Turkcell Iletisim Hizmetleri A.S. Q2 FY2025 earnings call

• Strong top line growth: Top line TRY 53 billion, 12% y-o-y growth. Group EBITDA TRY 23 billion, up 15% y-o-y, margin 43.5%. Net income from continuing operations TRY 4.4 billion, up 37% y-o-y.
• Postpaid growth: Added 816,000 postpaid subscribers this quarter, yearly net additions 2 million. Mobile ARPU up due to postpaid base expansion, price adjustments, and upselling.
• Strategic areas: Data Center & Cloud services grew 53%, Techfin maintained momentum. Focus on 5G, monitoring spectrum tender, investing in infrastructure.
• Customer focus: Implemented dynamic pricing, launched Tumbara loyalty program, Net Promoter Score led closest competitor by 17%.

Mobile: Top line reached TRY 53 billion with 12% y-o-y growth. Postpaid net additions of 816,000 this quarter, postpaid share in total mobile subscribers at 78%. Mobile ARPU increased by 9.8% y-o-y, churn rate 2.2%. Fixed Broadband: Subscriber base stable at 3.3 million. Residential fiber ARPU up 17.5% y-o-y, 67,000 new homepasses added, take-up rate 42.7%. Digital Business Services: Delivered solid growth of 39%, revenues exceeding TRY 4.9 billion. Data Center & Cloud: Revenues surged by 53%, plan to expand capacity to 50 megawatts by year-end. Techfin: Paycell revenue up 36%, Financell generated TRY 1.3 billion in revenues, net interest margin 4.9%.

• Reiterates full-year guidance. Anticipates moderation in performance in second half. Forecasts year-on-year inflation to be 30.5%.
• Remains prudent, waiting for clearer view on inflation dynamics and market conditions by end of third quarter before adjusting outlook.

• Competitive pressures in mobile market leading to high mobile number portability volume.
• Macroeconomic uncertainties impacting performance.
• Potential impact of new market entrants like Türksat entering the mobile market, which would affect competitive landscape.

Q: On fixed concession and 5G update, and CapEx target.

A: Fixed concession: Ministry of Transport and Infrastructure indicated renewal of Türk Telekom's concession; Turkcell sees value in broadening opportunities for mobile operators' 5G deployments. 5G: Waiting for official timeline, Ministry aims to make 5G services available by 2026. CapEx: ~65% allocated to fixed and mobile businesses, 13% to data center investments, 7% to renewable energy projects.

Q: Evaluation of guidance given high growth in first and second quarters, and TOGG's impact.

A: First question: Strong first half performance gives headroom, but price adjustments' impact tapers off, high base effect in prior year, so guidance remains. Second question: Automotive industry cyclical, TOGG needs time to reach sustainability, Turkcell sees it as part of e-mobility ecosystem, positive tax changes and cost management measures expected in midterm.

Q: Thoughts on Türksat entering mobile market.

A: No clear info from regulatory body; Türksat lacks mobile network infrastructure, building large-scale mobile network requires significant capital and tech, Turkcell confident in competitive position with strong network, customer focus, and innovation.