Vodafone wins auction for Turkish mobile phone operator

Britain’s Vodafone Group offered the highest bid – £3.81bn (€5.6bn) – in an auction today to buy Telsim, Turkey’s second-largest mobile telephone company.

Vodafone outbid Kuwait’s MTC Telecommunications in the closely fought open auction.

Telsim, which holds about 25% of the Turkish market, is estimated to have close to 10 million customers and the Turkish government had previously estimated its value at £2.3bn (€3.4bn).

Its sale to Vodafone is subject to government approval.

The nation’s second-largest mobile phone operator after Turkcell was formerly owned by the Uzan family.

The government took over Telsim, along with 200 other Uzan companies, to collect debts stemming from the failure of the family’s flagship bank, Imar.

Telsim’s sale had been held up until now because the company was embroiled in a legal case against Motorola and Nokia, which jointly sued the Uzans in 2001, alleging they borrowed £1.5bn (€2.2bn) to build a next-generation wireless network with no intention of repaying the money.

Both Motorola and Nokia reached a settlement with the Turkish government this year and part of the proceeds from the sale will go to the two companies.

Other companies bidding for Telsim were Egypt’s Orascom Mediterranean Telecommunications Services, Russia’s Sistema Telecommunications, Dubai’s Etisalat Telecommunications and Dubai’s International Investments and Telecommunications.