Welcome to the First Quarter 2016 Results Announcement Conference Call. At this time, I would like to turn the call over to Mr. Nihat Narin, Director of Investor Relations and Business Developments. Please go ahead, sir.

Thank you, Marian. Thank you for your participation. I would like to say, welcome to our call on behalf of the management team here and we will start today with the presentation by CEO, Kaan Terzioglu, and followed by presentation by CFO, Murat. And then we will go into the Q&A session. Just before we start the presentation, I would like to remind you of the brief legal notice. In this presentation, we will make statements that are forward-looking about our future targets and expectations. These are based on our current views and assumptions which may of course change in the future and our actual results may be different. Mr. Kaan Terzioglu, please, floor is yours.

Good afternoon and good evening everyone and welcome to Turkcell first quarter 2016 two thousand results call. Today we’re in Cyprus and I'm joined by our Executive Team including Chief Financial Officer, Murat Erden, Chief Sales Officer, Murat Erkan; Chief Technology Officer, Ilker Kuruöz; Chief Legal and Regulation Officer, Serhat Demir; Chief Strategy Officer, Ilter Terzioglu and Chief Customer Experience Officer [indiscernible]. I am happy to say that we started the year strongly with a record high level revenues and EBITDA both at Turkcell Turkey and at the group level. Our group revenues rose 8.3% to TRY3.2 billion and EBITDA by 8.1% year-over-year to TRY1 billion while the EBITDA margin was sustained at 31.1% despite the non-recurring costs related to 4.5G launch. Group net income as per IFRS rose north to TRY563 million quadrupling over the last year's figure due to elimination of foreign currency risks related to our subsidiaries in Ukraine, Belarus and Azerbaijan. This reflects the success of our restructuring efforts by focusing on balance sheet efficiency. Meanwhile pro-forma net income rose by 15.1% year on year to TRY544 million. Now to the next page, solid performance of Turkcell Group was primarily attributable to Turkcell Turkey, its revenues rose 10% and EBITDA climbed 10.6%. Pro forma net income level was up 11.4% year on year. Turkcell Turkey's performance was mainly driven by continued solid growth in data and digital services in Turkey. Meanwhile our international subsidiary saw positive growth after several quarters of decline. Based on our first quarter performance in Turkcell Turkey and group we remain on track with our plans and therefore we reiterate our full year guidance. As communicated before in 2016 8% to 10% revenue growth both for Turkey and the group. We also target an EBITDA margin of 31% to 33% and operational…

Thank you, Kaan. Good afternoon and good evening to all particpants, I will talk in more detail about our financial results. In the first quarter as Kaan highlighted our business in Turkey is clearly the main revenue in the EBITDA growth drivers. Turkcell Turkey incremental contribution to our top line was TRY265 million or 79% and the remaining from services and solutions. Despite the continued evolution in international operations our top line grew by 7% and 31% in Ukraine and Belarus respectively in local currencies. Consolidated EBITDA rose by 8.1% exceeded TRY$1 billion year on year. This was mainly due increase in revenues which were partially offset by rising in direct cost of living and administrative expenses. The rising direct cost of revenues was mainly related to expenses, moving onto next page. In the first quarter net income as per IFRS rose almost four times to TRY563 million whereas as the pro forma net income rose 16.1% to TRY544 million. Net income increased mainly due to higher EBITDA and lower transmission losses due to a more efficient balance sheet as well as to a lower tax expense related to Turkcell Turkey from less interest income and a decrease in translation on year-over-year. This was despite a lower contribution from [indiscernible] and increase interest expense on loans and license payables. I will not talk about our balance sheet and cash flow items on the next page. As of the end of the March 2016 our net debt position was at TRY1.5 billion and our consolidated debt was TRY4.0 billion. The decreasing debt balance was mainly due to Turkcell Turkey short term loan payments. During this quarter the major cash flow items includes mainly capital expenditure of TRY738 million or TRY675 million was related to Turkcell Turkey and regulatory key payments of…

At this point we are ready to have a Q&A session, Marian, could you please initiate the Q&A session?

[Operator Instructions]. We now take our first question from Ranjan Sharma from JPMorgan Dubai. Please go ahead. Your line is open.

Just couple of questions from my side, firstly as you’ve seen the announcement of the decision to IPO the global tower company, can you share for the details on how many towers there are in this company and what stake are you looking to list? Secondly if you can share what percentage of a base stations are connected with fiber in Turkey and the third question is on your depreciation and amortization expense, if you can share in more details on how you're accounting for the amortization of the 4.5G license? Because you're amortizations doesn’t seem to have increased much from the fourth quarter to the first quarter of this year. Thank you.

First of all on the tower IPO we will not be able to share the details of the number of towers at this particular moment but we have decided actually to start the process for the IPO and we will keep you informed as we have more available data for that purpose. With regard to the fiber infrastructure, we’re as of today can have 95% of our transmission on our own network. We will not be able to provide the exactly the number of fiber sites but we’re are very comfortable in terms of providing the seats that we need to our nation.

The infrastructure would be like [Technical Difficulty] is capable of all our background traffic more than 95% and main station we have recently launched with the 4.5G has high speed back haul connectivity, either way our fiber infrastructure or our high speed radio networks.

And with regard to the depreciation expense, maybe Murat you can provide the answer.

Starting from December 2015 on a monthly basis we will be sharing 8 million for the license and starting from the first April when we had the lunch, we're going to have additional TRY26 million is going to come and the total is going to be going forward TRY34 million.

We will now take our next question from [indiscernible]. Please go ahead. Your line is open.

Could you please share your observations regarding the increase in data usage after 4G and maybe it's potential impact going ARPU going forward when campaigns are ended in a couple of months and my second question is on your subscriber losses, you alone been focusing on postpaid segment but you're losing market share and your ARPU growth is not very strong for awhile. Does that concern you? My question is that,

With regard to the increase in data usage we have seen actually a very healthy uplink in the data usage. We are now at 1.9 gigabites per user up from 1.7 levels actually we have seen overall 10% increase in the mobile data consumption. More than 22% of our total data has moved to LTE network which is also very, very was that. Maybe one anecdotal thing I can share is if look to the average number of minutes that people watch TV on their mobile devices has moved from seven minutes to 60 minutes over a period of six months and we have seen a strong increase of the services which you really encourages us and actually shows that our customers really enjoying the doubling the quarters for the next three months. If With regard to the subscriber base we are very comfortable with the growth we see on our portfolio. Actually the ARPU levels increases are a result of the switching from prepaid to postpaid which shows the average is lower but if you look to our double play and triple play customer base the changes we see are exactly in the right direction. So we considered the higher value generating customer focus as the right thing to do for us.

We will now take our next question from Ivan Kim from VTB Capital. Please go ahead. Your line is open.

Questions from my side please. Firstly on the mobile revenue, their decline accelerated to 8% year-over-year during the first quarter. I was just wondering whether you can elaborate on reasons behind that and probably we have been trying to increase prices for inflation or for everybody but for heavier users less price sensitive users, does it work at all because in this mobile [indiscernible] trend it's not that feasible. And the second question is on your fixed residential broadband business. There you see a mid-30% revenue growth for several quarters now. By now it started being driven ARPU rather than subscriber growth, so I was just wondering how sustainable do you think this trend is and do you think you will able to sustain such high growth for much longer? Thank you.

First of all mobile voice revenue, let me correct growth or decline rate, it's not 8% but 4.1%. This is actually in our second page -- it was on the seventh page of our report as well and this is actually better than our forecasts. As you know the revenues is an allocation of the total packages and we actually see the growth on the date side and the digital services side helpfully compensating for this decline and this is in line and better than actually our plans for 2016. With regards to the inflationary pricing we continue to raise our prices in to the level that we are comfortable with the customer feedback. On the residential fixed business, we see 30% revenue growth. The total home pass increase was seasonally lower on a winter period. So we’re not also surprised to see this levels of growth. We believe that this is a substantial level of growth for our fixed data revenues on the fixed side as well. And I am also particularly happy with the growth of double play and triple play customers in subscriber mix which is the most healthy sign.

We will now take our next question from Vyacheslav Degtyarev from Goldman Sachs. Please go ahead. Your line is open.

Two questions from my side. Your first quarter EBITDA margin is at the bottom range of your annual guidance. So what makes you comfortable in your guidance for the full year and what are the improvement that you target to achieve over the course of the next nine months. So you mentioned one of course related to 4G launch, can you estimate the amount of such cost? And my second question is can you please provide any update with regards to the [indiscernible] is there any formal deadline for [indiscernible] reply to you? Thank you.

With regard to the EBITDA margin actually Q1 we have done better than our plans, we’re expecting a higher promotions and marketing expense with regard to the 4.5G costs and despite these one-off expenses and aggressive marketing campaigns including promotions, additional quarter doubling and also advertising costs we are comfortable with where we’re and we’re reiterating our guidance for the year. With regard to 4.5G costs I think in our report we have already provided you the CapEx figure, 735 million I believe and with regard to the marketing we have lined again in line with our plans. We have increased almost additional marketing dollars by 35 million for the total quarter. And despite these one off we are well in our plans. The deadline for [indiscernible] deal, our discussions are continuing. We have been provided a binding offer and we will let you know when these discussions progress.

We will now take our next question from Atınç Özkan from Credit Suisse. Please go ahead. Your line is open. Atınç Özkan: If I may I have two questions. I heard your previous reply on global tower, I do perfectly understand you cannot disclose any numerical data, could you just provide some color on the revenue mix of the first set I mean how much of better the majority of revenues are external or internal. Just asking that because as far as I know this is no cover collocation regulation in Turkey so I'm just trying to figure out whether the material revenue generator or not? And my second question is regarding your effective tax rate which was significantly below versus what you reported in full year '14 and '15. I know you have been simplifying streamlining your corporate structure eliminating some subset reasons as well as lower tax charge driven by this or anything else? Thank you.

For the tower, this is in-line with our strategy of an asset light model. So we are actually consolidating all our assets in different countries under the global tower structure. As you can guess we'll not be in a position to provide you numbers with regard to that but revenue generation potential will also be in a healthy balance in terms of the foreign currency revenue generating assets of the mix. With regard to the effective tax rate we have actually applied a very efficient way of restructuring and looking to our balance sheet making sure that none of the expenses are incurring outside of the country eliminates our tax shelter benefit so by doing this in the right way consolidating all our cash management practices also in Turkey simplifying our operations in terms of number of companies, we have come to a point I think we are slightly about 20% in corporate tax rate which is which is in Turkey. So we are comfortable with this and we can foresee that this will be the future trends.

[Operator Instructions]. We will now take our next question from Dalibor Vavruska from Citigroup. Please go ahead. Your line is open.

I just wanted to ask about the 4.5G and how the launch went and how you think that you are positioned relatively to competitors in this area. Also referring to the fiber into the discussions that has been taking place about sharing fiber. I'm just wondering where we are and whether you have any whether -- you can maybe talk about scenarios that if the fiber sharing goes ahead, where is the scenario when it doesn't, what sort of CapEx differences are we talking about in the next couple of years? Thank you.

With regards to the 4.5G launch I think the team did a fantastic job in terms of executing on the plans. As of the launch dates we have seen more than 70% of population coverage. We are in 81 of the 81 cities, 970 of the 970 provinces in Turkey. With regard the pick-up I think we world record in terms of 1 million subscribers in a minute or two and as of today we are getting close to 4 million which is actually a very, very strong figure, we almost are 15% of our customer base already enjoying from 4.5G and as you know in the global averages this takes almost more than a year for telcos to get to these levels. So we are happy. We are seeing the benefits of hitting 47% of the available spectrum. By carrier aggregation we're seeing maximum speeds of almost up to 400 megabits per second. You know I think Istanbul and Ankara, Turkcell Networks are currently the fastest metropolitan mobile networks in the world based on the speed test averages that we’re following and when you come to Turkey I'm sure you will enjoy having 60, 70 megabits of connectivity while we’re in the city. If you got the fiber sharing our hypotheses and proposals have been embraced by Ministry of Telecommunications and regulatory bodies, so we are now working hand in hand exploring different options on this. There are two main issues one fiber sharing, either through a joint infrastructure company or through the right sharing and pricing mechanisms for access to fiber but also the government has taken steps for eliminating the hurdles with regard to getting licenses in terms of construction licenses and they are working on a new law which will allow us a much smoother operations in this area. So I am hopeful that as an industry and within in hand in hand with the regulatory buddies we will find a mutually acceptable solution. Based on our calculations a joint infrastructure could save almost $12 billion in order to achieve the desirable fiber infrastructure for the country.

[Operator Instructions]. I would now like to actually take another question from [indiscernible]. Please go ahead. Your line is open.

Very good performance in a the broadband sector, what are you seeing from the competition in the support end [ph], has your outlook changed regarding the wireline segment and could you also share a home pass for fiber as of Q1?

As you know this was a winter period so home pass growth is relatively low because of the seasonality.

Yes, Kaan as I mentioned actually the Q1 has been in-line with our yield plans and since there is a heavy winter conditions the roll out of [indiscernible] has been slower in the first quarter. but this is a usual seasonal traffic. Our plans are in-line and we will be concluding with 100s of 1000s of home pass related to our network at the end of 2016. I recall we had 350,000 passes and I think we will be reinventing our plans.

I think we’re now with about 2.4 million target for this year.

Yes 2.4, 75 [ph].

This will conclude your question and answer session. I would like now to hand the call back to Mr. Nihat Narin.

Thank you, Marian. On behalf of the management here I would like to thank you and all for the participations to the call and please do call IR team if you’ve further questions and also please be aware that our audio will be available. So feel free to call. Thank you very much and have a good day and have a good night. Thank you.

That will conclude today's conference call. Thank you for your participation. Ladies and gentlemen you may now disconnect.