging around USD 700,000,000 over the past five years [10] Infrastructure Development - Turk Telekom has built nearly 80% of Turkey's fiber network, covering 500,000 kilometers and passing over 33,500,000 homes [10] - The company aims to expand fiber coverage to 38,000,000 homes by the end of the decade, with a target of 18,000,000 subscribers and 76% on FTTH B packages by 2030 [16][17] Digital Ecosystem and Future Plans - The company plans to leverage its extensive fiber backbone to support the rollout of 5G technologies, ensuring ultra-low latency and high capacity [13] - Turk Telekom aims to expand into new verticals such as data centers, cloud services, AI, IoT, and cybersecurity, maximizing ROI [15][18] Financial Health and Leverage - Turk Telekom maintains a conservative net debt to EBITDA ratio of 0.68, with expectations to remain aligned with global standards despite upcoming investments [25][29] - The company plans to finance its obligations through a mix of operational cash flow and market borrowing, including potential sukuk and green bonds [39][42] Regulatory Environment - The new wholesale pricing mechanism introduced by the regulator aims to increase predictability and transparency in the sector, allowing Turk Telekom to manage its business more effectively [14][49] - The company emphasizes the need for legal regulations to prevent duplicate infrastructure investments, which it views as wasteful [52] EBITDA and CapEx Expectations - Turk Telekom expects EBITDA margins to reach 41% by 2025, with a CapEx to sales ratio of 29% [73][78] - The company does not anticipate significant changes to its CapEx expectations due to the concession update, aiming to maintain current investment levels [78] Conclusion - Turk Telekom is positioned to lead Turkey's digital transformation through strategic investments in fixed line services and infrastructure, while maintaining financial discipline and exploring new growth opportunities in the digital ecosystem [20][103]