Turkcell’s MVNO could be seen as part of the trend towards ‘ethnic’ MVNOs, mobile operators which purchase wholesale capacity to create attractive call rates for an expat community. Germany is a natural destination for Turkcell, with over three million Turkish speakers and another two million with Turkish ancestry. The company believes that its recognisable brand and custom content could capture half of that market.
But the operator believes that the MVNO model is more than a way to hoover up Europe’s Turkish-speakers. For Turkcell, it is the pattern for expansion into developed markets. It expects to launch several more MVNOs in 2011. Why bid for an operator licence, it reasons, when leasing capacity can provide everything that Turkcell needs at a fraction of the cost and time? “Instead of going for a third or fourth licence, it’s better to set up an MVNO,” says Ekren Yener, the chief expansion officer at Turkcell, who points out that the operators who bid for these licences rarely make a profit from them. “If the market is liberalised, there is nothing you can’t do [with an MVNO]. In saturated markets we can still grow, using a targeted marketing approach.”
Whereas the first wave of 3G licences effectively secured permission to build and operate a network within the borders of a country, few operators can afford this capital commitment. Few would choose to, if they can share an existing network, or outsource the building and operation to a specialist. The trend to outsource other parts of the operational support for a mobile network has brought the MVNO and licensed mobile operator models still closer, to the point where Turkcell’s western European expansion will be entirely MVNO-based.
In Germany, Turkcell has a five-year lease on the capacity it needs from Deutsche Telekom, through which it can provide voice and 3G data at equivalent service levels to its own networks; all in a country where the ARPU is $19.4, compared to $13.5 in Turkey (Merrill Lynch). The evolution of the MVNO model into something equivalent to its domestic network is reflected Turkcell’s choice of brand name for its MVNO: Turkcell.
Existing MVNOs have been created as sub-brands, often because the services were a low-cost subset of their branded service, or – for ethnic MVNOs – intended to create a community identity not conveyed by the parent company. Germany’s Turkish community already has two MVNOs: Cosmo and Ay Yildiz. But there are no sub-brands in this case: trading as ‘Turkcell Europe’, it aims to remind Turks of home by using the name of Turkey’s dominant mobile network. The same name is proposed for other MVNOs in western Europe with strong Turkish communities.
“Historically, for MVNOs price is number one. We will have attractive tariffs for calls to and from Turkey, but we think it is more important to offer value-added services such as Turkish news, Turkish TV and Turkish football,” says Yener. “For the first time for an MVNO, we are going with our own brand.”
Tim Phillips can be contacted at: tim@timphillips.co.uk
