The ratings on Turkcell Iletisim Hizmetleri A.S. (Turkcell)--the leading GSM (global system for mobile communications) operator in Turkey--reflect the company's high exposure to foreign currency denominated debt and to the macroeconomic environment in Turkey. These weaknesses are mitigated by Turkcell's strong business position, sound operating performance, and improved financial flexibility. Turkcell has high exposure to fluctuations in the Turkish lira, owing to its foreign currency denominated debt ($1.4 billion in total at end-September 2002) and the substantial dollar-denominated portion of its variable costs. Amid the severe economic crisis that has affected Turkey since 2001, the company has, nevertheless, demonstrated its ability to raise tariffs in line with any lira devaluation, while limiting the decrease in minutes of cellular use among
