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Last Updated: Tuesday, 13 December 2005, 13:05 GMT
Vodafone buys Turkish mobile firm
With 72 million people, Turkey is Vodafone's fourth largest market
Vodafone is buying Turkey's second biggest mobile telephone operator, Telsim, for $4.5bn (2.5bn).

It outbid Kuwait's MTC to win the auction for state-owned Telsim, which holds about 25% of the Turkish market with 9 million customers.

Vodafone will provide $1bn in extra funding for Telsim, which is expected to make a loss in the short term.

The privatisation of Telsim will give further impetus to Turkey's economic case for membership of the EU.

The start of European Union entry talks, a revaluation of the Turkish lira and strong economic growth have made Turkey more attractive for foreign investment.

"With a larger population than every European country except Germany, and a penetration level of approximately 53%, the Turkish market represents a major growth opportunity," said Vodafone chief executive, Arun Sarin.

Rapid growth

Telsim is growing rapidly, with revenues up by 43% in the first seven months of 2005 compared to the previous year.

It added 2.8 million customers in the 12 months to the end of June 2005.

But Vodafone said it would need to invest $1bn in upgrading Telsim's network and operations.

The main rivals to Telsim are Turkcell, which has nearly 27 million customers, and Avea, a partnership between Turk Telecom and Telecom Italia Mobile, which has about 6.5 million users.

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