Türk Telekom chief executive Ümit Önal said on Tuesday that a merger by the Türkiye Wealth Fund (TWF) of its stake in his telecommunication company and that of Turkcell is not on the agenda.
"I can clearly say that there is no project aiming to merge the shares of Türk Telekom and Turkcell owned by Türkiye Wealth Fund on a company and product basis," Önal said when asked about the prospect.
TWF currently holds nearly 62% stake in Türk Telekom and 26.2% in Turkcell
Önal's remarks came on the sidelines of a news conference in Istanbul to announce the company's second-quarter financial and operational results.
He also said there are no plans for a strategic partnership or a block stake sale of the Türk Telekom following Türkiye Wealth Fund's acquisition.
"There’s no block sale or interested party on the table for us," he said. He added that while the future course of action would depend on TWF’s decisions, he does not foresee a block sale in the near future due to Türk Telekom’s strategic importance. "This is just my personal opinion," he added.
He added that the wealth fund could consider a possible secondary public offering of its Türk Telekom stake after a concession agreement, depending on market conditions.
Türk Telekom applied to extend its concession agreement, which expires in February 2026, to the Information and Communication Technologies Authority (BTK) late last year.
Turnaround to profit
Meanwhile, the company returned to the black in the second quarter of this year and registered a net profit of TL 1.4 billion ($41 million).
It had posted a loss of TL 3.62 billion a year ago, mainly due to the impact of the devastating earthquakes that struck Türkiye's southeastern region.
The net profit for the first half of the year jumped to TL 2.55 billion, swinging from a loss of TL 2.28 billion a year ago.
Its consolidated revenues rose by 4.4% annually in the second quarter to TL 33 billion.
For the first half of the year, total revenues grew by 5%, reaching TL 63.2 billion.
The company's earnings before interest, taxes, depreciation and amortization (EBITDA) rose by 21.6% to TL 12.8 billion in the April-June period. The EBITDA margin stood at 38.8%.
For the first half of the year, EBITDA increased by 22.2% to TL 23.9 billion, with a margin of 37.8% – an improvement of 530 basis points year-over-year.
Türk Telekom's shares rose by 3.8% following the announcement, outperforming the benchmark BIST 100 index, which was up 1.7%.
On the 5G front, Önal emphasized Türk Telekom’s fiber network strength, which he believes makes it the best-prepared operator for 5G in Türkiye.
Regarding debates for a shared network infrastructure, Önal responded critically, pointing out that Türk Telekom had invested $21 billion in its network since 2005 and laid down 449,000 kilometers of fiber network.
He noted that this investment would ultimately be handed back to the state under the concession agreement.
Önal also questioned the logic of setting up a common infrastructure company, arguing that it would only benefit competing companies trying to leverage Türk Telekom's state-owned infrastructure.
"We are a telecom company that has brought fiber to 86% of named streets and, in terms of population density, 96% across Türkiye," he noted.
"We cannot understand the rationale or logic behind discussing establishing a joint infrastructure company to address the distance between buildings and distribution boxes."