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As mobile data services boom in eastern Europe, the pressurized Turkish operators are seeking to expand in the area. Two of them, Turkcell and Turk Telekom, are vying with

Telekom Slovenije to acquire Macedonian cellco Cosmofon, currently a unit of OTE of Greece.

In general, cellcos in central and eastern Europe can hope for a 30% jump in annual service revenues over the 2009-2014 period, according to new estimates from Informa, with the leap mainly driven by mobile data. Informa believes their revenues will top $77bn in 2013. The rise in voice revenue will tail off from 2011, but data revenues will double in value to reach $23.4bn in 2013. There will also be a steady increase in the mobile subscriber base in the region, from 447m at the end of last year, to 534m at the end of 2013. Another growth driver will be a trend for customers to buy two SIM cards, one for a mobile broadband connection.

With such trends in mind, the three operators are bidding for Cosmofon, and are likely to make further moves in the region over the coming few years. Cosmofon is Macedonia's second largest mobile carrier and if successful, Telekom Slovenije would combine it with its existing operation in the country, fixed ISP On.net. Telekom Austria owns the country's third cellco, Vip, but has so far made no move towards Cosmofon.

T-Mobile is the market leader with 1.5m customers. Its parent Deutsche Telekom acquired a strategic (25% plus one share) stake in Cosmofon's parent OTE in mid-2008. As a result, Macedonian regulators ruled that the German operator must sell one of the businesses.

At home, the two Turkish contenders had a difficult fourth quarter, as a 33% cut in termination fees squeezed their profits and the introduction of mobile number portability increased competition. Vodafone Turkey was the biggest loser, seeing a 14.5% quarterly decline in service revenue, much of it benefiting Turk Telecom's Avea, the third largest cellco. Turkcell is trying to protect its lead and increase its margins by focusing on corporate and postpaid markets.

With mobile penetration of 86.2%, Turkey is close to saturation and operators are looking for growth from international expansion, the introduction of 3G from later this year, and higher value services such as mobile broadband.

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