Turk Telekom on Wednesday revealed that it has made a bid to take sole control of mobile unit Avea, and at the same time presented a set of first quarter results that showed revenue and EBITDA growth, but pressure on the bottom line.
The Turkish telco owns 89.99% of Avea and has submitted a non-binding offer for the remaining 10.01% held by Is Bankasi.
It did not disclose how much it has offered the bank for the stake, but said in a regulatory fili ng that the shares have a nominal value of 820.3 million lira (€282 million).
Securing the remaining stake in Avea would enable Turk Telekom to avoid having to float the unit, Reuters explained. Under a 2006 shareholder agreement, Is Bankasi has the right to call for an IPO this year, but any float would be impacted by the operator’s weak earnings, the newswire said.
Indeed, Turk Telekom’s mobile business recorded an operating loss of TRY10 million (€3.4 million) in the first quarter of this year, although that was an improvement on its TRY84 million loss in the year-ago period. And mobile revenues and EBITDA grew by 22% and 95% respectively.
Overall, Turk Telekom posted an operating profit of TRY805 million, up 11.3%, but it saw net income fall by 93.1% to TRY27 million (€9.3 million). Its bottom line was impacted by the depreciation of the lira against the U.S. dollar and an increase in capex; the telco spent TRY313 million in Q1, up from TRY279 million a year ago.
Revenue grew by 7.5% to TRY3.43 billion, while EBITDA increased by 10.8% to TRY1.33 billion.
"The results were mainly driven by our strong performance in both mobile and fixed broadband businesses," said Turk Telekom CEO Rami Aslan.
On the fixed broadband side, the Turkish market offers significant growth opportunities due to under-penetration and "favourable population dynamics," Aslan said.
"Turkey’s appetite for higher broadband speeds and higher capacity is an indication that our business will continue its solid growth in the long term," the CEO added.
Turk Telekom recorded 310,000 mobile net additions in Q1, driven by growth at its postpaid business. 49% of the telco’s mobile customers now use postpaid plans, giving it the highest postpaid percentage in the market, Aslan said.
"In addition, we grew our smartphone penetration to 59%, again highest in the market by a large margin," he said.
