Thank you, Polina, and hello, everyone. This is Ömer Karademir, Türk Telekom CFO.

Welcome to our 2026 second quarter results conference call. Thank you for joining us today.

Let's go to slide number 3, Financial and Operational Overview slide. First, I will start with a quick update on the quarter and markets.

Overall, as Türk Telekom Group, we successfully closed the period with strong revenue growth and solid profitability, despite global geopolitical tensions and macro impacts. Building on this strong first half, we are excited about the second half and full-year growth prospects for our revenue and net profit.

As you all know, geopolitical tensions continued to impact global markets, resulting in higher energy prices and inflation risks. US Fed left its policy rate unchanged at its April and June meetings.

In Türkiye, annual CPI rose to 32.6% in May, before easing to 31% point 31.8% in July. Central Bank kept its policy rate unchanged at 37%.

Year-end inflation expectations rose to 29.2% in July 2026 market participants survey. In this volatile environment, as Türk Telekom Group, we remained focused on sustaining our strong operational and financial performance through our disciplined and proactive approach.

On the mobile business side, following the nationwide launch of 5G in Türkiye on April 1st, we introduced 5G to our subscribers with enriched tariff options. Rational competition continued in the mobile sector in the second quarter.

Operators implemented price revisions in April and July. On the fixed internet business side, we introduced new prices in retail segment in June and in the wholesale segment in July.

Now on the group financial results. Consolidated revenues increased by 9% to 73 billion Turkish liras.

Excluding the IFRIC 12 accounting impact, revenue growth was 6%. EBITDA grew by 5% to 29.4 billion TL with 40.4% EBITDA margin.

As IFRIC 12 revenues are investment driven and have relatively lower margin. In Q2, strong growth in IFRIC 12 revenues impacted EBITDA margin.

Excluding IFRIC 12 impact, our EBITDA margin is 43.3%. EBITDA margin percentage expanded by 60 basis points year-on-year in the first half.

We recorded 6 billion TL net profit in the quarter. It declined 7% year-on-year and impacted by our long-term 5G fiber and license investments.

CapEx, excluding solar investments and license, stood at 23 billion TL. It was higher in year-on-year terms due to due to 5G rollout and strong progress in fiber investments.

Unlevered free cash flow stood at 3.9 billion TL. This figure indicated a decline from 9.4 billion TL in second quarter of last year, mostly as a result of higher CapEx.

Net leverage remained flat on Q-on-Q basis and stood at 1 time, compared to 0.6 times at 2025 year-end. In summary, I want to emphasize that these results once again demonstrate the strength of our diversified business model and disciplined financial management.

Let's go to slide number 4, our Customer Information. Our total subscriber base reached almost 58 million, with 455,000 net additions Q-on-Q.

Excluding 125,000 loss in the fixed voice segment, quarterly net additions were 580,000. Fixed broadband subscribers declined by 24,000 Q-on-Q to 15.4 million.

Retail broadband subscriber base expanded by 28,000 Q-on-Q. Thanks to our continuous efforts to improve our analytical skills, our retail churn rate for the second quarter was the lowest recorded in the post-pandemic period.

Mobile segment added 539,000 subscribers on net basis, pushing up the total base to 32.7 million. Activation and churn volumes were lower lower in year-on-year basis, driven by rational competitive environment.

Subscriber growth remained robust, with 424,000 net additions, excluding 116,000 M2M additions. Let's move to slide number 5, our Fixed Broadband Performance.

We continued our strong double-digit revenue and ARPU growth in fixed internet. We introduced retail price revisions for new acquisitions in January and June.

Subsequently, we introduced the wholesale price revision effective from July 1st. We have seen other ISPs adjusting their prices in June and July.

Next wholesale adjustment is to be implemented in January 2027. First-half recontracting volume scored higher year-on-year despite last year's high base.

ARPU growth remained solid at 15% year-on-year in second quarter. Combination of solid upsell and sustained recontracting performance along with successful price implementation enabled us to maintain high growth.

We expect strong ARPU trajectory to continue in second half of 2026. Average package speed of our total subscriber base increased by 57% year-on-year to 124 megabit per second.

69% of our subscribers now use more than 50 megabit per second speed packages, compared to 54% a year ago. Moving on to mobile performance, slide number 6.

In second quarter, we continued our mobile customer growth. However, our revenue growth impacted by higher inflation.

Rational competitive environment visible by the end of 2025 prevailed in first half of 2026. Mobile number portability, MNP, market size declined both quarterly and yearly.

Türk Telekom finished second quarter as the leader in the MNP market. On the pricing side, revisions were made in January, April, and July.

Postpaid and prepaid segments added 415,000 and 124,000 subscribers respectively. Ratio of postpaid subscribers in total portfolio rose by 3.5 percentage points in year-on-year and reached over 80%.

Mobile ARPU, excluding M2M, declined by 6% year-on-year in the second quarter. We expect our growth momentum, together with pricing actions taken so far, to enable improved real ARPU growth performance in second half of the year.

Now we go on to slide number 8 for our Group Summary Performance. On the revenue side, consolidated revenues expanded by 9% to 73 billion TL.

Fixed broadband, corporate data, and ICT projects led this strong growth. Driven by the acceleration in fiber investments, IFRIC 12 revenues rose strongly.

Excluding IFRIC 12 impact, Q2 revenues exceeded 66 billion TL, up 6% year-on-year, including increases of 15% in fixed broadband, 12% in TV, 17% in corporate data, and 30% in other segments. Fixed internet and mobile revenues together accounted for 77% of operating revenue.

Fixed internet made the largest contribution to growth, with 2.9 billion Turkish liras higher revenues in total year-on-year. Corporate data, ICT solutions, and equipment sales added a further 2.7 billion TL, while call center and international resource revenues declined by a combined 1.6 billion TL, mobile revenues were lower by 692 million TL.

ICT solutions recorded significant growth, supported by new projects won by our subsidiary, Innova. Moving on to EBITDA side, direct costs rose 11% year-on-year.

Commercial costs rose 42%, mainly due due to one-off cost increases, while other costs remained almost flat year-on-year. Increase in commercial costs was driven by one-off spending in sales and corporate communication to support 5G and sales and distribution channels.

We can expect this cost to moderate in the second half. Within other costs, network expenses increased by 22% year-on-year on higher technology maintenance and repair cost.

5% year-on-year decline in personnel cost can be explained by the reduction in headcount at our call center subsidiary due to project completions in the second half of 2025. The decline in interconnection costs was driven by contracting international voice revenues.

EBITDA increases by 5% year-on-year to 29.4 billion TL. EBITDA margin declined by 170 basis points year-on-year to 40.4%.

Excluding the IFRIC 12 accounting impact, the EBITDA margin realized as 43.3%. Coming to our Net Profit slide, net financial expense increased year-on-year and quarterly, impacted by 5G and concession-related unrealized FX, hedge, and discount expenses.

Hedge expenses were also impacted by increase in average hedge costs, impacted by volatility in the global markets since the end of February. We booked 423 million TL net interest expense in the second quarter, compared to 705 million TL net interest income in the first quarter, as we we made a payment of $1.1 billion in the first quarter regarding 5G and concession renewal.

Monetary gain increased by 8% Q-on-Q to 16 billion TL, despite the inflation rate being lower compared to the previous quarter, driven by the fact that the concession asset was inflation-adjusted for 1 month in Q1 '26 versus 3 months in Q2 Q2 '26. As a result, we recorded net income of 6 billion TL for the period.

Let's go to next slide, number 9, to review our CapEx numbers. CapEx spending rose to 23 billion TL in the second quarter, compared with 17 billion TL of last year on the back of 5G rollout expenditures and strong progress in fiber investments.

Regarding CapEx breakdown, fixed-line CapEx, especially fiber access and core network investments, has 51% weight in total. 23% of spending went to mobile, while another 15% went to IT and project investments, and the remaining 11% for other investments.

In summary, our CapEx intensity for the first half realized as 29.1%. Moving on to slide number 10, you can see our Debt Profile.

Türk Telekom Group's cash and cash equivalents total 25.6 billion TL. The FX exposure included US dollar equivalent of $3.2 billion of FX-denominated debt, $2.8 billion concession and mobile license liabilities, $3.4 billion of total hedge position, and $99 million of hard currency cash.

Net debt over EBITDA increased to 1 time from 0.6 times as of 2025 year-end on the back of 5G and concession renewal payments. Net debt EBITDA remained flat on Q-on-Q basis.

In January, we paid the first installment of 5G license, $365 million plus $219 million USD as VAT, and the VAT amount of concession extension worth of $500 million. By the end of the year, we will pay the second installment of 5G license and the first installment of concession extension.

The VAT payments will be net-off. I want to highlight that our increased FX liabilities are driven by long-term investments investments in 5G spectrum and concessions.

These future payments are extended over a long-term horizon until 2035, and all settlements will be made in Turkish lira equivalents. Additionally, we actively mitigate our currency risk exposure through targeted hedge.

Last but not least, concession and 5G assets are revalued under inflation accounting and hence creates monetary gains, which as a result balance P&L impacts overall. We are now on slide number 11, where we provide update on our Cash Flow and FX Exposure.

We recorded $2.4 billion short FX position, compared to $102 million as of year-end due to booking of $2.8 billion 5G and concession concession renewal liabilities. Excluding those payments, our net FX long position is positive $331 million.

Finally, we generated 4 billion TL of unlevered free cash flow in Q2, compared to 9 billion TL in the same period of last year. Annual decline is mostly due to higher CapEx spending for 5G rollout and fiber investments.

Moving on slide number 12, we provide updates on 2026 Full-Year Guidance. In first half-year, our operational revenues were realized in line with our expectations in nominal terms.

However, real growth impacted by higher inflation. As a result of our actions in pricing and growing business, especially in ICT, we expect the annual operational revenue growth to accelerate in the second half of the year.

Hence, we expect to finish the year at 8% real revenue growth. Our first-half EBITDA margin increased by 0.6 percentage points year-on-year to 41.3%, remaining with within our guidance range of 41% to 42%.

We maintain our guidance on the EBITDA margin. Considering the pace of progress in our fixed-line investments as of the first half of the year and macro and inflation impacts, we expect our full-year CapEx intensity to be realized as at 34%, at the upper end of our 33% to 34% previous guidance range.

In summary, we are confident about our revenue growth, EBITDA margin, and investment intensity outlook, and excited about the second-half growth potential. This concludes my presentation.

Thank you for listening. Now we can open up the Q&A session.

Yes, hi. Thanks a lot for taking my question.

I have three questions if I can ask. The first question is on the revenue performance in mobile, decline of around 2% in the quarter.

I was wondering what is the driver behind that and is that a trend we should expect in the coming quarter as well? That's the first question.

Second question is on the guidance. Given that your first half growth is about 5.6% and full-year guidance of around 8%, you are expecting some significant acceleration in second half.

If you could talk about what is driving that optimism. Is it pricing or is it usage?

Please, if you could give some color there. Then on the commercial cost increase, if you could break it down in terms of how much is purely because of 5G and how long is that going to continue during this year?

Thank you.

Thank you for the questions. First, for the revenue performance of mobile, I want to start with your first question.

The main reason behind the growth performance is coming from the macro side. This is inflation.

The inflation increased higher than our expectation, not just our company's expectation, but also the CBRT and other actors. That is one of the first reason for the mobile performance.

Additionally, you will remember because of the last year's competitiveness in the market impacted the prices in mobile market. At the beginning of this year, we have made price revisions.

In January it is 30%. In April it is 13.

In January it is 30, in April this is 13, and in July it is 16%. We are expecting to see their effect in second half of this year, this price revisions.

In our operations results, you see we are the first in MNP market and we are now at second operator in the market. We are expecting in both the ARPU growth and revenue growth will be positive in the second half compared to the first half.

The main reason is coming from the price revisions that we have taken, since the speed of this price revisions will take some time in subscriber base, but second half we will see the concrete results. About your second questions, about the revenue growth guidance, you have stated it is 5.6% in first half and the revised guidance is 8%, and wondering our acceleration for the second half.

Firstly, there is a base effect for the first half of over the year, and the inflation realization for the first half was higher than our expectation. As I stated in your mobile performance, mobile revenue performance question, it is same for our revenue growth.

The price actions not we have taken for the mobile, we have also taken for the fixed broadband side. In January, for the retail side, the price revision is 20% for January.

For June, it is 30% for the retail side. For the wholesale side, in July, 1st of July it was effective, it is 38%.

We will also see the impact of these price revisions in the second half of the year. I have to emphasize that the first half growths are in line with our budgetary expectation.

As I stated for the mobile sector, these pricing actions will impact the subscriber base. It will take some time, as you may expect, and we are expecting this actions offset negative impact of more elevated inflation, and we are confident to reach our revenue growth.

In addition to that, for the ICT side, we have new business opportunities for ICT project business line. We expect the additional operational revenue growth from that side.

We are confident for our current revenue growth guidance. Your last question, considering the increase in commercial cost, our year-on-year increase in commercial expenses is 1 billion Turkish liras.

The increase specific to Q2, and we are considering is as one-off. Since the launch of 5G, both the commercial activities impacted an increase on this commercial costs to support our trading activity, both mobile and fixed.

Additionally, we can say sales and distribution channel supports. We are not expecting this to continue in the following quarters, and we expect it return to normal trend.

Thank you.

Yes, hello. Good afternoon and thank you very much for the presentation.

I have just two questions. For my first question, there were some news and I think you've published a press release on KAP regarding potential sale of sukuk debt up to 1 billion abroad.

Any color on that, on the timing and the size and the use of the proceeds would be very helpful. My second question is related to CapEx on the fixed broadband side.

Maybe I'm just not fully understanding the reasons for the increased CapEx, because when I think you announced the concession renewal, the message was that the expected investments in the infrastructure will be more or less in line with the historical investments on the fixed side. Now we are seeing a significant increase obviously this year.

Do you expect the investments to normalize in the next several years or is this the new normal level of CapEx that we can expect going forward? Thank you.

Thank you, Evgeniya. For your first question, considering our possible sukuk transaction, we had a financing program last year it as a total of $1.8 billion in order to cover our license payments of 5G and concession license.

We have still limit for both sukuk and Eurobonds that we have issued last year, but we are not we are not planning to tap the market for for the remaining limit that we have the consent of Capital Markets Board. It was 1 billion, and for 1-year validity.

As you remember, the transaction was $600 million, the remaining is $400 million available from that. We are not planning to tap the market for this existing sukuk, and it expires in September.

The first intention to renew our consent from Capital Markets Board, and it is still for 1 billion as a limit. We are not expecting to use this whole amount.

The basic motivations for this financing is to cover the next year's license payments, since we are covering all the payments of this year and half of the next year's license payments for 5G and concession. The basic motivation for this sukuk issuances to cover the next year's payments.

For the size, yeah, of course the size will be size will be determined through the market appetite and the cost. These are important.

We are going to we are going to look the pricing and the market appetite, and this will be important for the size. We have other alternatives in addition to sukuk.

We are access to different markets. We tapped the market for Eurobonds last year.

We have access to Gulf region, and we have ECA facilities. In addition to this financing opportunities, we have also access to international financial institutions.

Concretely, we are now negotiating with EBRD and ADB as multilateral funding sources. We have also ability to borrow from the local market.

There are different alternatives, and we have to optimize with the cost and the investors' appetite. For your second questions on CapEx spending, last year our CapEx intensity ratio was 29%, and our historical levels are somethings in 20s.

We are saying that we will reach this historical levels in in a in a period of time. For this year, the main reasons the increase in CapEx ratio is both 5G and the renewal of concession boost this CapEx spending.

We are expecting a normalizing in future years. Next years or the 2028, we are expecting it to be lower than this year.

For this year also, we have 5G rollout. That also increased the CapEx ratio compared to last year.

Our fiber also supports mobile network. We are connecting our 5G 5G bands with the with the with the fiber.

This this year is an exceptional year. We have to state that.

Thank you.

Thank you.

Thank you for the presentation. My questions related to your investments and, the license and concession fees.

We see, gradual increase in your depreciation expense side and, as of the second quarter. Could we assume that this depreciation expense will continue to increase throughout the quarters as your spending goes?

How should we think about that? Because already in the second quarter or or should we assume that the all, the costs are capitalized in second quarter, and this will remain stable?

I I would like to understand that part. The other question is about the financing side.

This, again, should we assume that we had we we saw the full impact of the, the higher debt burden on your financials starting by this quarter? We could we assume similar trend in the following quarters?

That's the my second question. The first one is about depreciation, the second is financial expense.

The third one is, what is the key topic on your side, for the the following 12 months as the top management of the company? Thank you.

Thank you, Cemal Bey. For the depreciation and expense, Q2 run rate will continue.

We have full impact in Q2, you may expect similar impacts in the following quarters. For your second question, considering financing side, the impact of the financial expenses increased by the payment of the license fees for 5G and concession.

We have paid with the VATs $1.1 billion in first quarter. That's why our both financial expenses and depreciation expenses increased.

The key drivers behind in financial expenses, we can summarize as as a first reason, significant increase in FX and hedging expense on both a year-on-year and quarter-on-quarter basis, as I stated. The second one, the conversion of net interest income into net expense on a quarterly basis, following $1.1 billion, as I stated.

That's the second reason. As a last, the discounted expenses recorded for the liabilities recognized on the balance sheet.

We expect a decline in hedging expenses in the second half of the year, in line with decreasing hedging cost. Since we stated that in first quarter investor call, we said that we are expecting an increase in the second quarter because of this geopolitical conflicts.

It impacted the cost of hedging, and we lived the increase of this hedging cost in Q2. For Q3, we are seeing a decline in the hedging cost, we are expecting a lower level of hedging cost in the financial expenses side.

For your last questions, the key topics on our mind are data center is important. We are increasing our data center capacity.

Right now, we have a capacity of 50 megawatts, 50, and our new data center will be planning to build in Ankara. It is 82 megawatts, almost 1.5 times bigger than our existing data center capacity, and we are expecting it to be operational in a couple of years.

We want to increase our size on this data center business. The artificial intelligence is also important.

We are trying to use in our business the solution of artificial intelligence, both the commercial side and investment side, so that is important. As a last, we are also prioritizing our cost optimization.

Since we have commitments for the 5G and concession part, we try to make the cost optimization. I want to make an addition for your second question also.

Our total debt didn't changed between Q1 and Q2. It is flat.

That means our cash-generating business helps us to hold this level of debt. After these license payments, we are also expecting a decline in our both leverage and the net debt.

Thank you.

Thank you.

Thank you for the presentation. I have one question on mobile ARPU growth.

ARPU growth slowed in the first quarter and also continue at a similar pace this quarter, second quarter of this year. I'm trying to understand the 5G contribution.

What would second quarter mobile ARPU growth have been excluded 5G? If there is a contribution from the 5G, how many points did it add to the mobile ARPU growth in this quarter?

Because at this point, it is not the apple-to-apple comparison, because last year in the second quarter of the last year, there were no 5G. That's why I asked this question, to understand the contribution of the 5G.

Thank you.

Thank you, Yasin Bey. The negative ARPU growth in first quarter and second quarter, yes, we were expecting that because of the last year's price actions.

Excluding 5G, we are expecting it to recover at the end of this year. We are expecting positive ARPU at the end of this year.

For the 5G, yes, we have launched the 5G in 1st of April. It is still new, and the in the 5G compatible device, it is 1/3 of our total subscriber has this 5G-compatible device.

It will take some time to to see the effects of the 5G technology in the in the commercial side. We are expecting in upsells with the 5G technology.

This will contribute to our upsell potential, and we are also witnessing that an enhanced usage of data. According to my view, we can expect this concrete results at the beginning of last year, we can say.

Next year, in 2027, we can expect. It is still new.

The adaptation of the devices are still lower. We can expect this concrete results in in with the also 5G technologies.

The penetration, with with our investment in in 5G, it is intense in this year for Türk Telekom. We are intensely investing in 5G C-band.

At the again at the beginning of the next year, the we are expecting an higher penetration ratios. This will also affect and will contribute to our both ARPU and revenue growth in in mobile side.

Thank you.

Thank you so much, Ömer Bey.

Hello. Thank you for your presentation.

I have three questions. It relates to the balance sheet.

We can see lots of fixed assets in your balance sheet, and I wanted to ask, do you consider to change the valuation way of this asset to the market valuation and any possible sales to get more cash? The second question is, do you consider the IPO or any similar process in the TTNET side?

The third question is, recently we see that lots of Turkish Eurobonds have share buybacks, and we want to ask, if you are so cheap compared to peers and so on, do you consider any buyback programs and so on? Thank you.

Thank you, Amir. Considering the fixed assets in our balance sheet, there's no change.

Maybe the assets coming from this 5G and concession license makes a huge difference compared to last year. That could be the main difference for this year and last year, since we have recorded both the 5G license and concession in first quarter, and it make a big difference in our balance sheet.

For your second question, can you repeat it again?

Do you consider the IPO of TTNET, initial public offering of TTNET?

We don't have a plan. We're not intending any kind of IPO for TTNET.

For your last question, it was about the buyback, as far as I remember. We have an option always to make buybacks.

We have always option. We think that our price is lower and our leverage is also lower compared to our peers, both in-country, both global.

We haven't published any plan for this buyback, but we have always option to that. In the past, we did, by the way.

It was, let's say, three years in 2023, 2000 some, I don't remember exactly, but it will be 2023. In the past, we did.

At the moment, we are not planning, but we can do that anytime. Thank you.

Related to the first question, you're expecting your asset in your balance sheet increase after your 5G investment, and do you consider any revaluation of the current assets, because maybe there is some additional advantages from this side or no? That's my last question.

We are not seeing any revaluation the assets other than the license. It is normal inflation indexation.

Thank you.

Yes, sorry. I was on mute.

Thank you for the opportunity to ask a follow-up. Just a quick question on the taxes.

I noticed in the cash flow statement that the income taxes increased in the first half of the year compared to last year. Just wanted to better understand what could be the driver of that.

Thank you.

The main reason is the profit. When we generate profits, the tax expenses also increase.

There is no revision in tax level, tax rate, in the government side. That's mainly because of the increase in our revenues and profit.

Thank you.

Thanks.

Thank you for joining us today. Have a good evening.