Due to the country’s existing digital services tax, requirements for local content, and limitations on social media platforms, it has become more difficult for foreign businesses to operate in Turkey. Turkey has consented to switch from its current DST to a new international tax system, which is slated to go into effect in 2023. Nevertheless, possibilities for U.S. businesses in this industry are provided by upcoming large-scale projects, the GoT’s 2019–2023 strategic plan, and national 5G ambitions.
$17 billion was spent on communication technologies, and $9.9 billion was spent on information technologies, for a total market size of $26.9 billion in 2020. About 158,000 individuals work in the sector. Turkey exported connected goods and services worth $1.3 billion in 2019, and this amount is anticipated to rise.
Trials for 5G have begun. Banking, healthcare, and media are just a few of the industries that stand to gain a lot from the advancement of this technology. Turkey is using top-notch IT solutions because of its integration and alignment with EU norms and regulations, as well as its exposure to industry best practices. Local telecom providers are accelerating IoT solutions and smart city initiatives. Turkey is a country that faces a lot of cyber threats, thus cybersecurity prospects are still present.
Data infrastructure
The percentage of homes with access to broadband internet is about 92%. 61.9% of homes utilize fixed broadband, while 88.5% use mobile broadband to access the internet. There are 88.2 million mobile broadband subscriptions.
Social media use
80.8% of the population in Turkey uses social media, which has 68.9 million active users. WhatsApp is the most popular social media platform, followed by Instagram and Facebook. Legislation that could severely curtail access to platforms that refuse to comply with official demands to remove content deemed offensive was passed by Parliament on August 6, 2020. Social media businesses must also have at least one representative in the nation, according to the regulation.
IT hardware and software
Due to smartphones’ cannibalization of tablet sales, IT hardware investment decreased in 2016. Spending on software and services held up better, and some regions experienced rapid growth in cloud computing. Enterprise resource planning and customer relationship management were the two key software areas. Systems integration, consulting, and computer programming were the three sectors of traditional IT services sales that contributed the most.
Telecommunications
Although the Turkish telecom sector is very advanced, there is still an opportunity for expansion. High-speed data services are in high demand in the mobile market. Smartphones are used by almost all 97.6 million mobile phone subscribers in Turkey. Up until 5G starts to take over, 4G service will keep growing. Turkcell (45.2% market share), Vodafone (30.1%), and Turk Telekom/TT Mobil (24.8%) are the three largest GSM cellular providers in Turkey. When 4.5G (LTE) technology was introduced in 2016, there were 81 million subscribers, accounting for 92% of the global data market. The implementation of 4.5G has improved sales of e-commerce, mobile broadband, mobile banking, and mobile television services, which has benefited investors. The adoption of 5G technology and new technology investments will probably hasten sector expansion. The development of localization is a top GoT goal, and 5G project tenders usually include localization specifications.
To invest in cutting-edge networks, operators are collaborating with suppliers like Nokia, Ericsson, and Huawei. Although plans for the Turkish government to be a 5G early adopter have stalled, 5G operations are most likely to start at the end of 2023.
Opportunities
The opportunities below are listed.
5G
The availability of funding for 5G development in this country is luring capital into the telecom sector. The government set aside $5 billion for the development of cutting-edge 5G networks alone in 2019. Izmir, Istanbul, Ankara, and Antalya are the major places where operators will initially try to introduce 5G service while 4G will still be widely used elsewhere. Although it has not yet been announced, a spectrum auction for 5G frequencies is anticipated to take place within the coming year.
Fiber optics
With the investments in infrastructure being made by Turk Telekom, TTNet, and other ISPs, fiber optic solution providers are gaining access to the market. According to its 2019–2023 strategic plan, Turkey’s regulator is likewise eager to provide improved internet availability. BTK predicts that within 10 years, the 18.2 million subscriptions in the broadband market which includes xDSL, fiber, and cable will increase to 23 million.
Cybersecurity
Top priorities include protecting networks from attacks and viruses, email and online security, cyber governance, identity and certificate governance, mobile security, system security, data security, and application security. To combat cyber risks, the government has increased spending on hardware and software.
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