Turkcell - Decline in Customers As Churn Hits All-time High

Turkcell - Decline in Customers As Churn Hits All-time High

¬The first quarter of the year is traditionally the weakest for growth for Turkcell, Turkey's market leader, but Q1 09 was a particularly poor quarter. The quarterly loss of 0.6m customers was only the second ever suffered by the company, with the first being in Q1 08 (-0.3m). In both Q1 08 and Q1 09, it was the prepaid base which suffered the entire loss. In fact, the contract base has grown with remarkable consistency, adding 0.3m in the past four quarters, although it is worth mentioning that Turkcell only reports numbers to the nearest 0.1m. At the end of Q1 09, the prepaid base stood at 28.6m . unchanged year on year . while the contract base was up 18.2% to 7.8m. Total customer growth stood at 3.7%, down from 9.0% a year earlier.

Turkcell's KPIs present a mixed bag. Churn hit an all-time high of 8.2% per quarter, up from 7.2% in Q1 08. However, blended ARPU was up 8.9% to TRY17.1 and prepaid was up 15.2% to TRY10.6. Contract was still down, however, a 7.0% fall taking the Q1 09 figure to TRY41.4.

Turkcell also holds stakes in Astelit, Ukraine's third largest operator, and Fintur, which operates networks in Kazakhstan, Azerbaijan, Moldova and Georgia. Astelit saw a 22.3% rise in registered customers to 11.5m, but active customers grew by 37.9% to 8.0m. Both registered and active ARPUs fell, however, the former dropping 30.3% to USD2.30 and the latter falling 35.2% to USD3.50. Meanwhile, Moldcell of Moldova appeared to perform the best of the Fintur operations with 20% annual growth; however, more detailed figures from TeliaSonera, Fintur's joint owner, show that the operation grew by just 4.8% from 0.54m to 0.57m (rather than 0.5m to 0.6m, as Turkcell portrayed it).
The fastest growing operator was in fact Georgia's Geocell, which was up 14.4% to just under 1.6m. Azercell (Azerbaijan) grew 13.4% to 3.58m and K-Cell (Kazakhstan) was up 9.0% to 7.06m.

Turkcell's total revenue was up 12.3% to TRY2,103m and EBITDA grew 12.6% to TRY774m. Both Fintur and Astelit saw declines in revenue, although since both are reported in dollars, currency fluctuations do have a part to play here.