Turkcell Iletisim Hizmetleri AS

Ladies and gentlemen, thank you for standing by. I am Vassilios, your chorus call operator. Welcome and thank you for joining the Turkcell's conference call and live webcast to present and discuss the Turkcell First Quarter 2024 financial results. At this time, I would like to turn the conference over to Ms. Özlem Yardım, Investor Relations and Corporate Finance Director. Ms. Yardım, you may now proceed.

Thank you, Vasilios. Hello, everyone. Welcome to Truxell's first quarter 2024 earnings call. Today, our CEO, Ali Taha Koç, and CFO, Kamil Kalyon, will be delivering a brief presentation covering operational and financial results, which will be followed by a Q&A session. Before we begin, I would like to kindly remind you to review our safe harbor statements available at the end of our presentation. Now, I'm handing the meeting over to Mr. Ali Taha.

Thank you Özlem. Good afternoon everyone and thank you for joining us today. As Turkcell, we are celebrating our 30th anniversary with great pride, having pioneered numerous milestones from our first call to becoming Turkey's leading technology provider. In the first quarter of 2024, we are delighted to share our successful results. By taking timely actions, We have delivered robust double-digit real growth despite global central banks tightening policies and re-accelerating inflation in Turkey. Our top line grew 12% to 31 billion Turkish Liras with a remarkable 23% increase in EBITDA. These results have been driven by relational price increases since 2021. which enabled mobile ARPU growth to reach 17% and fiber residential ARPU growth to reach 14%. Supported by lower energy and interconnection expenses, operating leverage expanded the EBITDA margin by 3.8 percentage points to 41.4%. Additionally, our commitment to focusing on value-generating post-paid and fiber customer acquisition resulted in 333,000 net additions in the first quarter of the year. Overall, our strong operational performance resulted in a remarkable net profit of 2.6 billion Turkish Liras. Our strong first quarter performance enabled us to revise our 2024 revenue growth upwards, which I will elaborate on later. Next slide, please. Let's take a look at our operational performance in the first quarter. Unlike previous quarters, competition in the mobile market was relatively less aggressive in this quarter. On the mobile front, we sustained our focus on the postpaid segment, which contributes more value to our financials, resulting in a net increase of 472,000 subscribers. Over the past 12 months, our postpaid base has grown with 1.7 million additions. Our postpaid customer base exceeded 27.6 million, reflecting 72% of the total on a three-point rise year-over-year. Disconnections from previous year's tourist lines, rising new acquisition price levels, and demand to alternative data solutions were the main factors behind the prepaid net loss of 243,000 subscribers. Our customer-centric and innovative approach contributed to a low churn rate this quarter. The churn rate in the mobile segment was at 1.5%, marking the lowest rate in the past six years. Driven by sequential price adjustments, upsell efforts, and an increased share of post-paid subscribers in the portfolio, blended mobile ARPA rose by 95% year-on-year and continued to outpace CPI. The base effect from the last year's earthquake contributed to the widening ARPU inflation gap in this quarter. Taking into account inflation adjustments, mobile ARPU recorded 17% yearly growth. Next slide, please, Özlem. In the fixed broadband market, this year started with price adjustment in December, and the market has become more rational compared to the previous year. In the first quarter, we had 48,000 Fiverr customer additions to our portfolio, following focused investments in expanding our Fiverr footprint over past years. We are pleased to have added 41,000 IPTV subscribers, reaching the homes of 1.5 million customers. TVPlus is a premier solution for Fiverr subscriber retention, enabling us to implement effective price adjustments thanks to its rich content. With the contributions of TV+, our pure fiber technology and a rational market, we achieved a fixed churn rate of 1.3%, marking the lowest level since 2007. Widening the gap with CPI, residential fiber or pool growth continued to rise, achieving a 90% year-on-year growth on a hysterical basis. Our off-sale efforts to higher speed packages and an increase in 12-month contract share within the customer portfolio were the main components of this outstanding performance. Similar to the mobile side, the base effect from last year's ORDK contributed to the widening ARPU inflation gap in this quarter. Lastly, we will be prioritizing fiber subscriber net additions over increasing home passes this year. Therefore, it is reasonable to anticipate lower new HomePass figures compared to last year.