While Turkish Telecom process is going to be close, statements, comments and stories are in the all around. Oger Telecom is one of the bidder at Turkish Telecom privatization tender. They were in a conference early this week in Istanbul, named 5th Telecom Arena organized by Steam.
During the conference, we talked with Paul Doany, Managing Director of Oger Telecom, to learn their opinion, problems and challenges in the process..
turk-internet.com : You told, you will work in win-win basis, with alternative telecom and internet companies if you buy Turkish Telecom .. pls open this..
What will be your strategy for the local companies.. what areas you will be work together?
Paul Doany :Win-win works to expand the market, and we believe in developing the right strategies that work for TT, in addition to its current resellers and its future wholesalers, as the case may be. This is in the public interest, and the interest of all market players. There are examples of such approaches in US and Europe, which have been developed after an initial period in which incumbent operators resisted competition by being obstructive.
On several activities of the business, we probably wouldn’t need to wait for interventionist decisions by the respective authorities, however, we need to ensure that Turk Telekom also gets a fair deal in areas where it is currently prejudiced. One example is tariff rebalancing and price cap application, where sufficient time should be allowed by the regulator, in addition to fair terms. The same applies for un-bundling.
Another important area is the disparity between fixed termination rates, and mobile termination rates, with regulation moves on the former, and apparently no action on the latter. All dominant operators should be on compatible basis for cost determination, or at least pass a simple ‘retail-test’. Also, discriminatory practices should be stopped.
We have compiled a top team, including executives from Oger Telecom and BT Telconsult, in addition to experts from Analysys and Clifford Chance to cover all aspects of operational, commercial, market, technical, legal and regulatory, to come up with the appropriate business plan for the company. All these aspects have to be considered in full, to build the WIN-WIN-WIN I referred to. (TT/Competitors/Customers).
turk-internet.com : Who will be your partner for privatization. We, as Turkish people had respect and admireness for Mr.Hariri. We are sharing your sadness for his unlucky death.
Paul Doany : Thank you for the sentiment on the tragic loss of Mr. Hariri.
As to Turkish partnering, we will be announcing this very soon.
turk-internet.com : What is opinion about Italia Telecom comments (about if they cant be buy TT, they will exit from Avea too)
Paul Doany : We don’t know what TI mean by such statements.
We understand that both TT and TI are bound in agreements in terms of Avea, and that there are no ‘exits’ allowed for either party, unless by prior agreement between TT and TI. If there is such an agreement, it should be provided to the bidders, and we are confident that it would. If there is no agreement, then we can only assume the current terms remain in place, and the transaction means a block sale of 100% of TT, which includes 40% of Avea.
In any case, we have been comforted by the recent public statements made by the Government, where they confirmed that these TI statements will not affect the tendering process, which shall remain fair and transparent. We have no reason to believe otherwise.
Finally we would say that TI is a competitor to us in the TT bid, in which we wish them well, and we will be the first to congratulate them if they win.
Also, TI are a possible partner with us in Avea, if we win, and we would in that case look forward to working with them, to make Avea a success.
turk-internet.com : What is approximately price of TT (we heard from CNN Turk that you said something 7-10 billion $). What you are planning to pay?
Paul Doany : When asked this question by CNN Turk, in reference to independent valuations being circulated of Eu8n, we confirmed that the earlier range mentioned in the Turkis media, namely $7-10bn appeared to be valid, although this range will depend on many factors yet to be determined, least of all the transaction conditions, and the requisite share in Avea (i.e., what happens to TI).
I am sure you can appreciate that we cannot reveal what our price. There will be a public opening of the bids, and it will be announced on that date by the Privatisation Administration.
I would also like to echo my earlier statement about the importance of avoiding OVER-PRICING this asset, which approach is not in the public interest. You have all seen what happens in such cases, where in the end, either the Government pays for it, or the customers pay – i.e., the public will pay. The RIGHT PRICE is the one the provides a balance of interests for all stakeholders, including: the public, the customers, the employees, and the shareholders.
turk-internet.com : What was the issues made you bother related with Avea?
Paul Doany : In principle, we understand that there will always be uncertainty in any transaction, and that we can appreciate.
In this case, the information provision by Avea was limited and delayed, which impacted the bidders due to the initial dates set by the Privatizilation Authority. That was the concern we expressed, and why we requested an extension of time.
In addition, your above question relating to TI statements are important. Are we talking about 40% of Avea, or is it 80% of Avea? And what further capital is required by Avea – note the recent news about further increases. All this uncertainty lowers the overall value, and brings the price range alluded to above downwards.
That is why the valuation can only be concluded in mid-June, by which time we hope to have the final answers to these questions. Otherwise, we have no problem either way – i.e., we believe we can find a way to work with TI if they ‘stay’, or if they ‘leave’ (using their own words)?
turk-internet.com : What is your expectation for new electronic bill draft? What would be bother you if included..What would be make you happy if have?
Paul Doany : We have not had an opportunity to review that draft in detail, but in principle, I would emphasize the importance of establishing clear policy ‘directives’ and policy ‘guidelines’ by the Ministry, to better enable the Telecommunication Authority to carry out its responsibilities. In that regard, we would hope for a formal consultation process, including all interested persons. This is very important for future sector development. In that regard, the issue we raised is not with gist of the law (which is very important of course), but with ‘implementation’.
turk-internet.com : What is the strongest side of TT in your opinion? and again.. what is the weakest point at Turkish telecom?
Paul Doany : The key strength of TT is its organisation and its network, which covers the country at large, and is well placed to serve its current and future customers.
As with most incumbent operators, however, the main weakness is the ability to procure the right systems at the right time. As you know, TT is currently restrained by public tendering rules, which unduly limits their ability to implement new technologies and solutions in a timely manner. Other telecommunications operators in Turkey do not have such restraints, and can react better to their customer requirements, and also to technological developments. That is one of the key reasons why TT will benefit from privatisation, regardless who is successful therein.
turk-internet.com : What is your opinion about worker number? What number would be normal? Do you have a plan for lay offs? You know union is ready to go to courts..
Paul Doany : The overall staffing levels are not materially out of bounds, in comparison with other operators of same size (by customer numbers, and by network size). However, there would be a need to restructure, enlarging certain critical departments, and also, TT needs to prepare for competition.
We are confident that fair and reasonable measures will work for TT. We believe that our joint team with BT Telconsult have come up with the right solution, in line with the approaches begun by the TT management.
turk-internet.com : Turkish telecom announced that, making investment as an amount of almost 1 billion $. What is your opinion about that? would be suitable for your future plans?
Paul Doany : Our investment plans are in excess of what we understood of TT’s future budgets, particularly in the immediate term. We believe that some of these investors are very critical to TT’s future, in relation to increased capacity, improved network performance, and better quality of service. Again here, we believe that our joint team with BT Telconsult have come up with the right solution.
Note : For the Turkish translation of that interview please click to Paul Doany; İşOrtağımızı Kısa Bir Sürede Açıklayacağız