Turkish mobile phone operator Telsim said on Tuesday, May 15, it had no problems in its relationship with US cell phone giant Motorola, which said on Monday the Turkish operator had missed a loan payment deadline.
Motorola said in a statement to the Securities and Exchange Commission (SEC) that Telsim had missed an April 30 deadline to make a $728 million loan payment, part of an estimated two billion dollars owed by Telsim to the US manufacturer. "As Motorola stated, talks between Motorola and Telsim are continuing. There is no problem in the positive cooperation that has continued to date," Telsim said in a statement.
"The statement made by Motorola to the SEC is a routine flow of information," Telsim added.
Motorola said it was in talks with the Turkish company to reschedule payments on the loans, which were made under a scheme dubbed "vendor financing". Motorola is one of several technology giants that lent money to their customers as a means of boosting sales in recent years.
Telsim is Turkey's second-largest operator after Turkcell, a partnership between Turkey's Cukurova Holding and Sonera. A third operator that started operations in March is Aria, a partnership between Is Bankasi and Telecom Italia Mobile.
Andrew Beale, telecoms analyst at Deutsche Bank in London, said he was not surprised by this week's news on Telsim. "Telsim is clearly number two by some way. It went on a big financing drive and the floating of the lira had a significant effect on cash flows. This is not a massive surprise," he said.
Turkey was forced to float the lira on February 22 to cap a financial crisis, abandoning a crawling currency peg that was the focus of a three-year IMF-backed anti-inflation program. The lira has since lost around 40 percent of its value against the dollar and the government is forecasting three percent contraction in the economy this year.
"This (cash flow problems) will restrict the ability of Telsim to grow. This might be good for Turkcell and new entrants to the market in terms of market share," Beale added.
Turk Telekom, due to be privatized, will be offered Turkey's fourth GSM license as a sweetener to attract a buyer. The government passed a bill to privatize the company at the weekend but weakness in the global telecoms market and high debt levels at potential buyers are seen delaying the sale for some time. ― (Reuters, Istanbul)
By Osman Senkul
© Reuters 2001
© 2001 Mena Report (www.menareport.com)