Turkish telecom operator Turkcell on Thursday said it aims to ramp up investment this year to prepare its new data center and grid for 5G services, and could resort to issuing eurobonds or sukuk in international markets to finance these plans.
The company penciled in an amount equal to almost a quarter, or 23%, of its revenue this year for investments, CEO Ali Taha Koç said. That would mark a 2.4 percentage point increase in investment spending compared to 2023.
Koç said the main reasons for that are the data center, solar power plant and 5G network preparation.
"The most important of them all is to be ready for 5G. We need to install fiber optic cables to base stations so that they can handle the high capacity that is necessary for 5G. We need to prepare our infrastructure. We are heavily investing in our grid, that is why our capital expenditure is high," Koç said.
Speaking to reporters late on Thursday, he said the company has budgeted for a 300-megawatt (MW) solar power plant by 2026.
Kamil Kalyon, the company's CFO, mentioned that Turkcell would utilize cost-effective loans and also borrow from international markets for "green investments."
"We have previous experience with eurobond issuance, and this year we will have additional borrowing opportunities in international markets," Kalyon said.
He highlighted that Turkcell was considering borrowing through eurobonds and sukuk, and emphasized potential in regions such as the Gulf Arab countries where there has been significant interest in the company.
Regarding regulatory approvals, Kalyon stated that besides the Capital Markets Board (SPK), Turkcell also needed permission from the Information and Communication Technologies Authority (BTK) before issuing bonds. However, he did not provide a specific timeline for the process.
Koç also said they will look at the foreign investor interest for the planned initial public offerings (IPOs) of Superonline, Global Tower and Paycell.
He said the current market conditions do not pose an environment for the correct valuation of these units for a public offering.
"In these public offerings, international investors need to come to Türkiye and show demand. It has to be ready and appropriate. In such an environment, we are always open to IPOs ... We believe it will be valued at the right time and at the right value. We do not think such an environment exists now," Koç explained.
Among others, Koç also mentioned that despite a "precautionary measure" taken by the court for the sale of its subsidiary Lifecell in Ukraine, the process was ongoing.
"On March 5, a court decision came regarding Lifecell. Thanks to the discussions we had during the closing process and the negotiations conducted by regulatory authorities, the process is ongoing. There is no problem. This was an expected process. Our Lifecell team appealed, and the process continues," he said.
Turkcell operates Ukraine's third-largest mobile network and had reached an agreement at the end of last year to sell its Ukrainian assets to NJJ Capital, stating their value at $525 million.
Koç also disclosed that Turkcell was in talks for a foreign data center and cloud infrastructure operator, which it terms "hyperscalers," to enter Türkiye.
"Partnership-style discussions are being held regarding hyperscalers. It wouldn't be appropriate to go into details."