Catalysts
Turkcell’s growth is fueled by its diversified business model, including PayCell in digital payments, Superonline in broadband, and Global Tower in telecom infrastructure. The 5G rollout is a key catalyst, expected to drive ARPU growth and boost revenue across services. The sale of its Ukrainian operations for $625 million has further strengthened the balance sheet ahead of upcoming 5G investments, enhancing the company’s financial flexibility.
Assumptions
Turkcell anticipates 7% annual revenue growth for both 2024 and 2025, driven by ARPU expansion and digital services. EBITDA margins are expected to remain strong, projected at 42.2% for 2024 and 41.2% for 2025. This steady profitability, supported by diversified revenue streams, positions the company for consistent earnings growth over the medium term.
Risks
Turkcell faces risks from delays in 5G deployment or slower growth in PayCell’s digital payment services. Regulatory changes or tax increases in the telecom sector could also impact profitability. Competitive pressure from major players like Vodafone and Türk Telekom may challenge market share and pricing power.
Valuation
The stock trades at 2.9x 2025 EV/EBITDA, reflecting a 54% discount compared to its international peers. Given its strong financial position, consistent earnings momentum, and growth potential in 5G and digital services, Turkcell has significant re-rating potential. A valuation re-rating to 4-5x EV/EBITDA could unlock meaningful upside for long-term investors.
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Disclaimer
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