Turkey must bury €10 billion underground for switching to fiber cables based telecommunication system, said a senior official from a major European research institution. Heaviest tax burden on earth and harsh topography are among greatest challenges Turkey faces.

A senior official at the Center for European Policy Studies, or CEPS, said that Turkey needs to invest approximately 10 billion euros to reach European Union telecommunication infrastructure standards.

  Andrea Renda of the CEPS' regulation department noted that this figure includes costs such as new technology and licensing fees. He maintained that Turkey's tax burden on mobile communications is too high and that the delay in receiving third generation mobile communication, or 3G, licenses are the main handicaps for the sector.

 Given the fact that EU countries will be required to spend around 200 billion euros in total to transition to a fiber cable system, Renda pointed to the much heavier burden Turkey will have to bear when undertaking the process. Turkey's unfavorable topography will make laying underground fiber cables a painful task, he noted.

With the transition to fiber cables, copper cable will no longer be usable and all service will be provided by fiber optic cables and networks. Turkish Telecom, or TT, also made a decision to invest $4.3 billion in the transition to fiber cable, planned for 2010. This will allow TT to offer services like high-speed Internet and television broadcasting via Internet protocol, or IPTV, to more remote areas.

A more liberal market should be created

  Many technologies, such as 3G and television broadcasting via IPTV, are already available in EU countries while in Turkey such technological advances have not yet been made available, making Turkish markets an appealing area for future investment, said Renda during a speech at a meeting organized by Turkcell to facilitate contact with European officials. He argued that Turkey needs to overcome delays and create a more liberal market in the field of telecommunications.

  Renda highlighted delays in the submitting of 3G licenses, underlining the tax burden and timetables on mobile communication as risk factors. “Many taxes are levied over communication, but this situation narrows the demands,” he said. According to a survey conducted by CEPS, Turkey is the top country in the world for the taxation of mobile services, followed by Uganda, Brazil, Zambia, Ukraine and Kenya.