Good day, and welcome to the second quarter 2017 results conference. Today's conference is being recorded. At this time, I would like to turn the call over to Korhan Bilek, Director of Investor Relations and Mergers and Acquisitions. Please go ahead.

Thank you, Ashley. Hello, everyone. Welcome to Turkcell's Second Quarter 2017 Results Call. Today, speakers are our CEO, Mr. Kaan Terzioglu; and our CFO, Mr. Bulent Aksu. Our C-level executives and IR team are also participating in the call. We have a brief presentation, and afterwards, we will be taking your questions. Before we start, I'd just like to remind you to review the disclaimer of our presentation. Now I hand over to Mr. Terzioglu.

Thank you, Korhan. Good afternoon, and good evening, and welcome to Turkcell's Second Quarter 2017 Results Call. Turkcell has been on an exciting transformational journey towards becoming a global digital services provider. We have worked tirelessly to evolve into a digital services-focused experience provider that enriches our customers' lives. Today, we are in New York to ring the closing bell at The New York Stock Exchange and to announce and celebrate our second quarter results, which demonstrate that our customers have embraced this digital transformation wholeheartedly. Our services are designed to accompany our customers throughout their day, from home to office and while mobile or in a social environment. And so we have developed a portfolio of innovative and competitive applications. To date, our core digital services have been downloaded 64 million times and this is 100% increase in the number of downloads since Q2 2016. Leveraging our network capabilities and the power of the 4.5G network, our services combine the best of OTT world, the best of capabilities of a converged telecom services operator as the main digital operator, reaching higher standards of quality and customers' experience. This, in return, spells higher customer satisfaction and loyalty. As such, digital services have grown to represent 18% of Turkcell Turkey revenues in Q2 '17, and we have -- we expect this segment to claim a higher proportion going forward. Next page. Using Turkcell's digital services, our customers have redefined the ways in which they interact, read, listen, watch and store their memories. Today, BiP, the first and leading global product of our digital services portfolio, is a platform for 25 million messages and 1 million minutes of calls per day. UpCall offers an enhanced call experience. Nearly 0.5 million unknown numbers are identified through UpCall every day. Our digital publication application,…

Thank you, Kaan. Good afternoon, and good evening to all participants. Let's take a closer look into the financials. In the second quarter, group revenues rose by 28.5% year-over-year corresponding to TRY958 million in nominal terms. This came mainly from growth of the subscriber base and the strong ARPU performance of Turkcell Turkey and Turkcell Consumer Finance Company bringing an additional TRY112 million, Turkcell International EBITDA an incremental TRY54 million to our revenues. EBITDA rose by 41.6% year-on-year to TRY1.5 billion. This was mainly due to a solid drive in revenues and an effective cost-transformation program while we identify the areas of potential improvement, ranking from head office processes to operating costs in the field. We also reviewed main procurement and OpEx items to create synergies among the business units. As a result, the EBITDA margin improved by 3.1 percentage points to 33.8%. Moving to the next page. The second quarter [produced] net income of TRY704 million on 69.2% growth. TRY428 million higher EBITDA margin was the main driver of this growth. In the terms of depreciation and amortization, we have a comparable base period in the second quarter wherein we see a smaller negative impact in the bridge chart. The other positive impact came from the change in the fair value of cross-currency swap transactions amounting to TRY118 million, which nets of FX gain and loss. Fintur's contribution was TRY8 million net loss in Q2 2016. Yet, as expected, it had no P&L impact in Q2 as in the previous quarter. Moving on to the next page. Now I would like to talk about our balance sheet and leverage details. At the end of the second quarter, our net debt position was TRY6.2 billion with a net debt-to-EBITDA ratio of 2 -- 1.1 times. Excluding the impact of consumer…

[Operator Instructions] We do have a question from Ivan Kim from VTB Capital. Your line is open.

Two questions, please. First, I just was wondering whether there was anything as of late regarding the special communications taxation and potential changes to that? Secondly, I wanted to ask you whether you think Turkcell is going to be subject to wholesale fiber regulation and whatever you think of it and potential scenarios around the wholesale fiber regulation. And the last thing, just a bit probably more technical, but if I look at Turkcell Turkey revenue, it looks like that a lot of your growth is coming outside of mobile and fixed. So I'm just wondering what's driving that. It doesn't look to be wholesale because you disclose wholesale separately, so I was just wondering what's driving this non-mobile and nonresidential fixed revenue growth.

Ivan, thank you very much. Let me start with the first question you have on special communication tax. Of course, tax legislation is under the authority of the Finance Ministry and I would not want to speculate on what they intend to do. But the obvious is, as we move more to digital services and data, the differentiation of taxation on voice services and data services is having an impact on our numbers. I do not expect an increase in the taxation burden of our industry, given the fact that Turkey is the most heavily taxed telecoms industry in the entire world. But of course, this is the -- this is something that the government needs to answer more than us. With regard to our wholesale fiber regulatory environment, our percentage of fiber assets in Turkey is probably about 20% of what the telecom has, so I do not expect any additional regulatory control for Turkcell on the fiber market. But of course, again, the subject of the question should be that they call regulatory office. With regard to our revenue distribution, as we have indicated, the triple play customers we have on mobile and triple play customers on fixed, on the mobile side now, 47% of our customers are having triple play services from us meaning that they have one additional digital service subscription with us in addition to voice and data service. And more than 40% of our fixed subscribers are having IPTV as part of their contracts. So when you look into telecom services and digital services, the way you are looking at it is probably comparing us to an old fashioned telecom business model rather than the business we are in right now. So we consider our overall mobile and fixed services integrated with our digital services. So that's why you see a potential drop in voice, but actually an overall increase in telecommunication services including the digital services. Thank you for the question.

[Operator Instructions] And we do have our next question from Walid Bellaha from Barclays. Your line is open.

I have a couple of questions. Regarding net leverage, so including the consumer finance unit, right now you're at 1.1. Just wanted to understand whether you had any sort of guidance towards the net leverage position for the whole group that you feel comfortable with going forward. And my second question is regarding funding. Given the current market conditions -- capital market conditions, would you consider coming back to the bond market?

Walid, thank you very much. First of all, thanks for asking this question because, I think, our leverage guidance, which is 1.5% now needs to be a little bit further disclosed in terms of how it fares in between our consumer finance business and telco operations. And later on, I'm going to ask Bulent to answer that question in terms of where we are standing on both of the different sides. With regard to the funding options, our three year business plan actually is still fully funded. We will, of course, be looking into the market conditions, but we don't have any plans for the time being. Bulent, can you give more detail on the leverage question?

On the leverage side, as I mentioned during the presentation, only for telco business, we have a 0.5 multiple and including the finance company, it's 1.1. And for the year-end, as a guidance, it's 1.5 for only telco business. And for the finance business, we have a guidance for equity multiple. It's around 5% -- 5 multiple.

[Operator Instructions]

There is a webcast question that I see here asking whether we would also make a play in satellite TV business as Turkish Telecom has done it. I personally believe that the satellite TV business is overcrowded and we do not see that as a market that we can add value necessarily with our digital services, so we have no intentions in going into satellite TV business.

[Operator Instructions] We do have one more question from Dalibor Vavruska from Citigroup. Your line is open.

Just a quick question. In terms of your revenue, where are the main surprises for you? Obviously, you have done better than expected in operating your guidance. What surprised you the most between the two quarters? And I also wanted to ask about wholesale revenues, specifically if you can comment on the trend there. And my second question, if I may, is on the consumer company. I mean, obviously, depending on your willingness to provide credit for the customers, you can manage to a certain degree your growth. So I'm wondering how you decided -- how you're deciding how much you push this credit and whether it may be in anticipation of some economic slowdown next year, if you're expecting it, or slowdown of the growth rate, whether you'll be more strict about providing the credit next year than you are now or how you look at it.

Sure. Dalibor, thank you very much and also thanks a lot for the recent report that you put through. I think it catches really our strategy in a very, very realistic way. Now what surprised me the most, frankly speaking, I would -- I was not expecting to have so low rates on the churn. Actually, since we have implemented inflationary pricing, we have been steadily increasing our prices and I was expecting a higher churn rate given the reaction of the markets towards that. So the good surprise is that our customers are seeing the value and they are sticking with us despite slightly higher prices that we are putting forward in the market. That's why -- that's what has surprised us a little bit on the revenue upside that we have seen, and I'm very glad to see that happening. With regard to the consumer finance business, we have a healthy scoring method. And so far, we have issued 85% of all consumer finance loans in Turkish market in a 10-month operation cycle. And what we have also added to our portfolio as part of responsible financing, we are insuring every credit with an unemployment and life insurance policy so that the borrowers are actually are insured against losing their jobs or health. So I believe we are on a very healthy position in terms of our nonperforming loan ratio as well. [Majorly], it's important to watch the markets and the Turkish economy's direction, but I think, overall, it's a healthy market and we like the business we are in and we will keep on our current strategy moving onwards. Thank you.

[Operator Instructions]

I see here actually a question about the Fintur exit process from Can Oztoprak, Unlu & Co. Frankly speaking, our work on the Fintur exit continues hand in hand with our both partner and shareholder, Telia, and I do expect closure to this process within the end of this fiscal year. Thank you, Can.

I have another question over the phone from Ondrej Cabejsek from Berenberg. Your line is open. Ondrej Cabejšek: I'd just like to follow up on the last question. In terms of M&A, international M&A, particularly with regards to Global Tower, whether there's any update because we've seen news [indiscernible] that there are some tower cells in the region, et cetera, whether you have anything on that?

Thank you, Ondrej. Now with regard to the Global Tower, it's part of our asset-light strategy. As we move on, we would like to really highlight the hidden assets within our balance sheet and we believe Global Tower is one of them. It has a big potential, and we do keep our intentions in terms of making this asset public. But the time will tell. I don't have a time line in front of us. We still have some additions to our portfolio to straighten up the value and we will only do it when it is the right time and when we are ready. Ondrej Cabejšek: Maybe if I can follow up on that, please. There's been -- your competitors are talking about active network sharing. I was just wondering, because you're not the party usually mentioned in these talks, how you look at that within that market?

Well, we have publicly indicated our preference for sharing infrastructure. And while active network sharing is, at this point, is not one of our priorities, we are open for any type of infrastructure sharing on both fixed and mobile. For the time being, our scope is mostly on the passive elements of these networks.

[Operator Instructions] It appears there are no further questions at this time. I'd like to turn the conference back over to the speakers for any additional or closing remarks.

Well, thank you very much. We will now go to The New York Exchange trading floor to ring the bell. Thank you very much for participating with us on this call, and looking forward to the next one. Thank you.

That concludes today's conference. Thank you for your participation. You may now disconnect.