Vodafone beats off rivals in Turkish mobile auction

After a closely fought contest with MTC Group of Kuwait, Vodafone wins the auction for second operator Telsim with a US$4.55 billion bid.

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By  Alex Ritman Published  December 13, 2005

Vodafone has won the race for Turkish mobile operator Telsim with a US$4.55 billion bid. The UK-based operator fought off five others bidders in a televised auction, beating the likes of MTC of Kuwait, Etisalat and the Emaar construction group of the UAE, Egypt’s Orascom and Russia’s Sistema. Vodafone’s closest rival in the bid was MTC, which after a heated competition decided to withdraw from the contest at US$4.53 billion. Telsim has been in state receivership since February 2004, when it was seized by Turkish authorities from the hands of the Uzan family. The family were taken to court by Motorola and Nokia in 2002, accused of cheating the companies out of US$3 billion in a false financing scheme. The case was won in 2003, but due to an unrelated bank failure the Turkish government stepped in and took control of the operator. With close to 10 million customers representing a market share of roughly 25%, Telsim is the second largest GSM operator behind Turkcell. Its value prior to the auction had been estimated at US$2.8 billion. Vodafone’s success in Turkey is in stark contrast to 2004’s sale of the second GSM license in Saudi Arabia. The auction, eventually won by Etisalat, saw Vodafone disqualified by the regulator after an evaluation of the operator's technical submission. The sale of Telsim to Vodafone will be subject to governmental approval.

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