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Turkcell Hits 31.8M Subs

Turkcell's subscriber base reached 31.8M in December, representing 14% annual growth

January 12, 2007

2 Min Read

ISTANBUL, Turkey -- Turkcell (NYSE: TKC, ISE: TCELL), the leading provider of mobile communications in Turkey, announced today that it recorded a 14% increase in its overall customer base to 31.8 million in Turkey as of December 31, 2006 from 27.9 million subscribers as of December 31, 2005 on the back of the continuing strong market growth.

Turkcell added 3.9 million net new subscribers in 2006. Of the 31.8 million total subscriber base, 5.8 million were postpaid subscribers and the remainder 26.0 million were prepaid subscribers. The number of net new subscribers added in the fourth quarter of 2006 was 0.9 million. New gross subscribers acquired in the fourth quarter of 2006 consisted of 90% prepaid subscribers and 10% postpaid subscribers.

The annual total churn rate as of December 31, 2006 increased to 14.7% from 10.1% as of December 31, 2005, in line with Turkcell's expectations, due to overall high growth, Turkcell's large subscriber base as well as intensified competition in the Turkish market throughout the year. In the fourth quarter of 2006, Turkcell's churn rate was 4.4%, slightly higher than 4.1% in the third quarter of 2006.

The overall financial performance of Turkcell is in line with Turkcell's target for this year of achieving no less than a 38% EBITDA margin mainly due to continuing strong operational performance of the company. Although generally in our market, the fourth quarter is one of the lowest quarters of the year due to seasonality and the one-month period of Ramadan resulting in relatively lower mobile usage, Turkcell had a strong fourth quarter in 2006, ensuring revenues at comparable levels to first three quarters of year, on the back of continued strong usage and a growing subscriber base.

The Turkish market provides plenty of room for growth given relatively low penetration rates compared to its peer markets. Turkcell plans to further improve its financial and operational performance next year, while continuing its leadership position. Having invested US$6.1 billion excluding license fee as of September 30, 2006 in Turkey alone, Turkcell is an established and by far the leading and strongest operator in Turkey in many aspects including the brand image, customer satisfaction, network quality as well as its profitability.

Mr. Sureyya Ciliv, Turkcell's new CEO appointed as of January 9, 2007, commented "I am very happy to join Turkcell and excited about continuing our strong technology and market leadership. Increasing our shareholder value by winning new customers, maximizing customer satisfaction and growing our business will be our top priorities. I am looking forward to working very closely with outstanding people in Turkcell group companies and our strong business partners."

Turkcell Iletisim Hizmetleri A.S. (NYSE: TKC)

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