Turkey a model European economy?

11 March 2011 | Guy Matthews


Stakeholders in the Middle East’s telecoms sector continue to wait anxiously to see if recent unrest across the region will affect their prospects for better or for worse.

The situation could hardly afford a greater contrast with the major economies of Europe, where telecoms players have no cause to fret over stability and security but instead battle problems like market saturation and levels of competition as yet unheard of in the Persian Gulf or north Africa.

Between these extremes lies Turkey, a country neither entirely Middle Eastern nor yet to be considered unequivocally European, despite being a candidate for EU accession since its application in 1999. It may take another decade before a final decision on full European membership is made (and let’s not discount Turkey ruling itself out, as opposed to being rejected). But that’s not stopping Turkey’s economy from making great strides, nor its telecoms market from becoming vitally important domestically and to the wider region.

The country’s regulatory framework has been amended to conform to EU strictures, although incumbent fixed-line operator Turk Telekom still retains much power. It doesn’t dominate the whole market, though. Turkey’s second most important telecoms player is mobile operator Turkcell, in fact the third biggest GSM operator in Europe. Turkcell subsidiary SuperOnline has been building an all-fibre access network that should have passed its millionth Turkish home by the end of this year, and can already call over 200,000 of these addresses paying subscribers.

A greater proportion of Turkish consumers now enjoy optical fibre connections delivered directly into their homes than in the UK, Germany or Spain. You need to look to the Nordic and Baltic economies to find a similarly impressive European fibre story.

Turk Telekom has aggressive ambitions of its own. Following the acquisition of Invitel last year, with its heavy presence in central and eastern Europe, Turk Telekom now wants to turn Istanbul into a major communications hub for a region encompassing the Middle Eastern countries to the south, the Balkans to the west and eastern European economies to the north. Turkey now has its own internet peering point, in the form of TNAP, meaning local internet traffic no longer needs to flow via London or Frankfurt. If Turkey does ever become a full EU member, it may do so as Europe’s biggest telecoms market.

Guy Matthews can be contacted at: guy@transom-enterprises.co.uk