I C T INDUSTRY Opportunities for Cooperation

1. ICT INDUSTRY Opportunities for Cooperation Tuğrul Tekbulut Turkish Informatics Industry Association Turkey – Korean Business Council Istanbul, September 5 (Wed.), 2007

2. AGENDA 1) About TUBISAD 2) Turkish ICT Market : Ready to Rebound !! 3) Why to invest in Turkey

3. About TUBISAD • Turkish Informatics Industry Association (TUBISAD ) established in 1979 • is the largest non governmental organization of Turkish private ICT Sector • has a group of members comprising of nearly 180 prestigious ICT Companies • Member companies hold more than 99% of the country's turnover in the Information Technology and Telecommunication Industry

4. Objectives • to promote the development of ICT industry in Turkey, • to be the voice of ICT industry in Turkey, • to develop and foster relationships with global counterparts.

5. TURKISH ICT SECTOR

6. TURKEY IN BRIEF • Biggest population of Europe - 70 Mio • Youngest population of Europe %60 below the age of 28

7. TURKEY IN BRIEF • Covers %45 of Europe’s TV market by 2005 (Market share was %5 in 1995) • Covers %15 of Europe’s Digital Equipment market by 2005 (Market share was %3 in 1995) • Turkey has growing sectors such as IT and Telecommunications

8. ICT SECTOR IN BRIEF • Turkey had an average growth rate %21 for the last 4 years in the ICT Sector • Growing sector trend as regulations decrease and competition increases as a result of various privatization.  • One of the most popular sector among the labor force • Turkey is definitely an interesting emerging market with a huge potential within internet, wireless, and other communication solutions.

9. Turkey in World Competitive Index World Competitiveness Yearbook , International Institute for Management Development, Lausanne Switzerland

10. Total (billion USD) Information Tech. Communication Tech. 2006* 17.39 22.73 5.33 2005* 4.39 14.37 18,77 2004 3.45 11.81 15.27 2003 2.87 8.60 11.46 2.63 7.52 10.15 2002 2001 2.43 6.84 9.09 * Estimated values Turkish ICT Market Total ICT market :22.725 billion USD Information Technologies: 5.335 billion USD Communication Technologies: 17.390 billion USD Source: Interpromedya

11. The market volume of the entire ICT market is around 22 billion USD in 2006, with a yearly growth rate of 21%. Source: Interpromedya

12. TURKISH IT SECTOR IN BRIEF– 1 – <Turkish IT Sector Development> Turkish IT sector is growing <Annual IT Graduation Indicators> <School Qty> <Engineering B’down> Turkey’s most successful university candidates are selecting IT schools (Top 1%)

13. Market Size Indicators • Internet users Around 14-15 million with a 31% yearly increase • ADSL subscribers around 4 million and both expected to grow in 2007 • Enterprises with Internet access is 80 % • Enterprises with a broadband connectionis 52% • 6 million personal computers, 750.000 notebooks with an over 35% increase per year in sales. • Mobile phones subscribers 55 million with a 50% penetration rate . By number of users, 4th in Europe. • 5th largest telecommunication market in Europe and 12th largest in the world Source: Interpromedya

14. TURKISH IT SECTOR SWOT ANALYSIS WEAKNESSES STRENGHTS • Economic / Political turmoil in the past • Limited amount of TechnoParks / Free zones expected to be expanded by the government by 2010 • Bridge between Asia – Europe • Lower labor costs compared to Western Europe Young, educated Population • India’s and especially China’s incomparably low labor cost offers, OPPORTUNITIES THREATS • EU Candidate – Adopted Regulations • Increasing Demand in IT sector • Outsource/Off-shore possibility • Global IT players already exists,

15. Turkey’s Export Potential Call Center Hardware Remote Management System Integration Software Development

16. Some Cases • NORTEL NETWORKS • Software/Hardware Development Team • 350 Software Developers • 50 Hardware Developers • MICROSOFT • IT Support Center • 50 Support personnel • Meets UK’s demands

17. Examples • SIEMENS • 150 Software Developers • Call Center team (600+ people) • Meets World’s demands • TOSHIBA • IT Support Center • Call Center (250 people) • Meets World’s demands

18. Turkey in Technology Fast 500 Turkish technology firms, participating in Deloitte Technology Fast50/500 program for the first time, achieved a big success in Europe. 21 companies from Turkey achieved to be placed among 500 fast growing companies of Europe.

19. IT LABOR COSTS IN TURKEY • Support Engineer 1-3 years exp. (Yearly/Gross) Average : 35.000 € • Developer 1-3 years exp. Average : 50.000 € • Senior Developer 3-5 years exp. Average : 65.000 € • Manager 6+ - years exp. Average : 85.000 € • The government support for research 10-20 % incentive (Techno parks)

20. TURKEY’S LABOR POTENTIAL • Every year • 1.5 Million student takes the university exam (To enter an university) • The first %1 slice starts undergraduate programmes in IT (5.500 people) • Turkey has 36 universities that have an IT program. • Every year in total 21.611 people starts an education program inmed IT (5.500 people undergraduate programs , 16.111 people 2 years of higher education )

21. Total Yearly Labor Cost Savings • The research is based on 50 personnel • -8 Support Engineer • 22 Junior Developer • 18 Senior Developer • 2 IT Manager

22. Market Evaluation The next big market opportunity for companies in the sector other than privatization is the wireless broadband internet and applications and the related accessories. Number of hot spots in public places such as airports, hotels and cafes are rapidly increasing. Wireless connection devices such as PCMIA cards, Bluetooth hardware, edge technology, GPRS etc. are becoming more popular everyday. Wireless technology does have a direct positive impact on notebook sales as people look for mobility and connectivity at the same time.

23. Market Evaluation As the most recent trend especially the defense software contracts are being outsourced to Turkish subcontractors. The remarkable know-how and experience of Turkish companies is resulting in a number of joint ventures between Turkish and foreign companies.

24. Turkey- a mega market for mega business

25. CeBIT Bilişim Eurasia The 6th largest IT and telecommunications trade fair in the world, bringing together all segments of the ICT industry at one single venue. Establish links with an international audience that has the power to make investment decisions. We’ll welcome from Korean IT Delegation in our booth at CeBIT Bilişim Eurasia.( 2-7 October 2007)

26. Reasons to Invest in TURKEY Turkish IT market has an average growth rate around 21% for the last four years. ICT investment is accepted as a must both by public and private sectors. Strong macro-economic indicators. Stable political environment.

27. Reasons to Invest in TURKEY • Talented IT Workforce. And growing.. • Government Tax Incentives in newly formed Technology Parks. More to be opened. • Deregulation in Telecoms market will generate a new market for value added telecom and IT services.

28. Reasons to Invest in TURKEY Business sentiment is up. Optimism for 2007 and beyond ! Entrepreneurial sprit is high ! Room for growth in IT and Telecom markets. Turkish Scientific and Technological Research Council (TUBITAK) has allocated R&D funds for 500 M USD.

29. Reasons to Invest in TURKEY • Stronger Economy • Lowest inflation in 35 years • Growing income levels • Second fastest growing country (9,9%) in the world (2004) • Lowered interest rates • Growing Consumer Market • Majority of population < 35 years old • World’s 17th largest economy

30. THANK YOU...