INVESTOR PRESENTATION. June 2016

Transcription

1 INVESTOR PRESENTATION June

2 1) TURKCELL GROUP SNAPSHOT 2016 Guidance 2) BUSINESS DISCUSSIONS TABLE OF CONTENTS Segment Performance Network Fiber Market Environment 3) INTERNATIONAL BUSINESS 35 lifecell BeST Fintur 4) FINANCIAL REVIEW ) BACK UP Turkey Telecommunications Market Taxation

3 NOTICE This presentation may contain statements that are forward looking. These statements are based on current expectations and assumptions that are subject to risks and uncertainties which may cause actual results to differ materially due to factors discussed in this presentation, in our press release, in the Risk Factors section of Turkcell s most recent Form 20- F or in other reports and filings with the US Securities and Exchange Commission. We undertake no duty to update or revise any forward looking statements, whether as a result of new information, future events or otherwise. Please note that all financial data are consolidated whereas non-financial data are unconsolidated unless otherwise specified. 3

4 HIGHLIGHTS 4

5 TURKCELL GROUP SNAPSHOT CONVERGED COMMUNICATION AND TECHNOLOGY SERVICES PLAYER 9 COUNTRIES 67.6 MILLION TURKCELL GROUP SUBSCRIBERS (incl. unconsolidated Fintur subscribers) 1.6 MILLION FIXED SUBSCRIBERS LISTED ON NYSE & BORSA ISTANBUL WITH A $8.3 BILLION MARKET CAP 1 SUBSCRIBER BREAKDOWN (m, Q116) Turkcell Turkey Ukraine 2 Kazakhstan 2 Azerbaijan 2 Georgia Belarus 2 Moldova Northern Cyprus Germany 3 13,3 9,9 4,1 1,9 1,6 0,9 0,5 0,3 35,2 5 1 As of Turkcell owns 41.45% of Fintur which has interests in Kazakhstan, Azerbaijan, Moldova and Georgia. Fintur is not consolidated to the Group. 3 Turkcell Europe GmbH operating in Germany changed the business model to a marketing partnership. Turkcell Europe operations transferred to Deutsche Telekom s subsidiary as of January 15, Subscribers are still included in Turkcell Group Subscriber figure

6 RECAP Convergence Network, marketing & sales, tariff 4.5G Largest spectrum 4.5G launched on April 1 st, 2016 Globally Relevant Services BiP downloaded in 192 countries Voice & video call GOOD CORPORATE GOVERNANCE & EXECUTION 6 International Expansion Acquired 100% of lifecell in Ukraine Binding offer for Fintur Global Tower IPO decision Efficient Balance Sheet 3 investment grade ratings Debt restructuring in subsidiaries $2.9 billion debt raised Consumer Finance Company Settlement with Turk Telekom

7 TURKCELL GROUP CONVERGED COMMUNICATIONS AND TECHNOLOGY SERVICES 10.0% 2.1% (18.0%) TURKCELL TURKEY TURKCELL INTERNATIONAL OTHER SUBSIDIARIES 90.8% 6.1% 3.1% MAIN SEGMENTS 1 OUR BUSINESSES 2 CONSUMER 79.9% 10.0% (4.1%) VOICE DATA 48% 34% 26.4% CORPORATE 17.9% 8.7% WHOLESALE 2.8% 13.9% 57.2% 8% SERVICES& SOLUTIONS TV 0.6% 188.3% 7 Share in revenues in Q116, main segments share in Turkcell Turkey revenues Q116 YoY growth 1 Breakdown does not include other revenues 2 Breakdown does not include wholesale and other revenues

8 TURKCELL GROUP FINANCIAL HIGHLIGHTS YEAR QUARTER CONSOLIDATED TRY MILLION 1 FY 2015 Growth YoY % Q Growth YoY % Revenue 12, % 3, % EBITDA 4, % 1, % EBITDA Margin 32.4% 1.2pp 31.1% - Net Income- Proforma 2 2, % % Net Income-IFRS 2, % % Record first quarter revenue & EBITDA 8 1 TRY figures are based on IFRS TRY figures 2 Net Income excluding FX gain/(loss) (inc tax and minority impact), monetary gain (inflation impact), interest Income on time deposit, Fintur s profit/loss impact & one off items

9 TURKCELL TURKEY FINANCIAL HIGHLIGHTS YEAR QUARTER CONSOLIDATED FY 2015 Growth TRY MILLION 1 YoY % Q Growth YoY % Revenue EBITDA 11, % 3, % EBITDA Margin 32.7% 1.0pp Net Income- Proforma 2 2, % 2, % % 31.3% 0.2pp % Record first quarter revenue & EBITDA 9 1 TRY figures are based on IFRS TRY figures 2 Net Income excluding FX gain/(loss) (inc tax and minority impact), monetary gain (inflation impact), interest Income on time deposit, Fintur s profit/loss impact & one off items

10 TURKCELL TURKEY: STRONG DATA & SERVICES GROWTH Revenue Breakdown As of Q116 Data & Services Revenues TRY Million YoY Consumer & Corporate Data & Services 42% 31.1% Voice 48% 4.1% , ,147 1, % 57.2% 28.4% SMS 5% 2.9% % Other 1 (including Hardware & Software Sales) 4% % of Turkcell Turkey 37.0% YoY Growth Q115 Q215 Q315 Q415 Q116 Mobile broadband Fixed broadband 10 Services&Solutions

11 TOTAL TELECOM MARKET SHARE Revenue Share of Major Players 1 Change FY15 vs FY13 (%) 46.2% 45.5% 44.2% 2.0% 35.2% 35.6% 35.5% 18.6% 18.9% 20.3% 0.3% 1.7% E 2017E 2018E 11 1 Share calculation based on operators announcements. Turkcell Turkey s market share is based on Turkcell Turkey reported revenues and call center revenues.

12 BEST POSITIONED TO MONETIZE CONVERGENCE #1 in Spectrum #1 in Mobile #1 in Fiber #1 in Customer Care #1 in Postpaid 47% 30% 23% 46% 24% 30% 54% 46% Spectrum distribution at the 4.5G tender Mobile subscriber market share 1 Owned 2 Exclusive 3 Fiber subscriber Quality of dealer market share 1 service # of postpaid customers 1 Turkcell Vodafone Turk Telekom 12 (1) Based on operators announcements (2) Company research among Turkcell s customers (3) IPSOS research Q116

13 CONTINUED FOCUS ON VALUE Mobile (million) Fixed (thousand) TV (thousand) Smartphone (million) % 50% , , % % 16.6 Q115 Total Postpaid (%) Q116 Postpaid Q115 Total Q116 Fiber Q115 Q116 IPTV Q115 Number Q116 Penetration Net Add Postpaid Fiber IPTV Smartphone QoQ 124K 36K 44K 514K YoY 1.2M 159K 169K 3.4M 13

14 INCREASING MULTI-PLAY Mobile Subscriber Breakdown* Fiber Residential Subscriber Breakdown** 47% 29% Single Play Single Play 36% 17% Double Play Triple Play 30% 42% Double Play Multi-play with TV ARPU (TRY) Q116 YoY Growth Mobile Blended % Postpaid (excl. M2M) % Prepaid % ARPU (TRY) Q116 YoY Growth Fixed Residential % 14 *Breakdown among mobile voice users which excludes subscribers who do not use their line in the last 3 months **Fiber residential subscriber breakdown revised and Multi-play with TV includes internet and TV users which was shown in double play in previous presentations

15 FIRST REAL CONVERGED OFFERS 5GB 5GB 5GB 5GB 1GB 15 GB Mobile internet 10 GB 6 GB 1000 MIN 500 MIN 4 GB Single Invoice One and only in Turkey Integrated Call Center Single call center & My Account app Uninterrupted Connection 4.5GB mobile internet until xdsl installation No installation Costs No charge for fixed line installation 50 Mbps Unlimited (75 GB) TRY129 TRY109 TRY89 TRY79 15

16 CONTINUED FOCUS ON STRATEGIC SERVICES "All-Access" "All-Access" "All-Access" "All-Access" "All-Access" in Q2 INSTANT MESSAGING 7.5M download As of April MUSIC 5.7M download As of April PERSONAL CLOUD 2.6M download As of April SPORTS 2.1M download As of April TURKCELL TV+ ~700K subscribers As of April DOWNLOAD (Million) DOWNLOAD (Million) DOWNLOAD (Million) DOWNLOAD (Million) SUBSCRIBERS (000) Q115 Q215 Q315 Q415 Q Q115 Q215 Q315 Q Q Q115 Q215 Q315 Q415 Q Q115 Q215 Q Q415 Q Q115 Q215 Q315 Q415 Q Download numbers are cumulative BIP download numbers include total of BIP 1.0, 2.0 and 3.0

17 DATA CENTERS NATION S LARGEST DC&CLOUD INFRASTRUCTURE GEBZE DC K m 2 33K m 2 DC space 17K m 2 white space 107K m 2 DC space 30K m 2 white space 8 locations 10 locations Largest Data Center in Turkey total data center space with 10K m 2 white space TRY 275 mn total investment in 3 years

18 NEW ERA STARTS WITH 4.5G Highest Capacity & Speed Largest frequency 375 Mbps speed at launch >70% population coverage MHz 172,4 Best Experience 42% smartphones are 4.5G enabled Rich product & service portfolio Highest data packages (up to 50GB) «10 principles» for customer satisfaction 16% MHz 110,2 82,8 62,0 64,8 57,0 Turkcell TT Vodafone Before 4.5G tender MHz 4.5G tender Total 4.5G penetration in subscriber base* 22% 4.5G data traffic share 18 * share of customers with 4.5G compatible devices and SIM cards in total subscribers exc. M2M

19 GROUP STRATEGIC PRIORITIES In an effort to build value for our customers and shareholders, we have identified following strategic priorities POSITION TURKCELL AS A CONVERGED COMPANY STRENGTHEN OUR POSITION IN TURKEY FOCUS ON INTERNATIONAL EXPANSION TAKE VALUE CREATING ACTIONS Convergence in sales & marketing Convergence in network & technology Largest 4.5G spectrum Stronger customer base Fair competitive environment Return on investment in our international businesses Disciplined M&A approach Strong balance sheet Improving working capital & FCF Mobile Voice Fixed Voice Data TV Other Services 19

20 DISCIPLINED M&A Cultural & geographical alignment Balanced portfolio of mobile & fixed infrastructure EBITDA accretive MIDTERM GROUP REVENUE BREAKDOWN Focus on Eastern Europe Balkans & MENA life : ) 3% 6% 91% ~8-10% ~7-10% 80-85% Turkcell Europe Moldcell lifecell Turkcell KCell Geocell Azercell 20 Current (Q116) Organic Inorganic Turkey International Other KKTCell

21 GUIDANCE FOR 2016 MAINTAINED TURKCELL GROUP Q E MIDTERM REVENUE GROWTH Turkey 10.0% Group 8.3% Turkey 8-10% Group 8-10% Turkey ~10% Group 10-14% EBITDA MARGIN 31.1% 31%-33% 32%-35% OP. CAPEX / SALES* 20% ~20% ~17-16% in * Excluding license fees

22 BUSINESS DISCUSSIONS 22

23 TURKCELL GROUP: OVERVIEW OF BUSINESS LINES Q TRY MILLION 1 TURKCELL TURKEY YoY % TURKCELL INTERNATIONAL YoY % OTHER SUBSIDIARIES YoY % TURKCELL CONSOLIDATED YoY % Revenue 2, % % 101 (18.0%) 3, % % in Total 90.8% 1.4pp 6.1% (0.4pp) 3.1% (1.0pp) 100% - EBITDA % % 32 (30.0%) 1, % EBITDA Margin 31.3% 0.2pp 27.2% (0.3pp) 31.6% (5.4pp) 31.1% TRY figures are based on IFRS TRY figures 2 EBITDA is a non-gaap financial measure. Please refer to the press release for the reconciliation.

24 TURKCELL GROUP: OVERVIEW OF BUSINESS LINES FY 2015 TRY MILLION1 TURKCELL TURKEY YoY % TURKCELL INTERNATIONAL YoY % OTHER SUBSIDIARIES YoY % TURKCELL CONSOLIDATED YoY % Revenue 11, % 856 (24.8%) % 12, % % in Total 89.9% 2.9pp 6.7% (2.7pp) 3.4% (0.1pp) 100% - EBITDA 2 3, % 246 (12.5%) 135 (12.6%) 4, % EBITDA Margin 32.7% 1.0pp 28.7% 4.0pp 28.9% 5.4pp 32.4% 1.2pp 24 1 TRY figures are based on IFRS TRY figures 2 EBITDA is a non-gaap financial measure. Please refer to the press release for the reconciliation.

25 TURKCELL TURKEY: DOUBLE DIGIT GROWTH CONTINUED Turkcell Turkey (TRY Million) Segment Revenues(TRY Million) Consumer 31.3% 31.1% 31.3% 80% 10.0% YoY % YoY Corporate 18% 8.7% YoY Wholesale % YoY 3% 13.9% YoY Q114 Q115 Q116 Revenue EBITDA EBITDA Margin % in Turkcell Turkey Q116 Revenue Growth 25

26 TURKCELL TURKEY: SOLID GROWTH Turkcell Turkey (TRY Million) 31.7% 32.7% Segment Revenues(TRY Million) Consumer 80% 10.2% YoY 9.5% YoY Corporate 18% 6.5% YoY Wholesale 13.0% YoY 3% 9.4% YoY Revenue EBITDA EBITDA Margin % in Turkcell Turkey FY15 Revenue Growth 26

27 SUBSCRIBER MIX CHANGE POSTPAID SUBSCRIBER SHARE FIXED-MOBILE BLENDED ARPU TRY 50% >60% 10% CAGR >1 M more subscribers with >TRY 50 ARPU >4 M less subscribers with <TRY 5 ARPU Q E Q E 27

28 MONETIZING USAGE: SMARTPHONE EFFECT million 30% 19% SMARTPHONE PENETRATION 52% 55% 40% >70% Q E 2x GROWTH DRIVERS Traffic increase with SP 1 100% 4.5G compatible sales 42% of smartphones are 4.5G enabled 28 1 A Turkcell smartphone user creates two times higher traffic when switched from a non-smartphone. Note: Approximately 268 thousand of smartphone net additions in Q415 and 1.1 million for the full year were due to an adjustment in relation to devices which were not previously classified as smartphones.

29 WELL-POSITIONED TRANSMISSION BACKBONE Independent Fiber Backbone 95% of Turkcell transmission traffic carried Q116 ~35.6 km 41.5 km thousand 29 *Akamai s third quarter report 2018 thousand 15 cities 19 cities Turkey Avg internet speed* 6.3 Mbps 25 Mbps Turkcell s fiber broadband speed to 1000 Mbps ~20% of Turkey transmission traffic carried Transforming Silk Road into Fiber Road

30 FREQUENCIES BEFORE AND AFTER 4.5G TENDER TOTAL FREQUENCY AFTER TENDER AWARDED FREQUENCY IN TENDER MHz MHz MHz TOTAL FREQUENCY BEFORE TENDER Turkcell Vodafone Türk Telekom 30 Price / MHz / Population in Turkey: 0.12 per MHz per sub cost

31 FREQUENCIES BEFORE AND AFTER 4.5G TENDER MHz 4.5G main coverage layer 900 MHz 1800 MHz 2100 MHz 2600 MHz 2G/3G coverage and voice layer Main layer for 4.5G Terminal support, capacity and coverage layer Mobile broadband layer for 3G 4.5G usage for mid/long term 4.5G capacity boost layer for hot spots MHz MHz MHz Turkcell Vodafone Türk Telekom 31 Price / MHz / Population in Turkey: 0.12 per MHz per sub cost

32 TURKCELL HAS HIGHEST SPEED CAPABILITY MAXIMUM THEORETICAL THROUGHPUT With Wi-Fi Aggregation > 4 Carrier HSPA + Triple Carrier Triple Carrier April 1, Carrier 2017 Turkcell Türk Telekom 32 Vodafone

33 FIBER MARKET ENVIRONMENT TURKCELL TTKOM TURKCELL FIBER SUBSCRIBER & NET ADD (THOUSAND) Q114 Q214 Q314 Q414 Q115 Q215 Q315 Q415 Q116 Total subscriber Net add FIXED BROADBAND MARKET SHARE* % (Q415) Incumbent Turkcell 75.4% 71.7% 67.1% TTKOM FIBER SUBSCRIBER & NET ADD (THOUSAND) Q114 Q214 Q314 Q414 Q115 Q215 Q315 Q415 Q116 Total subscriber Net add HOMEPASS(mn) & Take-up Rate(%) 38.0% 39.5% 39.9% 24.2% 23.3% 22.7% 10.6% 14.0% 16.4% Q413 Q414 Q415 TURKCELL 2.2 TTKOM Q115 Q415 Q *Subscriber market share is calculated from ICTA report by taking fixed broadband technologies including cable and excluding ISDN.

34 TURKCELL TURKEY: SUCCESFUL IPTV SERVICE TURKCELL TV+ Subscriber Market Share As of Q415 CableTV 7% Tele Dünya 14% Turkcell 4% D-Smart 18% Turk Telekom 6% Digiturk 52% 679 Turkcell TV+ subscriber in Q Source: ICTA Q4 15 Report

35 INTERNATIONAL BUSINESS 35

36 TURKCELL INTERNATIONAL: RETURNED TO GROWTH & PROFITABILITY Turkcell International (TRY Million) Q115 Q215 Q315 Q415 Q116 UKRAINE Revenue EBITDA Margin 27.5% 27.2% 29.6% 30.2% 27.2% 65% 6.9% in UAH 31.4% 2.1% BELARUS Net Income % 30.7% in BYR 1.7% (12.0%) NORTHERN CYPRUS Revenue Growth YoY 36 (656) (38.0%) (23.6%) (22.9%) 16% % in Turkcell International 3.2% in TRY Revenue Growth (in local currency) 34.8% EBITDA Margin

37 GROWTH DRIVERS TURKCELL INTERNATIONAL 16% 17% 65% >10% >15% ~70% ~16% CAGR E ~35% EBITDA Margin lifecell is the main driver 37 Q E lifecell BeST KKTCell Other

38 TURKCELL INTERNATIONAL: OPERATIONS IN UKRAINE UKRAINE MOBILE MARKET FACTS* Q m Total subscribers 140% Mobile Penetration 3 Operators lifecell PERFORMANCE UAH MILLION FY15 YoY% Q116 YoY% Revenue 4, % 1, % EBITDA 1, % % EBITDA Margin 33.2% 2.7pp 31.4% 0.5pp HIGHLIGHTS OF lifecell Ownership 100% Turkcell Ownership 100% Vimpelcom Ownership 51% JSFC Sistema 49% Free Float Continued 3G+ investments in Ukraine 48% smartphone penetration Solid operational performance o 10.4 million subscribers 1 o 2.3 million 3-month active 3G data users 38 *Source: Global Wireless Matrix 1 3 months active

39 UKRAINE: MOBILE MARKET PERFORMANCE MARKET SHARE Subscriber* 50.1% 14.1% (*) 3 month active subscribers 45.0% 35.8% 36.2% 18.8% pp in 4 yrs FINANCIALS Mobile Revenue Growth (in UAH) (YoY) 9% 10% 11% 13% 7% 6% 3% 1% 1% 2% lifecell MTS Kyivstar -5% -5% 12% 10% % Mobile Revenue 50.1% 46.3% 37.7% 37.1% 16.6% 12.2% pp in 4 yrs EBITDA Margin (%) 53.2% 48.0% 25.5% 28.2% 50.8% 51.9% 47.1% 47.0% 51.3% 48.5% 45.2% 41.0% 30.5% 30.5% 33.2% pp in 3 yrs 39 Source: Company announcements

40 TURKCELL INTERNATIONAL: OPERATIONS IN BELARUS BELARUS MOBILE MARKET FACTS Q m Total subscribers 124% Mobile Penetration 3 Operators BYR BILLION BeST PERFORMANCE FY15 YoY% Q116 YoY% Revenue % ,7% EBITDA % 3, % EBITDA Margin 2.2% 1.9pp 1.7% 1.5pp HIGHLIGHTS OF BeST Ownership 80% Turkcell 20% Belarusian State Ownership 51% Belarusian State 49% MTS Ownership 100% Telekom Austria Group 1.1 million subscribers 1 in Q months active

41 BELARUS: MOBILE MARKET PERFORMANCE MARKET SHARE Subscriber* 43,3% 10,1% (*) 3 month active subscribers 46,6% MTS VELCOM LIFE :) Q116 million FINANCIALS Mobile Revenue Growth (in BYR) (YoY) 32% 20% 82% 84% 98% LIFE:) VELCOM MTS 69% 33% 25% 21% 23% 20% 13% 27% 18% 10% Revenue life EBITDA Margin Trend 47,7% 7,0% 45,2% MTS VELCOM LIFE :) Q116 BYR billion 1,489 1,571 0,231-8,1% -5,0% 0,3% 2,2% -27,8% Source: Company announcements. Figures of life:) are not inflation adjusted.

42 FINTUR: PERFORMANCE IN Q116 REVENUE US$ MILLION FY15 YoY % Q1 16 YoY % Fintur Total 1,325 (26%) 193 (50%) Kazakhstan 758 (28%) 100 (57%) Azerbaijan 408 (26%) 59 (48%) SUBSCRIBER SUBSCRIBER TREND (3-MONTH ACTIVE) Moldova 64 (11%) 14 (7%) Georgia 95 (26%) 21 (16%) 50.1% decline in revenues due to competition and devaluation Q115 Q215 Q315 Q415 Q116 Kazakhstan Azerbaijan Moldova Georgia 42

43 FINTUR: OWNERSHIP STRUCTURE OF TURKCELL TURKCELL 41.45% FINTUR 51.0% 51.3% 100% 100% Turkcell s indirect share 21.14% 21.26% 41.45% 41.45% Fintur Contribution to Group s Net Income (mn $)

44 FINANCIAL REVIEW 44

45 TURKCELL GROUP: REVENUE & EBITDA DEVELOPMENT REVENUE TRY MILLION EBITDA TRY MILLION 2, (22) 3, (129) (38) (5) 1, % 8.1% Revenue Q115 Δ in Turkcell Turkey Δ in Turkcell International Δ in Other Subsidiaries Revenue Q116 EBITDA Q115 Δ in Revenues Δ in Direct cost of revenues* Δ in G&A exp. Δ in S&M exp. EBITDA Q * Excluding depreciation & amortization

46 TURKCELL GROUP: NET INCOME DEVELOPMENT TRY MILLION in non-controlling interest (295) in other inc/exp (253) in EBITDA 75 in D&A (61) 14 (43) (80) Q115 Δ in EBIT Δ in Interest Inc./Exp. Δ in Equity in Net Inc./Loss Δ in FX Gain/Loss Δ in Taxation Δ in Other Inc/Exp. Q116 46

47 TURKCELL GROUP: BALANCE SHEET HIGHLIGHTS SUMMARY BALANCE SHEET TRY MILLION Q Q Q Total Cash 8,174 2,919 2,522 Total Assets 23,978 26,207 26,175 Total Debt 4,127 4,214 4,028 Net Debt/(Cash) (4,046) 1,295 1,506 Total Equity 12,927 14,419 14,902 CASH DEVELOPMENT (738) 172 (145) (491) (195) 2,919 2,522 Q415 EBITDA Capex* Net int income Net chg in debt Regulatory fees Other Q * Including operational and non-operational Capex

48 DEBT BREAKDOWN Q Q NET DEBT/EBITDA 14% TRY 4,127 mn 19% TRY 4,028 mn 1, x x 86% 81% (5,334) Foreign Currency Local Currency Foreign Currency Local Currency (1.4x) Turkcell Turkey 54% 46% 90% 10% lifecell 94% 6% 0% 100% BeST 100% 0% 0% 100% Q116 Net Debt (TRY mn) Net Debt/EBITDA 48

49 BALANCE SHEET OPTIMIZATION AVAILABILITY DATE AMOUNT MATURITY INTEREST PURPOSE OF FUNDING PERIOD Club Loan (September 2015) June 30, 2016 US$500mn and EUR445mn 2 year grace period, 5 years maturity 3 month LIBOR/ EURIBOR % CAPEX and inorganic growth opportunities Bond (October 2015) - US$500mn 15/10/ % CAPEX and inorganic growth opportunities China Development Bank (October 2015) 2 Years 3 Years EUR500mn EUR750mn 3 year grace period, 10 years maturity EURIBOR % EUR500mn: Debt restructuring EUR750mn: CAPEX 49 9 Months Summary US$2.9bn 6 Years 3.40% 3 Years Equal weighting of EUR and US$ debt CAPEX, Debt restructuring and inorganic growth opportunities

50 BALANCE SHEET OPTIMIZATION Expectations Regarding Establishment of TURKCELL FINANCIAL SERVICES (TFS) 50 Support smartphone penetration & converged offers Improve working capital management NPL sales opportunity Addressing unbanked population New revenue stream Contribution to Company Value Synergy & Growth of M-Banking Convergence between telecom & finance Dec-15 Dec16E Dec17E Dec18E TFS Loan Portfolio Receivables from terminals 2013A 2014A 2015A 2016E 2017E 2018E FCF (Excl. License Fees)

51 TURKCELL GROUP: CAPEX/SALES TREND 35% 30% 25% Turkcell Group Average: 20.0% EEMEA Average: 18.4% Between 2005 and 2014 including 3G license fee (TRY0.8bn) 20% 15% 10% 5% 0% Turkcell Group EEMEA 51 Source: Bloomberg Industry Data and company announcements

52 TURKCELL GROUP: DIVIDEND DISTRIBUTION Cash Dividends million TRY Dividend Payout Ratio DPS (TRY) Dividend Yield % % 50% 50% % 50% 50% %42.5% 42.5% 42.5% 42.5% % 4.8% 3.5% 3.9% % 3.0% 3.3% 2.5% 2.5% % % % billion TRY dividend distributed for years , amounting to ~13% dividend yield in total. The Company shall target a dividend payout of at least 50% of its distributable net income as cash. This policy will be subject to the Company s cash projections, business outlook, investment plans and capital market conditions. 52 Dividend yield for calculated with closing price of April 3, 2015.

53 CURRENCY TRENDS USD / TRY EUR / TRY Average Period-End Q116 USD / BYR Q116 USD / UAH 18,569 20,133 8,570 9,510 11,850 20,552 15,917 8,326 8,883 10, Q Q116 53

54 BACK-UP

55 THE MARKET 85.1 m Total Subscribers 94% Mobile Penetration 43.9% 25% Fixed Broadband Pay-TV Penetration Penetration 1 Mobile Market Petabyte Fiber Market Millions Pay-TV Market Millions Mobile broadband usage Mobile broadband penetration Fiber subscribers Share of >8Mbps package Pay-TV subscribers Pay-TV penetration 42% 50% 52% 73% 25% 25% 97 PB 165 PB 1.5 mn 1.7 mn 5.5 mn 5.5mn Q414 Q415 Q414 Q415 Q414 Q Source: ICTA as of Q415 1 Penetration based on household

56 GROWING ECONOMY GDP $ thousand 19,6 20,4 4.0% 21,2 4.5% 22,5 23,8 5.0% 5.0% Share of <30 years old in population As of 2014, % <30 49% 2.9% E 2017E 2018E GDP per capita (ppp) GDP growth rate (%) Sustainable Growth Growing Young Pop. Investment grade by Largest youth pop. in EU Fitch and Moody s 56 Source: Turkish Statistical Institute (TUIK), International Monetary Fund, World Economic Outlook Database, Medium Term Plan January 2016

57 TURKEY: TRAFFIC MIGRATES FROM FIXED TO MOBILE REVENUE COMPOSITION (%) TRAFFIC COMPOSITION (%) 63% 65% 68% 70% 72% 73% 75% 63% 72% 82% 84% 87% 90% 92% 94% 95% 37% 35% 32% 30% 28% 27% 25% 37% 28% 18% 16% 13% 10% 8% 6% 5% FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 Fixed Mobile Fixed Mobile 57 Source: ICTA Q4 2015

58 Turkey Jamaica Ghana Tanzania Bangladesh Brazil Jordan Gabon Pakistan Tunisia Cameroon Colombia Egypt Thailand Hungary Kenya Chile South Africa Chad Croatia Sri Lanka Peru Ecuador Uruguay Panama Nigeria Turkcell Investor Presentation TURKEY: TAXATION TAX MOBILE FIXED Special Communication Tax on voice Special Communication Tax on broadband 25% 15% 5% 5% VAT 18% 18% Treasury Share* 15% 1% Contribution Share to Telecom Authority 0.35% 0.35% Communication Tax - 1% New subscription Special Communication Tax (at first enrollment) TRY M2M TRY 0 - Wireless license fees (per acquisition) Wireless usage fees (annual) TRY TRY % 60% 50% 40% 30% 20% 10% TURKEY HAS THE WORLD S HIGHEST MOBILE SERVICE TAXES** 58 *Under the licence agreement Turkcell pays a treasury share equal to 15% of its gross revenue from Turkish GSM operations **GSMA/Deloitte, Digital inclusion and mobile sector taxation, 2013

59 TURKEY: MOBILE / SMS TERMINATION RATES MTR RATES TRYkr. Voice Rates SMS Rates OLD NEW Asymmetry OLD NEW Asymmetry Turkcell Vodafone % Avea % % EVOLUTION OF MTR TRY kuruş per min Turkcell MTR is 1.9x below EU MTR -Turkcell Europe-MTR 59MTR: Mobile Termination Rate Source: BEREC July 2015 report

60 TURKCELL GROUP - OWNERSHIP STRUCTURE SHAREHOLDER STRUCTURE OWNERSHIP 1 Cukurova Finance International Limited 51% Alfa Telecom Turkey Limited 49% Cukurova Telecom Hold. Limited 52.91% TeliaSonera Finland Oyj 47.09% Free Float 35% Cukurova 14% Alfa Telecom 13% Turkcell Holding A.Ş % Sonera Holding 14.02% Cukurova Holding 0.05% Free Float 34.93% Telia Sonera 38% TURKCELL İLETİŞİM HİZM. A.Ş Direct and indirect ownership based on public announcements.

61 THANK YOU For further information please or call Turkcell Investor Relations at ( ) Please download our IR App via here for ios and here for Android mobile devices or via below QR codes. For Android For ios 61