Turknet: An Innovative Challenger with a Differentiation Strategy

Turknet started as one of the first commercial internet service providers (ISPs) in Turkey in 1996. It experienced and influenced the journey from a monopolistic telecommunications industry to a more open and competitive one, which is focusing more on consumer needs. Recently, ZTE Technologies interviewed Cem Celebiler, CEO of Turknet. He shared with us his career history; Turknet’s achievements, innovative initiatives and challenges; and his thoughts on the LLU project and IPTV sector. He also talked about his expectations for ZTE and visions for Turknet.

My first job, in the late 1980s, was as a programmer, while I was still in high school. After studying Electrical Engineering & Computer Science and Mathematics at MIT, I worked in software development.
With the emergence of the commercial internet in the early and mid-1990s, the computer and telecommunications worlds started their convergence, which is still ongoing. The potential of the internet, the introduction of competition in the telecommunications industry, the positive impact of entrepreneurs, and innovative startup culture have motivated me.

Turknet is an innovative challenger offering services to residential users, businesses and carriers. Turknet has a clear differentiation strategy: simple and transparent pricing with an emphasis on all-inclusive bundles; superior, friendly and flexible customer experience; and a focus on online sales and customer interactions.
Turknet is the first operator in the consumer space to focus exclusively on bundles, to simplify its product offering, and to move to a no-committment model. In addition, since March of this year, we provided much higher usage quotas as a standard offering than any of our competitors. All of these have significantly impacted the market. Turknet was recently rewarded with the A.L.F.A. Award for best customer experience in the internet service provider category in Turkey.
Turknet is also a leading challenger in the SME segment for fixed line telephony. We will continue to develop and propose innovative communications offerings to the SME segment.

Celebrating its 20th anniversary, Turknet has always been an innovator in the industry. Turknet is one of the first firms offering a 7×24 call center. At that time (1996), neither the incumbent operators, nor banks or airlines had such an approach. We are the first operator to negotiate and activate DSL services over bitstream access with the regulator, and the first again for unbundling. We are the only operator offering Ethernet over copper services in a wide footprint (20 cities),allowing SMEs in areas where fiber is not widespread or prohibitively expensive to get high speed symmetric metro Ethernet access at affordable prices.
As a challenger, Turknet has a culture of innovation and thinking outside of the box. We have the most innovative and industrious engineers and team members, who come up with unique solutions to our customers’ and our needs. We have developed our own billing, CRM and OSS/BSS software and systems in house, which give us a lot of flexibility.
Our whole approach, focusing on simplicity, transparency and a friendly customer experience, has allowed us to differentiate ourselves and innovate on our go-to-market strategy. While our competitors have to balance and manage storefront sales and resellers, our online sales has allowed us to be more innovative and focused on this front through our no-committment offering.

We are competing with legacy and multinational operators who have very large advertising budgets, so getting our message across is a challenge. Competitors are also quick to copy innovations, so our success is based on having a fundamental value proposition and business model that is so unique that it cannot be easily copied.
In addition, although consumers are increasingly looking to purchase goods and services online, at the moment they are still more accustomed to purchasing internet services in shops than online. Managing and educating the consumers, and giving them a superior experience in purchasing online will help this change.

Turknet has built its strategy on the Investment Ladder model: Turknet continues to invest in its own infrastructure while also purchasing services from the incumbent where necessary.
Turknet was the first operator to apply for access to the local loop (2001) and was able to sign the first unbundling agreement in 2007. While initially using unbundling to offer services to SMEs, we are now migrating home users to this infrastructure as well. We are grateful to the ICTA (Turkish industry regulator) for their support in this process, and will continue working with them and the incumbent operators to rollout our LLU footprint to an even wider geography.
At the moment, Turknet is the only Turkish operator pursuing a nationwide unbundling strategy. This project is another sign of our innovative and trail breaking approach.

We initially worked on the LLU project with other vendors but did not find the support and approach we needed. ZTE’s willingness to help integrate its solution into our existing ecosystem, to work with us to find win-win commercial models, and the flexibility of its rich product line lead us to partner with ZTE.
ZTE’s team has done a fantastic job working with Turknet’s teams to integrate the solution, complete the proof of concept and commence the rollout. We are very happy to work with ZTE on this project and hope to broaden our relationship further on this and other projects.
The support of the same MSAN platforms for XPON offerings and the strength of ZTE’s XPON product set are also very important for us. We have started rolling out XPON FTTH services using ZTE equipment.

IPTV and OTT technologies are transforming the TV industry. While TV channels and content providers were previously limited to a small number of cables and satellite PayTV platforms for distribution, they now have many more options in the form of telecommunications operators such as Turknet or directly through the internet.
Internet service providers such as Turknet are obvious partners for channels and content providers as we can provide distribution and monetization. From the consumer point of view, the triple play of fixed telephony, broadband and TV at a single price point has proven value and demand continues to grow.