Turkcell Iletisim Hizmetleri AS NYSE: TKC reported second-quarter revenue of TRY 71.8 billion, up 2.5% year over year, as the Turkish telecommunications company cited disciplined pricing, postpaid subscriber growth and lower churn in a macroeconomic environment where inflation remained above 30%.
Chief Executive Officer Ali Taha Koç said the company delivered “real revenue growth” for an eighth consecutive quarter, despite inflation of 32% during the period. EBITDA totaled TRY 30 billion, representing a 41.8% margin, while net income was TRY 5.2 billion.
Management kept its full-year financial guidance unchanged even after revising its year-end inflation assumption to approximately 28% from 23% previously. Koç said growth in the second half should be supported by the delayed effect of pricing actions taken during the first half, more normalized competition in the mobile market, and continued contributions from Digital Business Services and Techfin.
Mobile Growth and Customer Metrics
Turkcell crossed 40 million mobile subscribers for the first time, led by 284,000 postpaid net additions during the quarter. The company’s postpaid base reached 32.5 million subscribers, including 2.4 million additions over the past 12 months. Postpaid customers accounted for 81% of the mobile customer base.
Monthly average churn improved to 1.6%, while mobile ARPU excluding machine-to-machine customers increased 27% year over year to TRY 448. Koç said the contractual nature of the postpaid base means price increases are reflected gradually as customer contracts renew.
Management said it expects clearer effects from recent pricing measures toward the end of the fourth quarter, with more substantial ARPU gains expected in 2027. Chief Financial Officer Kamil Kalyon said investors could begin seeing positive signals as early as the third and fourth quarters of 2026.
Fiber, Fixed Wireless and TV+ Expansion
Turkcell’s fiber business added 31,000 net subscribers during the quarter, bringing its subscriber base to 2.6 million. Residential fiber ARPU rose 37% year over year to TRY 570, and monthly churn improved to 1.1%. The company said 88% of residential fiber customers were on 12-month contracts.
The company added 194,000 fiber home passes during the quarter, reaching 6.7 million homes across 31 cities. Customers served through Turkcell’s own fiber infrastructure represented 80% of the fiber base, while the company reported a 41% take-up rate.
Its Superbox fixed wireless access, or FWA, service added 64,000 subscribers, expanding the base to 818,000 customers. Turkcell said it held a 74% share of the FWA market. Koç described 5G as a potential catalyst for the product, which is positioned as a plug-and-play home internet option and is priced at levels comparable to, but slightly above, fiber depending on data allowances.
Turkcell has begun replacing existing 4G Superbox devices with 5G-capable equipment for customers as it expands 5G coverage. Koç said the company’s 5G offerings support Wi-Fi 7 and are aimed in part at households relying on older DSL technology.
TV+ subscribers rose to 2.7 million after 123,000 net additions in the quarter, accelerating from 106,000 additions in the first quarter. The company said its HBO Max partnership, launched in November, strengthened its content offering. Viewing time increased 14% sequentially and 64% year over year.
Digital Business Services and Data Center Investments
Digital Business Services revenue increased 33% from a year earlier to TRY 8.7 billion. Data center and cloud revenue rose 10% to TRY 1.6 billion and represented 2.3% of group revenue.
Turkcell activated a new data center module during the quarter, lifting active IT capacity to 54 megawatts across facilities in Kocaeli, Ankara, Tekirdağ and Izmir. Construction is under way on hyperscale data center facilities in Ankara intended to support Google Cloud’s Türkiye region. Including those hyperscale investments, Turkcell’s total data center investment amount reached EUR 612 million.
The company entered the second half with more than 1,500 new contracts and a TRY 16 billion system-integration backlog. Kalyon said major projects from government bodies and other customers helped increase the backlog from TRY 10 billion in the prior quarter, and management expects follow-on projects to continue into 2027.
Koç said Turkcell expects data centers to account for 10% to 15% of revenue by 2030 or 2031, aided by demand for cloud and artificial-intelligence infrastructure. He said the Google Cloud facilities could begin selling services in roughly 18 months to two years.
Techfin, 5G Spending and Balance Sheet
Techfin revenue rose 7% to TRY 4.1 billion, representing 6% of group revenue. Paycell revenue increased 22% to TRY 2.4 billion, while transaction volumes rose 84%. Total payment volume reached TRY 39 billion, and Paycell had 6.8 million active users.
Kalyon said Paycell’s EBITDA margin was affected by the company’s focus on physical point-of-sale solutions, where transaction profitability can be lower. At Financell, revenue declined 12% year over year as the company maintained a cautious approach to lending and portfolio quality. However, Financell’s net interest margin increased to 7.8% from 4.5%, while its cost of risk was 3.4%.
Operational capital expenditures represented 25% of sales during the quarter and 23.2% in the first half. Turkcell directed 81% of second-quarter operational capital expenditures to its core business, including 5G rollout and fiber expansion. The company also acquired a 12.1-megawatt solar plant in Mersin, increasing active solar generation capacity to 74.4 megawatts.
Turkcell ended the quarter with TRY 89 billion in cash and cash equivalents, net debt of TRY 44 billion and a net-debt-to-EBITDA ratio of 0.4 times. The company said its liquidity covers remaining 5G license obligations and debt maturities over the next four years.
The company paid a first 5G license installment of $625 million in January, including VAT. Management said a second installment of about $400 million is due in December 2026, followed by a final payment of about $400 million in May 2027.
About Turkcell Iletisim Hizmetleri AS (NYSE:TKC)
Turkcell Iletisim Hizmetleri AS, traded on the NYSE under the symbol TKC, is a leading integrated telecommunications and technology company headquartered in Istanbul, Turkey. Since its founding in 1994 as the country's first GSM operator, Turkcell has expanded its footprint to offer a comprehensive suite of mobile voice, messaging and data services to millions of subscribers. The company has made significant investments in nationwide 4.5G and 5G network infrastructure to deliver high-speed connectivity across both urban centers and rural regions.
In addition to its core mobile offerings, Turkcell provides fixed broadband and fiber-optic services tailored to consumer and enterprise customers.
This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.
Continue following MarketBeat
Add MarketBeat as your preferred source on Google to see our latest stories in your feed.
Before you consider Turkcell Iletisim Hizmetleri AS, you'll want to hear this.
MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Turkcell Iletisim Hizmetleri AS wasn't on the list.
While Turkcell Iletisim Hizmetleri AS currently has a Hold rating among analysts, top-rated analysts believe these five stocks are better buys.
View The Five Stocks Here
Looking to profit from the electric vehicle mega-trend? Click the link to see our list of which EV stocks show the most long-term potential.
Get This Free Report
