“Turkey, we aspire to be a very strong number two,” Vodafone Chief Executive Arun Sarin said at a presentation in London to showcase the group’s Turkish and other emerging market businesses to analysts and investors, reported Reuters.
“The fact that it’s a good network is the most important thing,” Vitai said, adding that previous owners had chronically underinvested in the company.
Vodafone announced that the its Turkish unit will be able to cover operating costs by the end of its second year — 12 months earlier than originally expected, reported the Anatolia news agency.
Vodafone’s purchase of loss-making Telsim for $4.55 billion had previously been criticized as too pricey.
The Newbury-based company announced in a statement that Telsim is now targeting a medium-term EBITDA (earnings before interest, tax, depreciation and amortization) margin in the “high twenties,” compared with a previous forecast of “mid-twenties,”’ reported Reuters.
The company also lowered its forecast for capital outlay to “turn around’” the Turkey unit to $850 million from the previous prediction of $1.2 billion. Due to the lower cost, the company decided to fund the investment from operating cash rather than rather than a $1 billion injection previously expected, reported Bloomberg.
Vodafone now has focused on upgrading Telsim’s network in tourist areas and major cities to lessen network congestion, lower the number of dropped calls and improve customer service, Attila Vitai, head of Vodafone’s Turkey unit, said at the conference. The company is also building a second data center and adding capacity.
The company’s new strategy is to strategy to focus on revenue growth and cost cutting in Europe to focus on growth in emerging markets, said Sarin. “We are interested principally in Eastern Europe, Africa and Asia,” he added.
Also taking the stand during the meeting, Paul Donovan, chief executive officer of the company’s emerging market business, said that developing countries present an opportunity for the company because a smaller part of the population has mobile phones, thus leaving more room for growth.
The company gave presentations on units in Romania, Turkey and Egypt and its Vodacom joint venture with Telkom South Africa Ltd. in South Africa.
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