News: TurkTelekom's management team held an earnings conference call yesterday. 
Our View: There were two key take-aways: i) EBITDA guidance of TRY 5.1-5.3bn meets our forecast at the low end and consensus at the high end; and ii) there is a continued improvement in mobile competition, which primarily benefits Turkcell. 
Guidance for 2013: 5-7% revenue growth, EBITDA of TRY 5.1-5.3bn, capex of around TRY 2.2bn. The revenues growth guidance seems aggressive, as we expect 3% and consensus sees 3.5% (while in 2012 revenues, ex IFRIC 12 revenues, grew 5% YoY). The capex guidance is in line with consensus and TRY 0.2bn above our estimate. We think the EBITDA guidance is key here: we are towards the bottom end of the guidance range, while consensus is at the top end. Management expects the EBITDA margin at 37.5-40%, vs. 40% in 2012. 
Mobile market: CEO Kanafani said there was some indication of rationalisation, but did not see that as a trend yet. We think there are positive signs of continued market improvement, primarily benefiting Turkcell. 
Fixed broadband subscriber base dynamics. It seems a major challenge for management to return to growth in 2013. 
PSTN subscribers decline. TurkTelekom had 950k net disconnections in 2012 (including naked DSL), and wants to have less in 2013. 
Smartphone penetration on Avea network keeps rising. By YE12, it had reached 24%, up from 16% at YE11. Smartphone penetration is higher on Avea's network vs. competition, because Avea i) has a higher share of postpaid and ii) ran 20 campaigns for smartphone promotion in 2012 (12 exclusively launched by Avea). 
The contribution of construction revenues in 2013 will be less than in 2012, according to Kanafani. 
Source: bne