Is a crisis looming in Turkey's telecommunications sector? Here are two major problems!

As we enter 2025, the electronic communications sector in Turkey has lost its growth momentum. While inflation-adjusted sector revenues have remained stagnant for 22 years, the market share of alternative operators remains at low levels. Fiber infrastructure investments are falling short, and the total market value of the sector is rapidly declining.

Real Revenues Have Not Increased for 22 Years

Sector revenue, which was 14.98 billion TL in 2003, reached 224.54 billion TL by the end of 2023. However, when adjusted for inflation, this figure remained at the 14.79 billion TL level. In the third quarter of 2024, real revenue was calculated at 4.5 billion TL. TELKODER Chairman of the Board Halil Nadir Teberci stated, "Growth cannot be achieved in real terms. Increasing competition and raising the market share of alternative operators is of critical importance."

Turkey Is Far Behind Europe

The market share of alternative operators was recorded at only 8.89 percent in the third quarter of 2024. While this rate reaches 50-60 percent levels in Europe, new regulations need to be implemented to increase competition in Turkey. Teberci added, "It is essential to review incentive mechanisms for alternative operators to grow."

Market Value of Telecom Giants Has Melted

The total market value of the two major operators in the sector was 22.90 billion dollars in 2008, but it fell to 10.15 billion dollars by the end of 2024. This decline negatively affects investor confidence and slows down investments in the sector.

Fiber Infrastructure Investments Are Behind Expectations

Fiber infrastructure length, which was 576,569 km in the second quarter of 2024, reached 588,148 km by the end of the third quarter. However, the fiber internet subscriber rate remained at only 7.91 percent. TELKODER states that accelerating fiber infrastructure investments is of critical importance in Turkey's digitalization process.

Fixed-Line Usage Has Almost Disappeared

While 17.4 percent of total voice traffic was provided by fixed lines in 2009, this rate fell to 1.54 percent in the third quarter of 2024. As users continue to turn to mobile operators, fixed-line usage has almost completely disappeared.

Communication Expenses Are Rising

The annual expenditure of a four-person family for mobile, fixed-line, and broadband services has risen to 17,166.40 liras. Of this amount, 3,961.48 liras consists of taxes. While users' communication costs are increasing, the high tax burden is noteworthy.

No Concrete Steps Taken on Data Centers and Internet Exchange Points

The 2025 Presidential Annual Program includes goals for establishing internet exchange points and determining standards for data centers. However, no concrete progress has been made in this area since 2019. TELKODER calls out, "Data center investments must be accelerated so that our country can keep its data locally and reduce costs."

The Future of the Sector Is at Risk

Far from growing, the electronic communications sector in Turkey continues to decline due to insufficient competition and investment. TELKODER's report clearly reveals that urgent measures must be taken for the sustainability of the sector.

News Source: Netizen Global