Turkcell Q3 profit rises 29%

Turkey's leading mobile firm Turkcell posted a 29% annual rise in third quarter net profit, helped by a strong lira and new subscribers, and saw 2007 revenue growth of nearly 30%.

Turkcell said net profit came in at $401.2 million while third-quarter revenue grew 44% to $1.7 billion. Earnings before interest, tax, depreciation and amortisation (EBITDA) rose 62% to $771.5 million.

A stronger lira boosted revenues posted in dollars, although it also increased financial costs, and the firm revised its year-end exchange rate forecast to 1.24 lira from 1.45 lira to the dollar. It expected "double digit" revenue growth in lira terms next year.

The subscriber base grew 13% and average revenue per user - a closely watched measure - rose 26% to $15.3 due to the stronger lira and price hikes.

Next year it expected ARPU to rise in lira terms while subscriber growth would slow compared to 2007.

Churn, which measures customers leaving the operator, increased 1.6% year-on-year to 5.7% and Turkcell said the rate next year would be a few points higher than in 2007, assuming legislation allowing customers to keep the same number when switching operator is introduced in the second half of 2008.

Turkcell is the largest operator in European Union candidate Turkey, but faces increasing competition from Vodafone Group and Avea.

3G seen next year

Turkcell, which is already present in Central Asia and wants to expand regionally, said its Ukrainian subsidiary Astelit posted positive EBITDA for the first time with core earnings of $2.9 million.

But the company, which has already restructured the unit financially, said it may have to contribute to financing Astelit with equity next year.

At home, Turkcell said it expected third-generation mobile licences to be auctioned next year. A tender was carried out this year, but then cancelled after Turkcell ended up the only bidder.

Turkcell's major shareholders are Nordic telecommunications company TeliaSonera AB, Russian private equity firm Altimo and unlisted Turkish conglomerate Cukurova.

Its stock has risen 58% this year compared to a 43% rise on the main Istanbul index.

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