Turkish pioneer opens telecoms market

Avea aims to embrace the changes the internet has brought about, to bring technological enlightenment to Turkey, writes CEO Erkan Akdemir

Avea aims to embrace the changes the internet has brought about, to bring technological enlightenment to Turkey, writes CEO Erkan Akdemir

We are living in a time in which global change is much greater than 10 years ago. Whether social, economic or political, all aspects of life are changing. The dynamics of this period, which have been dubbed the ‘new normal’, are quite different to anything we have seen before.

The role of communication and mobile technologies in this change process is unquestionable. In today’s world, which has become more like a global village, we are able to follow emerging developments in any time or place with only our mobile phones; express our thoughts via social networks such as Twitter and Facebook with the help of mobile internet, and come together with thousands, even hundreds-of-thousands of people under a common objective to form pressure groups.

Not only people, but also devices and machines, virtually everything will be connected to each other and accessible at any time through sensors, barcodes, RFID tags and similar techniques

There is no longer any need to make plans for tomorrow, the day after, or even years ahead. Information technologies connect people with each other through mobile networks.

Now, billions of mobile phone users experience the comfort and convenience of reaching instant and real-time information independently, any time, any place. This development is so rapid that in 2012, the proportion of smartphones in the mobile arena increased to as high as 37 percent. This is quite remarkable.

What this really means is that the digital age has been transformed into the mobile age.

Estimations about this are very impressive: the number of mobile internet users worldwide exceeded two billion at the beginning of 2011, and is predicted to reach at least half of the world’s population by 2015. According to predictions, worldwide mobile data traffic will increase 18-fold during the next four years.

Sending the right signals
Avea follows these developments closely, and continues to passionately invest in this field. The number of mobile internet users among our 13 million customers has reached 4.25 million people – 100 percent higher than the previous year. Our total mobile internet income reached TRY 171.7m during the first half of 2012. When we compare this with our mobile internet income realised three years ago, the increase rate is 377 percent. Our income has reached TRY 1.643bn, an increase of 27 percent during the past three years; our EBITDA has reached TRY 165m; and our ARPU (average revenue per user) has reached TRY 20.6. On June 2009, when I took up this position, the half-year financial results were TRY 55m and TRY 15.3 in terms of EBITDA and ARPU respectively.

In Turkey, the information sector is passing through a major transformation and getting ahead of many other sectors. Of the 66 million mobile phone users, 36 million of them are 3G subscribers. Avea has become a name synonymous with innovation in the GSM (Global System for Mobile Communications) field with both its campaigns and tariffs, and its corporate solutions. With its renewed management, Avea has become a more self-assured brand. The vision brought out by our new management approach is reflected in all of our business units, from operational activities to human resources management, and from marketing to R&D.

Investing in the future
We started our journey with a strong staff. We kept the mindset that success can only come by working as a team. We announced 2010 as the ‘quality’ year, and 2011 as the ‘investment’ year. The investment in sales and retail channels, and the improvement of our service, has brought growth to our company.

Avea, which is listed among the 500 most valuable brands worldwide, is also the most competitive and innovative telecommunication and technology company. In our eight-year history under the brand of Avea, we have been the game-changing player. Our whole ethos revolves around making things ‘work’ better. In the first half of 2012 – our eighth year – we shaped the competition with our drive on innovation; the steady growth we have seen because of it confirms it is the right road to take.

At Avea, we want to become Turkey’s technology base. So that Turkey can become an information society, we have made, and continue to make, R&D investments, to give Turkey the most recent technologies and allow it to benefit from rapid access to information.

In accordance with our mentioned investments, as the technology company having the first and only licensed R&D centre in Turkey; we have performed exemplary work in mobile finance, mobile health and smart city fields, not only for Turkey, but also for the world. With our applications involving many sectors and corporations from finance to entertainment, from smart home to smart city, from education to local managements, from health to agriculture, from tourism to transportation, we bring technology to people, not people to technology. In AveaLabs Customer Experience Centre, within the R&D Centre, we give people the opportunity to experience the applications that will form the future of technology.

The technology bridge
During the next 10 years, the ‘internet of things’ will leave its mark on the communication sector. Not only people, but also devices and machines, virtually everything will be connected to each other and accessible at any time through sensors, barcodes, RFID tags and similar techniques. When implementing all these, to create value not only for Avea but also for our country, we’ve joined forces in the field of R&D with leading universities such as Bogazici University and ITU in Turkey and MIT (Massachusetts Institute of Technology) abroad.

Eight leaderships in eight years
As the youngest company of the telecommunication sector in Turkey, Avea aims to become the market leader using the power it garners from the Turk Telekom Group, its affiliate. At Avea, we have reached leading positions in the following fields, among others:
1. Average revenue per year
2. Call minutes per person
3. Proportion of post-paid customers
4. Proportion of smart devices
5. Increase rate of mobile internet
6. Mobile number transfers
7. Increase rate of number of customers
8. Avea is the sector leader in Turkey in terms of number of exclusive retailers.

From 1861 to today, MIT’s motto, and the principle which inspired its logo, is “Mens et Manus”, Latin for ‘mind and head’. We, based on this motto, use the phrase ‘technology bridge’ for our collaboration between Avea and MIT, and set our goal as converting AveaLabs to a world-renowned research and innovation centre in the mobile sector.  We see our collaboration with MIT as a bridge both to create smart solutions and applications for both our individual and corporate customers, and to bring the global R&D perspective to young engineers. Technological leadership is one of the most important leverages which allows corporations to stand out among their competitors. Within this context, Avea has focused on ensuring that Turkey becomes a country that not only consumes, but also generates, technology.

Focusing on the next generation
One of Avea’s top priorities is to make peoples’ lives easier and to increase opportunities to young people. Avea implements innovative projects with corporate citizenship awareness in a wide range of fields, from education to entrepreneurship, from employment to sports, from culture to art, removing borders, supporting individuals and offering possibilities for them to create a difference by providing equal opportunities. For this, as the GSM operator with the highest call rates in Europe, we have made an agreement with FCBarcelona, ranked number one in the ‘Best Football Teams in the World’ by the International Federation of Fooball History & Statistics (IFFHS), to collaborate together in shaping Turkey’s future football stars at FCBEscola Camp Avea. The camps have been designed on the general principles and know-how of FCBEscola.

In collaboration with the Turkey School Sports Federation (TOSF), young football talents aged between nine and 14 from all around Turkey participated in elections carried out in Van, Izmir and Istanbul in June this year, where 120 candidates were elected. During the first camp period these young talents learned the path to success and the techniques they need to succeed from the trainers of Barcelona’s stars.

In addition, all materials needed by these young talents were covered by Avea. In the second camp period to be carried out in November, this opportunity will be offered to another 120 young talents. During our camps the candidates are given information and training about football to reveal their inner talents and improve their nutrition programmes. Another feature about our project is the fact that during the two camp periods 24 trainers also receive teaching from Barcelona’s trainers. By offering this opportunity, we will ensure sustainability, so our 24 trainers will be able to convey these experience and knowledge to future students. Being the ‘Turkish Official Telecommunication Business partner’ of FC Barcelona, Avea has made the dreams of 18 young people come true by taking them to Nou Camp, Barcelona, for training.

Despite being a young brand, we are the most entrepreneurial company in the sector. Our work has led to respected broadcasting corporations and universities in Turkey choosing Avea as the GSM company of the year and myself as the CEO of the year. It is only by working as a team that this has been possible.


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The May – June 2013 Issue

Highest corporate tax
rates in Europe

European countries are scrambling to raise every last penny of funds through taxes. But some countries may have gone too far...

Belgium

Though all business taxes in Belgium can be paid online with little effort and preparation, the rates are still sky-high at 57.7 percent, including a staggering 50.8 percent total rate on profits only in social security contributions.

Belarus

In Belarus, a company spends up to 338 hours annually preparing for and paying ten different taxes and duties. The total tax rate has incredibly been lowered to 60.7 percent, from 117.5 percent in 2008.

France

A company in France pays seven different taxes and duties, the sum of which can amount to 65.7 percent of profits; though President François Hollande has announced a wave of business tax rate cuts coming up.

Estonia

A business in Estonia pays 67.3 percent of profits in tax, 37.2 percent exclusively in social security contributions. The country has gone against the grain in Europe by raising businesses taxes from 48.6 percent in 2008 to the current rates.

Italy

While corporate income tax (IRES) in Italy is limited to 38 percent of taxable profit, a company operating in Italy can expect to pay 14 other taxes and duties, including social security contributions, bringing their total payable tax to 68.7 percent of profits, according to the World Bank.

Norway

Norway taxes motor fuels twice, with a road use tax and a CO2 emissions tax. Combined with strikes in the energy sector that have curbed output, the price of gas at a local pump has soared to $10.12 per gallon.

Turkey

Though Turkey sits on the Suez Canal and neighbours many oil rich countries, the price of a gallon of average gas clocks in at $9.41 in Turkish pumps, because of a 60 percent share of taxes. 

Israel

Like Turkey, Israel is surrounded by oil-rich neighbours, but drills very little itself. Gas prices are controlled by the government, so about half of the $9.28 per gallon goes to taxes.

Hong Kong

There are few gas stations in Hong Kong, but the ones available charge up to 76 percent more per gallon than mainland China, where the government caps the cost of fuel. A gallon at the pumps will cost around $8.61 on the island.

Netherlands

Expensive labour costs make the Dutch petrol prices the dearest in Europe, at $8.26 per gallon; though the 57 percent tax add-ons don’t help.

The credit crisis

8 February 2007
HSBC warns of subprime mortgage losses

2 April 2007
New Century goes bus

14 September 2007
Wholesale markets have dried up

17 March 2008
Rescue of Bear Stearns

7 September 2008
Rescue of Fannie Mae

15 September 2008
Lehman Brothers file for bankruptcy

3 October 2008
US congress approves $700bn bailout

14 February 2009
$787bn stimulus approved by congress

 

The effects of the current financial crisis are global and irrefutable. With the collapse of Lehman Brothers, the domino effect of irresponsible public monetary policies, huge levels of unsustainable debt, and a deregulated financial sector, has escalated to the point where no corner of the globe has been left untouched.

1973 oil crisis

October 1973
Syria and Egypt launch an attack on Israel on Yom Kippur and set off a twenty day war;

1977
US President Carter creates Department of Energy, which develops the US strategic petroleum reserve

 

The Organisation of Petroleum Exporting Countries (OPEC) used their oil reserves as a weapon with the Arab Oil Embargo against those who supported Israel. By January 1974, world oil prices were four times higher than they were at the start of the crisis, especially in the US, and the shock led to a huge drop in the stock market with NYSE losing $97bn in just six weeks.  The embargo lasted five months, and the effects are still seen today.

German hyperinflation

1922-1923

Hyperinflation
1923 – 1924
Stabilisation

 

The trouble began when Germany missed a repatriation payment, worth about one third of the German deficit in this period. Inflation was already high but by 1923 it was raging. Prices doubled within hours, and by late 1923, it cost 200bn marks to buy a single loaf of bread. People burned money as it was cheaper than buying firewood. Germany eventually regained control of its economy when it introduced the Rentenmark into circulation in 1923, and then the Reichmark in 1924.

The Great Depression

1929-1933
The Great Crash
1934-1939
Recovery and Recession

 

After the decadence of the Roaring Twenties, the 1930s saw the biggest economic slump of all time. The stock market crashed on 29 October 1929, and optimism and decadent living tumbled along with the figures. The GDP fell from $103.6bn in 1929, to $66bn in 1934 and the subsequent years of recovery were the most dramatic in US history.

1907 bankers’ panic

1907
Otto Heinze and his brother Augustus Heinze bought shares of United Copper.

 

The stock market was already cautious over the tight money supply, but the US was thrown into a depression after the stock market fell nearly 50 percent from its peak in 1906. The Heinze brothers thought they could influence market shares but ended up bankrupting lenders that provided the financing to buy the stock. A chain reaction left nine institutions bankrupt. By February 1908, the panic was over and the government created the Federal Reserve system, to prevent banks from exercising too much control over the economy.