Ladies and gentlemen, thank you for standing by. I'm Mina, your Chorus Call operator. Welcome and thank you for joining the Turkcell's Conference Call and Live Webcast to present and discuss the Turkcell Third Quarter 2022 Financial Results Conference Call. At this time, I would like to turn the conference over to Mr. Ali Serdar Yagci, Investor Relations and Corporate Finance Director. Mr. Yagci, you may now proceed. Ali Serdar Yağcı: Thank you very much, Mina. Hello, everyone. Welcome to Turkcell's third quarter 2022 results call. Today speakers are; our CEO, Mr. Murat Erkan; and our CFO, Mr. Osman Yilmaz. We have a brief presentation and afterwards we will be taking your questions. Before we start, I would like to kindly remind you to review the last page of the presentation for our safe harbor statement. Now, I hand over to Mr. Erkan.

Thank you, Serdar. Good morning and good afternoon, everyone. Welcome to Turkcell's third quarter earnings call and thank you for joining us. We left behind another quarter where macroeconomic challenges continued to weight on the economic activity around the world. While inflation remains to be a major concern, especially in Turkey, domestic demand was still strong as rising prices prop up consumer spending. We recorded 57% revenue growth in the third quarter, enabled by consecutive price adjustment and upsell performance coupled with a growing subscriber base. Strong rebound in roaming, ongoing momentum in digital business services and techfin, also positive contribution from international operations supported top line growth. Amidst continuing inflationary pressures on, EBITDA grew by 49% year-on-year implying just short of 41% margin. On the back of growing EBITDA and proactive FX management, we recorded a net income of TRY 2.4 billion, increasing 68% year-on-year. Higher mobility and strong tourism activity enabled us to accelerate the growth in the subscriber base with one million net additions. In the first nine months, we gained a total of 2.2 million net subscribers, further strengthening our leadership in the market. Lastly, this quarter with a focused approach, the revenue share of digital channels in the consumer sales achieved 23% and setting a record. In consideration of these results, we further increased our full year guidance, which I will elaborate on my last slide. Moving to next slide. Let's take a look at our operational performance in mobile. In line with historical trends, this quarter was marked by increasing mobility coupled with a sharp rise in foreign visitor to Turkey, exceeding pre-pandemic levels. The market continued to grow on back of -- [Technical Difficulty] Sorry for interruption. So let me start with the second slide. Let's take a look at our operational performance…

Thank you, Murat. Please now let's take a closer look at our financial performance. In the third quarter our group revenues grew by 57% year-on-year, corresponding to an incremental rise of TRY5.3 billion. Turkcell Turkey recorded a revenue growth of 57% in this quarter; thanks to an expanding subscriber base, gradually increasing ARPU growth as a result of dedicated price adjustments throughout the year and strong momentum of Digital Business services. Doubling year-on-year strong performance of wholesale and roaming revenues was another driver of the top line growth. Turkcell International revenues comprising 11% of the Q3 top line contributed TRY700 million, mainly with the positive impact of currency movements and better-than-expected performance of Lifecell Ukraine. Our Techfin segment made TRY218 million contribution. Paycell revenues which accounts for 49% of the segment rose by 105% year-on-year. This performance was due mainly to traction in the Pay Later product as well as our POS solution that has been on an uptrend since its launch. Additionally, Financell's revenue was up 57% year-on-year, thanks to a greater loan portfolio average interest rates and rising contribution of insurance business revenues. Improvement of the other segments' contribution on a yearly basis was mainly thanks to a rise in sales from digital channels and higher equipment revenues. Next slide, now some highlights on EBITDA development. EBITDA rose by 49% year-on-year to TRY6 billion and margin decreased by 2.2 points year-on-year to 40.9%. Two main factors behind this contraction were wage hikes and higher energy prices. On the personnel expenses side, we reflected the rise in minimum wage to our wage ancillary's budget in July which was the second increase of the year. Our energy expenses more than tripled year-on-year as of Q3, stemming from globally increasing electricity prices and higher utilization in data centers. On the other…

The first question comes from the line of [indiscernible]. Please go ahead.

Hello, thank you for taking my question. Congrats on the very strong results. Can you hear me?

Yes.

Great. Okay. So, you have presumably spoken about ending the year nearly 1.5 times net leverage. Now, net leverage actually went down to 1.2 times from one point -- sorry 1.0 times from 1.2 times in 2Q 2022. So I was wondering what do you now think we should expect for net leverage at year-end 2022?

I guess this is the only question. Actually we completed this quarter as we said with the leverage of one times. Our target is to keep this -- keep the leverage at these levels given that we don't have any big CapEx cycle inside in near future like 5G. We continue to focus on our fiber investments and invest less in mobile network since we had already done a bulk of investments in the past five years. So, excluding for the currency impacts we keep -- we aim to keep our leverage target around one times going forward.

That's excellent news for us I guess. Your EBITDA is obviously growing stronger than expected which has to with deleveraging. But I was wondering if given the high cash position you've accumulated like bonds are trading below par, if you are looking into accelerating the bond debt reduction?

Could you repeat the question? Second question, we couldn't get the question.

Sure. I was wondering if you're planning to accelerate the bond debt reduction given the very high cash position you have accumulated while bonds are trading below par?

Yes, it is one alternative for us to use our cash to buy back bonds which are trading very cheap in the current credit conditions both locally and globally. But unfortunately the liquidity in the secondary market is very thin. So, we are not able to buy back as we wish. So, we use our cash in relatively more liquid instruments at the moment. But bond buybacks are an important item on our treasury's agenda. So, we look for opportunities to increase our bonds.

Great. And the last question is related to private penetration. Your uptake rate is very high at 41%. And you obviously mentioned that among new homes passed even 50%. So, I was wondering if you can provide an outlook on the topic here where do you see penetration rates trending going forward, do you have any homes pass targets for this year and next year? And then you also mentioned that the government is paying for some of your fiber CapEx. So I was wondering if you can expand a bit how the dynamic works. For example, what the proportion is between fiber CapEx that you pay for yourself compared to that of the government? And if it reverses you or it pays a direct play?

Okay. Thinking further, I didn't get your point about government restriction on the CapEx side, because we don't have any constraint on the government limitation for the fiber CapEx. For the fiber side, we aim to reach around 800,000 fiber home pass. We already get like around 700,000-710,000 level. So, it seems that we're going to reach our targets. And for the take-up rate part, our take-up rate is quite strong. Obviously, while we are adding new home passes, we can see some slight decrease on the take-up. But we're going to recover as soon as we penetrate to the market. We penetrated to the new home passes that we get. So we don't see any issue on the take-up rate side. We're going to see that it's going to continue to slight increase on the take-up rate side.

The question on the government was not about restrictions. But I think you once mentioned that the government is paying for some of your CapEx. So that subsidies or reimbursement or something like that. And I was wondering how this dynamic works?

No, no. Actually, this is not related with fiber. Government doesn't give any incentive, any payment on the fiber side, fiber CapEx side. But we have universal fund, which is used on the mobile side for the area that have a very limited customer lives. But this is related with mobile, not the fiber side. We don't get any incentive, any CapEx support from the government or anywhere else. I wish we have.

Okay, great. Thank you very much. Those were all my questions, and congrats again on the great quarter.

The next question comes from the line of Kennedy-Good Jonathan with JPMorgan. Please go ahead.

Good evening, and thanks for the opportunity to ask questions. Just a one from my side. You mentioned, there were no real plans for 5G. I just wanted to -- if you could refresh us on whether there are any renewals of licenses coming up or spectrum auctions that we should be aware of in the near to medium-term? And thoughts on 5G rollout eventually please?

Okay. First of all, let's focus on the 5G side. Obviously, there is no official time line for 5G announced by the regulatory ad. And 5G is a vital technology that we can facilitate the digitalization of industries and contribute to the economic development of country. However, we believe there are some issues that are needed to be addressed first for how to launch such as the fiber connection of base station, 5G capable smartphone penetration and development of local manufactured equipment. As of 29 of July, we officially launched commercial 5G in Istanbul Airport with a special regulatory permission that is issued to all operators. And Turkcell customers and international roamer can get 5G support 5G part of it. We will position this airport as a commercial 5G pilot cluster. And we would like to use it as a base of create an R&D and test facility test side of the equipment. As to the license cost and rollout CapEx, it is difficult to give any estimate to be honest. And we'll see the time line. And there is no official tender announcement yet. On the 2G renewal side, we are talking with the regulatory in terms of renewing 2G, at least for the end of our 3G and 5G -- sorry, LTE spectrum license end, which is 2029. So as soon as we get some conclusion, we'll go and announce this position. So -- but it is not going to be a big thing for us. It should be another six years extension of the 2G. And obviously 2G is coming to the end.

Great. Thank you. That’s very helpful.

The next question comes from the line of Nagy Nora with Erste Group. Please go ahead.

Hi, and thank you for the presentation and for the possibility to ask questions. Two from my side, please. Today, we've seen the release of the inflation in Turkey, which topped 85%. And I was wondering if this could mean further price increase to come even this year so in December maybe? And then, the second question about any more if you have in Turkey about another minimum wage increase, and if yes, by how much? Thank you.

Okay. Let me start from the second part of the question. Obviously, having such a high inflation environment, we will see some increase on the -- on minimum wage salary. But our expectation is starting from next year as a usual time line. I don't know how much, because it really depends on the government policy and the discussion with all the shareholders. So -- but you can assume that we can see some increase on the minimum wage salary in Turkey. Regarding inflation pricing, as the leading operator, our priority in the high inflation environment is to adjust our prices in a more frequent and the timely manner. So our approach has given competitors to opportunity to adjust their price as well, because we are the leading operator. We start adjusting our prices on the mobile segment in December, last year. And we have made further increase in March, June and September. We saw that these price adjustments were followed by the competition to an extent. Despite the effective pricing on the mobile side, competitive dynamics and it leads to more limited price increase on the fixed segment. In spite of the continued demand for fixed broadband services, the incumbent operator was reluctant to make meaningful price adjustment until October, which was evident in the limited revenue growth and significant EBITDA margin contraction. Accordingly, we had fewer price increases in the fixed segment. In October, the incumbent operator made a meaningful price revision, which was also followed by us on November 1. Furthermore, telecommunications is a necessity service for our customer unlike a discretionary item demand to our services and have limited price elasticity. Additionally, the price of other spending items is also rising, which makes consumers less sensitive to price adjustments as well. So, therefore, it's fair to state that we do have the ability to reflect higher inflation to our prices. Our accelerated ARPU growth over the last quarter's also confirm this.

Thank you.

The next question comes from Demirak Kayahan with AK Investment. Please go ahead.

Hi. Thank you very much for the opportunity to ask question. Also congratulations on the strong results. I have a few things on my mind. The first thing I understand that the prices for the new mobile tariffs almost doubled in September with the cumulative price increases. So, I mean, for the existing tariffs, I mean, for the renewables where do you see the price growth as of September?

I mean, obviously, it reflects to our ARPU numbers. And I think we see that 60% to 70% level.

Okay. Thank you. And I was hoping to get more color for the next year. Maybe could you give us some color, some direction regarding the expected blended ARPU growth for the next years given the pricing actions you take so far?

Obviously, we had increased four times during this year. So it really depends on the inflation journey in Turkey for next year. So -- but we have just one rule, which we're going to follow inflationary pricing. If we see inflation is decreasing, we're going to react based on that. If we see inflation increasing, we're going to react based on that. So I cannot comment from now about inflation process, but I mean whatever it happens we're going to follow this.

Okay. Thank you. And as for the next year's results in terms of the expected CapEx intensity, do you think that the churns around 20% as of sales is sustainable since you don't expect any further investments on that front in the near term?

To be honest, we would like to expect similar CapEx intensity for next year. Obviously, for the CapEx side there are a dependency that we cannot control, which is like currency and other things. But to be honest, we would like to stick on our CapEx intensity side for next year as well.

Okay. Understood. Thank you. And the final question was about -- it's about the dividend payment. You were usually paying around 50% payout ratio, but you reduced it to 25% this year, I mean, given the difficult operating environment and the rising cost of debt. So the leverage seems now quite comfortable. What should we expect on that front at least in terms of your deal?

Yes. Based on the normal condition, we will come back to our normal procedure, which is 50% distribution of the net income. So, I mean, we don't -- I mean, as long as we don't see any different things on macro micro whatever, we will continue we're going to stick on our policy, because we -- our policy is quite clear so we're going to keep our policy.

Okay. That was very helpful.

Ladies and gentlemen, there are no further questions at this time. I will now turn the conference over to Turkcell management for any closing comments. Thank you.

First of all, thank you very much for joining our third quarter results call. And also I would like to apologize for the interruption of the communication. But anyway, thank you very much for joining us and good afternoon and good evening to everyone. Ali Serdar Yağcı: This concludes our call. Thank you very much all for joining. Hope to see you in the next one.