Turkey 4G auction better than forecast

Written by on August 27, 2015 in News with 0 Comments

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ANKARA (Reuters) – Turkey’s auction of 4G mobile phone frequencies lured a higher than expected 3.96 billion euros ($4.5 billion) worth of bids, the agency running the process said on Wednesday, showing the appeal of Turkey’s youthful and growing market.

The bids from Britain’s Vodafone, and Turkish duo Avea and Turkcell, the only three operators in Turkey, will be subject to an approval process before a final decision on allocations is made.

Turkey’s mobile phone industry is a growth sector servicing a young and data-hungry population, noted Jonathan Friedman at global risk consultancy Stroz Friedberg.

“Beyond recent political instability, Turkey is a large market with nearly 80 million consumers, and investors want to be a part of that,” Friedman said.

The tender had been postponed in May, weeks after President Tayyip Erdogan urged Turkey not to waste time with 4G and move straight to 5G, for which technical standards do not yet exist.

4G and 5G refer to the latest technology standards for mobile devices. Fourth-generation technology, which went mainstream worldwide around 2010, enables users to watch videos and download big documents on their phones.

In an apparent bid to placate Erdogan, Turkish officials had dubbed the technology being auctioned as 4.5G, but subsequently dropped the term. Wednesday’s tender was a sale of mobile spectrum used all over Europe for 4G, which allows for up to 10 times faster mobile broadband than 3G technology.

Generally, lower bandwidths offer faster data speeds but over a shorter distance and are useful for densely populated areas; larger bandwidths offer greater coverage but less speed for rural areas.

The fifth-generation technology Erdogan craves remains years away from formal definition and is not expected to be ready for widespread commercial rollouts until 2020.

Turkey had divided the bandwidths to be used for its 4G network into packages, to be shared broadly equally between the operators.

For the 800Mhz bandwidth for instance Vodafone offered the highest bid of 390 million euros for the package dubbed A1, Avea the highest with 380 million euros for the A2 package, and Turkcell’s offer of 372.93 million euros was the largest for the A3 package, commission chairman Deniz Yanik said on Wednesday.

The three operators also each posted the highest bids in subsequent tenders for higher bandwidths, Yanik said, with the total value of the auction 1.5 times higher than predicted.

(By Tulay Karadeniz; Reporting by Leila Abboud in Paris and Eric Auchard in Frankfurt; Writing by Jonny Hogg; Editing by Ece Toksabay and David Holmes)

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