TURKCELL ILETISIM HIZMETLERI A S Annual Report - How They Did This Year

I’m putting together a plain-English guide to help you understand how Turkcell performed this year. Think of this as a "cheat sheet" to help you decide if this company fits your investment portfolio.

1. What does this company do?

Turkcell is Turkey’s leading mobile and digital services provider. They serve about 43.5 million mobile subscribers and 3.2 million home internet customers.

They have evolved from a phone company into a digital ecosystem. Beyond mobile plans, they manage a vast fiber network and large data centers. They also offer digital financial services through their subsidiary, Paycell, which processed over TRY 120 billion this year. Additionally, they act as a "digital gateway," using Turkey’s geography to bridge internet traffic between Europe, Asia, and the Middle East.

2. Financial performance: The "Big Picture"

Turkcell had a strong year. They brought in TRY 241.5 billion in total revenue, a 78% increase from last year. They ended the year with TRY 17.6 billion in profit, a 7.3% profit margin. Their operating profit (EBITDA) reached TRY 101.4 billion, a 42% margin, thanks to disciplined cost management despite high inflation.

Their Digital Business Services division grew 24.7% to reach TRY 18.2 billion in revenue. Their "Techfin" division grew 21.1% to TRY 13.7 billion. They also use machine learning to tailor plans to customers. This helped them grow their average revenue per user by 65%, outpacing Turkey’s annual inflation rate.

3. Major wins: Infrastructure & Network Quality

Turkcell is doing more than just selling SIM cards:

• The "Fiber Road": They have a fiber network spanning 67.1 thousand kilometers. They are aggressively upgrading to fiber-to-the-home to offer faster speeds, reaching 6.2 million homes.
• 5G Leadership: As of March 2026, they launched nationwide 5G. They secured 41.6% of Turkey’s available 5G spectrum, giving them a significant speed advantage.
• Future-Proofing: They are researching 6G and AI-driven networks. They are also moving their core network to "cloud-native" technology, which makes it 30% cheaper to scale services.
• Reliability: Their network is highly stable. Their dropped call rate is very low—only 29 out of every 10,000 calls—supported by 24/7 AI monitoring.

4. Future outlook: The Google Cloud Bet & 5G

Turkcell is investing USD 1 billion by 2032. They are partnering with Google Cloud to build a new "cloud region" in Turkey. This will reduce internet lag for local businesses by 40%. They aim to double their data center capacity and grow their cloud revenue sixfold. This move positions Turkcell as the primary digital infrastructure provider for Turkish businesses.

5. Key Risks: What to watch out for

• Customer Turnover: The monthly rate of customers leaving rose to 2.3% for mobile and 1.7% for home internet. Losing subscribers is a constant challenge as competitors cut prices.
• Legal Headwinds: Turkcell is in a legal battle with regulators over a smaller provider, resulting in a TRY 50 million fine. They also face scrutiny over "net neutrality" rules, which could impact future profits.
• Government Ties: The Turkish Wealth Fund owns 26.2% of the company. Government policies, such as price caps or infrastructure requirements, could shift the company’s focus away from profit.

6. The Bottom Line

Turkcell is successfully pivoting from a traditional carrier to a digital powerhouse. Their massive investment in 5G, fiber, and cloud infrastructure gives them a clear edge. If you want a long-term play on Turkey’s digital infrastructure, Turkcell is a major player.

Investor Checklist:

• Watch the churn: Keep an eye on whether they can keep their subscriber turnover rates stable as competition heats up.
• Monitor the cloud transition: The Google Cloud partnership is a major growth engine; watch for updates on data center capacity expansion.
• Consider the macro environment: Given the government's stake, stay alert to regulatory changes that could influence pricing power or operational strategy.