Good day everyone and welcome to the First Quarter 2017 Results Conference Call. For your information, today's conference is being recorded. At this time, I would like to turn the conference over to Korhan Bilek, Director of Investor Relations and Mergers and Acquisitions. Please go ahead, sir.

Thank you, April. Hello, everyone. Welcome to Turkcell's first quarter 2017 results call. Today's 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 would 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 everyone. Welcome to Turkcell’s first quarter 2017 results call. We are pleased to share the steps we have taken towards our goal of digital transformation set in 2015. Over the past two years, we have evolved into a digital services company creating our own technologies and providing our services globally, while maintaining our leading position in the telecommunications sector. We continue to up the benefits of our efforts and vision. This quarter we have beaten our previous at both the top line and at EBITDA levels. In-line with our plans, our digital products and services became our gateway to the world. And as the Turkcell family, we have made a strong start to 2017 having transformed from Turkey’s GSM operator to work global digital services company with our pioneering technology. Reflecting this transformation as the first quarter, 18% of Turkcell revenue now comes from digital services. I will talk more on this in the upcoming slides. Let me briefly summarize the highlights of this quarter. Following the previous quarter's record results, we saw new highs in revenue and EBITDA growth, the highest of the past 10 years, both at group and Turkcell Turkey level. We also saw all-time high quarterly revenue and EBITDA at the group level. An EBITDA margin of 34.5 was the highest since 2009. In April, we completed the first year of 4.5G and are happy to see that our investments are paying off as the customers receptiveness to a services remain at very high levels. On the back of our investments and growing customer demands, our data and digital services revenues registered 94% growth from the first quarter of 2016. The share of multiplay customers using our mobile, voice, data, and digital services doubling yearly reached 42%. Meanwhile,…

Thank you, Kaan. Good afternoon and good evening to all participants. Let's take a closer look into the financials. In the first quarter, group revenues rose by 26% corresponding to 827 million TL in nominal terms. This growth came mainly from the strong ARPU platforms of Turkcell Turkey, driven by solid data and digital services. Turkcell International EBITDA and incremental 51 million TL to our revenues and Turkcell consumer finance company is one of the strong contributors to growth with an additional 114 million TL. EBITDA rose by 40% year-on-year to 1.4 billion TL. This was mainly due to a solid rise in revenues and an effective OPEX management program. As a result, the EBITDA margin improved by 3.4 percentage points to 34.5%. Moving onto the next page. The first quarter presented net income of 459 million TL. 398 million TL higher EBITDA was partly offset by a 174 million TL higher amortization expense, related to the 4.5G investments. Additionally, net income was negatively impacted by increased interest expense related to loans and 102 million TL rising translation losses, including the impact of swap contracts. Fintech’s contribution to our net income was 50 million TL in quarter one of 2016, yet had expected it made no P&L impact in this quarter. That is why we see a negative 15 million TL change from last year on the chart. Moving on to the next page. Now, I would like to talk about our balance sheet and leverage details. In the first quarter, our net debt position was at 4.3 billion TL compared to the previous quarter. This represents a rise of 551 million TL, almost fully led by the increase in our consumer finance company's step. In line with our active balance sheet management, we securitized 100 million TL of our…

April, we are ready to take the questions.

Thank you. [Operator Instructions] Roman Arbuzov of UBS. Please go ahead.

Good evening. Thank you very much for taking my questions. I have actually three, if that is okay. First one is a simple one on the guidance, you are presenting today very impressive results, I'm just wondering why you know perhaps it has been more positive on the guidance and if, could you share with us if there is anything in particular that is making you concerned in terms of the remainder of the year, that is the first one. The second one is just an observation on market share dynamics, so if you look over the last couple of quarters or even three quarters, you are taking in customers and sort of stabilizing and even growing a little bit your subscriber market share, if that has not been the case historically, so I was just wondering if you could share please some thoughts on what’s allowing you to reverse those trends and stabilize your market share. And just thirdly on OPEX please that’s one of the key reasons why your profitability performance is very strong this quarter so could you please elaborate a little bit more on what exactly you are doing to keep your OPEX flat please? Thank you very much.

Roman thank you very much. Let me start with your first question about the guidance. We have really, as you say a very strong start to the year. We would like to actually see the rest of the year in terms of making changes to our guidance. At the time, we would like to be cautiously optimistic about the process and we're thinking that we are in-line moving onwards with or plan. In terms of market share, we are actually seeing all time role churn rates and I actually attribute to these digital services pickup in our customers. So that was from intake perspective in terms of number of customer additions, as well as ARPU increases, both from a subscriber base perspective and revenue share perspective, we are steadily increasing our market shares and we are happy to see that. This is a combination of higher customer adds, the all-time low churn rates and ARPU increases in the mix. With regard to the OPEX, we are really having a very strong OPEX deduction program and we are progressing on the plans that we have set in the beginning of 2016, Bulent anything you would like to add there?

As you mentioned that we established a project management office and approached this topic structurally. We run a companywide project for OPEX management to include all areas of potential improvement. These areas range from head office processes to operating cost in the field. We reviewed all main procurement and OPEX items to create synergies amount to businesses.

Thank you so much.

Thank you Roman. Actually as Bulent said this companywide program has contributions over 1000 people in the company in terms of saving ideas, and I am very happy to see that it has turned into a companywide initiative, really a good execution on that side.

Thank you very much.

[Operator Instructions] Next we will hear from Herve Drouet of HSBC.

Yes, good evening, thanks again as well for taking the questions. I've got three quick questions as well. The first one, just on the regulation, I was wondering has there personally been any change in regulations in the short-term, especially on [indiscernible] tariff, looking forward do you think it would be just on the broadband fixed line or can it be as well on the mobile as well, can we see any potential change there to come in the future as well on taxes and especially Telecom tax? Second question is on your FX loss, you pushed it and your reduction of your FX exposure felt in US dollar, your average use, I was wondering, I mean looking forward obviously depending on the currency movement, I mean should be expect gradually these FX less that has been booked to gradually disappear being less and less sensitive to currency movement? And finally just on the dividend proposed, I mean you still have this 50% of distributable income, what prevents you to propose a higher percentage of distributable income than 50%, is it linked with your balance sheet gearing, currently you in net-to-EBITDA of 0.9 and I was wondering if you securitized a part of your loans built, could that push you to increase as a percentage of the distributable income in dividend? Thank you.

Thank you, Herve. Let me start with your regulation question. As you know Turkey is the highest taxed country in terms of Telecom industry. I do expect certain regulatory changes, especially on the fixed side with regard to the port transmission [ph] costs and I think the regulatory office is looking into cost based pricing models on that side, and this will be potentially a positive change to our cost structure. With regard to other regulatory changes, I do not want to speculate, but given the nature of very high taxation of the telecoms industry and government policy in terms of fiscal relaxation, I do expect if any changes in the positive side. With regard to the foreign currency losses, as you know we have an active hedging strategy. We have borrowed in foreign currency, long term and we have swapped these loans into Turkish Lira. So, actually our foreign currency position as of end of quarter is only 91 million, but maybe Bulent maybe you can add some more color to that.

Yes, as you mentioned that we have a very, very limited low stock position and due to this reason we did not affect for the FX loss in this quarter. This is directly related with the cost of converting our FX loans into the TL loans and this will be classified in foreign, classified as interest expenses, yes there is a very limited amount of FX cost in this quarter. We expect that this amount will be decreased in the coming terms.

And with regard to your question about dividends, we believe economically and operationally, we are a growth company and it is the amount we will be [indiscernible] this is a proposal for the general assembly and any decision that can come out from there is not under our capability to impact, but I think this is a sound and in-line policy proposal to our general assembly.

Alright thank you very much for the answer.

What was the question?

Herve, did you have anything further?

No, but I think that [indiscernible] one question I had, maybe on leasing income maybe just a bit of a follow-up I would say just on the dividend as I was asking, if in the scenarios where the net EBITDA reduced, I mean do you think there is room to increase the proposed percentage of distributable income to be put in cash dividend. So currently I think you had 50%, I was wondering if your net debt-to-EBITDA is reduced, can they lead you to propose in the future higher percentage, so is it linked to your balance sheet currently gearing or not?

Well Herve we are - as I mentioned, we are in an important investment cycle both in Turkey and in other operations in Ukraine. We are about to consider launching 4G in Belarus and Ukraine. So we consider our free cash flow positions and we believe applying the current policy in terms of dividends is the right thing to do for the company. I do not want to speculate how this could change in the future, as long as the policy is set as 50% of net income.

Okay, well understood. Thank you.

Thank you.

[Operator Instructions] Okay it appears there are no further questions at this time. I will turn the conference back over to our presenters for any additional or closing comments.

On the online questions.

Roman has signaled for another question, please go ahead Roman.

Thank you very much, just a quick follow-up, just taking the opportunity. Any update on Fintur please, anything you can say on that side? And also just a question, a bit more technical on the working capital please, so thinking, thinking about working capital for 2017 overall, what should we be looking for from that line and also maybe going forward as long as you could comment that would be very helpful.

Sure, thank you Roman. Fintur as you know, we classified Fintur as an asset for sale and we are in the process of jointly selling with our partners Telia and we will be informing you about the progress, but there is no change in terms of our position there. And I hope that during this year we will come to a conclusion on that process. Bulent on the working capital?

On the working capital side, as we mentioned in OPEX management side we focus on the working capital side and working together with different departments and different business units to effectively manage the working capital and we are expected more efficient working capital in 2017.

Okay so it is a positive working capital inflow in 2017, and is that how you think about the medium term as well, I mean I appreciate you try to common with position, but any thing you can say on how we should think about the working capital is generally given how quickly the consumer finance company is growing, but then on the other hand you are experimenting with the securitization instruments, so balance those two things off, do you think you can continue to have positive working capital?

As you know, we have successfully done our first asset-backed transaction of 100 million. This was a starting point, I do expect this trend to continue actually, I think this is a very positive trend from my perspective in terms of keeping the asset life position as well, but what is important is our OPEX reduction focus is now also focusing on inventory efficiency and all these will have a very positive impact on 2017 based on our plans.

And maybe we can add that. The main reason of establishing a consumer finance company to manage the working capital side efficiently and to sell or securitize our receivables from the consumer finance side and we achieved one important milestone and we will continue the next deals for securitizing our [indiscernible].

Thank you so much.

Thanks Roman.

[Operator Instructions]

So I guess, if no other questions, I want to thank all of you for - okay Herve, one more question.

Absolutely Herve, please go ahead.

Just a very quick one. Just back on your securitization of your [indiscernible], I mean looking forward do you have any timeframe on what you can securitize our any ideas on when that can happen and for which amount?

We are planning to realize the next one in the second quarter and for the amount we cannot give a specific amount at that stage, but it will be higher than the first one.

Okay, thank you.

Thank you.

And there are no further questions at this time.

Well thank you very much for your participation and also providing the guidance in terms of our operations. I appreciate all the questions and also feedback. Thank you very much.

That does conclude today's conference. Thank you all for your participation. You may now disconnect.