TURKEY: Ericsson wins $100 million GSM contract

05 July 1996

Sweden's Ericsson has been awarded a contract valued at $100 million for the supply of equipment to the local Turkceli, the country's leading operator of global standard for mobile (GSM) networks. This is the latest in a series of directly negotiated contracts linked to Turkcell's rapid expansion (Telecoms, MEED Special Report, 1:3:96).

The Swedish company will supply new radio base stations, switching equipment, and services. Delivery and installation will start later in 1996.

Turkcell at present holds a virtual monopoly of GSM services in Turkey.

However, this is only because the operation contract of its main competitor, Telsim, with state Turk Telekomunikasyon (Turk Telekom), was terminated in November 1995, when the constitutional court invalidated legislation for the privatisation of Turk Telekom.

The privatisation would have included full denationalisation of GSM services into licences. Both Turkcell and Telsim began operations in 1994 under revenue-sharing agreements with Turk Telekom, which apportion the companies 39.2 per cent of air-time, system and connection fees.

As a result, Telsim has fallen behind as its subscribers remained static at about 100,000, while Turkcell in the first six months has increased its subscribers to about 400,000 from 180,000. Telsim was also forced to suspend a $118 million investment programme planned in 1996. In the past, it has ordered switches from Germany's Siemens, and transmitting stations from France's Alcatel, the US' Motorola and Siemens

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