US embassy cable - 05ANKARA5536

UNCLAS SECTION 01 OF 02 ANKARA 005536 
 
SIPDIS 
 
USDOC FOR 4212/ITA/MAC/CPD/CRUSNAK 
FCC FOR A THOMAS 
 
SENSITIVE 
 
E.O. 12958: N/A 
TAGS: ECPS, EINV, BEXP, TU 
SUBJECT:  TURKEY AND TURK TELEKOM: EMBASSY ASSISTS AT&T 
 
REF: A) ANKARA 4226 
 
     B) ANKARA 2072 
 
CORRECTED COPY 
Sensitive But Unclassified.  Please handle accordingly. 
 
1. (SBU) Summary: Embassy helped AT&T obtain GOT regulatory 
approval for its merger with SBC and with researching timely 
resolution of problems with downed leased lines in Turkey. 
The Turk Telekom privatization has been delayed due to some 
legal attacks launched by labor unions, but all parties are 
optimistic that it will reach closure.  Embassy seeks to 
build on the Telecom Regulatory Authority's interest in 
cooperating with the FCC. 
 
Embassy Provides Assistance to AT&T 
----------------------------------- 
 
2.  (SBU) Embassy recently provided two instances of 
assistance to AT&T in Turkey, where it provides AT&T Global 
Network Node connectivity to multinational clients.  At 
AT&T's request, the Embassy interceded with the Turkish 
Telecom Authority in July to facilitate and gain timely 
approval without conditions for the AT&T - SBC merger 
(consistent with approvals around the world). 
 
3.  (SBU) Responding to a second request in August, Embassy 
researched with Turk Telekom on how to assure timely 
response to domestic leased line circuits going down.  Turk 
Telekom's Assistant General Manager Celalettin Dincer gave 
EconOff and Econ Assistant good news and bad news.   The 
good news was that TT is putting in place a new IT enhanced 
call center system ("error-management" system; web- or 
telephone-based) wherein complaints would be given ticket 
numbers for tracking and timely resolution.  (Dincer 
admitted that a parallel marketing system for problem 
resolution by wholesale customer reps had been put on hold 
pending the privatization of TT.)  The bad-news was that the 
system is targeted to be completed by the end of the year, 
and in the meantime, there is limited centralized control 
and no "national champion" for domestic local circuit 
management.  Rather, Dincer said, ISPs and other wholesale 
customers employ local contracts to monitor and facilitate 
resolution of downed circuits.  Subsequently, they asked 
Embassy to follow up again seeking an interim national 
"champion" and offering to provide TT with lessons learned 
world-wide. 
 
Suits against Turk Telekom Privatization 
---------------------------------------- 
 
3.  (SBU) Dincer admitted that the mood at Turk Telekom was 
morose, as the company waited for resolution of suits filed 
against the privatization tender won by a consortium led by 
Saudi Oger Telecom (partnered by Telecom Italia and advised 
by BT Consulting) (Ref A).  While the privatization 
contemplated placing some 30,000 employees elsewhere in the 
government bureaucracy, there was still uncertainty and 
stress over to whom the new management might make employment 
offers.  Dincer commented that Oger Telcom lacked a local 
partner and adequate human resources and technical staff, so 
it might benefit the new management to keep more current TT 
employees.  Of course, pending resolution of the suits and 
until the first payment is made, the new potential 
management cannot be directly involved with Turk Telekom. 
Dincer noted that the recent successful tender offering for 
the Turkish oil refinery company TUPRAS (in an amount over 
three-fold greater than the tender cancelled last year) 
might give detractors of the TT tender ammunition to argue 
for canceling and repeating (dialing for hoped for greater 
dollars). 
 
4.  (SBU) On the other hand, Privatization Administration 
officials are convinced that the TT privatization will move 
forward, citing new legislation aimed to reduce technical 
problems, which provided the grounds for the Danistay's 
(Council of State) ruling canceling the TT privatization 
last time.  In a press conference held on September 15, 
Finance Minister Unakitan, who is also the Minister for 
privatization, said the GOT did not expect any negative 
Court ruling to stop the TT privatization.  Moreover, the 
Minister said the concession agreement draft had been 
initialed by Turk Telecom and the Telecom Authority, and 
while the Danistay could offer its view, it would not have 
grounds to kill the deal. 
 
5.  (SBU) Comment: The Privatization Administration and we 
are still optimistic that the Turk Telekom privatization 
will move to fruition, but opposition from labor unions and 
the judiciary can still delay the process, exacerbating 
delays in liberalizing the key sector.  We are eager to 
pursue contacts between FCC and the Telecom Authority (Ref 
B).  The Turk Telekom Assistant Director thought such 
contacts could be useful, but pointed out that the Turkish 
market is quite unique, and now more appropriately targeting 
the European model because of prospective EU accession. 
However, private long distance service providers and ISP's 
continue to complain about the Telecom Authority not taking 
sufficient action against Turk Telekom's high 
interconnection prices.  Some are losing money and may close 
down.  FCC's advice and cooperation with the Telecom 
Authority may be an opportunity to provide ideas to counter 
these and other problems. 
 
McEldowney