Turkey’s Information & Communication Technology (ICT) Market

Turkey’s Information and Communication Technology (ICT) market size is currently 9.5 billion dollar. This figure is expected to reach nearly $5.58 billion by the end of 2006 with a market increase of about 20-24%. With over 8 million PCs in Turkey and 15 million internet users PC sales are still the main driver for gross sales. Total ICT market is estimated at 17.8 billion dollar.

The Turkish ICT market is expected to grow significantly as regulations decrease and competition increases. The industry consensus is that the next big market opportunity for ICT firms in Turkey is wireless broadband and applications. Hot spots in airports, café’s and other public locations are in the rise. Wireless connectivity devices such as PCMI, blue tooth, edge technology, internet via satellite are increasing in popularity. Wireless connectivity is also boosting notebook sales as people seek mobility and connectivity at the same time.

A. Market Highlights and Best Prospects

The Marketplace for Business Process Technology

The Government of Turkey is developing e-government , which would include the Prime Ministry’s goal of increasing WAN/LAN and WI-MAX networks to local and regional government offices and facilities in rural Turkey, upgrading computers in schools, and significantly increasing the ICT infrastructure used by the federal, regional and local governments.

Hardware Market

The Turkish ICT market is dominated by hardware sales. The market has experienced double-digit growth over the past five years except during 2001 when the economic crises affected ICT purchases across the board.

Key players in the Turkish hardware market are Beko, Asus, Vestel, Escort, Dell, HP, Compaq, Epson and Brother.

There are an estimated 8 million PCs and 2.6 Million notebooks in Turkey. Turkey’s population of 70 million is relatively young and given the current demographics of computer and Internet users, it is evident that the computer market is far from reaching the saturation levels, increased Internet speeds and other enhancements have and will continue to boost PC sales in foreseeable further.

Software Market

The Turkish defense software contracts are being outsourced to Turkish subcontractors. The know-how and experience of these Turkish firms is leading to many joint ventures between U.S. and Turkish companies.

ICT outsourcing to Turkish firms or creating joint ventures, where the US firms are responsible for global sales and marketing using Turkish ICT firms for the product development is expected to grow significantly.

Wireless Technologies

Turkey is quick to implement new technologies provided there is no hindrance from the government. ADSL is a good example of this implementation, once Turkish Telecom prepared the infrastructure, the consumers were quick to adapt and sign-up. Expectations are that this will also be true for Voice over IP (VoIP) products.

GSM operators are the leading edge of wireless technology in Turkey. Maxi messaging is catching on heavily. Products sold to GSM are on the increase and generating millions in revenues. Music downloads, ring downloads, and wallpapers for the phones are the most popular applications.

ADSL Wireless Mini Networks

ADSL technology has boosted the modem sales. Some of these modems are combined small routers with wireless networking capability (ranging at 100 USD+). With these modems a household can have up to 6-7 users online with a maximum range of 100 meters from the modem. Small businesses are using this technology since it saves them from wiring on premises they do not own and cuts cost significantly.

WANs via Microwaves

Wide Area Networks via microwave dishes connecting several corporate buildings has allowed and widely used especially in densely populated, Istanbul and other large cities. Several companies have specialized in these solutions. The market remains small since Turkish Telecom only permits this application to be used for intra-company usage. This solution is losing it popularity since ADSL technology combined with firewall technology can provide a similar solution at a lower cost.

Wireless Networks

Currently universities are top spenders in ICT technology. Most campuses have wireless networks where the internal network can be reached within the entire campus. Some private universities are giving notebook computers to students upon enrollment. Bogazici, Bilkent and Sabanci University are among the leaders in adapting this technology.

The wireless technology are available in hotels, cafes, restaurants and shopping centers. Not only do the small business located in the mall use this technology hence avoiding any expensive rewiring, but this technology is also open to customers wishing to bring their laptop and do business or entertainment while shopping. Chat corners and chat cafes using this technology are also in the rise.

RFID

Radio Frequency Identification is not yet very popular in Turkey. The estimated sales for this product are in millions since all firms who have an inventory are potential customers. The government of Turkey is using this technology to control and monitor inventory. All major companies are expected to switch to this technology within the next 5 years. RFID is also expected to be used by the cargo and shipping companies as well as the postal service.

B. Best Prospects

ADSL (Asymmetric Digital Subscriber Line) – The largest driving force for new ICT investments for SMEs

ADSL technology and its implications for the Turkish market has been impressive. ADSL subscriptions have reached the one million-subscriber goal and entered 55% of households in the top three cities.

The existing copper telephone line infrastructure proved to be reliable and capable of handling speeds up to 50 times that of dial up. The switch is quick and relatively hassles free. ADSL’s other strategic aspect is its role as a locomotive for the Turkish Government’s e-government initiative. All Government agencies have nearly completed their migration to ADSL based internet technology and thus invested in ICT equipment. Turkish Telecomm has allowed IP telephony (also known as Voice Over IP) to its users through a dozen or so companies who have obtained this license.

Best Prospect Products/Services

- Wireless equipment & services
- Notebook PC’s
- ADSL modems, routers
- Wireless modems
- Network security
- Software
- Portable data storage

C. Market Access

The U.S. ICT hardware and software manufacturer will find that due to time commitment, cost, and complexity of the regulatory and commercial environment, it would be critical to select representation that would have market know-how and access. Although many people in the larger urban areas understand English language, this may be a serious barrier in rural areas. It is therefore imperative that marketing information and user guides be written in Turkish.

The IT market reflects a high price elasticity of demand for most products and neither brand-name technology nor technology with long life-cycles has a guaranteed comparative advantage when the bottom line price remains the overriding purchasing decision factor.

Regulations

Turkey has adapted full acceptance of CE mark, therefore ICT products need to meet the European Union directives on low voltage and electro magnetic standards. ICT products need a CE mark to be able to import into Turkey.

Apart from electro-mechanical standards, ICT producers must ensure that all electronics be compatible with the radio-frequency levels of the Turkish national standards on frequencies.

For more information, please contact: