Telco sector bigwigs converge on Istanbul

Doing telco sector business in Turkey, the Caspian region or Central Asia?
......head for Eurasia Com at Istanbul's Conrad Hotel this March.

A belated Happy New Year to all loyal readers of (and occasional visitors to) DevelopingTelecomsWatch.

I daresay some of you will have found 2009 above-averagely challenging and are looking forward hopefully to a more prosperous and settled year ahead.

With this in mind, DTW will soon be evaluating some predictions about what 2010 may have in store for those of us with an interest in the telecoms sector in emerging markets and developing countries worldwide.

In the meantime, we will be using the announcement of the conference agenda for this year's Eurasia Com conference in Istanbul as the inspiration for a look around developments in Turkey, the Transcaucasus region and Central Asia. These are the markets from which the event gathers telecoms sector leaders for two days of discussions and networking.

My guess is that I will not be able to attend the conference - taking place at Istanbul's Conrad Hotel on 23-24 March - but I would definitely recommend it as a useful place to make new contacts and catch up with existing ones if you do business with the telecoms operators of that part of the world. I feel qualified to make this recommendation, having attended two iterations of the event, and having been involved in its development between 2006 and 2009.

This year's speaker panel includes a glittering array of telecoms leaders from both the host country and from numerous CIS markets. Those able to attend will have the opportunity gain a uniquely valuable opportunity to learn from these panellists - and some will doubtless advance their cases for doing business with the speakers' organisations.

While I daresay, however, that many of the presentations and public panel discussions will be somewhat insightful, my experience of attending many conferences has taught me that delegates can learn far more by being above-averagely proactive. This means being a real participant rather than a mere attendee. It means doing more than just scribbling/typing notes during the conference sessions. It means more than downloading the presentation slides.

So, if you make it to the Conrad Hotel in Istanbul, be sure to come prepared with the questions you particularly want answered. Then make the effort to direct those questions to relevant speakers, keeping in mind that however effectively the sessions are moderated, there will not be time for the Chair to deal with everyone who has something to ask. Should your most urgent questions not get dealt with, be sure to be one of those confident people seen springing from a front row seat to shake hands and exchange business cards with the hottest speakers the second the session breaks for strong Turkish coffee. Then might be the time you will finally make your point or extract the answers you're looking for. Or your possibly rather sensitive enquiry might best be handled over that coffee and a piece of sweet, flaky baklava. Failing that, the business card you've gained could be the key to setting up post-event conversations.

Question time: get the answers over coffee and Turkish treats at Eurasia Com

Does this all sounds like advice that's basic to the point of being a bit patronising? I hope not. It is, after all, offered as a result of having watched countless conference delegates fail to maximise the value of the investment their companies had made by paying for them to attend - even with the free tickets for which employees of telecoms operators and service providers are eligible at Eurasia Com and other Com World Series events, some costs are implied, be it plane tickets and hotel bills for out-of-town delegates, or just the cost of being away from the day job.

If you do decide to attend, and do attend on a mission to learn about developments in the region covered by the conference, what questions might you direct to the numerous worthies on the speaker panel?

Given that the CIS markets of Central Asia and the Transcaucasus region were among the first places that Russia's major telecoms players looked for international growth opportunities, you would hope that Eurasia Com is able to offer access to their top management. The event does not disappoint - gracing the stage for the opening Keynote Session will be Mustafa Kiral, Vice President of Altimo and Oleg Raspopov, who heads up the 'Foreign Subsidiaries' Business unit of giant Russian cellco MTS.

Any industry watchers with a strong interest in the latter company, might be tempted to try and squeeze in a question about the operator's hopes for its mobile broadband offering in Moscow, now that 3G services can finally be made available in the Russian capital. A full year after 3G services were offered in other parts of Russia, Muscovites learned last month that the country's military authorties were finally ready to cede control of the necessary spectrum and enable operators to switch on their W-CDMA base stations.

Given Mr Raspopov's responsibilities, however, and given the geographical coverage of the conference agenda, perhaps it might be more germane for delegates to ask the MTS man whether his company has any interest in further extending its CIS footprint. At present, MTS subsidiaries compete in Uzbekistan, Turkmenistan and Armenia. Away from the immediate focus region for this conference, further MTS business units operate in Ukraine and Belarus.

Strikingly absent from the MTS sphere of influence are two of the region's potentially more attractive markets - MTS does not compete in either Kazakhstan or Azerbaijan.

In June last year, MTS CEO Mikhail Shamolin told Reuters that his company was looking at acquisition opportunities in both countries, having decided that the prospects for a start-up operation were not good in either market.

It now appears, however, that the opportunity to make an acquisition in Kazakhstan has now passed. That country's mobile arena is contested by four operators, with the market split as follows, as of end-December 2009, according to the WCIS service offered by the organisers of Eurasia Com, Informa Telecoms & Media:

• Beeline Kazakhstan (Vimpelcom), 43.27% share
• KCell (TeliaSonera Eurasia/Turkcell), 42.87
• Neo, 7.29%
• Altel, 6.57%

The two leading mobile operators, then, are controlled by MTS's main rivals in the region and are therefore, surely, extremely unlikely targets for addition to Mr Raspopov's Foreign Subsidiaries Unit. Altel, too, as a rare example of a CDMA operator in the region, strikes me as a company one cannot easily imagine on the MTS shopping list.

Neo, a late entrant GSM operator which went to market in 2007, would be the logical choice for an MTS purchase. A majority stake in this cellco, however, is to be snapped up by Tele2, the Sweden-headquartered pan-European telecoms group. This transaction, as reported in December, involves Tele2 paying around USD 77 million for the 51% stake held by Kazakhstan's incumbent fixed line operator, Kazakhtelecom, which also owns 49% of KCell. According to a Wall Street Journal report, Tele2 has the option to buy the remaining 49% of Neo shares in five years' time from private investment group Asianet Holdings BV.

It will now be interesting to see how much Tele2 makes of the opportunity that MTS has declined to puruse in Kazakhstan. Interesting, too, to see how far the company's usual preference for competing aggressively on price will impact on the Kazakh market.

Speaking on a conference call, Tele2 said that Neo currently has lower prices and lower ARPU than its two larger rivals, so it remains to be seen whether tariffs can be cut further in order to gain market share. According to the WSJ article, a market share of 20% is what Tele2 has in mind.

Of further CIS markets likely to prove attractive to MTS, perhaps only Azerbaijan remain. A June 2009 article here at DTW noted that the Caucasus region country, although quite small with a population of just under 9 million, is oil-rich and relatively prosperous. It is notable, therefore, that of the three groups with footprints across the southernmost CIS markets, only the TeliaSonera-Turkcell joint venture Fintur Holdings has a presence - in the form of market-leading MNO Azercell, none of whose competitors are aligned with a significant multinational telecoms groups. Of these competitors, one will be represented at Eurasia Com by its CEO - Ineke Botter, who heads up Bakcell, is among the speakers. A cheeky question one might direct to Ms. Botter would be to ask whether she feels either her company or the third entrant, Nar Mobile, is a likely acquisition target for MTS or Vimpelcom, which similarly has no presence in Azerbaijan.

With Tele2 having seized the opportunity to move into the Kazakh market, conference delegates may be wondering what impact this may have on the country's telecoms landscape. Questions along these lines can be raised at Eurasia Com, the ideal time for this probably being a morning session on Tuesday 23rd March which deals specifically with the rapid maturation of the Kazakh telecoms market. Fielding the questions will be Kuanysbek Bahytbekovich Yesekeev, Chairman of that Kazakhstan Agency of Information Technologies and Telecommunication, and Maxut Sauranbekov, President of CDMA operator Altel.

A new feature of the conference this year is a day two session focussing specifically on the Turkish market. A very strong line-up of speakers will be on hand to debate the key issues. These include:

• Erkan Akdemir, CEO of Avea, the mobile operator in which incumbent wireline telco Turk Telekom holds a controlling interest
• Mehmet Toros, Turk Telekom's VP International and Wholesale
• Tayfun Cataltepe, the Chief Corporate Strategy & Regulations Officer of market-leading MNO Turkcell
• John Samarron, CTO of Vodafone Turkey

This year's event looks set to be even more useful than previous iterations and I look forward to feedback from colleagues and contacts who are able to attend.

Telco sector bigwigs converge on Istanbul