Turk Telekom starts up GSM

29 September 2000

State-owned Turk Telekom is pressing ahead with the development of its global system for mobiles (GSM) network, as part of a drive to ensure that its next effort to sell shares in the company is more successful. No bidders came forward to buy a 20 per cent tranche offered to strategic investors in mid-September. The Privatisation Administration (OIB) is now considering raising the stake on offer to 34 per cent (MEED 15:9:00).

Turk Telekom on 18 September activated its GSM licence, the country's fourth. The settlement of the fee for the licence involved the treasury deducting $2,525 million from the total amount that the government owes the company. This was the sum paid by Telecom Italia and local partner Is Bankasi for the third GSM licence.

Turk Telekom is now evaluating bids from five companies for contracts to supply the equipment necessary to launch the GSM service. The bidders are Sweden's Ericsson, Finland's Nokia, France's Alcatel, Germany's Siemens and the local Netas.

The company has also awarded two contracts for work on its fixed line system. Alcatel's local affiliate has a $121.3 million contract for the supply of synchronous digital hierarchy (SDH) and dense wavelength-division multiplexing (DWDM) networks. A $68 million contract has been signed with Netas to establish and maintain SDH services in 42 provinces.

OIB chief Ugur Bayar has now taken personal charge of the privatisation effort. The government had been looking to earn $2,000 million from the sale of the 20 per cent stake. However, prospective bidders were put off by reservations about management rights and by financial constraints following the wave of acquisitions and expensive licence auctions in Europe, analysts say. Bayar was quoted on 17 September as saying: 'Our experience with Turk Telekom has shown the necessity of being more careful about minority shares and management rights.'

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