Vodafone To Buy Turkish Mobile Operator
Vodafone has emerged as the winner of the auction for Turkish carrier Telsim, saying it will buy the operator for $4.5 billion. Telsim, the second-biggest mobile carrier in the country with 9 million customers and a 25% share, was auctioned off by the Turkish government following its seizure — along with 200 other companies — from the Uzan family after their flagship bank failed. Telsim and the Uzans were also the targets of a long-running fraud lawsuit by Motorola and Nokia, when they borrowed $3 billion to pay for network equipment, then never paid it back. Accordingly, Nokia and Motorola will get more than a billion dollars in proceeds from the auction. The Turkish mobile market only has about 50% penetration, compared to an 80% average or so for all of Europe and with several countries over 100%. Clearly Vodafone thinks there’s plenty of room to grow, but investors may not care: Vodafone has been under increasing pressure to raise its dividends, and questions persist about its global strategy.