ISTANBUL, Turkey, December 24 2004 – LAWFUEL – Best for law news – Turkcell (NYSE:
TKC ; ISE: TCELL), the leading provider of mobile communications in Turkey,
announced today that it has settled its interconnection dispute regarding the
call termination pricing, for the period between April 1998 and September
2003, with Turk Telekom by an amicable agreement.
The dispute had originated
upon Ankara 9th Administrative Court’s cancellation decision of the call
termination pricing terms of the interconnection agreement dated April 24,
1998. The settlement talks followed the Cabinet of Ministers’ decree dated
August 18, 2004, which set forth the rules and procedures to be followed by
the government entities to settle their disputes with third parties through
negotiation. The agreement was signed and became effective as of December 24,
2004.
Based on the aforementioned decree of the Cabinet of Ministers, Turkcell
and Turk Telekom calculated Turk Telekom’s receivables as TL1,808,375,359
million (US$1,315.2 million as of December 24, 2004), including principal,
interest, Value Added Tax (“VAT”) and Special Communications Tax (“SCT”) and
Turkcell’s receivable as TL 277,727,432 million (US$201.9 million as of
December 24, 2004), including principal, interest, VAT and SCT. After netting
the receivables, Turkcell and Turk Telekom agreed that Turkcell owed Turk
Telekom a total of TL1,530,647,927 million (US$1,113.2 million as of December
24, 2004), including principal, interest, VAT and SCT. Turkcell accepted and
committed to pay TL997,644, 669 million (US$725.6 million as of December 24,
2004) after the deduction of Turk Telekom’s collections through November 30,
2004, amounting to TL533,003,258 million (US$387.6 million as of December 24,
2004), including principal, interest, VAT and SCT according to the conditions
described below.
The first installment on December 31, 2004 will be equal to the monthly
interconnection fee receivables of Turkcell. The remaining balance as of
January 1, 2005, will be paid in 17 equal monthly installments starting on
January 1, 2005.
Interest will be paid on the installment amounts, according to the
payment plan. The monthly interest rate will be calculated from the annual
simple interest rate of the most recent TL denominated discount bond issued
by the Turkish Treasury before the 15th of each month of the actual monthly
installment. The interest payment for each installment will be calculated on
the outstanding balance after the last payment.
Based on the Cabinet of Ministers’ decree dated August 18, 2004 and
Turkcell’s estimates based on its settlement strategies, Turkcell provisioned
for the interconnection dispute in its financial statements for the nine
months ended September 30, 2004, for the above mentioned dispute.
As a result of the settlement agreement, Turkcell plans to pay TL997,
644,669 million (US$725.6 million as of December 24, 2004), including
principal, interest, VAT and SCT, in installments as explained above pursuant
to the settlement agreement. Turkcell has the option to pay all or a portion
of its debt, set forth by the settlement agreement, prior to a date
determined by the installment plan.
Turkcell and Turk Telekom will make necessary applications and start
necessary procedures for ending the court cases on above mentioned dispute
between them within one month.
– The TL/US$ exchange rate used in this press release equals to
TL1,375,000, which is the Turkish Central Bank’s closing ask price as of
December 23, 2004.
http://www.turkcell.com.tr
About Turkcell
Turkcell is the leading GSM operator in Turkey with 22.3 million postpaid
and prepaid customers as at the end of the third quarter 2004. Turkcell
provides high-quality wireless telephone services throughout Turkey and has
coverage of 100% of the towns with more than 10,000 inhabitants. Turkcell
provides roaming with 423 operators in 173 countries as of November 30, 2004.
Turkcell is the only NYSE listed company in Turkey. Turkcell has interests in
international GSM operations in Azerbaijan, Georgia, Kazakhstan, Moldova and
Northern Cyprus, which have a total of 3.5 million subscribers as of
September 30, 2004.
