Turkcell hopeful of end to dispute with state monopoly
ISTANBUL – Shares in leading Turkish mobile-phone operator Turkcell jumped 10 percent yesterday on expectations among some investors that the firm will settle its legal problems, traders said. The shares were at 6,600 lira in late morning trade after General Manager Muzaffer Akpinar said on Tuesday Turkcell hoped to settle its dispute with state landline monopoly Turk Telekom by the end of the year. «The general manager’s statement that the dispute with Turk Telekom will be resolved is positive, because a large portion of the balance sheet had been set aside for (legal disputes),» said Taner Ozarslan, head researcher at Pamuk Investment. The company has had to set aside $1.207 billion in provisions to cover its main legal disputes with the national phone company and the cash-strapped Turkish Treasury. Akpinar said the provisions were eroding net revenues. In an interview with Reuters, Akpinar said Turkcell would settle its dispute with Turk Telekom over the use of the phone company’s infrastructure and interconnection fees this year. The dispute with the Treasury stems from the way fees that GSM operators are required to pay the state are calculated. The firm’s net income, reported late on Monday, fell to $96.4 million in the second quarter, and Akpinar again blamed the high cost of provisions. Akpinar also said Turkcell, which had 20.9 million subscribers at the end of June, aimed to increase profitability for shareholders by entering the long-distance phone service. The government earlier this year liberalized the sector. Turkcell is the only Turkish company listed on the New York Stock Exchange. Its shares rose 5.26 percent to 6,000 lira on Tuesday after Akpinar indicated that an end to the legal battle with Turk Telekom was in sight.
