Turkey: Liberalization Efforts Continue In The Telecommunications Market

The Telecommunications Authority ("Authority") continues to introduce new authorizations/licenses to further liberalize the telecommunications market in Turkey. In addition to the below listed services recently authorized, the Authority issued -on its website- a new draft authorization for public opinion concerning the provision of "Terrestrial Digital Platform Services", which is defined as the ‘operation of terrestrial digital platform network/infrastructure and the single/dual communication of any voice, data, image and encrypted/unencrypted radio/television signals over such network through the channels exclusively allocated to broadcast over the said network’. Once this authorization is available, it will revolutionize the way to access multimedia services and contribute to further convergence of telecommunications and broadcasting services, while enhancing competition in the broadband market.

Infrastructure Operation Services

We previously reported about the draft authorization proposed by the Authority, for provision of infrastructure establishment and operation services. As of 7 September 2005, this authorization became part of the Regulation on Authorization of Telecommunications Services and Infrastructure ("Authorization Regulation") and, upon determination of the fees on 8 November 2005, the operators can now apply to the Authority to obtain such license. It is encouraging to see that the requirements to establish a minimum of 200km transmission facilities and start operations within three years following the obtainment of a license, which were highly criticized by the market players, were not included in the final scope of the license. The definition of transmission infrastructure remains limited to facilities such as cable, R/L or optic or other physical means to be determined by the Authority, which enables transmission of data that may be converted into signs, symbols, voice, image and electricity signals. Furthermore, this authorization will be granted for 25 years and on a regional basis. However, the operators may be authorized to provide infrastructure services in several regions under separate licences. Finally, the holders of this authorization cannot provide telephony services based on such authorization.

Wireless Internet Services Provision

Annex-A6 of the Authorization Regulation ("Annex-A6") regulating Internet Service Providers ("ISP") has been amended on 15 November 2005 in order to include wireless internet services as part of ISPs. Unfortunately, certain criticisms have arisen because the operators are required to obtain certain infrastructure from other infrastructure providers and/or to obtain a separate license to establish such infrastructure themselves. Furthermore, ISPs cannot provide telephony services based on this authorization.

The operators authorized to provide internet services under Annex-A6 before the effectiveness date of the above mentioned amendment, i.e., 15 November 2005, will be deemed authorized to provide all internet services set forth under the revised Annex-A6. Accordingly, they will be authorized to provide wireless internet services without being required to obtain another authorization.

Service Quality

The draft Regulation on Service Quality in the Telecommunications Sector has entered into force as of 3 March 2005. The regulation aims to bring the telecommunication services and telecommunication infrastructure services to national and international service quality standards by determining service quality criteria for connection periods; malfunctions for each access line; correction periods of malfunctions; unsuccessful call rates; establishment periods for calls; responding periods for operation services; responding periods for directory services; payphones and invoice complaints; and leased lines.

Moreover, pursuant to the regulation, operators are now required to publish comprehensible, comparable and up-to-date information regarding the quality level of their services. The operators providing fixed line telephony services and having significant market power should submit a quarterly report on their service quality to the Authority on the 15th day of January, April, July and October of every year at the latest. Furthermore, all operators providing mobile telephony services (regardless of having significant market power or not) are also required to quarterly provide the Authority with a report on service quality criteria determined under the concession agreements, and a report on call blockage rates, unsuccessful call rates, establishment periods for calls and invoice complaints on the 15th day of January, April, July and October of every year at the latest. In addition, the Communiqué on the Measurement of Service Quality Liabilities of Operators Providing GSM Mobile Telephony Services has entered into force on 15 December 2005. Among other specific provisions, the said communiqué sets forth that compliance with service quality requirements will be determined by third parties based on measurements made at the residential areas having at least 10,000 habitants.

Directory Services

The provision of directory services, which is defined as the provision of information, sometimes further processed, obtained from the number databases of the operators providing telephony services, has also been liberalized as of 6 July 2006. In addition to telephone numbers, information such as fax numbers, e-mail addresses and professional information may also be included in the directories provided that prior authorization is obtained from the relevant persons. Furthermore, the operators providing directory services may also provide value added services and they are entitled to build and operate the necessary infrastructure. The authorization period is 15 years and the directory services provided by Türk Telekom and GSM operators will cease within six months as of 6 July 2006. Furthermore, as of the date of the first authorization for directory services, Türk Telekom and GSM operators will be obligated, for two years, to announce in their invoices that directory services are being/will be provided by other firms via five digit numbers (i.e. 118**). On the other hand, it is noteworthy that the Council of Ministers has still not determined the fee for the authorization regarding directory services and that no authorization can be granted before the relevant fee is announced.

Long Distance Telephony Services ("LDTS")

Finally, the procedure and principles for provision of LDTS have been determined under a communiqué, which entered into force on 10 June 2006. It sets forth the rights and duties of LDTS providers, the liability of Türk Telekom for responding to demands of LDTS providers regarding traffic transfers between networks and also determines the relations between LDTS providers and their agencies.

Cable Platform Services

Despite the necessary amendments to the Authorization Regulation on 5 February 2005 and the grant of long-awaited licenses on 24 April 2005, there are still serious obstacles for the provision of cable platform services in Turkey. Such obstacles mostly relate to the availability of the relevant infrastructure by TURKSAT, the company that has executed revenue sharing agreements with cable platform service provider firms, which alleges that the infrastructure is owned by it upon termination of the revenue sharing agreements following the grant of the relevant licenses; whereas, cable platform service provider firms allege that the infrastructure should be owned by them following a settlement to be agreed upon with TURKSAT. TURKSAT has filed actions against the cable platform service providers in order to prevent them from using the infrastructure and demanded preliminary injunctions. So far, only one preliminary injunction has been granted out of three demands filed against three firms. On the other hand, the cable platform service providers have not been receiving any revenue share from TURKSAT after granting of the licenses, i.e., April 2005, due to the fact that their revenue sharing agreements are deemed terminated and they would probably file actions against TURKSAT to obtain the relevant revenue share. Until the dispute is settled, the consumers are likely to encounter serious disruptions in cable services.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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