Q2 2026 Turkcell Iletisim Hizmetleri AS Earnings Call Transcript
Key Points
- Turkcell Iletisim Hizmetleri AS (TKC) delivered real revenue growth for the eighth consecutive quarter, with group revenue up 2.5% year-on-year despite high inflation, demonstrating strong pricing power and commercial execution.
- The company achieved a significant milestone by surpassing 40 million mobile subscribers, with strong postpaid net additions of 284,000 in the quarter and improved monthly churn to 1.6%, indicating robust customer loyalty and a higher-value subscriber mix.
- Digital Business Services (DBS) revenue surged 33% year-on-year, driven by a strong system integration backlog of TR16 billion and the expansion of data center capacity, positioning the company for sustained growth in high-potential areas.
- The FWA (Superbox) business continues to accelerate, adding 64,000 subscribers in the quarter and maintaining a dominant 74% market share, with 5G expected to further boost demand and revenue.
- The company maintains a strong balance sheet with a low leverage ratio of 0.4x and robust liquidity, fully covering all remaining 5G license obligations and debt maturities, while also benefiting from tax incentives and improved net interest margins in its TechFin segment.
- Turkcell Iletisim Hizmetleri AS (TKC) faces persistent macroeconomic headwinds, with inflation revised up to 28% for year-end, which could pressure consumer spending and increase operational costs.
- The company's net income was impacted by higher depreciation expenses related to 5G assets, which began this quarter and are expected to continue, putting pressure on bottom-line profitability.
- FX losses remain a significant drag on financial results, driven by the depreciation of the Turkish lira and FX-denominated liabilities, including 5G license installments, with hedging costs still elevated.
- ARPU growth is expected to remain subdued in the near term, with management indicating that the full impact of pricing actions will only be visible in 2027, suggesting limited immediate revenue acceleration.
- The TechFin segment showed mixed performance, with Paycell's EBITDA margin declining due to investments in POS solutions, while Financell's revenue dropped 12% year-on-year due to tighter credit conditions and reduced demand for equipment financing.
Ladies and gentlemen, thank you for standing by. I am Gabe, your course call operator. Welcome and thank you for joining the TurkCell conference call and live webcast to present and discuss the TurkCell second quarter 2026 financial results.
All participants will be in listen-only mode, and the conference is being recorded. The presentation will be followed by a question-and-answer session. Should anyone need assistance during the conference call, you may signal an operator by pressing star and zero on your telephone. At this time, I would like to turn the conference over to Ms. Odram Yadim, Investor Relations and Corporate Finance Director. Ms. Yadim, you may now proceed.
Thank you, Dilly. Good evening, everyone, and welcome to Truxell's 2026 sixth quarter earnings call. Before we begin, I would like to kindly remind you to review our safe harbor statement, which is available at the end of our presentation.
Our earnings release and today's
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