Turkey’s Information and Communication sector has reached 83,1 billion TL growths

You will find the details concerning the report in the following lines. Let us first take a look at the notes I have made in the meeting – Sinan Oymacı

According to what the CEO of Context, Howard Davies, transmitted:

Context can assess 86% of the figures of distribution channel in the Information Technologies. That is a serious number. The top 11 distributors are involved in the report.

They viewed a market number of 3.2 Billion Dollars.

According to this, the market diminished 6.5% on a dollar basis, from 2014 to 2015.

When we compare the first halves of 2015 and 2016, we see that the market decreased 2.6%.

Internet of Things and Smart Devices has been becoming one of the big fields.

If we take a look at the notes taken by me at the speech of The head of the TUBISAD Information Center Commission, Mustafa Çağan, concerning the report:

There is an 18% growth from 2014 to 2015 on TL basis. There is a 15% to 20% growth expectation from 2015 to 2016. The market had 83.1 Billion TL market size in 2015. Opinions of 90 companies were received for growth estimations.

The market diminished 5.4% on USD basis from 2014 to 2015. There is a 30.4 Billion USD market size. However, 5.9% growth is expected from 2015 to 2016.

USD exchange rates used in calculations are thus:

2014 – 2.19 / 2015 – 2.73 / 2016 – 3.00

The market size of service portion is 4.7 Billion TL, and the market share is 6%.

It is seen that exchange rate effect caused the growth in the sector.

There are impressive figures in native-foreigner distribution.

IT Service %83 Native %17 Foreign import

IT Software %84 Native %16 Foreign import

(Communication) IT Hardware %18 Native %82 Foreign import

IT Hardware %19 Native %81 Foreign import

According to these results, out software sector is not dependent on foreign sources! My software developer friends with whom I shared this information were surprised a bit, just as I did. I believe that the parameters, which were used in obtaining this number, will be reviewed next years. I think that it is one of the issues which should be focused on mostly.

By the way, we learned that the software that comes with devices are evaluated within hardware incomes.

Another subject to which I attach importance is the performance of Technology Development Zones.

Technology Devel. Zones 2014 2015

The number of companies 1.782 1.967

The number of employees 25.951 29.161

Turnover 5 Billion 171 Million TL 6 Billion 326 Million TL

Export 699 Million TL 890 Million TL

By this, turnover and export numbers show an increase as TL both per company and per employee. However, when we use the exchange rate figures given for 2014 and 2015 by TUBISAD, there is, unfortunately, a decrease in turnover, 11% per company, 13% per employee; and in export, 7% per company, 9% per employee. To me, whatever the case the domestic market is in, these numbers should have been equal, at least. In 2016, I suppose that we will see the results of the investment made in 2015. I will follow it at the end of 2016.

14% of the employees who work in this sector work in R&D departments.

And the total export is 2 Billion 198 Million TL.

The total employment in the sector has increased from 107.000 to 113.000 employees.

The most needed titles:

Qualified labor need
Price-based public tender wins
The lack of venture funds

Other notes in the meeting:

Informatics Industry Association (TUBISAD) announced the “Market Data of Information and Communication Technology Sector” of 2015. In the meeting where the head of Information Technologies and Communication Organization, Dr. Ömer Fatih Sayan; the head of TUBISAD, Kübra Erman Karaca; the CEO of Context, Howard Davies and the President of TOBB Telecommunication Council, Yusuf Ata Arıak, made inauguration speeches, is the shareholder of Deloitte Turkey, Tolga Yaveroğlu, also made a statement. The head of TUBISAD Information Center Council, Mustafa Çağan, gave information about the details of the research.

Kübra Erman Karaca, the Chairman of the Executive Board of TUBISAD, who made the inauguration speech, shared her assessment about the sector stating that the study of “Sector Data of Information and Communication Technologies” is becoming more and more important each year. She expressed that beside it is pleasing to see the growth of the sector on TL basis, when the loss of value of TL is considered, the anticipated growth did not occur, and also told that the mobility in exchange rates, two election atmospheres, macroeconomic hardships and the problems resulting from our country’s geopolitical position are effectual in growth. She also stressed the great importance of postponements especially in public projects and investments. She emphasized that the increase in software and export is pleasing, that the subjects such as digital transformation, industry 4.0 and the internet of things, all of which will remain on the agenda frequently in the following period, will be effectual both in value-added products and in mobile products. In this respect, it will have a positive effect on the growth of both software development and service. Stating that an integrated political appropriation is a must so that the sector should reach desired growth figures, Karaca also pointed out that immediate precautions are to be taken to provide qualified labor required by the sector. She continued her speech as follows:

“2015 was the year in which institutions conversed about and planned rapidly-developing technology and digital transformation strategies. We expect that 2016 will be the year during which they will put these in practice and will take a concrete step. It was much pleasing to see in 2016 that there were titles that directly concerned IT industry in the 64th action plan of the government. Almost 40 of 216 articles are about IT world. We wish a process which will be accomplished through the new administration’s taking into consideration these items, which we believe will contribute a great acceleration. We will do our part on this subject.”

The Country Manager of CONTEXT Turkey, Erol Kuseyri, stated that CONTEXT Turkey Panel, which is mostly comprised of TUBISAD members Informatics Sector Hardware Distributors, made a 3.2 billion USD sale with 11 pioneer distributors, in 2015. He also added:

“We can evaluate 85% of IT Hardware sector of Turkey with real data. This rate is about 90% in EMEA area. We process the biggest IT Distributor data from the web, and we offer these data to our customers rapidly. In consequence of the intensifying global fluctuations of 2016, we clearly understood how much significant real data is in decision mechanisms. We observe that company targets cannot be predicted with classical methods anymore, and that decision makers of companies perpetually revise their goals in the light of these circumstances.”

Erol Kuseyri, who says that swiftly and accurately evaluated data creates a difference in companies, further adds:

“We support these processes of companies with the services we provide to our project associates and our customers.”

Yusuf Ata Arıak, the President of TOBB Telecommunication Council, a Project Associate, remarked the following statements:

You may remember that, in the previous years, various studies were conducted and shared with public each year about the size of the Information and Communication Technologies (ICT) sector by different institutions and organizations. However, we were witnessing several different results as a result of both the difference of the data used in these studies and the various approaches on a subject of industry wide. The average figures shared both were hindering us from reaching to only, accurate and valid data for our country and were causing problems in making comparisons in world standards.

To find a solution to this issue, we established “Sector Size Work Group” in 2013 under the roof of TOBB Telecommunication Council and conducted studies with the participation of all shareholders. Beside council members who wanted to contribute, we also invited TUBISAD and the Ministry of Development, which made studies on this subject earlier, to this group. Representatives from TOBB, from Ministry of Science, Industry, and Technology, from TUIK (Turkish Statistical Institute), also contributed. We thank all sharers who contributed.”

Tolga Yaveroğlu, an associate of Deloitte Turkey, who claimed that they are hugely happy to be a part of the fifth completed Information Center one more time in this year, stated that although it is pleasing to see that there is an 18% growth in the sector, almost half of the growth resulted from the increase in exchange rates. Yaveroğlu spoke:

“We have to fulfill the qualified labor deficit in the sector and should continue to attach importance to the attempts concerning the increase in domestic market demand. Especially, our informatics companies should evaluate the recent loss of value in TL as an opportunity for service exportation.”

In the video below, you can watch the assessment we made with Mustafa Çağan, the head of the TUBISAD Information Center Commission in Turkish.

The Market Size of Information and Communication Sector in 2015

According to the information given by Mustağa Çağan, the President of Information Center Commission, who made a statement on behalf of TUBISAD, the sizes of informatics sector of Turkey in 2015 appeared to be arrayed thus:

The total Information and Communication Technologies sector size reached to 83,1 billion TL volume in 2015 after an 18% growth.

Of the two significant components which constitute the total sector size; information technologies reached to 27,4 billion TL after a 19% increase on TL basis, communication technologies reached to 55,7 billion TL after a 17% growth. Thus, the share of information technologies in the whole market is 33%.

The growths of subcategories of information technologies which reached to 27,4 billion TL growths in 2015 are as follows:

Information technologies hardware: 13 billion TL

Information technologies software: 9,7 billion TL

Information technologies service: 4,7 billion TL

In the category of Information Technologies, compared to the previous year, the biggest growth took place in service category with 25,1%. In this way, the total share of software and service sectors in information technologies reached to 53%. The increase in the quality and quantity of techno cities contributed to the growth of software sector.7

Communication technologies sector had 55,7 billion TL volume in 2015. The distribution of subcategories is as follows:

Communication Technologies hardware: 16,1 billion TL

Communication Technologies electronic communication: 39,6 billion TL

While the domesticity rate in Information Technologies Service and Software categories is 83% in 2015, this rate became 18% in Information and Communication Technologies Hardware category.

Export is 2,2 billion TL

The total export volume of the sector reached to 2,2 billion TL on TL basis doubling the previous year. 60% of the total export came from software with 1,360 billion TL. Software export increased 49% compared to the last year. 14% of the turnover obtained from software comes from exportation.

30% of the total export are done from techno cities. According to a report, the top countries to which exportations are made are Azerbaijan, USA, Turkish Republic of Northern Cyprus, England and UAE. When analyzed on USD basis, the total export volume happened to be 788 million USD in 2015. The biggest growth on USD basis happened to take place in information technologies hardware category with 29% and software category with 20%.

Employment

Compared to the previous year, the employment of the sector in 2015 was 113.000 with 2,2% increase. The Information Technologies category employed 74.400 employees with a 66% share in the whole sector.

2016 growth expectation

According to the results of the research, the growth of 2016 is expected to be between 15%-20% on TL basis and between 5%-9% on USD basis. It is stated that the most important factor in the growth will be R&D investment and innovation.

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