Türkiye telecoms operator Turkcell announced it has invested $27bn (Tl890bn) in communications and technology since its founding in 1994, of which $350m have been allocated to data centre technology.

While this represents a meagre 1.3% of the total investment, GlobalData expects this figure to ramp up significantly as the telecoms operator moves away from legacy products, services, and solutions to B2B and enterprise.

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GlobalData’s revenue forecast for Türkiye’s data centre and hosting market is growth from $551m in 2023 to $729m, representing a CAGR of 6.8%. The telecoms operator says its objective is to make the country a ‘global data hub.’ In order to maximise this opportunity, on July 11, 2024, Turkcell announced a new data subsidiary, TDC, which now operates as a standalone entity. Turkcell states it has evolved from telecoms operator to an end-to-end technology provider.

Türkiye mulls over sale

The announcement comes on the back of Türkiye’s sovereign wealth fund TWF reportedly mulling the sale of its 26.2% stake in Turkcell, which it bought in 2020. Highlighting the success story of Turkcell is critical to the sale in a market that has been seen to play second fiddle to the Gulf players in terms of next-gen enterprise technologies. Arabian investors are reportedly interested in purchasing the stake: it would make sense for Gulf operators like stc or e& with significant interests in data centres to buy as they seek to boost their own data centre footprint.

Turkcell currently provides cloud and data hosting services for more than 3,000 local and international businesses, boasting eight data centres (four of which are next-generation grade) and an active white space of 36,500 square meters – the largest of any Turkish operator.

The localisation rate – domestic production of technology for the construction of data centres – averages well above 50%. The company operates across multiple sectors and is well-diversified. Continuous investment will assist Turkcell in maintaining relevance and steady revenue growth in an ever-evolving market.

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Competition

Competition in the data space is not limited to Turkcell’s telco competitors like Turk Telekom and Vodafone Türkiye, which also operate their own centres.

Global giants like Amazon, Google, and Microsoft are also vying for dominance in the data and cloud technology space.

The question remains whether Turkcell will be able to effectively compete in the country and region against its rivals and the global hyperscalers in terms of reliability and scalability, even with the $350m invested.

Where Turkcell can compete is in the ability to offer aggressive pricing, superior uptime, and advanced local features. If it so happens that a Gulf investor or telco assumes Turkcell’s stake, it might become an effective competitor against the likes of Google, Amazon, and Microsoft. It will almost certainly solidify the operator’s status as a leading data centre provider in the region.