Friday 8 December 2017

Turkey: 4G Trials and Tribulations

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Turkey has had its fair share of drama regarding mobile networks and technology. For example fourth-generation (4G) mobile data network didn't arrive in Turkey until April 2016 thats nearly eight years after arriving in Scandinavia and South Korea.Turkish mobile phone users had to wait for bureaucratic issues and uncertain market conditions to clear up before they could use faster data connections. Moreover in 2015 Turkish President Recep Tayyip Erdogan claimed that his country does not need to upgrade to the 4G system. Instead, Erdogan said, Turkey should leap forward to the more advanced 5G network in two years. This was a rather bizarre statement considering 5G technology does not exist and will not for a few more years. 

One expert, a senior engineer and product manager at Turkey’s leading mobile phone company, Turkcell, talked to Al-Monitor on condition of anonymity. He said that the most optimistic estimate for 5G’s first use around the world would be 2020. “The hope is to use 5G at the Tokyo Olympics,” the expert said, adding that Erdogan’s estimate of two years “does not appear to be technically possible.” The lack of a 4G network would slow down every facet of the Turkish economy — business, industry, transportation, communication and government — and undermine Erdogan’s ambition to turn his country into one of the top 10 global economies by the next decade.

So why this delay in bulding 4G? According to Fusun Sarp Nebil, one of Turkey’s leading telecommunications experts, Turkey's adoption of 4G is not the first time that Turkey has been late to adopt an innovation in telecommunications.

“Turkey always follows technology belatedly. It took [four years] before ADSL Internet came to Turkey,” while “3G [mobile networks] arrived nine years after it did in the rest of the world.”

Central and local governments’ delays and inadequacy explain why the development of wireless and landline Internet is moving at a snail’s pace in Turkey. For Nebil, a major problem is the extremely high tax burden on consumers. The Finance Ministry recently admitted that an exorbitant 60% of what Turkish consumers pay on their mobile phone bills goes to taxes. That is, for every 40 Turkish liras ($15) of minutes and data that customers pay their mobile service providers, they pay 60 Turkish liras ($23) to the Turkish government. (By comparison, US customers pay about 17% in federal, state and local taxes.)

However Turkey has now launched its self-declared '4.5G' network. Turkish mobile operators have engaged in even more impressive marketing stunts to sell new phones and data plans. The market leader Turkcell appeals to popular and patriotic sentiments with its “bagliyiz biz” (we are tied / connected / loyal to each other) campaign. Vodafone, with its “4 bucak g” (4 corners g) campaign, showcases folk dancers from the four corners of Turkey performing their own regional dances as well as those of other areas. Former telecom monopoly Turk Telekom (previously Avea) takes a different route and uses Portuguese soccer star Cristiano Ronaldo to emphasize its 4G network’s speed.

Currently Turkcell is the leading mobile phone operator of Turkey,based in Istanbul. In February 1994, Turkcell started Turkey’s first GSM network. In Q3 2012, it had a market share of 52,4%. Its competitors were Vodafone with a market share of 27,9% and Avea with a market share of 19,7%. The introduction of this '4.5G' infrastructure and an increased smartphone ownership, mobile-based internet and data services in Turkey have grown, this, in turn, has boosted revenues for the country's mobile operators. 

As of June 2017, Turkey had some 76.6 million mobile subscribers, including machine-to-machine communication (M2M) subscribers, which corresponded to 96 percent a penetration rate.

Since April 2016, there was a quick transition from 3G to 4.5G subscriptions and at the end of June 2017, the number of 3G subscribers dropped to 13.2 million, while the number of 4.5G subscribers reached 59.8 million. So much so, internet and data accounted for 71.1 percent of Turkcell's, 61.2 percent of Vodafone's and 51.4 Türk Telekom's total revenues in the second quarter of this year.Online music and video streaming services, internet TV, and social media applications have mainly driven the growth in mobile data usage.

However Subscription plans also do not come cheap. Modest plans with 2 gigabytes (GB) of data, 1,000 text messages and 1,000 minutes of phone calls vary between 35-50 Turkish lira ($12 to $17). But some plans with 15 GB of data can reach as high as 159 Turkish lira ($55), including taxes and other fees. For a country where the net minimum wage is 1,300 Turkish lira ($457), even the cheapest data plan seems like a luxury. To boost consumer demand and usage, Turkey must create a mature 4G network and, more importantly, a robust Internet infrastructure.

As a result Kozan Demircan, one of the country’s leading technology experts, calls the new '4.5G' an “April Fool’s joke” because Turkey simply does not have the fiber optic network to support the promised connection speeds. High levels of fiber optic penetration (an area in which Turkey comes up short) enable high-quality connections between personal computers, mobile devices and cell towers. 

As another expert told Al-Monitor a few months ago, Portugal — with a total area of 100,000 square kilometers (38,600 square miles) — boasts a fiber optic network of 545,000 kilometers (338,000 miles). But Turkey, with nearly eight times the area of Portugal, only has 250,000 kilometers of fiber optic cable (a figure that was already 150,000 kilometers in 2005), when it should have over 4.5 million kilometers of fiber optic cable to catch up with Portugal.

These shortcomings slow connection speeds. Demircan points out that “whereas the targeted speed with 4.5G is around 330 to 400 megabits per second [Mbps], average connection speeds are 30-40 Mbps.” Although those figures are a respectable improvement over actual speeds of 14 Mbps on the 3G network, even those limited speeds are not available to Turks who live in major cities such as Istanbul and Ankara. (According to Akamai Technologies, a global content delivery company, Turkey’s average Internet connection speed was 6.2 Mbps in the third quarter of 2015.) As Demircan warns, there is a positive relationship between high broadband Internet penetration and its contribution to high levels of national income.

So why does Turkey not dedicate itself to a truly viable and progressive 4G that would help to grow its economy?

One major problem is the Turkish state’s inability to open up the market to competition. In particular, Turk Telekom, which owns most of the fiber optic network thanks to its former status as Turkey’s telecom monopoly, does not want to share its property with service providers. Also Turkish municipalities continue to charge exorbitant fees whenever service providers attempt to lay new fiber optic cables.

A bigger challenge is the allegation that the Turkish state and the ruling Justice and Development Party (AKP) view high-speed Internet with suspicion. One Turkish Internet expert and former government employee told Al-Monitor alleges that Gezi protests of 2013 and the Gulen-AKP fallout in early 2014, the state — especially the national security apparatus — has become wary of very high Internet connections. “You cannot upload high-quality videos or extended audio files on the 3G,” said the expert. So there is not much enthusiasm to improve conditions through the 4G network.

Due to the delays and problems in 4G there is unfortunately a real possibility that Turkey will also be late in adopting 5G and that means falling further behind in economic development. Hopefully this can still be remedied. 

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