Turkcell Iletisim Hizmetleri AS Q4 2024 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Ece Mandaci - Unlu Securities - Analyst : Hello. Thank you very much for the presentation. I have a couple of questions about the prospective (inaudible). And you had also some comments in your interview before regarding the tender. So what's your view regarding the time line of the standard and potential license line. The frequency -- sorry, the spectrum were over the announcement, but -- what's your view regarding the potential investment size of this -- or license fee of these standards, I mean, the scope of the standard. And could there be regarding with the standard, could there be any change in the mechanism in the pricing mechanism of the contracts, mobile contracts there be a change in there because you had also mentioned the dynamic pricing model you will cause that in your interview. I just read about it. And could there be any possibility of more premium pricing with the deployment of 5G in Turkey, could that be possible? And could that contribute to your overall average ARPU performance going forward? And additionally, you set the target of 24% operational CapEx over sales. And you stated that this does not include any license fee, but there will be still the cost regarding fiberization of these base stations, linking the base stations. So these efforts are linked to, of course, the 5G deployment. So should we expect that is CapEx over sales remain around this cable in 2025 and '26 at around 24% operational CapEx over sales. So the final question is about infrastructure sharing models, could it be possible? Or is just an idea because there were some comments from the ministry from the ministry about that there could be another tender about the fiber infrastructure I just want to hear about your views overall about the things I have mentioned. Thank you very much.

Question: Ece Mandaci - Unlu Securities - Analyst : Thank you very much. From your comments, I understand that there could be a possibility of premium pricing with 5G deployment with higher usage the additional services we have mentioned? And do you have any perspective regarding the potential size of the license fee because since 2016 have changed, maybe the 5G deployment will not be necessary all over to Turkey, maybe it will be regional. So could that be a possibility of lower license fees overall than the -- in 2016, as per number of 4 billion for the sector, including the VAT. So could that be a possibility of lower license fee for the sector?

Question: Cemal Demirtas - Ata Invest - Analyst : First question is related to your growth prospects. As far as I remember, you were more just passionate about the growth side. Again, this year after 8% another 9%. Do you think we are going to see momentum in the growth prospects in the following years because I remember that you are very estimate about doubling this company going forward. What should we expect for the following years? Or could you further elaborate your -- the assumptions behind your similar growth profit in 2025 compared to 2024. That's my first question. The other one is the financial side, at the bottom line. Do you see that your net debt level is coming down going forward, are we going to see improvement at the bottom line in the second quarter? Or does it depend on the interest rates?

Question: Cemal Demirtas - Ata Invest - Analyst : Related to your financial expenses side.

Question: Cemal Demirtas - Ata Invest - Analyst : And maybe in the business lines, you mentioned the growth in the cloud and the data center side. What about the other side? Do you expect a similar trend in the other side, lower growth prospect. And in the trust care side, do you see the pricing environment supportive. Or you are still seeing the increase in competition compared to maybe last quarter?

Question: Cemal Demirtas - Ata Invest - Analyst : And the last question related to the monetary position side. And when we look at into details, we see that your financials after inflation accounting when we look at your figures. And when we look at your pre-inflationary figures, just based on the food not related to net monetary gain. I see that if inflation accounting was not applied, your profits would have been around 12 billion lower, and I look at the details. Is that a fair statement? Or in a simple way, if the inflation accounting didn't apply, your profit would be lower. Is it fair a fair statement?

Question: Cemal Demirtas - Ata Invest - Analyst : My number is I'm driving from your -- the financial statements. You had the distribution of your net monetary gain maybe it's like in the (inaudible) statements.

Question: Evgeniya Bystrova - Barclays - Analyst : I have just two quick questions. So my first question is, could you please elaborate on what is your inflation assumption for 2025 that you're using in your guidance? And my second question is, given that basically your net leverage ratio is very low with all the balance sheet management things that you've done in 2024? And given that you're expecting more CapEx and potentially some license fee payment, where are you seeing your net leverage at the end of this year?

Question: Campos Gustavo - Jefferies - Analyst : Congratulations on the results. Just a few questions from my side. Firstly, like you're expecting some top line growth while your margins will be sort of like very similar to 2024. However, there is concerns of like a decline in purchasing power for the Turkish consumer amidst this inflationary environment as well as some potential pressure from competition. How do you expect to maintain EBITDA margins on this environment? And what will be your drivers for that? That is my first question.

Question: Campos Gustavo - Jefferies - Analyst : Understood. Yes, that's crystal clear. I was also wondering about your CapEx breakdown. You mentioned you have like 48% target on fiber infrastructure. And I'm assuming that the other 50% of this CapEx will be directed to 5G tender to expanding renewable capacities, et cetera. Is that a correct assessment of like your expectations for (inaudible) 2025.

Question: Campos Gustavo - Jefferies - Analyst : Yes. Understood. And that also will include any potential like 5G tender and investments for this year, correct?

Question: Campos Gustavo - Jefferies - Analyst : Okay. That's very helpful. And Lastly, from my side, I was wondering what are your plans or your expectations for the 2025 year bond maturing in October. Is your plan to refinance it or just pay it in cash. Yes. That's my last question. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 27, 2025 / 5:00PM, TCELL.IS - Q4 2024 Turkcell Iletisim Hizmetleri AS Earnings Call

Question: Madhvendra Singh - HSBC - Analyst : The first question is on your mobile segment. It seems like the churn rate actually has gone higher. So wondering what is driving that higher churn? Is it because of the continuous price hikes, if at all? So if you could talk about the drivers there. Then the second question is about pricing outlook. Recently, the inflation expectations were raised, I think, in Turkey. So if you could remind us, can you still continue to pass on the inflation to the consumers? Is there any, let's say, issues from competition or regulation or anything which we need to know of. And then finally, I'm not sure whether I missed, but have you announced the dividends? And if not, when will that be done? And just remind us what should we expect?

Question: Madhvendra Singh - HSBC - Analyst : And if I can ask one more question on the salary hikes, if you could remind the -- because the inflation again, has been going up. What is the plan around the salary hikes, I mean, how many rounds of salary hike we should expect this year? And what magnitude?

Question: Madhvendra Singh - HSBC - Analyst : Which month (inaudible). Sorry?

Question: Madhvendra Singh - HSBC - Analyst : Yes. Yes. Yes.

Question: Madhvendra Singh - HSBC - Analyst : Yes. Yes.

Question: Madhvendra Singh - HSBC - Analyst : In which month? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 27, 2025 / 5:00PM, TCELL.IS - Q4 2024 Turkcell Iletisim Hizmetleri AS Earnings Call

Question: Madhvendra Singh - HSBC - Analyst : In June, should we expect that?