Cablegate: Turkey and Turk Telekom: Embassy Assists at&T

This record is a partial extract of the original cable. The full text of the original cable is not available.

231353Z Sep 05

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

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