Vodafone continues to publish reports that focus on Turkey’s digitalization journey. The company has now published a report prepared with its own internal resources, consisting of recommendations for Turkey’s digitalization vision and electronic communications sector strategy. The report states that for the continuity of investments in the telecommunications sector, the sector should be accepted as a strategic sector and an investment reform should be carried out.
With this reform, there is a need to use resources effectively and support investments with incentives and practices such as fair contribution shares, to make the income flow sustainable and to create a predictable investment environment by improving the competitive environment.
The real value of Vodafone investments exceeded 157.6 billion TL!
Speaking at the press conference Vodafone Türkiye CEO Engin Aksoyshared information about the company’s performance in the 17 years it has been operating in Turkey:
“We continue our investments with the confidence we have in the future of our country and our industry. The real value of our investment in the last 17 years exceeded 157.6 billion TL. The total investment made by Vodafone in this process corresponds to 4.6% of the foreign investment attracted by Turkey. As the Vodafone ecosystem, we contributed 68 billion TL to Turkey’s GDP in the 2022-2023 fiscal year alone.
Every 1 TL of added value created at Vodafone creates approximately 2.3 TL of added value in the Turkish economy. The GDP contribution of the Vodafone ecosystem is above the GDP of 45 provinces in Turkey. Our operations enable the creation of employment for 112 thousand people in Turkey.
Every 1 person employed within Vodafone Holding creates 38 jobs in the Turkish economy. The employment created thanks to Vodafone is more than the total number of insured employees in 32 provinces in Turkey. We are pleased to contribute to the digitalization of our country and increased international competitiveness with our investments.
In our latest report, we aim to ensure that the sector as a whole, without separating it as mobile and fixed, gains the strategic importance and reputation it deserves, eliminates the imbalance between investment costs and revenues that threaten the sustainability of investments in the sector, and contributes to the needed digital transformation and change of the sector on a realistic and healthy basis. We include our suggestions for.
It is important to act within a strategic plan that includes long-term goals in order to accelerate digital transformation by expanding electronic communication infrastructures, which have a critical role in the development of our country.
In this regard, in parallel with the developments in the world and the determined targets, setting targets with the 2030 digitalization vision and concretizing the action steps related to these targets in our country will be a step of high policy priority.
The most important component that will enable society, state and companies to achieve their digitalization goals is broadband internet infrastructure with high capacity and coverage. Therefore, the prevalence of internet infrastructure is an issue that should be addressed as a priority in digitalization policy.”
Milestones that will carry the industry to the 2030 target:
- 5G technology has been implemented
- Preparations have been made for 6G technology and the formation of the technology ecosystem
- Reaching 2 million km fiber network across the country
- Determining the spectrum policy in a way that will encourage investments through consultation with the sector, and presenting it within a plan that will both meet the capacity needs of subscribers and support future technologies.
- The regulatory framework should facilitate investment in new technologies and the obligations regarding investment in technologies that are insufficient to meet subscriber demand over time, such as 2G and 3G, should be removed and/or reviewed.
- Satellite technologies have been used as a complement to provide both redundancy and service to subscribers in rural areas and areas with coverage gaps.
- Cloud technology and solutions have become widespread in the private and public sectors, taking into account the opportunities brought by globalization.
- Data center investments have reached the capacity to meet data needs and our country has become a regional center.
- International connections have been made with submarine fiber cables
- 100% smart device penetration of subscribers and removing smart devices from being luxury products
Stating that for the survival of the sector and the continuity of investments, the sector should be accepted as a strategic sector and an investment reform should be carried out. Vodafone Türkiye CEO Engin Aksoy, He continued:
“First of all, it should be ensured that sector revenues are sustainable by creating a predictable investment environment. The first step to be taken for this is to prepare an effective spectrum management. Some steps need to be taken so that our sector can create investment plans that will enable the transformation to new generation technologies and increase the efficiency of investments.
For example, technologies that are no longer sufficient, such as 3G, need to be updated with newer and more efficient technologies such as 4.5G. Making 5G frequency allocations is very critical for our investments in technology transformation.
During the transition to 5G, by making the 700 MHz band, which is idle in our country, available without waiting for the 5G transition, it can both contribute to the preparation process for 5G and provide higher capacity and quality service to users. Making frequency allocations at the right time, in the right amount and under suitable conditions is of critical importance for the continuity of investments and the widespread use of technology.
The regulatory framework, which can basically be expressed as licensing and authorization, needs to be flexible, taking into account the dynamism of the telecommunications sector and technological developments, and the processes and rules regarding the extension/non-extension of the usage rights of scarce resources must be clear. It is important for the protection of competition that license processes, fees and extension conditions are determined and implemented equally and fairly for all players in the sector for fixed and mobile services.
In order to ensure the financial sustainability of the sector, there is a need to adopt new policies, review the current sectoral and general regulatory structure and take the necessary steps. It is necessary to adopt a needs-oriented approach in regulatory processes and reduce the pressure and costs caused by sectoral obligations.
For this purpose, there is a need for change from a holistic perspective in the investment obligations that impose responsibilities on operators and the coverage conditions that are impossible for the sector to meet, and in the consumer rights approach. The licensing regime needs to be simplified so that it becomes more flexible and fast enough to adapt to technological developments.
The coverage and investment obligations of each of the different licenses and authorizations such as 2G, 3G, 4.5G continue to be accumulated. However, it must be adapted and updated according to changing technology and consumer needs.
“In the strategy to be created with this vision, it will be in the interest of our country to facilitate infrastructure installations and reveal the economic growth and added value that digitalization will bring. In this context, one of the important issues is the prioritization of fiber expansion.
Fiber investment is not a job that can be left to a single company; bringing fiber to all households will take 2050 at the current investment rate. For this purpose, infrastructure installation legislation needs to be improved, fiber infrastructure installation needs to be accelerated, different models, including common infrastructure companies, should be evaluated in order to ensure competition in fiber access, and fiber access conditions must be brought to a level that will ensure that all players in the sector provide services at a fair price and service quality level.
To ensure competition in fiber in the world, models such as structural separation of incumbent operators and joint infrastructure companies are being implemented. For example, in the UK, British Telecom was transformed into two separate companies for infrastructure and service delivery through structural separation. The infrastructure company Openreach installs and rents fiber infrastructure to all operators.
At the same time, a different infrastructure company called Cityfibre has been established as a private initiative in the sector and is establishing fiber infrastructure in competition with Openreach. I would like to underline that there is a need for such practices that will pave the way for competition in our country. The current fixed infrastructure extension process, which will expire in 2026, offers an important opportunity to put these models into practice.
“A predictable and fair investment environment should be established in the sector.”
The prevalence of digitalization at the desired level in our country depends on the existence and sustainability of the electronic communications sector. If we continue with the current policies and structure, it will not be possible to achieve the 2030 targets we have set for the digitalization of our country, and we face the risk of falling behind the world.
At this point, it is essential to improve both the competitive conditions and the investment climate without wasting time, with the right policy choices and regulatory interventions. At this point, it is of great importance that the decision-making mechanism regarding policies affecting the sector is fair and at equal distance to all players.
In order for our country to catch up with international competition in its digitalization journey, investments must accelerate. In order for investments to accelerate, a predictable and fair investment environment must be established in the sector. For this, structural changes need to be implemented to eliminate imperfect competition in the sector and increase investments.“
“We should act with a common vision”
Underlining that it is necessary to act with a vision based on common and solid foundations in order to achieve the intended benefit with the sector’s strategic position that enables digitalization. AksoyHe concluded his speech with the following words:
“In order to establish this common vision, society, companies and the state must contribute to economic development with the benefits they can derive from new technologies and digitalization. Regulatory steps should be taken to support the establishment of income and investment balance by considering the sustainability of the sector.
The aim should be to increase capacity and coverage by encouraging and facilitating investment in infrastructure. In order for sector practices to be sustainable with a focus on green digital transformation, effective use of resources should be essential. The aim should be to encourage innovation by establishing a competitive environment for the sector, thus improving the services and products provided by the sector.
With this vision, social development can be achieved by achieving sector-led digital transformation. As Vodafone, we are ready to make every contribution and cooperate to secure the future of our industry, as required by our belief in our country, as we have done so far.”