Turkcell Reports Q3

ISTANBUL -- Turkcell (NYSE:TKC, ISE:TCELL), the leading communications and technology company, today announced results for the third quarter ended September 30, 2009. All financial results in this press release are unaudited, prepared in accordance with International Financial Reporting Standards ("IFRS") and expressed in dollars unless otherwise stated.

Please note that all financial data is consolidated and comprises Turkcell Iletisim Hizmetleri A.S., (the "Company", or "Turkcell") and its subsidiaries and its associates (together referred to as the "Group"). All non-financial data is unconsolidated and comprises Turkcell only. The terms "we", "us", and "our" in this press release refer only to the Company, except in discussions of financial data, where such terms refer to the Group, and where context otherwise requires.

Highlights of the quarter

• Turkcell Group continued its solid performance in the third quarter of 2009 despite the tough macroeconomic environment and intense competition.

• Group revenue for the third quarter was TRY2,368.0 million (TRY2,458.4 million) declining by 3.7% yoy and increasing by 7.4% compared to the last quarter. Compared to last year, revenue was negatively impacted by decreasing revenues from outgoing calls and the declining contribution of our consolidated subsidiaries, particularly Astelit and Inteltek.

• Group EBITDA** came in at TRY813.7 million (TRY1,001.8 million). EBITDA margin was 34.4% in the third quarter representing a 6.4pp year on year decrease and a 2.2pp quarter on quarter increase. In addition to the decline in our revenue, the reason for the year-on-year decrease in EBITDA margin was the 4.4 pp increase in interconnection costs, 1.3 pp increase in network expenses, 0.4 pp increase in selling and marketing expenses, and 0.2 pp increase in other items.

• Group net income decreased by 31.4% year on year to TRY496.8 million (TRY724.2 million) but increased by 27.6% compared to the previous quarter in line with the EBITDA trend.

• In Turkey mobile communication revenues continued to grow in the first nine months of 2009. However, mobile line penetration in the market decreased due to the declining multiple SIM card usage. In the third quarter, our postpaid subscriber base grew to 9.1 million with 482,000 net additions, while the total net subscriber loss was 338,500 compared to the last quarter.

• MoU increased by 36.1% to 148.6 minutes and ARPU in TRY terms decreased by 4.4% year-on-year to TRY19.7.

• The performance of Turkcell Group Companies improved in the third quarter with Superonline recording positive EBITDA for the second consecutive quarter, Astelit improving its EBITDA margin and Inteltek improving its performance compared to a quarter ago.

• TRY depreciated by 24.7% year-on-year against the US Dollar, leading to a 22.8% decrease in Group revenue in US dollar terms to $1,587.9 million ($2,055.9 million), a 34.9% decrease in EBITDA to $545.4 million ($837.8 million), and a decrease in net income of 44.9% to $332.9 million ($603.8 million) in the third quarter.

* Authority: Turkey's Information and Communication Technologies Authority will be referred to as Authority hereafter.

**EBITDA is a non-GAAP financial measure. See pages 13-14 for the reconciliation of EBITDA to net cash from operating activities.

à In this press release, a year on year comparison of our key indicators is provided and figures in parentheses following the operational and financial results for the third quarter 2009 refer to the same item in the third quarter of 2008. For further details, please refer to our consolidated financial statements and notes as at and for the nine months ended September, 2009 which can be accessed via our web site in the investor relations section (www.turkcell.com.tr).

Comments from the CEO, Sureyya Ciliv

"In the third quarter of 2009, we delivered solid operational results in a challenging environment: Turkcell Group revenue was TRY 2,368 million, with an EBITDA of TRY 814 million and net income of TRY 497 million.

In Turkey, we strengthened our competitive position through successful launch of Turkcell 3G network offering the fastest mobile broadband and the widest coverage. We are very pleased with the high level customer interest ahead of our expectations and excited about offering innovative mobile services to our consumer and corporate customers. We believe, going forward, our 3G business model will derive the growth in our VAS revenues through increased penetration of mobile broadband and services in this new 3G era.

In 2009, Turkish market was negatively impacted due to higher interconnection costs resulting from the unlimited flat rate offers triggered by competition. We have taken actions to minimize the impact of these challenges and are content to see signs of more rational behaviour beginning at the end of the quarter. During the third quarter, we also saw an improvement in operational results from our consolidated local and international subsidiaries.

Overall, I am satisfied with our performance so far in 2009 and we remain confident and optimistic about 2010. Next year, we expect our revenues and EBITDA to benefit from improvements in the economic environment and consumer confidence combined with growth in our mobile broadband business, a more rational market, and the increasing profitability of our subsidiaries.

I would like to thank all of our customers, employees, business partners, and shareholders for their continued support in such a challenging environment."

Turkcell Iletisim Hizmetleri A.S. (NYSE: TKC)