ECONOMY

Vodafone lands Telsim

ISTANBUL (AFP) – British telecommunication giant Vodafone made the highest bid of 4.55 billion dollars (3.81 billion euros) in a hotly contested auction yesterday for Telsim, the second-biggest Turkish mobile telephone operator. Telsim has been in state receivership since February 2004, when the authorities seized 219 companies that belonged to the Uzan family’s now-defunct business empire in a bid to recover the huge debts of their Imar bank, which collapsed in 2003 after a large-scale fraud scandal. Vodafone, which has 165 million customers worldwide, won the televised auction after heated competition with Kuwait’s Mobile Telecommunication Company (MTC), which threw in the towel at 4.53 billion dollars. Among the four other participants, Egypt’s Orascom and Emaar Properties of the United Arab Emirates shied away from bidding in the open auction, while Russia’s Sistema and Etisalat, another Emirates company, were eliminated after they submitted the lowest offers in the initial stage of written bids. Telsim, which has 9.7 million subscribers, has about 25 percent of the local market, according to company statistics. It employs 2,000 people. The sale is a fresh boost to Ankara’s efforts to attract foreign investment, seen as vital for the success of an IMF-backed recovery program aimed at bringing the Turkish economy closer to the standards of the European Union, which the country is seeking to join. The sale is subject to approval by the executive board of the State Deposit Insurance Fund (TMSF), which has managed Telsim since it was seized from the Uzans, and the competition watchdog. «We have plans to invest significantly in Telsim’s infrastructure to ensure superior network performance and greatly enhance customer service,» Vodafone executive Andre Sokol told reporters after the auction. «We’ll also introduce a wide range of products and services enabling Turkish customers to benefit from the latest GSM offerings in both the consumer and business markets,» he said. Sokol said that Vodafone would reveal a detailed strategy after the sale gets all the regulatory approvals required. Turkish officials were also satisfied with the auction. «The price is quite good,» Transport Minister Binali Yildirim was quoted as saying by the Anatolia news agency. «Eliminating uncertainties and problems at Telsim ahead of the tender increased the interest and we obtained a good result.» He was referring to the settlement of long-running disputes with US telecom giant Motorola and the world’s leading mobile telephone maker Nokia over debts accumulated by Telsim under the Uzans. Under the repayment schemes, 20 percent of the proceeds from yesterday’s auction, minus 500 million dollars already paid, will go to Motorola and 7.5 percent to Nokia. «With the arrival of Vodafone, we will see positive developments both for the market and mobile telephone users,» TMSF’s deputy head Ferruh Tunc commented.