Turkey - Country Commercial Guide
Information and Communication Technology

This is a best prospect industry sector for this country. Includes a market overview and trade data.

Last published date: 2021-12-07

Overview

Market size estimates for the ICT sector*:

Market Size in TRY and USD for 2015- 2020
Market Size in TRY and USD for 2015- 2020

source: https://www.tubisad.org.tr/tr/

 

* Due to devaluation of the lira, while the size of the domestic market increased in lira terms, in USDs terms, a slight decrease is indicated.

U.S. exports of computer and electronic products to Turkey:

U.S. Exports of Electronic Products to Turkey 2015 - 2020
U.S. Exports of Electronic Products to Turkey 2015 - 2020

source: https://usatrade.census.gov

Foreign vendors find it increasingly difficult to operate in Turkey due to a new digital services tax, local content requirements, and restrictions on social media platforms. Nevertheless, Turkey’s young population, forthcoming large-scale projects, the GoT’s 2019-2023 strategic plan, and 5G initiatives all support continuing opportunities in this sector.

The ICT market totaled $26.9 billion in 2020, with $17 billion spent on communication technologies (electronic communication and hardware) and $9.9 billion on information technologies (hardware, software, IT services). The sector employs 158,000 and, Turkey exported $1.3 billion in related products and services in 2019. Investment in Turkey’s ICT sector is expected to grow.

The GoT’s commitment to develop the sector is advantageous for U.S. companies looking to help the country improve its ICT infrastructure. 5G trials are underway, with cloud solutions, services, and devices in sectors including banking, healthcare, and media, set to benefit from the development of this technology. Integration and alignment with EU standards and regulations as well as exposure to industry best practices are driving Turkey to employ top-of-the-line IT solutions. Local telecom operators are speeding up Internet of Things (IoT) solutions and smart city projects. Cybersecurity will also offer opportunities in the medium term as Turkey is in a high-risk region for cyber threats.

Data Infrastructure

Roughly 89.9% of households have access to broadband internet, with internet usage among individuals aged 16-74 at 79%. Approximately 50.8% of the households reach the internet through fixed broadband and 87% via mobile broadband. The penetration rate of mobile phone users is nearly 100%, with 82.8 million mobile subscriptions for broadband.

Social Media Use

Turkey has 60 million active social media users (70.8% of the population). Primarily, social media platforms used in Turkey include Twitter, YouTube, Instagram, and Facebook. On August 6, 2020, Parliament passed legislation that could significantly restrict access to platforms (those with more than 1 million daily users in Turkey) that are non-compliant with official requests to remove content deemed offensive. The law seeks to define social media providers and one of the requirements is that those providers have at least one representative in the country.

IT Hardware and Software

IT hardware spending fell last year due to the cannibalization of tablet sales by smartphones. Software and services spending proved more resilient, with some areas seeing strong growth in cloud computing. The main software categories were enterprise resource planning and customer relationship management. The largest contributors to traditional IT services sales were systems integration, consulting, and computer programming.

Key sectors and areas for ICT spending:

  • Financial services (online, mobile banking payments,e-commerce platforms)
  • Insurance sector (Insuretech)
  • 5G technology-IoT services, network and support systems
  • Cloud services
  • Healthcare, mobile-health
  • Mobility
  • Manufacturing (advanced automation technologies)
  • Data centers and disaster recovery areas

Telecommunications

The Turkish telecom market is highly developed, yet still has room to grow. In the mobile market there is a strong demand for highspeed data services. Among the 81.6 million mobile phone users, 90% already use smartphones and ownership continues to increase rapidly. 4G service will continue to grow until 5G begins to take over in 2022. The major GSM cellular operators in Turkey are Turkcell (40.9% market share), Vodafone (31.2%) and Turk Telekom/Avea (27.9%). 4.5G (LTE) technology came into use in 2016 and the number of subscribers reached 81 million (92% of the data market) in 2020. As a result of 4.5G deployment, e-commerce, mobile broadband, mobile banking services, and mobile television services have increased, creating favorable business opportunities for investors. New technology investments and efforts to transition to 5G technology will accelerate sector expansion.

As they transition to 5G technology, operators are investing in advanced networks and partnering with providers such as Nokia, Ericsson, and Huawei. Turkey wants to be an early adopter of 5G, so telecoms are preparing their infrastructure for future uses, such as smart city projects and the IoT. With the introduction of LTE, IPTV, online services, content and media services, e-business, personalized services, music downloads, games, multi-play, video services, and other mobile entertainment, this segment has been developing rapidly, creating new business areas and revenues.

In Turkey, smartphone users regularly exchange their cell phones for new models, sustaining consistent growth in the handset market. Samsung has the lead in the mobile and wireless market; however, Apple’s iPhone has been extremely successful in recent years, followed by Huawei, Oppo and Vivo. GSM cell phone sets suitable for video downloading and livestreaming equipped with broadband internet access will contribute to growth in this sector.

ZTE, Nokia, Northel Telecom, Alcatel, Siemens, Ericsson, and NEC supply most fixed line switches, trans-multiplexers, and other telephony equipment. Nokia, Ericsson, and Huawei are major network providers in Turkey. U.S. companies can be competitive in software programs required for customer databases, emergency call services, corporate management, and intelligent network operation centers. Cisco, Motorola, Nokia, Ericsson, and Siemens are the main GSM switch and base station suppliers. U.S. companies can be competitive in new software products required by GSM cellular operators to provide new services to their clients and improve corporate and client management.

Leading Sub-Sectors

  • Communication Technologies/5G-related tech and services/Fiber optic solutions
  • M2M communication/IoT
  • Edge Computing Systems
  • Cloud/Data Centers
  • Cybersecurity solutions
  • Public Investments & e-Government
  • Consumer electronics
  • e-sports
  • Gaming
  • Robotics supported by Artificial Intelligence/Augmented Reality applications
  • e-Commerce
  • Blockchain solutions
  • Wireless equipment and services
  • Internet Protocol Television (IPTV)

Opportunities

5G Technologies

5G, a GoT priority, is attracting investments in the telecommunications market. In 2019, the government allocated $5 billion of its ICT budget for this purpose. 5G commercialization will not start until early 2022. Operators will initially look to implement 5G service in the major cities of Izmir, Istanbul, Ankara, and Antalya while 4G will remain prominent elsewhere. The primary industries of focus for 5G will be automotive, media & entertainment, energy, health, and agriculture.

The authority and main entity leading 5G efforts in Turkey, the Information and Communication Technologies Authority (BTK), established the ‘New Generation Mobile Communication Technologies Turkey (5GTR) Forum’, comprised of government, universities, manufacturers, operators, and NGOs, to provide a platform for meeting 5G requirements in the market. A goal is to enhance localization and collaboration among vertical sectors. Private companies and associations such as Ericsson, Huawei, ZTE, Vestel, Vodafone, Turkcell, Turk Telekom, Ulak Communication, the Telecommunications Businessmen Association, and the Technology Development Foundation of Turkey, participate in working groups.

Fiber Optics

Fiber optic solutions providers are gaining market access as Turk Telekom, TTNet, and other ISPs make infrastructure investments. Turkey’s regulator is also keen to ensure greater broadband access as stated in its 2019-2023 strategic plan. The broadband market currently has 17.2 million subscriptions, but this is expected to climb to 23 million within 10 years.

Cybersecurity

Network security against attack and viruses, email and web security, cyber governance, identity and certificate governance, mobile security, system security, data, and application security are top priorities. The government has increased expenditures on hardware and software to battle cyber threats. To implement these defenses, BTK, the Ministry of Transport and Infrastructure, Ministry of Justice and Interior, the Turkish National Police, and the Turkish military will continue to update their cybersecurity technologies. The Ministry of Transport and infrastructure formed Cyber Incident Response Teams (SOMEs), which are present within all state organizations and institutions to protect them from cyber-attacks.

Consumer Electronics, New Technologies

Turkey’s young population continues to drive sales of PCs, tablets, cell phones, and consumer electronics, as well as cellular voice and data services. The audiovisual market is expected to rise further. The application of new emerging technologies such as Machine-to-Machine (M2M) connections, AI, blockchain and robotics will also continue to grow, underpinned by the development IoT and Industry 4.0.

For further information on this section or more on potential opportunities, contact:

Gokce Tuncer

Commercial Specialist

U.S. Commercial Service Turkey

Gokce.Tuncer@trade.gov