Turk Telekom sale falters once again
The long-delayed privatistion has hit yet another obstacle after the sale attracted no overseas interest. The deadline for bids has now been extended again.
Turk Telekom has been on the brink of privatisation for over a year now, and the sell-off is not getting any closer after the process hit yet another hurdle when international strategic investors failed to rush in and bid for the company.
“The 14th May deadline [for bids] will possibly have to be moved back,” said an unnamed source within OIB, the privatisation administration.
“We are ready to open the datarooms, but only when have suitable bidders.”
The rules of the tender state that local companies cannot bid for the PTT unless they have an international backer, and such investors have been hard to come by.
In an attempt to remedy this, the Turkish government raised the available stake in Turk Telekom from 20 percent to 33.5 percent, but so far this has still failed to get the attention of foreign companies.
The OIB even made presentations to several major European telcos, but to no avail.
The Turkish government are now expected to raise the available stake to 51 percent, giving the eventual winner total management control of the company. This will require a change in Turkey’s privatisation law, which currently limits the maximum share to 39 percent.
However, observers believe that no Western telco would be willing to invest in Turk Telekom unless overall control was on offer. All the major players are still licking their financial wounds following after paying huge amounts for European 3G licenses last summer, and few are willing to take a chance with a government-controlled PTT.
The privatisation of Turk Telekom was one of the conditions set down by the IMF when it support for Turkey’s economic reform programme to the tune of US$10,000 million.
Economic reforms are a crucial part of Turkey’s on-going campaign to join the European Union, so it’s easy to see why Ankara is desperate to sell off the operator.
Meanwhile, Turk Telekom is continuing to develop its GSM license in spite of its difficulties with privatisation. Ericsson and Siemens have been handed contracts to build Turkey’s fourth GSM infrastructure.
Each deal is worth around $100 million, and between them they cover the construction of base stations, GSM systems and billing services across most of the country.