The operator is being auctioned off by the Turkish government agency, The Savings Deposit Insurance Fund (TMSF), which has set a minimum value of $2.8bn on the operator. However, there is speculation that bids could rise as high as $5bn.
There are seven bidders in the running, most of them from the Middle East. These include Etisalat (UAE), Orascom (Egypt), MTC (Kuwait), and International Investment and Telecommunications (UAE). The three European bidders are Vodafone Group Plc (UK), Systema (Russia), and Endeks (Germany). France Telecom SA and Norwegian carrier Telenor ASA recently withdrew from the auction.
Telsim is Turkey’s second largest GSM operator with 8 million customers, and is being sold off to pay debts run up by the company’s former owner, the Uzan family.
Turkey is an attractive market because the country of 70 million people has only a 50% mobile penetration rate. This, coupled with the fact that there are only three mobile operators in that market, means there is plenty of scope for growth, unlike the heavily saturated western European markets.
The auction will be closely examined by mobile giants Motorola Inc and Nokia Corp. Earlier this year Telsim was found guilty of cheating Motorola out of $2bn in loans. Telsim had apparently borrowed nearly $2bn from Motorola in order to finance the building of a Motorola-constructed mobile phone system in Turkey. Telsim also owes Nokia approximately $900m.
Both have now settled their lawsuits against the Turkish operator, and are expected to receive a sizeable percentage of the proceeds of the sale.
