Turkcell (A): How to Respond to Digital Disruption?

Case Solution

Tawfik Jelassi, Pallivathukkal Cherian Abraham
IMD ()

Kaan Terzioglu, CEO of Turkcell, was pensive on his fifth day on the job. He had just received his first WhatsApp call, highlighting the challenge facing his company, Turkey’s largest wireless operator, through OTC service providers (OTT). Of Turkcell’s 35 million mobile customers, 10 million were WhatsApp users. The 4.5G frequency auctions, in which the company would compete against Vodafone and Turk Telekom, were due to take place in August 2015. Turkcell had to decide whether to make an aggressive bid to maintain its leading position in the market or a less aggressive bid. for a more competitive and less profitable future. Turkcell maintained strong profitability, with sales in Turkey increasing 10% from Q1 2014 to early 2015. Voice sales in Turkey fell 4%, although a 46% increase in data sales offset by you grow this. Intense competition with Vodafone and Turk Telekom made price increases difficult. Turkcell faced significant internal challenges. Mobile and fixed communications were operated by separate subsidiaries, making it difficult for Turkcell to put a face to the consumer and respond effectively to the converging telecommunications market. The organization was overloaded with too many managers at all levels. Despite all this, there was a feeling in the company that there was no urgent need for change, because it was number one among mobile network operators and profitable. Turkcell’s international operations were affected by currency devaluations in Ukraine and Belarus. They were a mixed mix of subsidiaries and minority interests. As the new CEO, Kaan Terzioglu knew that he had a window of opportunity for significant change. He wondered where to start.

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