Turkcell to Sell Locally Produced Smartphone in 2013

Turkcell Iletisim Hizmetleri AS, Turkey’s biggest mobile operator, will start selling the nation’s first self-branded smartphone this year, Chief Corporate Affairs Officer Koray Ozturkler said.

“It’s going to be designed in Turkey, by Turkish engineers,” Ozturkler said yesterday in an interview at Bloomberg’s headquarters in New York. “We’re contributing to Turkey and our customer base.”

Turkcell is working with chipmaker Qualcomm Inc. to produce the Gebze phone, as it seeks to offer cheaper alternatives to handsets designed by Apple Inc. and Samsung Electronics Co. The Tepebasi, Turkey-based company, which had about 35 million subscribers at the end of 2012, is following emerging-market carriers in Brazil and Indonesia by selling customers more affordable devices to access the Internet.

“We need to be lower than the average phone price in the market, which is 350 euros to 400 euros,” Ozturkler said. That’s the equivalent of about $450 to $520.

Turkcell shares rose 0.9 percent to 11.90 liras at 10:53 a.m. in Istanbul trading.

Mobile-phone providers from Rio de Janeiro-based Tim Participacoes SA to PT Indosat, based in Jakarta, are offering unlimited surfing plans for as little as a minute and dangling free access to Facebook Inc. and Twitter Inc. to lure customers.

Turkey’s budget deficit was 28.8 billion liras ($16 billion) in 2012, higher than an initial target of 21.1 billion liras. The government plans to increase domestic borrowing by 47 percent this year before elections in 2014.

“Every 1 million phones that will be sold will create 500 million Turkish lira against the deficit,” Ozturkler said. “This money will remain in Turkey.”

Globul Bid

Turkcell is still considering a bid for Bulgarian mobile operator Cosmote Bulgaria Mobile EAD, also known as Globul, Ozturkler said.

“We have not taken a decision yet on whether to bid,” he said. “We have gone through due diligence. We are analyzing the company. We have financial strength to go forward with some buying opportunities.”

Turkcell made an initial non-binding bid in November for Globul, owned by Hellenic Telecommunications Organization SA. Hellenic Telecom, based in Athens, said last week that it may halt the planned sale after successfully refinancing its debt.

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