IT & Telecom innovations have gained momentum in Turkey over the last decade. Turkey’s ICT sector grew by 18% in 2015, increasing to $28 billion. It is expected that the value of the sector will increase to $160 billion by 2023, with a market growth of around 15% each year until then. The ICT ecosystem provided 120,000 jobs in Turkey in 2015. The sector has the potential to employ 500,000 people by 2023.

Here is a snapshot of Turkey’s IT & Telecom landscape:

Mobile Industry

The mobile industry in Turkey continues to grow rapidly, with 73.6 million subscribers in 2015, representing a 93.5% market penetration rate. Turkey had 41.5 million smartphone users in 2015; a market penetration rate of 56.7%. The share of postpaid subscribers in the market was 49% in Turkey, compared to around 62% in Europe.

Turkey is seeing continued growth to higher speed mobile broadband networks. The majority of Internet users in Turkey have access to the Internet through mobile devices. 4.5G services became operational in Turkey in April 2016. Turkey ranked second in the world for use of high-speed mobile broadband networks via smart phones in 2015 according to the OECD’s Digital Economy Outlook 2015 report.

There are three mobile operators in Turkey: Turkcell, Vodafone, and Avea.

TURKCELL Subscriber: 34 million
Smart Phone penetration rate: 52%
Postpaid: 16.6 million
Prepaid: 17.4 million
Revenue: TL 10 billion (2015)

VODAFONE Subscriber: 21.9 million
Smart Phone penetration rate: 64%
Postpaid: 9.5 million
Prepaid: 12.4 million
Revenue: TL 8.4 billion (2015)

AVEA Subscriber: 17.3 million
Smart Phone penetration rate: 66%
Postpaid: 8.7 million
Prepaid: 8.6 million
Revenue: TL 4.9 billion (2015)

The mobile industry has the potential to become one of the key drivers of economic growth and employment in Turkey in the medium term.

2015 was a record year in terms of mobile investment in Turkey. The investment of the three mobile operators increased by 378% in 2015, and reached TL 14.7 billion. Sustained investment in mobile broadband network development will ensure that overall investments continue to rise in the coming years.



Internet

The number of broadband subscribers in Turkey had increased to 48.6 million by the end of 2015. The number of fixed broadband subscribers exceeded 9.5 million in 2015. On the mobile broadband side, the total number of users was 39.1 million, representing a 49.6% market penetration rate at the end of 2015. There were 1.5 million mobile broadband users via non-phone mobile devices in 2015.

Fiber network infrastructure increased to 268 thousand kilometers in 2015 from 244 thousand kilometers in 2014, an increase of 10%. Turk Telekom with its 214 thousand kilometer fiber network has the largest fiber infrastructure in Turkey. The number of fiber subscribers was 1.7 million subscribers in 2015.

Social Media

There are 42 million active social media users in Turkey. Over 27 million people in Turkey use Facebook daily. Over 24 million people visit Facebook daily via their mobile phones. 88% of people with Internet access in Turkey have a Facebook account. In addition, over 12 million people in Turkey use Instagram at least once a month. Twitter has over 11 million users in Turkey.

Did you know?

There were 11.4 million fixed voice subscribers corresponding to 14.4% penetration rate in Turkey at the end of 2015.



Exports

The Turkish government supports innovation to boost IT infrastructure and to create a sustainable IT investment landscape. One of the key pillars of this policy is to adopt an export-oriented approach, especially in the software sector. Turkey’s ICT exports increased to $745 million in 2015. The country is aiming to have $15 billion in exports from its ICT industry in the next 10 years. It is expected that the investment will continue to boost areas of key ICT infrastructure, such as 4.5G, big data, cloud tech, M2M, and data centers. These investments will enable Turkey to export IT services.

Smart Cluster Project

Turkey’s Informatics & Services Exporter Union has launched a “Smart Cluster” project. The project aims to gather together various Turkish IT companies that can deliver giant IT projects worldwide. The Union believes that the project will also boost the competitiveness of the Turkish IT sector. Companies operating under the “Smart Cluster” project will also focus on smart city projects in Turkey in order to raise quality standards and lower the cost of ICT services across the country.

Software

The software sector can play a central role in addressing a range of socio-economic developmental challenges in Turkey. Boosting the software industry will drive economic development, increasing employment across the country. The software sector is one of the leading sectors in Turkey for youth employment. Thus, developing this sector will likely lower the unemployment rate in Turkey. The size of the IT sector in Turkey is around $8 billion, and its direct contribution to Turkey’s GDP is around just 1 percent. Turkey’s software market size is around $1 billion. Thus, the sector has huge growth potential.

M2M connections

The number of M2M connections in Turkey reached 3.2 million in 2015, increasing from 2.5 million in 2014. Operators are aiming to accelerate the delivery of newly connected devices and services in the M2M market through collaboration, and optimizing networks to support the growth of M2M in the immediate future.

Digital Commerce

Digital commerce is on the rise in Turkey, supported by a growing mobile and Internet penetration rate. The rise in smartphone adoption and mobile broadband usage are stimulating digital commerce.

It is expected that mobile commerce will grow by 39% in Turkey between 2015 and 2017, according to research conducted by PayPal at the end of 2014. The same research also claims that online commerce will grow by 17% in the same period. The research showed that 53% of consumers have made purchases via their smart-phones. Of these people, 71% are between 18-34 years old.

The share of mobile money is also increasing in digital commerce in Turkey. It is predicted that 21% of consumers who engage in digital commerce use mobile money. It is expected that this share will increase by 27% in 2019.

The Outlook

The ongoing growth of the IT & Telecom sector in Turkey depends on a forward-thinking regulatory environment, which is essential for the continued growth of the sector. It is forecast that the mobile industry’s contribution to the Turkish economy will continue to increase. The size of the IT & Telecom ecosystem will reach $160 billion with a market growth of around 15% each year by 2023. If the Turkish government can create a fair regulatory environment, the country will most likely reach its ambitious growth targets by 2023, and will promote the innovation enabled by IT & Telecom technologies and services. In addition to boosting the regulatory environment, Turkey needs to invest more on technological infrastructure and to increase its number of qualified workers in order to reach its $15 billion IT export volume.