The Turkish telecoms market, which has recently experienced a dramatic slowdown in subscriber growth and revenues in both the fixed and mobile sectors, is set for a turnaround in 2002, a new IDC report forecasts. The total revenue for Turkish telecoms operators is thus expected to grow over eight percent in 2002, primarily driven by the return of positive trends in the mobile sector.
Revenue growth in the Turkish telecoms industry came to a near halt in 2001, following the devaluation of the lira and the ensuing economic crisis. Growth in connections has fallen from its highs, revenues in both the mobile and fixed-line markets have taken a nosedive and the government's telecoms privatization plans have seen major delays.
"The mobile sector took the largest hit in 2001," said IDC CEMA telecoms analyst Mohsen Malaki. Macroeconomic conditions affected the mobile market in different ways. While operators continued to expand the mobile subscriber base, albeit at a much slower pace, a severe drop in the average revenue per user resulted in a contraction of mobile services revenues.
According to Malaki, "What contributed most to the drop in revenues per subscriber was the drastic reduction in the consumer's purchasing power, rather than any heated price competition from the new entrant." The report, titled Telecoms and Mobile Communications Services in Turkey 2000-2005, forecasts a change in tides for all segments of Turkey's telecoms market in 2002, although the recovery will be a gradual one.
Within the fixed telecommunications services, the fastest growth will come from managed data network services (MDNS), with a compound annual growth rate of 32 percent between 2001 and 2005. IP-VPN and frame relay/cell services will contribute the bulk of MDNS growth over the period. Nonetheless, the IDC report predicts that revenue from datacoms services will remain a miniscule portion of overall telecoms network services (TNS) revenues, with voice telephony continuing to dominate the market through 2005.
According to the IDC report, growth in the mobile subscriber base, along with the resumption of growth in mobile usage and fixed-to-mobile calls, will make mobile the biggest driver of revenue growth in Turkey's telecoms market, contributing almost half of total telecoms revenues by 2005.
Within the mobile sector, hyper-growth is expected in mobile data revenues, which IDC projects will reach $268 million by 2005. Short Messaging Services (SMS) will develop into a major component of mobile operator revenues, generating a staggering $2.6 billion over the next four years.
As Malaki explained, "The Turkish youth have shown an amazing affinity for SMS thus far. With a high penetration of prepay, a young population, and greater operator emphasis on new SMS-based services, this revenue stream will only increase in significance for the operators."
Although incumbents and new entrants alike are moving aggressively to capitalize on the expected growth in these services, operators in both mobile and fixed-line markets realize that voice services will continue to dominate their revenue streams over the next four years.
Incumbents will therefore be actively trying to protect their market shares in voice services in the coming years. "The intensified competition anticipated with the entry of two new mobile operators never materialized in 2001," according to Malaki, "but with a gradual return to revenue growth in 2002, new entrants will exert more pricing pressure on voice services to gain market share." The shrinking voice tariffs will force mobile operators to broaden their revenue streams through a focus on mobile data and corporate solutions.
IDC is a global market intelligence and advisory firm helping clients gain insight into technology and ebusiness trends to develop sound business strategies. More than 700 analysts in 43 countries provide global research with local content. — (menareport.com)
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