Turkcell, the largest mobile operator in Turkey, has announced that it has signed a Memorandum of Understanding in relation to an eight-year term loan of 500 million euros with China Development Bank (CDB).
Turkcell says that, supported by growing demand from corporate and retail customers, the new loan will be used to finance the procurement of hardware and equipment from Chinese vendors. The door-to-door tenor of the loan facility will be eight years, of which the first three years will be an availability (and grace) period. The parties have already begun work on the structuring and execution of the loan agreement.
Osman Yilmaz, Turkcell’s executive vice president for finance, has been quoted as saying “This long-term and cost-effective loan facility is intended to support the financing of our next three-year procurement in step with our plan.” More interesting perhaps is his next statement in which he notes: “We aim to sign the facility agreement, through which our ongoing and potential 5G investments will be financed, in the first quarter of next year.”
Turkcell has reported been working on 5G technology for several years with the cooperation of technology giants such as Huawei, Samsung, and Ericsson. Indeed a few weeks ago local reports noted that Ericsson and Turkcell had signed an MoU aimed at enabling the implementation of new 5G-related use cases, adding that the two partners will jointly develop a variety of 5G use cases for different industries.
Turkcell has a subscriber base estimated at around 33.76 million subscribers (as of end-2018), out of a Turkish population of some 82 million. Its main competitors are Vodaphone and Turk Telecom.
CDB describes itself as the world’s largest development finance institution, and the largest Chinese bank for financing cooperation, long-term lending and bond issuance.