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Aselsan to Build 4G System for Turkey by 2016 With Partners

Aselsan Elektronik Sanayi & Ticaret AS, a producer of civilian and defense electronic systems, and partners will build fourth-generation mobile phone software and equipment, allowing Turkish operators to avoid costly imports.

Aselsan, along with Netas Telekomunikasyon AS and Argela, a software company owned by Turk Telekomunikasyon AS, signed a $46.8 million contract with the Turkish government, according to Transport, Maritime and Telecommunications Minister Binali Yildirim.

“Turkish telecom operators spend billions of dollars for telecommunication equipment,” Yildirim said today at an Istanbul conference where the agreement was signed. “We have to cut that spending and get them to use locally made equipment instead of imports.”

Turkey’s three mobile operators -- Turkcell Iletisim Hizmetleri AS, Vodafone Group Plc and the Avea Iletisim Hizmetleri AS unit of Turk Telekom -- bought equipment from suppliers including Ericsson AB and Huawei Technologies Co. for third-generation systems when they got government licenses in 2008. The three operators spent about 19.4 billion liras ($11 billion) on investments from 2008 to the end of September last year, primarily for third-generation equipment, according to telecom market regulator BTK.

The new system for civilian and military use will be capable of delivering speeds of 100 megabits per second for mobile and 1,000 Mbps for fixed-line telecommunication, Yildirim said. Speeds for current third-generation mobile systems average 10 Mbps and can occasionally reach 40 Mbps, Ahmet Hamdi Atalay, a member of the executive committee of Netas, said at the conference.

Mobile Transmission

The Aselsan-led group will complete the development of the system, also known as Long-Term Evolution, or LTE, by 2016 for commercial use and 2017 for the military, the Ankara-based company said in a filing with the Istanbul Stock Exchange. The system includes development of software and building of base stations for mobile transmission.

Aselsan shares rose as much as 6.4 percent in Istanbul and were up 3.4 percent at 9.10 liras at 5:15 p.m., a record high.

To contact the reporter on this story: Ercan Ersoy in Istanbul at eersoy@bloomberg.net

To contact the editor responsible for this story: Benedikt Kammel at bkammel@bloomberg.net.

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