The company's fiber optics are a big part of Ciliv's belief in BOT. Through its subsidiary Turkcell Superonline, the company's fiber optics now pass through 73 of 81 cities in Turkey. Its 1,000 megabits-per-second capability makes it one of the fastest in the world. Turkcell's network got a major jolt from a BOT project with the Turkish state in December 2009. The company paid 20.9 million euros to build and lease the fiber optic network of Turkey's state-owned pipeline company for 15 years, giving it the right of way to 11,280 kilometers of new fiber, half of which is up and running already. The agreement expanded Turkcell's fiber optic service to new regions, allowed for new cross-border points with neighbors, and also bolstered its existing service by allowing alternative data paths.
Ciliv says that Turkcell got to its position of opportunity by investing aggressively in 2008, when many companies were tightening their belts and hoarding capital in the face of the tumult in the markets. The company has invested over TRY1 billion (about $570 million) into its fiber network infrastructure. Such a commitment to high speed gives Turkcell a competitive advantage, according to longtime telecom expert and independent analyst Jeff Kagan, "a winning move" that keeps Turkcell at the forefront of the global telecom industry's increasing focus on high speed.
A friendly government and booming economy haven't meant Ciliv has avoided difficulty. The company's quarterly earnings, to be released tomorrow, may take a hit due to a devalued Belarussian ruble, according to advance analysts' reports. What's more, shareholders TeliaSonera AB from Sweden and Altimo from Russia tried to seize control of the telecom company from the main Turkish shareholder, Cukurova Holding, several weeks ago. Perhaps to help block such a takeover by non-Turks, the Turkish Capital Markets Board announced a new rule requiring Turkish companies to have at least two, or a one-third proportion, of board members be independent.
Not surprisingly, Ciliv was openly pleased by the move, and argues that free float investors such as Lazard want the company to stay Turkish as he does. (More recently, his company scrambled after a devastating Oct. 23 earthquake in eastern Turkey, providing free calls and texts for a month and sending donated supplies to be distributed by its employees on the ground.)
Ciliv admits his Eurozone colleagues, for one, won't be able to simply copy Turkey's policies. Ciliv points to the range of nationalities and agendas in the Eurozone as its inherent shortcoming, noting ironically, "I don't see the simple approach [that] works well in Turkey."(Ciliv told Fortune this even before Greece pushed other European nations to apoplexy by announcing its bailout-threatening referendum yesterday.) In the U.S., meanwhile, BOT schemes backed by foreign firms may become political mine fields. For his part, Ciliv has no intention of letting Turkcell's growth slow or ceasing to spread the word on how his company and country do it. His European peers might do well to listen.
