HomeAccessTürk Telekom shrugs off currency woes to post strong Q2 results 

    Türk Telekom shrugs off currency woes to post strong Q2 results 


    The telco revisits 2023 guidance after both top-line growth and EBITDA exceed its expectations in H1

    Türk Telekom Group saw an accelerated top-line growth and higher margins in its second quarter, but its overall results were still hit by a sizeable depreciation in the Turkish Lira. 

    Consolidated revenues increased by 67.2% YoY to TL17.9bn (€607.5m) in Q2. EBITDA was TL6.0 billion with an EBITDA margin of 33.6%, impacted by slower opex growth. The telco’s net loss of TL601m was driven by the sizeable depreciation in lira and higher interest rates in the quarter.  

    TL3.7bn capex in Q2 included TL259m earthquake related expenditures. 

    The total number of subscribers declined to 52.4m with a net loss of 105k during the quarter, largely due to the ongoing contraction in the telco’s fixed voice customer base but also to tepid additions in other businesses. 

    Türk Telekom’s fixed broadband base touched the 15m mark with 144k net additions driven by an improved performance both in new sales and churn in the aftermath of the February earthquakes. ARPU growth was a healthy 41.7% YoY although recent price rises have not yet been factored in.  

    The telco’s fibre base expanded to 12.2m subscribers with 426k of quarterly net additions. The number of FTTC subscribers reached 8.4m, while the number of FTTH/B subscribers increased to 3.8m. The share of fibre subscribers in its fixed broadband base increased to 81.9% from 73.5% a year ago. 

    Its fibre network reached 419,000km at the end of the quarter, up from 381,000km a year ago. As a result, the telco said its fibre network now passed 32m households compared to 30.8m a year ago. Homes passed by FTTC reached 20.8m, while FTTH/B increased to 11.2m. 

    Mobile subscribers flat, revenue up 

    Overall mobile subscribers came in at 25.6m after the telco lost 9,000 in the quarter. Contract growth was a healthy 235k net adds, cancelled out by 244k net losses on prepaid. Despite this, blended ARPU grew 73.2% YoY. LTE monthly data usage was up 24.6% to 14.3GB YoY.   

    “New acquisitions in postpaid performed better than we expected and grew both in quarterly and annual basis. Churn rate was well contained at similar levels in both comparisons despite the abundance of attractive offers in the market,” said Türk Telekom CEO Ümit Önal (pictured). 

    He said all mobile operators launched their new prices in April, but the first quarter’s intensified competition extended into Q2 through longer lasting and aggressive promotional activities. As a result of its focus on maintaining ARPU growth, it was inevitable that the telco’s customer mix would shift to contract. “Mobile revenue increase reached a fresh high of 80.8% YoY with our continuously growing strength in the market and winner strategy,” he said. “The number of additional data packages sold grew by 19% YoY while average top-up amount per prepaid subscriber surged 104%.” 

    Fixed internet dynamics improving 

    The chief executive said half of the new subscribers took 35Mbps or higher packages. “Net acquisitions in fixed internet scored stronger than anticipated in a balanced pricing environment in the reporting period,” he said. “Therefore, we now target a positive net add in fixed broadband compared to our earlier expectation of a slight net loss for the FY23 despite having introduced price revisions [increases] both in wholesale and retail portfolios starting from 1 July.” 

    He added: “Close to 44% of our subscribers are now on 35Mbps and above packages compared to 40% a quarter ago and 29% a year ago.” 

    Performance prompts revised guidance 

    The telco has upped its guidance after exceeding expectations. “We now foresee 67-70% operating revenue increase, TL25-27bn EBITDA and TL19-21bn capex for this year compared to 52-55%, TL23-25bn and TL17-19bn respectively, in our prior guidance,” said Önal.