MIS 648 International IT country report TURKEY

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MIS 648 International IT country report TURKEY

• Jui Patil
• Ruby Tsai
• Dij Stefanovski

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Agenda

• Geographic and Demographic picture
• Socio-cultural picture
• Economy
• IT Infrastructure
• IT Industry
• E-commerce
• IT Strength/ Weakness-Contrast Syria
• Recommendations

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Geographic picture

• Capital city Ankara
• Located on two continents Europe and Asia.
  Bordering the Black Sea, between Bulgaria and
  Georgia, and bordering the Aegean Sea and the
  Mediterranean Sea, between Greece and Syria
• Prone to severe earthquakes especially in the
  North.

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Demographic picture

• Population 69,660,559 (July 2005 est.)
• Population growth rate1.09 (2005 est.)
• Median age 27.7 years
• Life expectancy72.36 years
• Literacy rate ( Age 15 and over can read and
  write) 86.5

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Socio-Cultural picture

• Languages Turkish (official), Kurdish,
  Arabic, Armenian, Greek
• Religions Muslim 99.8 (mostly Sunni), other
  0.2
• Everyone in Turkey has freedom of religion and
  belief.
• Ethnic groups Turkish 80, Kurdish 20

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Economy

• Labor force 25.3 million
• agriculture 35.9, industry 22.8, services
  41.2
• note about 1.2 million Turks work abroad
  (2003)
• Unemployment rate 11.7 (1Q 2005)
• GDP PPP 508.7 billion Per capita 7,400
  (2004)
• GINI Index 42 (2003)
• Inflation rate 9.3 (2004)
• Currency New Turkish lira (YTL after 1 January
  2005)
• Exchange Rate 1 USD 1.37 YTL
• In recent years the economic situation has been
  marked by erratic economic growth and serious
  imbalances.
• It has a strong and rapidly growing private
  sector, yet the state still plays a major role in
  basic industry, banking, transport, and
  communication.

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Economy

• Trade
• Imports 68.7 billion Petroleum, machinery,
  motor vehicle, and electronics.
• Exports 28.6 billion Textile apparels, iron
  steel, electronics, and tobacco.
• Foreign direct investment (FDI) in Turkey remains
  low averaging less than 1 billion annually, but
  economic and judicial reforms along with possible
  EU membership are expected to boost FDI.
• Major partnersGermany 12.9, Russia 9.3, Italy
  7.1, France 6.4, US 4.8, China 4.6, UK 4.4
• International affiliation Member of OECD, NATO,
  and candidate of EU

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Telecommunication Infrastructure

• Turk Telekom is the incumbent fixed line
  telecommunication operator, provides basic fixed
  line voice telephony of which 100 is government
  owned.
• Turkey currently has more than 19 million
  telephone lines with a density exceeding 25
  percent.
• Until recently, all telecommunications were
  state-owned. The first private telecom firms were
  the cellular networks but is highly regulated. It
  is expected to be privatized soon.

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Telecommunication Infrastructure

• Cellular networks
• The Cellular networks market has experienced
  rapid growth and is competitive.Turkey has three
  cellular service operator, Turkcell , Telsim and
  Avea subscriptions reaching a estimated
  penetration rate of about 50 per 100 in 2004,
  well above countries in the Middle East such as
  Egypt (10), but below that in EU countries,
  where penetration rates are in the 70-100 range.
• Cable TV
• Only the major cities such as Ankara, and a
  few others, enjoy the presence of a cable TV
  network. These systems are still at the
  development stage, have not reached all
  households yet. Cable TV is fully owned by Turk
  Telekom
• Satellite 3
• ISP provider
• More than 40 of the ISP market is held by
  Superonline, which offering services via Turkish
  Telecom's TurkNet monopoly.

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Internet Usage

• The creation of TURNET and a competitive ISP
  market led to a dramatic expansion of Internet
  usage in Turkey.
• 11.3m Internet users (2004), a penetration rate
  of 15.6, compared with rates of 30-35 in
  Hungary, Poland, and the Czech Republic.
• DSL and cable modem broadband Internet
  connections are available, but numbers of
  subscribers are low.
• 58.8 of the Internet users are in the 20-30
  years of age range.
• Mostly consumers use Internet for banking. 60
  of the Internet connection market is dominated by
  two ISPs, of which Superonline is the largest.

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PC Usage

• There are only 0.2 PCs per 1000 capita in
  Turkey. This low figure can be explained by the
  facts that 65 of the population is rural, and
  the economy is highly dependent on agriculture
  (as much as 56 of the labor force is in the
  agricultural sector)
• PC usage is thus concentrated in metropolitan
  areas more specifically in the business world,
  though the decreasing prices of computer hardware
  are allowing for an important increase in
  household usage of PCs.

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IT industry Hardware manufacture

• Turkish electronics industry is dominated by
  consumer products ( 50.8 ) and
  telecommunications equipments (21.4).
• Turkish electronics industry currently has been
  the fastest growing manufacturing sector and has
  become a basic industry for all other
  manufacturing sectors.

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IT industry Hardware manufacture

• Turkey exported the 48 of its production in
  2000. Consumer products are the largest portion
  of the exports (62.7), followed by
  telecommunication products (13.8) and defense
  electronics (12.8).
• Multinational companies (e.g. IBM, Hewlett
  Packard, Dell, Siemens) import components and
  assemble personal computers (PCs) and other IT
  hardware locally, either for sale within Turkey
  or for export to the EU or the Middle East.

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IT industry Software development

• The software industry has not yet reached the
  production levels of other industries due to
  limited expertise
• The number of software company now in Turkey is
  overwhelming. Such firms produce accounting
  planning, inventory control, and other database
  analysis programs, as well as customized software
  for financial, manufacturing, and other
  applications .
• The manufacturing sector is the largest user of
  computer software in Turkey, followed by the
  finance and education sectors.
• Widespread piracy of both domestic and foreign is
  the main drag on increased software sales
• Turkey's export of computer software and services
  is very few.

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E-commerce

• At the beginning of its introductory stage
• Banks are expected to be the driving force for
  the e-commerce development
• Obstacles in e-commerce are similar to those
  faced in other European countries, namely, stolen
  credit card numbers and customs regulations.
• Turkish consumers are often unwilling to
  purchase  goods due to a fear of supplying credit
  card or personal information over the Internet.
  Turkish banks attempted to create a solution to
  this problem by issuing special debit cards for
  Internet use, but these are only a temporary fix.
• No clear regulations of government-mandated
  firewall protections and encoding put a damper on
  public trust of e-commerce in Turkey

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Human capital

• Most universities offer computer science and/or
  MIS majors. The schools that specialize in
  teaching computer software are numerous.
• Turkish who leave their country for studying
  especially in the United States tend to return
  back to Turkey. Those students know that there
  exist great job opportunities for them in Turkey.
• Brain drain of computer specialist is low, the
  demand for computer professionals is extremely
  high
• Also, many Middle Eastern students who graduate
  from computer-related majors in Turkish
  universities choose to stay in Turkey, for the
  job opportunities there are much more attractive
  than in their own countries. Pakistanis and
  Lebanese are examples of such immigrants
• Turkish are in general not fluent in English
  language.

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IT policy

• Government Plan
• National Information Infrastructure Master
  Plan (TUENA)
• Support for IT Investments
• RD program
• E-Government
•         

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Comparison
Turkey
Syria

• 69,660,559 (2005 est.)
• total population 86.5
• 8.2 (2004 est.)

• 18,448,752 (2005 est.)l
• total population 76.9
• 2.3 (2004 est.)

Population
Literacy
GDP
( age 15 and over can read and write )
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IT Strength
Turkey
Syria

• Sharp increase in IT market
• Government support
• Investment opportunities
• Software development
• E-Commerce expansion

• IT education improvement
• Government Support
• Telecommunications modernization and expansion
• Oil industry IT system

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IT Weakness
Turkey
Syria

• Software piracy
• Recent economic crisis
• Struggle to enter the EU
• English language
• Lack of E-Commerce trust

• Government controlled IT sector
• Software Piracy
• Economic State
• Poor IT infrastructure
• Brain drain
• Low IT usage and awareness
• Lack of E-Commerce initiatives
• IT laws not enforced

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Business Opportunities

• Cellular network
• Turkey is the second largest potential consumer
  market in Europe (behind Germany).
• Cellular density is expected to grow rapidly in
  the coming years. The market was expected to
  reach over 12 million by 2005, and enabling
  investment in the mobile market.
• Turkey has already auctioned four mobile cellular
  phone licenses that private sector owns 3 of them
  where as Turk Telekom owns only 1.
• Additional opportunity exists for the Turkish
  market in international calls due to the widely
  dispersed Turkish population around the world,
  primarily form Western European and the United
  States to Turkey.

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Business Opportunities

• Software
• In Turkey software products  range from packaged
  programs to customized software that are being
  developed for specific needs.
• Requirement of customized built software is in
  high demand for government purposes and the mix
  of customized product and packaged software for
  the private sectors ,e.g. network security
  appliances, professional software for
  corporations and commercial software packages in
  accounting, finance, human resources. Thus making
  customized software the biggest market.

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Business Opportunities

• Internet service
• While Internet penetration remains low,
  subscriber growth rates have been rapid. Internet
  service markets are expected to expand
  substantially within the next five years.
• The chamber of commerce in Turkey estimates an
  additional 1.6 million people entering the IT
  market with purchases of internet services.
• Having the competitive and developing
  telecommunication infrastructure provided by the
  privatization, the investors will be able to find
  consumers who could be targets for the online
  services.

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Recommendation

• Turkey's parliament has finally passed a telecom
  law that paves the way for privatization.Turkish
  government will privatize 55 percent of the
  shares of Turk Telekom this year. The
  privatization of Turk Telekom will provide more
  opportunity for Turkey's IT market to grow and
  expand throughout the country.
• Make investments by joint venturing with local
  companies. This joint venture will let the
  foreign investors to share the risk associated to
  the investment, which will save the both parties
  from the instability impact of the economy.

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Recommendation

• In terms of internet usage and software
  marketing, Turkish consumers have the same
  patterns as the European consumers have,
  particularly in mobile cellular phone market.
  Turkish consumers are interested in high
  technology and they are known as the fast
  adaptors to the technologies as long as they are
  served with affordable offers.
• Small and Medium Enterprises in Turkey started to
  computerized their business and got connected to
  portals which can provide them large view of
  customers. Government encourages these
  enterprises to develop their activities so there
  had been a serious increase in SME's portion in
  IT investments.This fact motivates IT suppliers
  to have better access to those companies.

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Recommendation

• Although many people in the larger urban
  commercial centers understand English, language
  may be a serious barrier in rural areas. It is
  therefore imperative that marketing information
  and user guides be written to the consumers own
  language. To win over the local customer, a
  Turkish language web site would be extremely
  useful. Having a local representative or partner
  could help in translating your advertising so as
  to catch the eye and interest of the Turkish
  consumer.

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Sample of websites

• Turkish
• http//www.kultur.gov.tr
• English
• http//www.turkishpress.com/

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• Questions?