Thank you for holding ladies and gentlemen. Welcome to the Second Quarter 2012 Results announcement call on the 26th of July 2012. Throughout today's presentation, all participants will be in a listen-only mode. After the presentation, there will be an opportunity to ask questions. (Operator Instructions) I will now hand the conference over to Koray Ozturkler. Please go ahead sir.

Thank you, Patrice. I would like to welcome everyone to our conference call for quarter two 2012 announcement. As far as the procedure, I will go through a quick notice and then I will hand over the session to Mr. Ciliv for his presentation. This presentation may contain statements that are forward-looking. These statements are based on current expectations and assumptions that are subject to risks and uncertainties, which could cause actual results to differ materially due to the factors discussed in this presentation. Please also note that all financial data are consolidated, whereas non-financial data are unconsolidated, unless otherwise specified. Thank you.

Good morning, good afternoon, and welcome to Turkcell's second quarter of 2012 results call. We are glad to report another solid quarter, with 13% revenue and 8% EBITDA growth. We recorded Group revenues of TRY2.6 billion, achieving double digit revenue growth for the third consecutive quarter, due to strong continued growth in all segments. With this outstanding quarter, the performance Turkcell generated its historic highest second quarter, actually highest quarter and healthier revenue. While improving our top line, we manage to sustain a profitable business model in nominal terms. Our EBITDA rose year-on-year to TRY779 million, with an EBITDA margin of around 30.4%. Yet, prevailing intense competition continued to impact the margin levels of all players in the Turkish market. Strong operational performance, plus the absence of the one-off Belarus related items we recorded in the second quarter of last year, the increased Group net income to TRY534 million. Moving on to page five to talk about the driving force of this growth. Page five. In the second quarter of 2012, Turkcell Turkey grew by 9% year-on-year, with an increasing pace over the past three quarters. This was driven by accelerated growth in voice revenues by 6%, despite intensified competition in the Turkish mobile market. Meanwhile, the mobile broadband business fell about 44% year-on-year revenue growth. The operational performance of our subsidiaries were strong. Their contribution to the top line grew at 37%, mostly driven by Turkcell Superonline and Astelit. Overall, we are proud of the fact that Turkcell Group posted its third consecutive quarter of double digit growth with increasing momentum. Let's have a broader look at the margin of the market in Turkey on page six. During the second quarter of 2012, competitors pursuit of market share remained unchanged, in light of increase of net incentives, and a…

Thank you, Mr. Ciliv. Good morning and good afternoon to all today's participants. In the second quarter of 2012, Group revenues rose by 13% year-on-year to TRY2.6 billion, almost equally driven by voice and mobile broadband and services, 61% of the nominal increase in revenues was attributed to the strong performance of the Turkcell Turkey. The 6% rise in voice revenues, plus 18% growth in mobile broadband and services led to a TRY174 million Turkcell Turkey contribution. At the same time, subsidiaries contribution to the top line rose by 37% to TRY112 million, while their share in the consolidated revenues climbed to 16% from 13% a year ago. Quarter-on-quarter, Group revenues were up 8%, with voice revenues being the driving force. Compared to the previous quarters, Turkcell Turkey's revenue rose by TRY165 million, of TRY148 million was generated from our voice business, and further TRY18 million was contributed by our subsidiaries. Now moving on to the EBITDA slide on page 15, in the second quarter of 2012 consolidated EBITDA rose by 8% in nominal terms to TRY779 million, while the EBITDA margin was down by 1.2 percentage points to 30.4% compared to the same period of last year. As a percentage of consolidated revenues, direct cost of revenues excluding depreciation, amortization increased by 1.6 percentage points year-on-year, mainly due to the 1.4 percentage point higher interconnection costs resulting from rising of net minutes in Turkey. General and administrative expenses as a percentage of revenues rose 0.3 percentage points year-on-year to 4.8% in the third quarter, mainly on higher bad debt expenses. Selling and marketing expenses as a percentage of revenues decreased by 0.7 percentage points year-on-year to 16.9%. This mainly arose from a declining marketing and frequency usage fee expenses, following our decision to charge frequency usage fees to prepaid…

Patrice?

Thank you, sir. (Operator Instructions) The first question comes from Alex Kazbegi. Please state your company name followed by your question.

Yes, good evening. It's Alex Kazbegi from Renaissance Capital. Two questions. One is, again, I was wondering with these trends in the top line, the recovering so to say voice revenues and growing still data. The margin still is fairly, so to say, I wouldn't say weak, but there is so to say weaker recovery on the margin side, which is also supported by your own guidance, where you are more comfortable, so to say, give us the high number on the revenue side, but leave the margin in absolute terms, fairly unchanged. So I was just wondering, I mean what does it take or what do you need to see what to do in order for profitability to improve, both in Turkey if you wish, in Ukraine? So if you could give us an idea of what we should be looking at here or what you are looking at? The second question is, just about your Board composition. We are, so to say, beyond the timing of where CMB should have already intervened, and the question is, again, what is -- now CMB should be doing, what can it do, what is the timing on that, and when should we expect anything on the, so to say, Board membership to come through? Thank you very much.

Okay. About the first question, the quarterly profitability of a business depends on a lot of factors, and it depends on economy. It depends on competition and it depends on your investments of new products and services. So in the second quarter, economy last year in Turkey was 8.5%. It was the second fastest growing economy in the world. The first quarter, the result was 3.2%, so Turkish economy has slowed down. Second, on the market front, the Turkish market is unusually price competitive and you can see this by the profitable levels of three mobile operators. So there is really intense competition and unfortunately there is very intense price competition. And that has been a very important factor in the first half of the year. And the third part is we have a -- we are a technology company and the mobile Internet growth, mobile services growth is very exciting for us and it offers great opportunities for us. And all along we have been investing in new good businesses of the future. In the last two, three years, we have been investing in 3G and fiber's Internet business in Turkey, and we are investing in mobile services. And in the second quarter, we continued to invest in new mobile services like Turkcell TV and we are investing in mobile finance, mobile health, mobile education, mobile entertainment. So all of these factors coming together plus a change in the mobile termination rate that has happened some time ago has created an environment where there is a lot of off-net calls and that results in, as you can see in the presentations, pretty high interconnect costs. So all of this coming together has created a small decline in our EBITDA margin versus last year. I also want to point out that in Turkey, we do pay 15% treasury share that you should keep in mind. So if you are comparing Turkcell's profitability with some other companies, you should keep that in mind. So all of these factors have impacted but we are happy that in absolute terms, we grew our EBITDA by 10% in the first half versus the first half last year. So let me ask if there is anybody from Turkcell who wants to add to this. Yeah, go ahead.

Yeah. No, I just wanted to say that I understand the -- of course the large taxes, and by the way it was more a question -- tactical question whether you would expect generally the trend too for the margin to improve, not dramatically but even by 1 or 2 percentage points over the next one or two years, given again that you are now getting a better support from the revenue side?

I'll ask Emre to chime in on the latest conditions in the market, in the mobile market in Turkey. We do see some changes in pricing and maybe Emre can comment on it.

We've been talking about rationalization all along for -- as a condition for the profitability to go up in this market. And as Sureyya mentioned, the first quarters of this year were the most competitive price, competitive ever. But we feel that right now, it's time for revisiting the strategies and finding new strategies for all players in this market. We also said that we would be a responsible leader if there was ever a rationalization movement. The last couple of developments last -- of the last week shows us that there is a promise that rationalization might finally happen in the market, but it's too early to see whether this will be permanent or not. But to answer your question, that would be one of the conditions for the profitability to improve in the markets.

Okay, thank you. Now second question is for [Murat].

Yeah. Alex, about your second question, you asked about the Board membership. It is pretty clear that Capital Markets Board decision is to increase the number of independent Board members to at least one-third of the Board. So the deadline for this was June 30th. And then as you know, the general assembly was canceled. So, it is reality that we have not complied with the conditions Capital Markets Board has outlined. I don't have any more insights than you do. I think -- there are at least three options. One of them is existing shareholders and Board members reach an agreement and then they -- the Board approves changes in Articles of Association and nominate independent Board members to be added to the Board. The second option is Capital Markets Board takes an initiative to drive this change. And the third option is nothing happens and the status quo continues. I don't have any critical information I can give to you right now. I hope that this issue is resolved before the end of the year.

But at least the CMB doesn't put on itself any time, so to say timeline to intervene. They basically left it open. They can intervene now, they can not intervene for a while?

According to the latest communication by CMB, they warned us that this deadline was coming and they wanted Turkcell to take action to comply. And then the deadline came and passed and I haven't -- I don't think Turkcell has heard from CMB about this since then. So it has been a little bit quiet in Istanbul.

Okay, understood. Thank you very much.

The next question comes from Cesar Tiron. Please state your company name followed by your question. Cesar Tiron – Morgan Stanley: Yes, hi, it's Morgan Stanley. So congratulations for this very strong results. I have two questions if possible please. Number one, can you please explain why is the churn increasing on a year-on-year basis because I thought you've launched some retention offers which partially explain your strong quarters. So why is the churn increasing on a year-on-year basis? That's the first question. And the second question, if you can come back to those positive signs that you've seen in the market. I'm asking simply because we've seen these signs many times in the past two, three years and eventually they vanished after one or two months. So can you please say if those signs are really price increases as opposed to promotions that are being basically discontinued or promotions that are ending. Thank you very much.

Hi, this is Emre Sayin. I will answer the first question. The reason the churn numbers are increasing is due to a one-off effect from last year. When BTK, the regulator, increased the period for the involuntary churn, and that has resulted in unusually low churn figures. Last year and this effect has been canceled out right now. But of course comparatively it looks like the churn numbers are increasing. In fact, when we exclude those numbers the churn figures are actually under control and [they're] declining. Cesar Tiron – Morgan Stanley: Okay, that's very close thank you. And on the promotions can you please [say] the [Technical Difficulty].

Okay. It's for the second question, if I understood correctly you asked are the signs really for the price increase or promotions, the positive signs mostly came from the area of new customers, tariffs for new customers and there was – basically a level increase in the tariffs for new customers. And that's a very good sign, because that's where most of the price competition takes place in the market. And I believe if that continues then it will also impact the existing customer base and it will give us a relief in terms of increased prices and increased EBITDA levels. Cesar Tiron – Morgan Stanley: Do you see your competitors moving towards also aggressive retention offers? As opposed to aggressive offers which were more focused on taking customers from Turkcell?

I think I have not seen full picture, that all of our competitors are doing that, but I believe they should because, you know, when you look at the figures you see that this market will be moving towards better churn management taking care of your existing customer base. And I believe, all players in the market should focus on that rather than just trying to increase their number portability figures, which is actually hurting the market and we should all concentrate on making our existing customers happy. And that's the path to growth and to you know more profitable markets. Cesar Tiron – Morgan Stanley: Thank you, very much.

(Operator Instructions) The next question comes from Vera Sutedja, please state your company name followed by your question. Vera Sutedja – Erste Group: Yes, company name Erste Bank. I have a question regarding (inaudible), this 30% margin is this sustainable or this is highly related to the football championship? And can I extrapolate the rates offered towards the end of the year considering the third quarter should be strong? Thank you.

I think (inaudible) the second quarter's numbers, I think there was a little bit unusually high during the European championship. There were a lot of companies who were advertising and consequently the price of advertising went up significantly. And our company decided to be more careful about advertising spend and as we explain in our presentations, marketing expenses were lower in the second quarter. And actually my understanding Ukraine did not get as many visitors as they expected during Euro 2012. So there is the impact of Euro 2012 as I explained I think, and I am as the CEO, I think it will be very-very difficult to hold onto 30% margin during the second half. My expectation would be between 27% and 30% some place there. Vera Sutedja – Erste Group: Thank you.

The next question comes from Mehmet Agyuz. Please state your company name followed by your question. Mehmet Agyuz – YapıKredi: Yes, hi, Mehmet Agyuz from YapıKredi. Congratulations on the very strong numbers. My question is on the mobile internet site, we had seen some slight deceleration in the growth, and increase – you mentioned about some improvements in the voice pricing, increase about the pricing in the data sites, whether are you seeing any pricing pressure with more emphasis on bundles and (inaudible) for the second half of the year. Thank you.

Mehmet, thank you very much for your comment on a performance in the first half, we appreciate it. And on the mobile internet side – on the mobile internet area, our management is very much focused on the related costs and building a reasonable profitable business model. So our strategy from Turkcell site will be to price adequately appropriately because we see mobile data traffic increasing very rapidly. It has increased 70-fold almost in the last three years. And we only have about 15% of the of our customers on smartphones. So there is 85% to go, as a result, there will be a lot of investments required. So it is important for us to be careful about pricing appropriately, so that we can fund – we can make the right investments with the adequate return on investment going forward. So we are becoming more careful about pricing, but I also want to say, you know, this is a emerging market, it's a – it's in the early phases of this developing market and in the early phases I think Turkcell and other operators were introducing some introductory price offers, but we now see the volumes increasing and the smartphone penetration increasing. So we will be very careful going forward about data pricing. I think it is key to profitability in the future. Mehmet Agyuz – YapıKredi: Understood, thank you very much.

There are no further questions at this time. Please continue with any other further points you wish to raise.

At this time, thank you for participating to our call. We appreciate your questions. Please remember that audio recording is available to you for next two weeks. And also IR team is here to talk to you after and onwards. Thank you very much for participating. Bye, bye.

This concludes today's conference call. Thank you for participating.