“Turkey’s Turkcell”

ANNUAL REPORT 2008 CONTENTS

01 Our Vision / Strategic Priorities / Our Values / Operational and Financial Data Summary 02 Letter From The Chairman 04 Board of Directors 06 Message from the CEO 08 The Management Team 10 Managers of Turkcell Affiliates 12 Our Contribution to the Economy and Employment in Turkey Is Widely Appreciated 18 We Respond to Your Confidence With Strong Value Propositions 26 We Continue to Offer the Most Recent Technologies in Turkey 36 We Carry Out Projects That Add Value to Society, Reflecting Our Commitment to Social Responsibility 50 By Removing Barriers to Communication, We are Now the World's Turkcell Too 66 Mobile Communication Sector, Operational and Financial Review 2008 81 Investor Information, Compliance with Corporate Governance Principles 97 Consolidated Financial Statement and Independent Audit Report 164 Dematerialization of the Share Certificates of the Companies That are Traded on the Stock Exchange 166 The Board's Dividend Distribution Proposal 168 Abstract of Auditor's Report to General Assembly of Turkcell İletişim Hizmetleri A.Ş. 01

OUR VISION To ease and enrich the lives of our customers with leading communication and technological solutions. STRATEGIC PRIORITIES As a leading communication and technology company; • To grow in our core mobile communication business through increased use of voice and data, • To grow our existing international subsidiaries with a focus on profitability in the long-term, • To grow in the fixed broadband business by creating synergy among Turkcell Group companies through our fiber optic infrastructure, • To grow in the area of mobility, internet and convergence through new business opportunities, • To grow in domestic and international markets through communications, technology and new business opportunities, • To develop new service platforms that will enrich our relationship with our customers through our technical capabilities. OUR VALUES • We believe that customers come first. • We are an agile team. • We promote open communication. • We are passionate for making a difference. • We value people.

OPERATIONAL AND FINANCIAL DATA SUMMARY

2007 2008 Change (%) Subscribers (million) 35.4 37.0 4.5% Post-paid Subscribers (million) 6.4 7.5 17.2% Pre-paid Subscribers (million) 29.0 29.5 1.7% Average Revenue per User (ARPU) blended (TRY) 18.5 18.4 (0.5%) Churn Rate (%) 19.9 23.8 3.9 pp Average Minutes of Usage (MoU) per Sub. Blended 76.3 95.9 25.7%

Revenue (million US$) 6,329 6,970 10.1% EBITDA (million US$) 2,627 2,580 (1.8%) Net Income (million US$) 1,350 1,837 36.0% LETTER FROM THE CHAIRMAN

In a world beset by financial woes and an In 2008, in addition to its GSM networks in economic slowdown, Turkcell Group gained Ukraine, Northern Cyprus, Azerbaijan, six million subscribers in 2008, posted US$7.0 Kazakhstan, Georgia and Moldova, Turkcell billion in net revenues and US$1.8 billion in acquired an 80% share of Belarusian net income to become an even more forceful Telecommunications Network (BeST) in competitor in the local as well as in the Belarus. Operating in an attractive and regional telecom market. Fortified by a strong growing market with a young population, cash position and driven by a strategic growth BeST will draw on the experience gained plan that emphasizes new businesses and from our successful operation in Ukraine and technologies in addition to its core activity capitalize on Turkcell's strong eco-system. of mobile communications, Turkcell is well- positioned to continue to do well in 2009 Threat of Recession despite the bleak economic outlook. The economic and financial shockwaves of the collapse of mortgage-based securities in As the second biggest GSM operator in the United States reverberated throughout Europe and the 13th largest in the world, the world in 2008, leading to a credit crunch Turkcell from the beginning has sought to and posing a serious threat of recession and grow through international ventures while high unemployment in countries throughout building its market position in Turkey. At the the region. end of 2008, Turkcell's subscriber base totaled 62 million people in eight countries, including In Turkey, the negative effects of the global 37 million in our home market, Turkey, and turmoil were felt from the second half of touching a population of 160 million. 2008. After seven years of uninterrupted growth, economic activity contracted sharply in the fourth quarter of 2008 and GNP is expected to decline further in 2009.

The forecast for Central Asia and the Caucasus - where Turkcell through Fintur has operations in Azerbaijan, Kazakhstan and Georgia - is grim; the IMF foresees growth slowing to less than 2% in 2009 for a region that experienced a growth rate of 6% in 2008 and 12% in 2007.

In Eastern Europe - where we are active in Moldova, Belarus and Ukraine - there was a precipitous collapse of industrial production in the first quarter of 2009. The unstable political and macro environment in Ukraine, which caused a steep depreciation of the local currency in 2008, is a matter of concern.

We are monitoring the potential impact of global volatility on our businesses in Turkey as well as in other regions and the effect this may have on our financial performance and adjusting our business plans accordingly.

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MEHMET EMİN KARAMEHMET, CHAIRMAN OF THE BOARD OF DIRECTORS "BY INTRODUCING THE MOST UP-TO-DATE TECHNOLOGIES IN TURKEY, TURKCELL HAS CREATED ROOM FOR GROWTH IN THE CONVERGENCE OF COMMUNICATIONS AND INFORMATION TECHNOLOGIES. WE WILL REMAIN FOCUSED ON THIS AREA AND EMPLOY IT TO OUR ADVANTAGE FOR FUTURE BUSINESS LINES, ONE OF WHICH WILL CERTAINLY BE FIXED BROADBAND."

Going forward, the Turkcell Group remains By introducing the most up-to-date Turkcell has made tremendous progress keen to grow internationally, either technologies to Turkey, Turkcell has in meeting the rigorous requirements of through new operations or by forming created room for growth in the this legislation and indeed is a model in alliances that contribute to our economies convergence of communications and Turkey for its effective internal control of scale and create synergies. We are also information technologies. We will remain structure and transparent financial looking at possible mergers and focused on this area and turn it to reporting procedures. Good corporate acquisitions. advantage for our future business, one of governance is essential to generating which will certainly be fixed broadband. value for investors and other stakeholders. A Vibrant and Resilient Sector The progress in fiber roll out started by We are proud to have won the The telecommunication industry in Turkey our subsidiary Tellcom is creating pleasing International Public Relations Association's and around the world shows encouraging synergies, which will increase further with 2008 Golden World Award in the financial signs of resilience to the recent economic 3G implementation. services and investor relations category downturn. Specifically, the mobile for translating performance into value. telecommunications sector remains We are looking at new business vibrant, reflecting its position as a necessity opportunities in communications and We are also proud of our contribution to rather than a luxury. With mobile line technology that offer the potential for high the Turkish national budget. In 2008, penetration in Turkey verging on 92% returns or are critical for sustaining our Turkcell paid TRY5.6 billion in taxes to the overall, Turkcell's challenge in its home competitive advantage. The Turkcell Turkish Treasury on revenue of TRY8.8 market is to retain its customers and Technology R&D Center, which was billion, a vital 3.3% of Turkey's total tax increase usage, particularly of Value founded in 2007, represents a critical step revenues. Added Services, and to become one of the forward in our creation of new major fixed broadband providers servicing technologies and it promises to become We are also proud of the role we have high premium individual and corporate the core of a thriving Turkish Silicon Valley. played in educating girls from segments. disadvantaged families in the less Investing in People and Corporate developed eastern provinces, sponsoring The acquisition of a third-generation (3G) Governance student exchanges and supporting sports license in late November means that Turkcell's eco-system includes 235 in Turkey. Turkcell is in a position to do exactly that. business partners and 18,000 sales 3G technologies enable network operators channels. Turkcell Group itself provides Turkcell's shareholders stand united to offer users a wider range of more direct employment opportunities to behind the company and take an active advanced services while achieving greater approximately 10,355 people. role in its development. I would like to network capacity through improved thank my fellow board members for their spectral efficiency. Turkcell intends to As our business grows, we invest even involvement and dedication. On behalf of launch Turkey's first commercial 3G more in people. We are particularly proud the Board, I would like to express our networks in mid-2009. to have created jobs in the developing appreciation for the very successful cities of Eastern Turkey by establishing performance of Turkcell's management Turkcell has invested $9.2 billion since its call centers in Erzurum and Diyarbakır. team in a rapidly changing economic inception - $7.6 billion of this in Turkey environment. We believe that Turkcell will - making it one of the most significant At Turkcell, we take our responsibilities go from strength to strength in the year investors in the Turkish economy. We are to all our stakeholders very seriously. As ahead as it continues to expand its range eager to invest further in the future of the only Turkish company listed on the of products and to serve an ever larger Turkey to introduce the latest technologies New York Stock Exchange, Turkcell is subscriber base in Turkey and the Eurasia and create employment. In 2009, we plan subject to all SEC regulations, including region. to invest $1.6 billion, thereby underlining compliance with the Sarbanes-Oxley Act. our position as Turkey's leading Without a doubt, the Sarbanes-Oxley Act communications and technology company. of 2002 is the single most important piece of legislation affecting corporate governance, financial disclosure and the practice of public accounting since the US Mehmet Emin KARAMEHMET securities laws of the early 1930s. BOARD OF DIRECTORS

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1 MEHMET EMİN KARAMEHMET 2 AIMO ELOHOLMA 3 OLEG MALIS 4 ALEXEY KHUDYAKOV CHAIRMAN OF THE BOARD-ÇUKUROVA MEMBER MEMBER MEMBER HOLDİNG A.Ş. Mehmet Emin Karamehmet was Aimo Eloholma was appointed to the Oleg Malis was appointed to the Alexey Khudyakov was appointed to appointed Chairman of the Board of Board of Directors on August 22, Board of Directors on May 22, 2006. the Board of Directors on May 22, Directors on September 30, 1993. He 2007. He previously served on the He is also Senior Vice President of 2006. He also serves on the Board of was re-appointed on May 22, 2006. Board of Directors from 2003 to 2004. Altimo. Mr. Malis began working for Directors of Kyivstar. He is Vice He is also Chairman and a member He joined TeliaSonera in 1974 and Altimo in 2005. Between 2003 and President of Altimo, which he joined of the Board of Directors of Çukurova held management and executive 2005, Mr. Malis was Senior Vice in 2004 from Alpha Bank, where he Holding Companies. Mr. Karamehmet positions in data communications, President and M&A Director at Golden had worked as a Vice President attended Robert College in Turkey sales and marketing, business Telecom, a post he took after he managing Alfa Group's investments and Dover College in Kent, England. development and corporate planning, founded Investelectrosvyaz and in Golden Telecom and Kyivstar. Mr. and international operations. Corbina Telecom. Mr. Malis holds a Khudyakov worked for the Moscow Currently, he is the Head of degree in Ergonomics and Systems office of McKinsey & Co. from 1998 International Business Support at Engineering from Moscow State to 2002. He is a non-executive board TeliaSonera Eurasia, Chairman of the Aviation Technical University. member of Turkcell. He is also an Board of Directors of MegaFon, and Observer Member of Turkcell's Board a member of the Board of Directors of Directors' Audit Committee. Mr. of Fintur Holding, TeliaSonera UTA Khudyakov was named to the Audit Holding, TeliaSonera Asia Holding, Committee under Rule 10A-3(b)(iv)(D) and Telecom Invest. Mr. Eloholma of the Securities Exchange Act of 1934. holds a Master of Science in Electrical He holds an MBA from INSEAD and Engineering from Helsinki University a master's degree in Applied of Technology and he has also studied Mathematics and Physics from the Economics and Business Moscow Institute of Physics and Administration. Technology.

5 TERO ERKKI KIVISAARI 6 MEHMET BÜLENT ERGİN 7 COLIN J. WILLIAMS MEMBER MEMBER MEMBER

Tero Erkki Kivisaari was appointed to Mehmet Bülent Ergin was first Colin J. Williams was appointed to He was a long-term board member the Board of Directors on May 14, appointed to the Turkcell Board of the Board of Directors on May 22, and Vice Chairman of the International 2007. Mr. Kivisaari has managed Directors on April 29, 2005. He was 2006. He serves as a Voting Member Corrugated Packaging Institution, the TeliaSonera in Eurasia since May 1, re-appointed on May 22, 2006. and Chairman of the Audit Committee European Federation of Packaging, 2007. In addition, he is Chairman of Previously, he worked at Hochtief AG of Turkcell's Board of Directors. He is and the Federation of Paper the Board of Directors of Fintur with responsibility for the construction also Supervisory Director and Producers. Mr. Williams is the Holdings B.V. and a member of the of the First Bosphorus Bridge and at Chairman of the Supervisory Board founding President of Propak Europe Board of Directors of MegaFon. Tekfen A.Ş. on the Iraq-Turkey of Treofan, a packaging film company, and was a board member of the Previously, Mr. Kivisaari served as pipeline project. Mr. Ergin continued with activities in Europe, North Greater Philadelphia Chamber of the Chief Financial Officer and Vice his career at Çukurova Holding as a America, and South Africa. He is Commerce between 2002 and 2004. President of TeliaSonera in Eurasia, manager of Çukurova İthalat ve Chairman of Clondalkin and Chair of From 1988 to 2001, Mr. Williams was having been an Associate Professor İhracat T.A.Ş., and a board member the Audit and Remuneration the President of SCA Packaging, prior of Finance at the Helsinki School of of Maysan A.Ş. and Baytur Trading Committees of Clondalkin, a consumer to which he served as the Managing Economics. He holds a master's S.A. Currently, Mr. Ergin is Chairman and industrial packaging company; Director of Bowater, a corrugated degree in Finance. of the Board of Directors of Genel and chairman of Dewhurst, an packaging company, for four years. Denizcilik Nakliyatı A.Ş., Show TV, industrial textiles company. From From 1978 to 1984, he was first the and Akşam Gazetesi and a member January 2001 to December 2004, Mr. Sales Director and then the General of the Board of Directors at Çukurova Williams served as President of SCA, Manager of Chicopee in the Holding. Mr. Ergin graduated from North America, which is active in the Netherlands, a non-woven fabrics Robert College with a degree in Civil packaging sector, and in personal company of Johnson & Johnson. Mr. Engineering. care and paper tissue products. Williams holds a masters degree in chemical engineering, an MBA in finance from New York University, and an honorary doctorate from Lund University in Norway.

* The term of office of Board of Directors is three years upon the selection. SÜREYYA CİLİV, CEO "WE PERFORMED STRONGLY IN 2008 DESPITE THE CHALLENGES IN OUR OPERATING ENVIRONMENT."

We performed strongly in 2008 in the midst Growth in our core business, the mobile Turkcell's Direct Contribution to the Turkish of the most difficult conditions the business communications market, slowed due to Economy and Population world has ever seen. We continued to generate macroeconomic developments. In a period in We are proud that over the years Turkcell has cash and to increase our revenues throughout which we were obliged to limit our campaign built a valuable brand. As a company with a the year, despite the global macroeconomic and communication activities, aggressive keen awareness of our social responsibilities, volatility and the political, regulatory, and promotions launched by our competitors to in 2008 we continued to invest in our brand competitive challenges in our operating gain subscribers and campaigns directed to while making a direct contribution to Turkey environment. We achieved sound results in sales channels and price perceptions, and its economy. the face of these challenges and intense intensified price competition towards the end competition. Though the Turkish lira of the year. This development was exacerbated The Call Centers we opened in Erzurum in depreciated by 23.5% against the US dollar by the start of Mobile Number Portability. 2006 and in Diyarbakır in 2008 gained in the last quarter of the year, we still posted recognition from the United Nations as a an increase in consolidated revenue of 10.1% We Continue to Lead the Turkish Market “Model Project” and have created jobs for to $7.0 billion and an increase in net income With Distinctive Value Propositions Despite 1,160 young people in these economically of 36% to $1.8 billion, while EBITDA declined all Challenges disadvantaged areas. by only 2% to $2.6 billion. In 2008, Turkcell I am proud that we posted a net gain in Group's subscriber base increased to 62 subscribers for the year, given the introduction In 2008, Turkcell reported consolidated million, including those of our subsidiaries of Mobile Number Portability on November 9, revenues of TRY8.8 billion. In the same period, abroad. though, frankly, this is not a surprise. After Turkcell's direct contribution to the Turkish we regained our ability to launch new economy totaled TRY5.6 billion, including TRY2 A Very Difficult Operating Environment campaigns, which publicized the attractiveness billion in communication taxes, TRY900 million At the beginning of the year, Turkey's financial of our brand and our distinctive value in VAT and TRY1.2 billion Treasury share. markets were adversely affected by global propositions, we improved our operational economic worries and rising political tension performance within a short period in the The summer student exchange program, in the country. The impact of the global second half of 2008. Throughout the year, we “Bridge of Hearts”, conducted with the Ministry economic downturn became more severe in increased subscriber numbers and our share of Education, brought 100,000 students from the second half of the year. The 2008 global of traffic and revenue in the face of accelerating rural areas to the cities and sent city-dwellers crisis has slowed GDP growth to a significant competition. to villages and small towns in an ambitious degree in our major markets, depressed program to highlight Turkey's diversity and consumer confidence and caused a steep In Turkey, we maintained our market promote understanding and tolerance. Turkcell devaluation in local currencies. leadership by growing our subscriber base to is determined to improve the education of 37.0 million. We generated stickiness through women in Turkey, especially those from the With regard to the regulatory environment, value added services and maintained our less developed areas. Since 2000, Turkcell has the Information and Communication market share particularly in premium made it possible for 20,000 girls to go to Technologies Authority's decision in September segments. school, with some gaining admission to 2007 to intervene in the retail pricing of mobile university and starting a professional career. operators and to set minimum and maximum In 2008, we continued to differentiate Turkcell We also supported the National Football and prices has negatively affected our marketing from the competition by further emphasizing Basketball teams and sponsored meaningful and communications activities. In the first our value propositions. In 2008, we made projects that contribute to Turkey's social quarter of the year we lost subscribers for the consolidated capital expenditure of $808 development. first time in our history due to the limitations million, including that in Turkey, and this on our campaign activities. reinforced the outstanding quality of our mobile The Contribution of our International communication services. We designed and Subsidiaries Continues to Grow We posted a worse than expected performance effectively communicated many tailored offers We were especially pleased with Astelit, which in terms of the increase in the churn rate and throughout the year, providing the most has been making serious inroads into the the decrease in average revenue per subscriber. advantageous pricing for the largest Ukrainian market. Astelit increased its 3-month This situation, together with the sudden community. We emphasized non-exclusive active subscriber base by 31.5% to 7.1 million, reduction by 33% of interconnection rates channels for increased availability and accounting for 63% of the total subscriber effective April 1, led to a drop in the value of effectiveness of our sales channel and focused base. Despite the 52% devaluation of the our stock and dismayed our shareholders. on enhancing our Value Added Services. Co- Ukrainian Hryvnia against the U.S. dollar, branding offers for youth and corporate club Astelit increased its revenues by 71.4% to members provided benefits worth TRY120 $438.7 million while recording a positive million to six million members. We are proud EBITDA of $32.3 million, marking its first full to have widened our reach by adding the year of profitability. concept "Turkcell benefits Turkey the most" as our sixth value proposition. 06 07

MESSAGE FROM THE CEO

Through our international joint venture Fintur, The global economic slump will undoubtedly our holdings in Kazakhstan, Azerbaijan, take a toll on Turkey in 2009 as GDP growth Moldova and Georgia strengthened their weakens. We remain cautious and will position in their respective markets. As Fintur's continue to monitor developments and operations continued to grow, the net profit anticipate their effects. to Turkcell, calculated according the equity Although we expect mobile line penetration pick up method, totaled $151 million and a to remain at the 2008 level of 92%, we believe dividend of $83 million was paid for the first we can achieve revenue growth in TRY terms. time. We are aware of the increased pressure on expenditures in a difficult environment. Another highpoint of the year was KKTCELL's However, we are pledged to double our launch of the first 3G services, video calling investments in 2009. We plan to invest $1.3 and mobile broadband in the Turkish Republic billion in Turkey, reflecting our steadfast belief of Northern Cyprus. in our country's future, and to invest approximately $300 million on our In Belarus, we finalized the acquisition of international subsidiaries. 80% of BeST and we have started network roll out and rebranding activities. Appetite for Growth Turkcell was awarded an A-type 3G license More Challenges Ahead by submitting the high bid of Euro 358 million. The challenges we face will increase. The This license, which has the widest frequency “Great Recession”, in the words of the IMF, band, will differentiate us from our rivals in will cause global economic growth to shrink terms of quality, coverage area and speed. in 2009 for the first time since the Second The advent and development of 3G will lead World War, as consumer and business to a significant improvement in content and confidence remains weak. solutions and thus contribute positively to our current ecosystem of distributor chains and As for regulation, a possible reduction in the infrastructure, content and solution partners. interconnection rates may be on the ICTA's Implementation of 3G, a milestone for the agenda. European Union countries saw a Turkish market, is expected by mid-2009. reduction of 12% on average in mobile interconnection charges in 2008 whereas By supporting new generation smart phones, Turkey's rates were cut by 33%. The mobile such as the Blackberry Bold and iPhone 3G interconnection rates that went into effect on which, as a technological leader, we April 1, 2008 in Turkey are 57% below the introduced to the Turkish market, we will average for European countries. Thus, we do emphasize our Value Added Services. We not feel a further reduction by the ICTA in the believe that a reduction of mobile internet mobile interconnection rates is justified. taxes from 25% to 5% and the implementation We believe that there is a need for of 3G offer the greatest potential for the growth restructuring and reform in the fixed line and Going forward, we hope more dynamic and of our VAS revenues, which increased by 27% broadband sector so as to create a competitive, fair competitive elements to emerge as a in 2008 to make up 14% of the group's liberal environment through the participation result of liberalization of the fixed line market. consolidated revenue. of alternative players and we hope that these However, we see that the competition is solely reforms are implemented as soon as possible. focused on the mobile communication market We believe that mobility, internet, and We are convinced that Turkey's growth for the time being. convergence offer good growth opportunities. potential will be enhanced through this much Our Turkish broadband business, Tellcom, needed restructuring and liberalization. We are Determined to Grow by Seizing continued with its fiber optic network roll out New Business Opportunities at Home and in Turkey's major cities with the objective of In closing, I would like to extend my thanks Abroad becoming a major player in the fixed to the entire Turkcell team that has made us Turkcell, as Turkey's leading communications broadband business. We intend to take "Turkey's Turkcell". Their dedication, and technology company, is in an excellent advantage of an enhanced level of synergy intelligence, enthusiasm and imagination position to maneuver in an increasingly between Tellcom and our own network and enabled our company to meet its goals and challenging operating environment. Thanks to focus on growth opportunities in fixed objectives. The consistent support of our Board to our unimpaired ability to generate cash broadband following the liberalization in has been invaluable while the loyalty of our and our prudent financial management we Turkey that is expected to take place in May. customers is, of course, the bedrock of our are able to consider growth opportunities in success, now and in the future. new international markets while retaining our focus on new business opportunities in Turkey. Süreyya CİLİV THE MANAGEMENT TEAM

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Important Note: Levent Burak Demiralp, who was Chief Sales Officer, resigned from his position on July 1, 2008. On the same date, Emre Sayın was appointed to this post. Cenk Serdar, who was Chief Business Development Officer, resigned his post as of March 08 13, 2009. 09

1 SÜREYYA CİLİV 2 LALE SARAL DEVELİOĞLU 3 SELEN KOCABAŞ 4 SERKAN OKANDAN CHIEF EXECUTIVE OFFICER CHIEF MARKETING OFFICER CHIEF BUSINESS SUPPORT CHIEF FINANCIAL OFFICER OFFICER Süreyya Ciliv joined Turkcell on January 9, Lale Saral Develioğlu joined Turkcell in Selen Kocabaş joined Turkcell in 2003 and, Serkan Okandan joined Turkcell in 2000 2007. Between 2000 and 2007, he served 2003 and has held her present post since since May 1, 2003, she has held the post of and he has held his present post since in various management positions in June 19, 2006. Prior to this position, she Chief Business Support Officer in charge of January 1, 2006. Prior to this appointment, Microsoft Global Sales, Marketing and was the Consumer Marketing Division Head Human Resources, Internal Communications, he was the Financial Control and Reporting Service Group in the USA, having previously of Turkcell. Starting her career at Unilever, Turkcell Academy, Turkcell Group Division Head of Turkcell. Mr. Okandan worked as Microsoft Turkey Country Ms. Develioğlu served as Marketing and Organizational Development, Procurement started his professional career at Manager from 1997 to 2000. Prior to 1997, Brand Director of Unilever in various and Contract Management, and Administrative PricewaterhouseCoopers in 1992. He then Mr. Ciliv was the General Manager and markets. She is a graduate of the Affairs. Mrs. Kocabaş started her professional worked for DHL and Frito Lay as Financial Chairman of Novasoft Systems Inc., a Department of Industrial Engineering of career as a Management Trainee at Koç Controller. Serkan Okandan is a graduate company he established in Boston, USA. Boğaziçi University. She also holds a Holding and worked in the Human Resources of Economics from Boğaziçi University. Mr. Ciliv earned an MBA from Harvard master's degree in Management Department at Arçelik. She went on to work University in 1983 after graduating with Engineering from Rensselear Polytechnic as Human Resources Coordinator for Marshall honors in 1981 from the University of Institute, New York. and as Human Resources Director at Danone Michigan in Industrial & Operations SA. She is a graduate in Economics from Engineering and Computer Engineering. Istanbul University and holds a master's degree in Human Resources Management from Marmara University.

5 ORHAN GEMİCİOĞLU 6 CENK BAYRAKDAR 7 İLTER TERZİOĞLU 8 KORAY ÖZTÜRKLER TURKCELL GROUP LEGAL COUNSEL CHIEF INFORMATION AND COMMUNICATION CHIEF NETWORK OPERATIONS OFFICER CHIEF CORPORATE AFFAIRS OFFICER TECHNOLOGIES OFFICER Orhan Gemicioğlu was born in Lüleburgaz, Cenk Bayrakdar joined Turkcell in 2002. He İlter Terzioğlu has served as Chief Network Koray Öztürkler joined Turkcell in 1998 and Turkey, in 1944. He completed his first served as Chief Service and Product Operations Officer since April 1, 2006. He since April 9, 2008 he has been Chief degree at Istanbul University's School of Development Officer from April 1, 2006. Prior has worked in the communications sector Corporate Affairs Officer, which includes Law in 1967 and, since joining the Istanbul to this appointment, he was Content Services since 1993 and served as Assistant General taking charge of corporate communications. Bar in 1970, he has worked as an attorney. and Partnering Management Division Head Manager at Ericsson, Superonline and Show Previously, he served as International Mr. Gemicioğlu has provided legal counsel in Turkcell. Mr. Bayrakdar started his career TV. He is a graduate of the Department of Business Development Director and then to many companies in various sectors. Since at Koç Holding as a management trainee. He Econometrics at Istanbul University. as Head of Investor Relations at Turkcell. 1986, he has developed an expertise in worked at Arçelik, where he was in charge He started his career in the USA at telecommunications law. He has served as of Information Systems and a Production Accenture Consulting and went on to work Turkcell Group's Legal Counsel since the Team Leader. Subsequently, he worked at at Yapı Kredi Bank. He graduated from Company's establishment and he has been Corbuss and Turktell as a Business Johnson C. Smith University in Marketing involved in all of Turkcell's major projects Development Manager. He graduated from and earned an MBA majoring in to the present. Istanbul Technical University, Department of Management Information Systems from Electronic and Communications Engineering Mercer University. and holds a master's degree in Industrial Engineering from Texas A&M University.

9 EMRE SAYIN 10 TAYFUN ÇATALTEPE 11 EKREM YENER CHIEF CONSUMER SALES OFFICER CHIEF CORPORATE STRATEGY AND CHIEF CORPORATE BUSINESS OFFICER REGULATION OFFICER

Emre Sayın joined Turkcell as Chief Tayfun Çataltepe joined Turkcell as its Chief Ekrem Yener joined Turkcell as the Chief Corporate Sales Officer in 2007 and is Corporate Strategy and International Enterprise Group Officer in 2007 and is currently the Chief Consumer Sales Officer. Expansion Officer in 2007 and is currently currently the Chief Corporate Business Mr. Sayın worked for Evyap Pazarlama ve the Chief Corporate Strategy & Regulation Officer. Mr. Yener, worked as the Ankara Tic. A.Ş. as the Deputy Manager in charge Officer. After graduating from the Electronic Regional Manager of Microsoft Turkey, was of Marketing in 2005-2006 and for Kodak Engineering Department of Boğaziçi appointed Microsoft's Deputy General A.Ş. as the General Manager from 2002 to University, Mr. Çataltepe received his MBA Manager in charge of Marketing, and then 2005. Prior to that, he was the Deputy from Michigan Technology University and Deputy General Manager in charge of Marketing Officer for Microsoft Turkey from his doctorate from the University of California. Business and Strategy Development 1999 to 2002. He worked at Unilever He worked as a Research and Development between 2004 and 2007. Graduating from Turkey, from 1992 to 1999 as manager for Engineer in the Bell Laboratories and then Istanbul Technical University's Department Chain Stores, Commercial Marketing and at AT&T as IP Network and Service Planning of Metallurgical Engineering in 1982, he Marketing. He graduated from Boğaziçi projects manager. After AT&T, he joined earned a master's degree in Materials University in Industrial Engineering and Aycell as Deputy General Manager in charge Science from the University of California at holds a master's degree from Rutgers of Technical Operations. Then, he worked Berkeley in 1986 and an MBA in Marketing University. as the Deputy General Manager in charge Management from Kellogg University in of Network Operations and Regulation in 2002. Avea. From 2006 to 2007 he worked at Ernst & Young in charge of European Telecom Sector Post-merger and Acquisition Corporate Integration Services. MANAGERS OF TURKCELL AFFILIATES

GLOBAL BİLGİ TURKCELL TEKNOLOJİ TURKKULE ASTELIT BAHADIR PEKKAN SEMİH İNCEDAYI EKREM ÖZORBEYİ TANSU YEĞEN

INTELTEK KKTCELL TELLCOM BeST AHMET SEZER DAĞHAN FELLAHOĞLU MURAT ERKAN ÖZCAN ERMİŞ

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1GLOBAL BİLGİ 234TURKCELL TEKNOLOJİ TURKKULE ASTELIT BAHADIR PEKKAN SEMİH İNCEDAYI EKREM ÖZORBEYİ TANSU YEĞEN Bahadır Pekkan started working for Semih İncedayı took up his present Ekrem Özorbeyi has been the General Tansu Yeğen was appointed Chief Global Bilgi A.Ş., Turkey's leading call post as General Manager of Turkcell Manager of Turkkule since July 1, Executive Officer of Astelit in February center, at the beginning of 2005, after Teknoloji in April 2007, having joined 2008. Mr. Özorbeyi started to work 2007. Before joining Turkcell, he held holding managerial positions in Turkcell in December 2006. He had at Telsim as a Planning Engineer in several managerial positions in well- various local and international previously held managerial positions 1995, and continued on at Netaş from known international companies companies. At Global Bilgi, Mr. in Borusan Telekom for two years and 1996 to 1998. He started to work as where he gained experience of the Pekkan served as the Chief Financial Telsim for four years, after working Turkcell's Radio Network Project IT/Telecom business. He has garnered Officer and then, from June 1st, 2006, for Koç Group for ten years. Mr. Coordinator in 1998 and, in 1999, he a number of professional awards. as the General Manager. Born in İncedayı was born in Istanbul in 1965 was appointed Cell Planning Unit Before Astelit, he was CEO of Apple Istanbul in 1967, Mr. Pekkan is a and he graduated from Middle East Manager and then as Radio Network IMC Turkey. From 1999 to 2005, he graduate of Saint Benoit High School Technical University in Computer Division Head in July 2006. He was the Deputy General Manager of and the Department of Mathematics Engineering in 1988 after attending completed his undergraduate degree Microsoft Turkey. Prior to those posts, of Boğaziçi University. He also holds Istanbul Erkek High School. at Yıldız Technical University between he held managerial positions in masters degrees in Capital Markets 1982 and 1986 and then completed Hewlett Packard Turkey and Digital & Stock Exchanges from Marmara his graduate degree at the same Equipment Turkey. Mr. Yeğen University and in Finance-Accounting university. He continued his academic received his MBA from Marmara from Yeditepe University. studies at Innsbrug University in University and he holds an Electrical Austria between 1992 and 1993. and Electronic Engineering degree from Boğaziçi University.

5INTELTEK 678KKTCELL TELLCOM BeST AHMET SEZER DAĞHAN FELLAHOĞLU MURAT ERKAN ÖZCAN ERMİŞ Ahmet Sezer has served as the Dağhan Fellahoğlu joined the Turkcell Murat Erkan joined the Tellcom family Özcan Ermiş has served as the General Manager of İnteltek since family in 2008 and, since 1 August in 2008 as General Manager. Having Individual Sales and Marketing 2001. After starting his career as an 2008, he's been serving as the started his career at Toshiba, Mr. Director at life:) Ukraine since 2006 engineer, a position he held until General Manager of KKTCELL. His Erkan then became an Application and, since September 2008, he has 1997, Mr. Sezer became Vice expertise, developed from holding Engineer at Biltam Engineering. Then also been serving as the General President at Intertech A.Ş. and Vestel senior positions in local and foreign became Turkey's first Systems Manager of life:) Belaurs . Mr. Ermiş Group of Companies. In 1998, he was telecommunications and IT markets, Engineer at Cisco where he also held has managed to expand the appointed General Manager of Vestel rests in marketing, sales, product the posts of Technology Leader System subscriber base of life:) significantly Consultancy and Professional management and network design. Engineering and Business and he is also in charge of increasing the monthly revenue per subscriber Services. He graduated from the Between 1996 and 2008, Mr. Development Manager, and Regional and profitability. Until 2004, he served Department of Electronic Fellahoğlu served in various senior Sales Manager for projects with as the Sales and Marketing Director Communications Engineering at management positions in Ericsson in companies like Koç.net, Superonline, of Vodafone Turkey, having serving İstanbul Technical University in 1982. Turkey, Sweden and, recently, in Doğan Online, Kablo Net, Ultra TV as the Marketing Director of Telsim South East Asia and Singapore. He is and Turkcell. Prior to Tellcom, he until 2003. Mr. Ermiş transferred to a graduate of the Department of worked as the Business Unit Manager the telecommunications sector via Electric and Electronic Engineering at Aneltech responsible for providing Rumeli Telekom in 1995, though he of Eastern Mediterranean University. solutions to the telecoms, mobile started his career in the automotive communications, information and sector as a marketing manager in communications technology, defense 1992. Born in 1970, Mr. Ermiş is a and industrial product sectors. graduate of the Department of Mr. Erkan graduated from the Mechanical Engineering of Boğaziçi Department of Electronics and University and he is a member of Telecommunications Engineering at Group for Strategies and Marketing Yıldız Technical University in 1992. Group (GSMA), the Association of Mechanical Engineers of Turkey, and Boğaziçi University Alumni Association.

"OUR contribution to the economy and employment IN TURKEY IS WIDELY APPRECIATED" WE CONTRIBUTE TO THE TURKISH ECONOMY THROUGH THE EMPLOYMENT WE CREATE, THE TAX REVENUE WE GENERATE, AND THE INVESTMENTS WE MAKE IN TECHNOLOGY As Turkcell, we believe that corporations Turkey has a large, young population, so have a social responsibility to contribute employment is critical. Our call centers to the national economy and society. In in Diyarbakır and Erzurum, the prioritized this regard, in the face of global economic cities in development are on a par in challenges and intense competition, as terms of technology and facilities with Turkey's Turkcell, we have sustained our commitment to our country and to our call centers in more developed parts of people, notably through our investments Turkey and handle calls from all over the in Turkey's underdeveloped eastern cities, country. creating employment, generating tax revenue, and undertaking social We operate our call centers through responsibility projects. Global Bilgi. There are ten centers - Yalova, Izmir, Erzurum, and Diyarbakır We Employ Approximately with one center each and Istanbul with 2,000 People at Our six. At the end of 2008, 4,635 people worked at these call centers. A further Diyarbakır and Erzurum Call call center in Ukraine employed 327 Centers people at the end of 2008. The call centers we opened in Erzurum in 2006 and in Diyarbakır in 2008 Our Erzurum Call Center, opened in 2006 provide job opportunities to young people and employing a thousand people, was while contributing to the national selected as an 'Exemplary Project' by the economy and to the development of eastern Turkey. World Bank in its Development Report for 2009.

Diyarbakır Call Center was established after the Erzurum Call Center, our first investment in Eastern Anatolia, with an investment of $12.3 million. The Diyarbakır Call Center is a vital part of our strategy of contributing to the economic and social development of that part of our country.

IN A WORLD WITH A SHRINKING ECONOMY AND MULTINATIONAL COMPANIES SHEDDING EMPLOYEES, NUMBER OF EMPLOYEES AT TURKCELL GROUP ROSE TO 10,355 IN 2008 WITH THE CALL CENTERS WE OPENED IN EASTERN AND SOUTHEASTERN ANATOLIA.

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Opening of the Diyarbakır Call Center

Continuing our investments, we plan to Turkcell Global Bilgi “World Our "Best Technological Innovation" provide employment to 1,000 young Champion for Best Technological category award was won on the strength people by the end of 2009 at our Innovation” of our special product the "ccDashboard", Diyarbakır Call Center. The Center was As Turkey's leading customer relationship which distinguishes us for performance opened on 20 October 2008 on a 6,600 management center, Global Bilgi is management and efficiency. Our "Best square meter site and we expect it to gaining international recognition. Global Customer Service" category award was reach a service capacity of 2.5 million Bilgi was nominated world champion in given for applications such as "fair minutes a month. The young people the "Best Technological Innovation solution, solution at first call" for projects employed at the Diyarbakır Call Center Category" at ContactCenterWorld.com's that make our customers feel special. were chosen from graduates of the local 2008 World Awards, seeing off Dicle University who had completed the competition from the USA, Europe, the Customer Relations Development Middle East, Africa, and the Asia Pacific Program organized by Turkcell Academy region. Organized since 2003, the World and the University. Awards select the best call centers from around the world. Global Bilgi also won third place in the "Best Customer Service" category. Turkcell Ecosystem Contributes to the We Provide Employment for Turkish Economy We give great importance to the Approximately 36,000 People ecosystem Turkcell has created. Through through our Sales Channel our partnerships, we provide our We have created employment for around customers with solutions and services 36,000 people via our sales channels. that add value. Thanks to the ecosystem Turkcell is a big family that contributes that we have formed with our 202 to the livelihood of around 143,000 business partners, we provide more than people. We take Turkcell's quality to every 500 services to our corporate and corner in Turkey with over 80,000 counter individual customers. Turkcell is Turkey's sales points via our digital channels, technology locomotive and the Company's ATMs, POSs, kiosks, call centers, the business partners operate not only in internet, WAP, retail chains, SMS, Digital Turkey but also in various other countries, TV, and USSD. including Ukraine, the UK, the United Arab Emirates, as well as countries in Africa.

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We Generated About 3.3% of We Contribute to the Turkish As part of our service and product development efforts, we employ close to Turkey's Tax Revenue and Economy by Developing Our 700 people, 200 of which are engaged in Paid TRY5.6 billion to the Own Technology R&D work. Our R&D development makes Turkish Treasury We transform our locally developed us an exemplary organization in the global In addition to the contribution we make information and technology into global arena in terms of communications and to employment, as Turkey's Turkcell, we values. We utilize highly qualified human technology. By developing technology using contribute to the national economy resources in our R&D activities to develop our own resources, we gain cost through the tax revenue we generate. In and retain this expertise locally, thereby advantages, speed and flexibility for the 2008, we paid a total of TRY5.6 billion reversing the brain drain and allowing Company and these lead to competitive in taxes, of which TRY2 billion was us to grow with the companies in our advantages for the Turkcell Group and communication tax, about TRY900 million ecosystem and to export technology by contribute to the Turkish economy. was value added tax, and TRY1.2 billion opening ourselves to foreign markets. was the Treasury share. Altogether, we We opened a new building in the Gebze- paid 3.3% of all taxes collected by state We have over 200 partner companies in TÜBİTAK Marmara Research Center in 2008. As Turkey's Turkcell, we are our ecosystem and we either receive Technology Free Zone in May 2008. proud of the contribution we make to our human resources services from them or Enclosing 6,000 square meters, we plan to country's economy. carry out turn-key projects with them turn Turkcell Technology into a technology and we include these firms in our direct development base by increasing the number development activities. of personnel from the current 300 to 500 people in line with our strategic goals. The service and product development teams completed 415 projects in 2008. This is a 35% increase over the previous year. As a result of these projects, we have applied for 10 patents.

AS TURKEY'S TURKCELL WE GENERATED REVENUE OF TRY8.8 BILLION IN 2008 AND PROVIDED TRY5.6 BILLION OF TAX REVENUE TO THE STATE.

Our R&D Attracts Attention from the In June 2008, Turkcell was nominated to We Contribute to the Development of European Union the Board of Cooperation for Sustained Information Technology and As a result of our increasing R&D efforts, European Leadership in Telecommunication Sectors we took part in the European Union's 7th Telecommunications (CELTIC), which is We continued to contribute to the Environment Program and EUREKA R&D EUREKA's R&D group in the development of information technology events, in addition to TÜBİTAK's R&D telecommunications area. Our nomination and telecommunication sectors in Turkey funds, which we joined at the end of gained the approval of twelve giant through our support of the CeBIT Eurasia 2006. Our involvement enabled many telecommunication companies in Europe fair. This huge event, which we have firms in our ecosystem to become involved that are also Board members. CELTIC sponsored for the last 11 years, plays an in European Union R&D programs. supports R&D projects that develop important role by gathering the sector's solutions in information and players on a single platform while communication technologies (ICT). As increasing technology awareness part of this initiative and with guidance generally. from leading players in Europe, the Company works on projects valued at up to Euro 1 billion. This involvement allows Turkcell to play an active role in determining R&D issues, creating strategies, developing projects, and selecting proposed projects. "WE RESPOND TO YOUR CONFIDENCE WITH strong value propositions"

OUR CUSTOMERS BENEFITTED FROM OUR QUALITY SERVICES AND THE MOST ADVANTAGEOUS TARIFF OPTIONS

We have significantly differentiated our At the beginning of 2008, Turkcell was Company from its competitors through the only mobile operator to cover all offering the widest coverage, best quality, residential areas with populations of widest service network, the most 1,000 people or more. We also cover reasonable tariffs, and the greatest 93.5% of the residential areas with product diversity and variety of populations between 500 and 1,000 applications (many of which we pioneered people. Our investments since our internationally). In addition to our establishment totaled $7.6 billion at the superior quality, our campaigns played end of 2008 and our base stations an important role in enticing individual numbered 15,100. At the end of 2008, and corporate customers to Turkcell 98.9% of our network was supported by throughout the year, especially during EDGE technology. the transition to mobile number portability implemented in November We Made Our Mobile Fleet Stronger 2008. in 2008 We have developed mobile satellite We Continue to Lead in communication vehicles to enable connections in regions that are Coverage and Quality geographically isolated from the normal Since we were established, we have cellular network. We have distributed invested in delivering our services to these vehicles to all over Turkey to every corner of Turkey. improve our response rate in emergencies. In 2008, we doubled our Covering more than 780,000 square mobile fleet so we can provide more kilometers, Turkey is the second largest services at more locations with the highest country in Europe after Russia. At the quality service. end of 2008, we had covered 84.3% of this vast land (in other words an area equal to Germany and Italy combined) and 98.8% of the Turkish population.

BY THE END OF 2008, TURKCELL WAS THE ONLY OPERATOR IN TURKEY TO COVER ALL SETTLEMENTS WITH POPULATIONS OF 1,000 PEOPLE OR MORE.

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We Emphasize Environmental Turkcell contributes to the Turkish Turkcell Radio Network Energy Savings Protection in Addition to Quality and economy with energy-efficient solutions. via Active Applications Coverage Currently, the energy savings we have Thanks to technological advances, most Alternative Energy Systems obtained total 15,460 MW annually, telecom operators have stabilized their In locations where the national grid is which correspond to a drop in CO2 energy consumption at 1995 levels, unavailable for geographic or cost emissions of 19,300 tons. In other words, despite the rising number of subscribers. reasons, solar and wind power is used. these savings equal the total energy The mobile communications sector helps Alternative energy provides up to 4.5 kW consumption of 15,000 families or a city reduce CO2 emissions by decreasing the of energy savings per region. of 60,000 people. need for travel and developing more intelligent home and office environments. Passive Cooling System In this regard, mobile communications This system decreases the need for active companies help optimize energy air conditioning by making use of internal consumption through an awareness of and external temperature differences. their social responsibilities. When the environmental temperature is above or below preset limits, this system At Turkcell, we have increased the adjusts the internal temperature of the number of our environmentally sensitive base station by turning on the fan or the base stations and improved their air conditioner according to the suitability utilization of alternative energy sources of the external temperature, thereby for the energy supply of base stations in optimizing energy consumption. some regions. We Made a Difference in 2008 The Super Tariff, launched in July 2008, With the "Load and Win" (Pomegranate) is our most popular tariff; campaign, launched in February, we through Economic Offers that enabled our individual pre-paid line users Eased our Customers' Lives With the Alo Packages, which are the to win bonus minutes each time they We provide customer satisfaction via our most economic way of talking for post- loaded pre-paid units. high value offers. In 2008, we conducted paid lines, and our new campaigns 800 campaigns to meet the needs and launched in July, all Turkcell subscribers We Presented Distinctive Services to usage habits of our individual and continued to call home or business our Subscribers through Turkcell corporate customers. numbers at very low prices; Platinum and Turkcell Gold Worlds In 2008, we continued to provide our As Turkey's leading communications and With the "Home Turkcell From Turkcell" customers with benefits via the highest technology company, we strive to provide campaign, launched in April, we brought quality communications services available our customers with the highest quality, a big technological advance to our at all locations. In February, we launched most widely available and most economic customers and enabled them to use their the unique Turkcell Gold and Turkcell mobile communications services. With cell phones from their homes at Platinum worlds to enable our customers the tariff alternatives we developed in reasonable prices; to experience the benefits of Turkcell to 2008, we continued to focus on customer the fullest and to provide better services satisfaction and to maintain our In April, we launched the "Bizbize to our customers through distinctive, leadership by presenting attractive offers Kampüs" tariff to students and young tailored solutions. to the largest subscriber network of any people aged under 25 and this tariff company. became our most popular tariff for young Turkcell Platinum offers customers price people; privileges, a private personal assistant, We structured our new tariff model as a mobile team support for cell phones, long-term investment to reinforce our In November, we launched a new distinctive brand advantages, special intimate and sincere brand image and campaign with the slogan "Hey Turkcell surprises and consultancy and the loyalty of our customers. In addition User, Which are Your Lucky Days?", which organization services related to social to reinforcing customer loyalty, we also allowed our subscribers to talk to millions life. For our Gold customers, in addition gained an increased number of new of other Turkcell owners for free for two to price and handset privileges, we offer customers while raising usage periods. days a week for a period of two months; exclusive customer services and a free assistant service.

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Advantageous Offers to our Corporate Subscribers Continued in 2008 We continued to make a difference in 2008 by presenting advantageous tariff options and solutions to our corporate subscribers to meet their various usage needs.

With the Şirketiçi 2400 option, launched in April, we provided our corporate subscribers with a very advantageous intra-company tariff;

With the İşteHerkes option, launched in August, we enabled companies on the İşTcell tariff to call all other companies using İşTcell tariff over intra-company rates;

In July, we doubled the number of minutes we offered to our subscribers using discounted intra-Turkcell packages, without changing the tariff price;

With the HerYöne minute packages, launched in May, we enabled our subscribers to connect through all other domestic operators and so helped our corporate subscribers to bring their costs down.

We Continued to Make a Difference with Value Added Services We continued to expand our range of value added services in line with our subscribers' expectations and needs. With products and services unique to Turkey and the world, we increased subscriber satisfaction and loyalty while the increased penetration of these products and services also raised our revenues. Since the day we were established, we have maintained our leadership of the sector in terms of service speed and flexibility.

WE CONTINUED TO MAKE A DIFFERENCE IN 2008 BY PRESENTING ADVANTAGEOUS TARIFF OPTIONS AND SOLUTIONS TO OUR CORPORATE SUBSCRIBERS TO MEET THEIR VARIOUS USAGE NEEDS. We Brought Added Value to The McDonald's Campaign Yields İşTcell Customers through Co-Branding TRY45.64 Million in Benefits Offers Our subscribers had 6.4 million free İşTcell Brand Collaborations Eased Throughout 2008, we provided around meals at 110 McDonald's restaurants in Lives of Our Individual and Corporate 6 million Turkcell users with a total of 21 cities in 2008. In all, 1.38 million people benefited from our McDonald's Subscribers and Provided Benefits of TRY120 million in benefits through our TRY21 Million co-branding offers for gnçtrkcll and İşTcell Campaign in 2008, making use of brand. TRY45.64 million in benefits.

Via gnçtrkcll, which, with 15 million Partnerships With 13 Brands in Clothing members, is Turkey's largest youth Campaign Generate TRY26 Million in organization, we provided widespread Benefits and long-lasting brand benefits through We collaborated with 13 brands under our collaboration with brands that are the gnçtrkcll Clothing Campaign in 2008. popular among young people. Benefits of TRY26 million were created at Aldo, Accessorize, Koton, Mavi Jeans, TRY18 Million Benefit via Cinema Collezione, Mudo, Collin's, Polo Garage, Campaign Hotiç, Lescon, Steve Madden, So Chic, The gnçtrkcll cinema campaign attracted and Seven Hill shops. Our campaign great attention and our subscribers used covered 860 shops in 60 cities and a total it to obtain 4.5 million cinema tickets in of 1 million purchases at discounted 2008. Of these, more than 2.25 million prices were made. tickets were given free of charge to gnçtrkcll members. More than 1 million subscribers made use of this campaign in 2008, visiting 186 cinemas in 51 cities, and they benefited to the tune of TRY18 million.

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Widest Distribution Network During the second quarter of 2008, We improve the Turkcell brand and its Turkcell Distribution Centers (TDC) were quality daily by focusing on our main through 1,087 Turkcell established to provide products, ease of business area via five value offers that Communication Centers and procurement, and to standardize we developed. In addition, we contribute 16,419 Points of Sale merchandising and display practices at increasingly to society as well as to the In line with our goal of delivering our Turkcell Sales Points (TSP) around the national economy. services promptly, we distribute our country. At the end of 2008, 57 TDCs were products all over Turkey via nine serving 16,419 TSPs operating under As part of this effort, we contribute to the distributors and one service provider. eight regional offices. Turkish economy and society under the concept "Turkcell Benefits Turkey the Our dealer network has become Turkey's We also serve our customers via 200 Most" and in this vein we have widened largest retail chain. It comprises 1,087 online sales channels . our current five value propositions in Turkcell Communication Centers in 81 January 2009 by adding this new concept cities. These centers sell only Turkcell Turkcell Benefits Turkey the Most as our sixth value proposition. We are products and operate under eight Since the day we were established, we proud to be Turkey's Turkcell and are regional offices. have been developing through our confidently moving towards becoming principle of offering the highest quality the world's Turkcell via our international With a team of 50, we serve our services and the latest technologies. projects. customers at three Turkcell Shops where customer satisfaction and experience is held at the forefront.

CO-BRANDING OFFERS YIELDED TRY120 MILLION IN BENEFITS TO SIX MILLION TURKCELL SUBSCRIBERS IN 2008.

“WE CONTINUE TO OFFER the most recent technologies in Turkey” WE OFFER TURKEY A WIDE PRODUCT RANGE UTILIZING THE NEWEST TECHNOLOGIES

With our well equipped, strong We also work on projects developing technological infrastructure, we are technologies to increase the effectiveness confidently developing new technologies. of communication in other sectors. We provide our customers with services that enrich and ease their lives by By selling the products and services we combining the latest technologies with have developed, we contribute to our the highest quality services. technology exports. We carry our R&D projects to strategic areas by being Our investments in 3G will increase our actively involved in international R&D subscribers' daily usage of value added platforms that shape the technological services. In addition to voice services, we future. plan to provide mobile services and bring As the intensity of our R&D efforts has the latest technologies to our customers. increased, we have identified a need to We will invest to this end. consolidate our operations into techno parks. As part of this effort, we accelerated We Bring the Most Recent Technology our R&D work in 2007 by establishing to Turkey Turkcell Technology Research and With our products and services such as Development Corporation in Turkey's one mobile signature, m-education, and only Technology Free-Zone. EvTurkcell, Flexible SIM, and e-Government, we make the lives of a With projects that involve applications large portion of the population easier such as telemetry, field automation, and and we develop products and the vehicle tracking that we developed in infrastructure that makes a difference, 2008, we helped our corporate customers particularly in service quality. to significantly decrease their costs. With the İşte KimKimdir service, launched in May, we are helping companies to improve their internal communications. Their employees can use this service to retrieve the telephone numbers of their colleagues by entering names or retrieve names by entering telephone numbers.

With the İştePosta mail service, launched in cooperation with Google in March 2008, we are supporting small and middle-sized companies in their efforts to obtain e-mail addresses that include their company names and web domains free of charge. Turkey is the World Leader in Mobile Signature Applications Turkcell Mobil İmza (Mobile Signature) is accepted as an Entrepreneurial Initiative by the World GSM Association (GSMA), an institution representing 850 operators and over 180 mobile communication companies. 28 29

WE MAKE IT EASIER FOR MILLIONS TO ENJOY THEIR LIVES AND DO BUSINESS WITH OUR PRODUCTS AND SERVICES THAT MAKE A DIFFERENCE.

For the first time ever, the GSMA has put Turkcell mobile subscribers can search We provided our customers with more a Turkish project on its “initiative” list. in Google, access Facebook and upload unique services by making Windows Live Eighteen operators from 15 countries are pictures to their profiles via MMS or Messenger available for the first time in following up on this solution under download a full-feature version of Yahoo Turkey through our collaboration with Turkey's leadership. With this project, a Go. They can make Garanti Bank account Microsoft. first in the world, we have again transactions, surf in Mynet, read demonstrated that we are moving newspapers, and send e-mails and, most confidently towards becoming a giant importantly, thanks to "turkcell-im technology and communication company. internet", they can experience the internet as they do on their computers, even New Collaborations for Mobile accessing popular websites with a single Internet click via the main page of turkcell-im. We reinforced the mobile internet world in 2008 by offering services in partnership with strong brands, including Google, Facebook, Yahoo, Microsoft and Mynet, Garanti, Ntvmsnbc, and Kariyer.net. We Continue to Invest with Confidence in Turkey The transition to 3G technology is vital for the development of new business opportunities and branches in the Turkish telecommunications sector and for investing in new technology and attracting foreign investors. 3G is Turkey's door to the future: it will be a driving force for national economic growth, accelerate our Company's growth, and bring other benefits such as local know-how accumulation and increased technology usage, exports and employment, and a skilled labor force. Together, these benefits will increase Turkey's international competitiveness and create significant opportunities for young entrepreneurs to access the global arena. It will open the door to many innovative services to meet important needs in Turkey, especially in health and education.

As a result of the 3G tender held on November 28, Turkcell generated Euro 358 million (excluding VAT) for Turkey in payment for its license. With 3G, Turkcell is investing in the future of Turkey.

We are a Pioneering Company in Turkey in the Field of Technology Turkish people love new technology and they embrace it quickly. The average age in our country is 28, so we have a very young population and it is open to innovations and new technology.

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With the Type-A license we obtained from 3G Application Underway with the 3G tender, we will continue our KKTCell leadership in terms of coverage and KKTCell, our wholly owned subsidiary in service quality with the 3G infrastructure the Turkish Republic of Northern Cyprus, and we will provide new products and received its 3G license in March 2008. services that will become an With 3G communication technology, indispensable part of our subscribers' KKTCell subscribers have gained access lives. to high-speed data transfer allowing mobile broadband, video calls, mobile The faster data transmission rate provided television and many other value added by 3G infrastructure, in addition to data services and the exclusivity of "connecting services, enables us to provide web-based to the world faster". During the first two services that enrich our subscribers' social weeks, 54,000 subscribers started lives. Fast mobile internet will create receiving 3G services from KKTCell and additional value not only for young people 10,000 data cards were sold. but also for professionals who want to work outside of their offices.

3G WILL ACCELERATE THE GROWTH OF THE NATIONAL ECONOMY THROUGH LOCAL KNOWLEDGE ACCUMULATION, TECHNOLOGY USAGE, EXPORTS, EMPLOYMENT AND A SKILLED WORKFORCE. AS A LEADER IN THE FIELD OF TECHNOLOGY IN TURKEY, WE HAVE PIONEERED THE INTRODUCTION OF 3G-ENABLED DEVICES INTO THE TURKISH MARKET.

Blackberry Bold and iPhone 3G By launching the 3G-enabled Blackberry Bold for the first in Turkey, we have enhanced our market leadership. With this initiative, Turkey became the third country in the world to launch this service. Also, in line with our focus of increasing our value added services revenues, we launched iPhone 3G to increase the penetration of smart phones.

Mobile internet has brought change to our lives. iPhone 3G carries the mobile internet and multimedia experience to the furthest point possible.

In addition to all the revolutionary features of iPhone, iPhone 3G contains iPhone 2.0 software. This software doubles the speed of 3G network access and the device incorporates a new generation GPS that enables its users to utilize location-based mobile services. We are delighted to introduce this prestigious device, which has attracted much attention in Turkey.

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We Continue to Offer the Most “İBBCepTrafik +”, developed using When business or home addresses are Microsoft software technologies on the defined in the system, the "Travel Planner" Innovative and Life Windows Mobile platform, has a feature can tell you the most suitable Facilitating Products "intelligent location detection" feature time to start your journey. that downloads the video captures to the Cooperation Between Istanbul user's cell phone from the closest traffic İBBCepTrafik+ is a world's first for its Metropolitan Municipality, Turkcell cams via base stations. "location-based service" feature. and İsbak is a First in the World With a superior touch-screen, the user ‹BBCepTrafik Sends Information on Traffic can easily get the desired information, Conditions in Istanbul to Mobile Phones zoom in and out of an Istanbul road map, In January, we presented Istanbul with and find a destination by clicking or the İBBCepTrafik service in cooperation sliding his/her finger on the screen. with Istanbul Metropolitan Municipality. Currently 400,000 people use the İBBCepTrafik application. This service has become one of the most widely used services in the world with a usage rate of over 15 million. e-Government Gateway Turkcell Mobile Education e-Government Gateway provides access We developed the Turkcell mobile to public services from a single address. education platform by considering the Started in December 2008, this educational needs and expectations of application allows Turkcell subscribers institutions. This new system offers to make use of e-government services educational material in the form of still categorized under the headings of "Our and moving images, audio, and texts for Citizens", "Business" and "State" and they employees who wish to receive self- can use their mobile signature in a safe development training. and economic way. e-Government services include online services such as Mobile Wallet obtaining social security institution (SSK) NFC technology enables users to use their service summaries, information about cell phones as a credit card, court cases, unemployment benefit transportation card or ID by allowing applications and follow-ups, Ministry of them to be read by an electronic reader. Education examination locations and Turkcell played a leading role in results, and various other public services. determining the standards for NFC technology by taking an active role in "Open or Lock" Your Door Using Your workshops organized by the GSMA. As a Cell Phone result, four out of 12 pilot applications Turkcell Mobile Signature Service started agreed for NFC technology were realized with banking applications and continued by us in partnership with Garanti Bank. with municipality services, e-commerce, and e-health applications. Now it can be Turkcell Mobile Payment used with the Mobile Door Security In August we launched the Mobile System developed in partnership with Payment System, a first in Turkey. This Kale Kilit. system enables Turkcell subscribers to make payments via a single text message The Mobile Door Security System works without a credit card or change. The most with a Turkcell SIM card placed in the appreciated version of this application is Kale X10 Intelligent Lock System the service that enabled users to pay their developed by Kale Kilit company. It parking lot fees to İsPark, an affiliate of enables you to open or lock your door Istanbul Metropolitan Municipality. via the Turkcell Mobile Signature system using your cell phone from any corner of Turkcell Health the world. www.saglik365.com The www.saglik365.com health portal, for which we are the main sponsor, was launched During CeBit 2008. The Sağlık365 portal enables the health institutions, application providers, and agencies to present multimedia content, Rural Tele-Medicine Project interactive applications and campaigns In 2008, we started the Rural Tele- to individuals and physicians. Users can Medicine Project in Adıyaman in access physicians via the web and mobile partnership with the Ministry of Health, channels. Sağlık365 provides individuals United Nations Development Project, Intel with comprehensive medical information, and the Turkish Association of Family daily health news, and interactive Physicians. As part of this project, family applications and it communicates health physicians and nurses in Çakırhöyük and awareness campaigns and social Ahmetkoca villages of Adıyaman carried responsibility projects to a large audience. out assessments using mobile EKG and diabetes devices and shared the results of patients at risk with expert physicians.

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These Awards Underlined Our Successes. Tone and Win Service "Tone and Win" service became the 2009 champion in the Best Mobile Advertisement Service category of the GSMA Awards, the Oscar of the mobile communication world. It operates on the "RingBackTone" platform and enables users to win units/minutes as they listen to advertisements. With 7.5 million members, the Turkcell Mobile Marketing Department operates on one of Europe's largest authorized databases and, in 2008, the department created 650 projects and worked in cooperation with 276 brands in 13 sectors. Turkcell Mobile Marketing's services and campaigns reached over 19 million customers in 2008. Web As one of the top companies for investment in web services, we used new technologies and applications on the digital platform to the fullest extent possible in 2008. With micro sites with video production, demos that give information about our services, gadgets and interactive media usage, we continued to create innovative technologies and rolled out 17 new micro sites and demos. We changed the whole design of gnçtrkcll, the youth club of Turkey, and created a web platform full of music, games and cinema content for the young people. In the games section, we provided reviews of PC and mobile games, a feature that made www.gnctrkcll.com unique in Turkey. In 2008, we gained 14 awards for Turkcell websites and online advertising campaigns. Our official web site, www.turkcell.com.tr, was nominated Turkey's best corporate website in a web rankings survey conducted by the Swedish company Hallvarsson & Hallvarsson.

TURKCELL WEBSITE AND ONLINE ADVERTISEMENT CAMPAIGNS WON 14 AWARDS IN 2008. “WE CARRY OUT PROJECTS THAT ADD VALUE TO SOCIETY, reflecting our commitment to social responsibility”

AS TURKEY'S TURKCELL, WE CONTRIBUTE TO INDIVIDUAL AND SOCIAL DEVELOPMENT IN THE COUNTRY At Turkcell, we believe that any support given to an individual and society is a contribution to Turkey as a whole. As Turkey's Turkcell, we support economic, environmental, cultural and social development for a sustainable world and we do this in partnership with our employees, their families and our community, to improve the quality of life. With our awareness of social responsibility, we continue to carry out projects that add value to society while reaching a wide audience.

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AS PART OF THE "BRIDGE OF HEARTS" PROJECT, 100,000 STUDENTS TRAVELED FROM ONE END OF TURKEY TO THE OTHER, MAKING NEW FRIENDS ALONG THE WAY.

Building Bridges Between The children were students aged 13 to 17 from grades seven through ten. They 100,000 Hearts joined cultural activities organized in Bridge of Hearts is a project carried out cities chosen by the Ministry of Education in partnership with the Ministry of and established long lasting friendships. Education. The goal of the project is to During the journey, each student was enable 100,000 young people from 81 hosted by a family who had a child of the Turkish cities to learn more about their same age as the guest student, allowing country, to visit places they haven't seen the host children to guide their guests before, and to discover different cultures. around the city. As part of this project, the students traveled from one end of Turkey to the other and made new friends. Runners to the Future We expanded the project in 2007 by We also expanded the coverage of our increasing the number of scholarships Sports Schools For Free project, which awarded annually to 10,000. Since 2000, we have supported since 2000. We also 20,000 students have received Turkcell changed its name to “Runners to the scholarships under this project. 7,420 Future”. In April 2007, we included 38 Snowdrops graduated from high school, additional schools in this project. With 1,902 passed the University Entrance this recent expansion, we annually Examination, and 363 graduated from provide about 15,000 children with the university and started their careers. chance to participate in sports activities. The Leadership Program, a support Kardelenler (Snowdrops) process for the Kardelen Project, aims to Women make up 75% of Turkey's contribute to the development of the illiterate population which means that social and behavioral skills of Snowdrops two in ten women in Turkey are illiterate. who have a chance to continue their With this in mind, the Kardelen Project education at university. This Program was publicly announced on 28 August was created in 2004 in parallel with the 2000 at a press conference organized by Kardelen Project and it has now become the Ministry of Family Affairs and Women, a part of it. The program started with 46 the Society for Supporting Modern Life, participants in its first year and this year and Turkcell. This project provided it expanded further to reach 160 girls. scholarships around Turkey for 5,000 girls who showed the ambition and determination to complete their 40 education. 41

AS PART OF THE KARDELEN PROJECT, WHICH BEGAN IN 2000, WE HAVE PROVIDED SCHOLARSHIPS TO 20,000 GIRLS WHO HAVE SHOWN THE AMBITION AND DETERMINATION TO STUDY. We Encourage Turkish Sports Our goal is to ensure the continuation of Through the support we gave to sports, the successful development of Turkish Turkcell reinforced our faith in Turkish football and to increase competition by athletes and teams and the values sport contributing to the transformation of the represents. By supporting sports activities country's four most popular teams into over the years, we have supported "the Big Four". personal development and contributed to the overall welfare of society. With the In addition to our sponsorship of the 14 goal of supporting the development of Anatolian clubs, we will provide financial Turkish sports and carrying success into support worth US$500,000 to the Turkcell the future, we reward success with Super League champion for the 2008- sponsorship. We not only sponsor teams 2009 season, US$300,000 to the second- but we also develop projects and place team, and US$200,000 to the third- contribute to the development of the place finisher or the team that participates sports economy. in the Union of European Football Associations (UEFA) Cup. We will also give US$100,000 each to the Turkish team Turkcell Continues to Support that ends up among the 32 qualifying Turkish Football teams after the group matches for the In addition to sponsoring the national UEFA Cup and the Turkish team that football team, Turkcell in 2005 signed a maintains its position in the Champions five-year agreement to become the main League. Additionally, we will grant sponsor of the Turkish professional US$150,000 to the Association of Football football league. After a signing ceremony Clubs to support its contribution to Turkish held on August 11, 2005, the name of football. the league was changed to the Turkcell Super League. Turkcell also continues to be the main sponsor of the National Basketball Team A. Since 2003, we have been successfully supporting Anatolian football teams and we are, as of the 2008-2009 season, the sponsor of 14 football clubs. Turkcell is the main sponsor of Ankaragücü, Ankaraspor, Bursaspor, Denizlispor, Gaziantepspor, Gençlerbirliği, Hacettepespor, Kayserispor, Konyaspor, and Sivasspor, and a sponsor of Antalyaspor, Eskişehirspor, İstanbul Büyükşehir Belediyespor, and Kocaelispor.

WE CONTINUE TO SUPPORT TURKISH SPORTS BY REWARDING ACHIEVEMENT WITH SPONSORSHIPS IN ORDER TO CONTRIBUTE TO THE FUTURE DEVELOPMENT AND SUCCESS OF TURKISH SPORTS.

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Turkcell Volunteers Support the Needy in Anatolia Volunteer groups made up of Turkcell employees implement various social- responsibility projects in cooperation with non-governmental organizations. Projects completed to date include the restoration of the Diyarbakır 75. Year Primary Boarding School, the establishment of a call center for disabled, the renovation of Yakacık Kindergarten, and of programs entitled "Will You Share Your Toys?", "Let's Keep Yukarı Tandır Village Warm", "Books to the Box and Kids to School", "Let's Make Ayvalık Greener", "Let's Keep Batman Warm", "A Sweet Peace of Mind," and "My First Vacation". In 2007, Turkcell volunteers were honored with the Excellence in Public Relations-Golden Globe Award by the International Public Relations Association (IPRA).

Turkcell volunteers who established the Life Forest Association in 2008 will play a pioneering role in developing social responsibility awareness among our employees by supporting the needy all over Anatolia. Turkcell Social Activity Group The Turkcell Social Activity Group organizes tours, tournaments in Turkey and abroad, kids' club activities, training sessions, contests, and parties to enrich the social lives of Turkcell employees. More than 23,000 employees and their relatives participated in 365 social activities organized in 2008. Turkcell Supports Social, We also contribute to the career Turkcell Encourages development of sports columnists who Cultural, and Sports Activities work in Anatolia by organizing in Tomorrow's Leaders In addition to the contribution the partnership with the Turkish Sports Since the day Turkcell was established, company makes to the national economy, Columnists' Association (TSYD) the TSYD- the company has abided by a principle Turkcell adds value to Turkish society by Turkcell Sports Press Seminars all over of investing in people and we continue supporting social projects in a wide range the country. More than 1,000 sports this work today under the slogan "People of fields, including education, technology, columnists and 2,500 university students First in a Pioneering Turkcell." We carry sports, arts and culture. With these have participated in these seminars, out various projects in partnership with activities, we aim to contribute to the which have been held in 17 cities over universities to help develop qualified development of qualified human the last two years. workers for the communication and resources. technology sectors. Our Gnçtrkcll For the past nine years, Turkcell has Graduate Scholarship Program, which In June 2007, Turkcell signed a new, supported the International Istanbul Jazz we initiated in partnership with the 15-year sponsorship agreement with the Festival organized by the Istanbul Turkish IT Society to develop a well- Turkish Football Federation under which Foundation for Culture and Arts (İKSV), qualified labor source for the industry the Riva facilities were renamed the a non-profit organization; and, for the and create new opportunities for the National Teams' Turkcell Facilities. These past six years, we have also supported young generation, provides scholarships facilities host the Turkish national team İKSV's International Istanbul Film Festival. to 50 graduate students every year. Our and young Turkish teams, as well as Since 2005, we have also been the goal with this scholarship program is to football teams from foreign sports communication sponsor of İKSV. discover promising young people and federations, and provide them with support their development in this sector. camping and training opportunities. Another example of our projects in the area of arts and culture is our support, in cooperation with Ericsson Turkey, for the restoration of the Bodrum Antique Theater, which has been hosting a series of concerts titled "Starry Bodrum Nights", as well as the restoration of the ancient Myndos Door and the old Ottoman shipyard in the same area.

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IN 2008, WE CONTINUED COMMUNICATING OUR CORPORATE CULTURE AND VALUES, WHICH GUIDE ALL OUR DECISIONS AND ACTIONS.

As part of our Gnçtrkcll Graduate Human Resources After defining our corporate values, we Scholarship Program, we contribute to determined actions that would help us academic research projects at universities put those values into practice through a by providing scholarships to graduate Our Values and "Turkcell Is Me" process that included conducting In 2008, we continued communication students in science and social science employee surveys, face-to-face activities to promote awareness of programs at Anadolu University, Atatürk interviews, and focus groups. Our goal decisions and actions that highlight our University, Boğaziçi University, Çukurova is to ensure our values guide the way values and corporate culture and we were University, Dokuz Eylül University, Ege our employees do business and that these excited to spread the message "Turkcell University, Gaziantep University, values are adopted by our entire staff as Is Me" through various platforms. We see Hacettepe University, Istanbul Technical an indispensable part of our business our values as the guiding force behind University, Karadeniz Technical University, life. Today, employees at all levels of the unique plans of action that will increase Kocaeli University, Marmara University, company take part in this process by and expand the success of Turkcell Group. Middle East Technical University, and declaring "Turkcell Is Me" and by The critical and strategic agenda of our Yıldız Technical University. We plan to supporting the survival of a values- corporate culture program influences all expand the program in the coming years oriented culture through contributing of our employees. to cover additional universities as well. ideas that improve and develop the company and its business. Our Employees: Our Most In 2008, in line with our new projects Our Personal Retirement Plan covers all and our corporate growth, Turkcell employees and gives them an opportunity Valuable Asset recruited 535 new employees. Due to the to invest in their futures. We administer Guided by our philosophy of "People First opportunities we offer, 269 employees this program by means of the mutual- in a Pioneering Turkcell," we keep rotated into new jobs, assuming new benefit model. employee satisfaction and motivation at roles and responsibilities that support the top of our priorities. We closely follow their career development. The employee In addition to regular paid vacation, all new technologies that will affect our turnover rate at our company in 2008 employees receive one additional day off company, both in Turkey and around the was 4.6%. for their birthdays. We also provide world, and strive to play a pioneering kindergarten support for female role in developing applications that will Under our strategy of providing employees with children between the set international standards. By creating employees with additional benefits that ages of two and five. a flexible, sensitive, and democratic enhance their professional and personal business environment that supports lives, we implemented a "flexible perk change, we invest in adding value to our program" that allows employees to create organization in order to motivate our their own benefit packages by selecting employees. We define our work their preferred options from an array of environment as a "living environment" job perks. and implement all of our projects with this in mind.

46 There are no employee or labor unions active at Turkcell, nor are there collective-bargaining agreements in place at our company. 47

2007 2008 Employee Demographics Male 1,854 1,798 Female 1,021 1,011 Average age 32 33

Employee Education Levels 2007 2008 Post-graduate Degree 484 500 University Degree 2,066 2,025 High school Degree 316 277 Middle School Graduate 9 7 Knowing one Foreign Language 2,064 1,910 Knowing Two or More Foreign Languages 799 855

We Develop Our Employees, We provided our global information and field personnel with a new vision for Our Environment, and Our customer orientation and experience, Society Through Our Training with the goal of improving customer Programs loyalty and winning new customers by Turkcell systematically monitors the increasing employee knowledge of and performance and potential of its staff, skills in Turkcell customer strategies. As rewarding employees for good part of this effort, we provided 1,255,014 performance and developing human hours of training to 146,297 people, resources practices that generate our including field personnel, members of workforce's pride in making a difference. sales and marketing teams, and call center employees. These training events In 2008, we provided a total of 1,480,624 focused on development and occupational hours of training, reaching 189,294 expertise in a variety of areas, including people in the Turkcell Group environment. common marketing culture, common service and sales culture, customer experience, customer relationship management, effective sales management, mobile number portability, and product, service, and tariff awareness.

IN 2008, WE PROVIDED 1,480,624 HOURS OF TRAINING TO 189,294 PEOPLE IN THE TURKCELL GROUP ECOSYSTEM. OUR HUMAN-RESOURCES PRACTICES MAKE A DIFFERENCE AND MAKE US TURKEY'S "MOST ADMIRED" COMPANY AND "MOST VALUABLE BRAND".

Our goal is to cultivate future business leaders who will make a difference, and we do this under one roof with the Turkcell Group Leadership Academy by gathering a full spectrum of management and skills-development programs aimed at enhancing corporate culture and values and creating a common management culture.

We reached 5,000 students through the pioneering projects that Turkcell Academy initiated to promote university-industry cooperation, develop highly qualified human resources for the sector, and create employment in the industry. In 2008, as a result of a partnership between Turkcell and Harvard University's John F. Kennedy School of Government, we played a key role in adding value to both the communications sector and the country as a whole through academic studies that support the Technology and Innovation in Turkey project.

In 2008, we initiated a professional development program to identify successful and promising students at all universities in Turkey and to prepare them for business life at Turkcell Group companies and throughout the industry. Fifty-six selected students took part in 70 hours of training programs at Turkcell Academy, and 23 of those who successfully completed the coursework joined the Turkcell family.

The Turkcell Academy, the strategic development center of Turkcell Group, was honored as an Exemplary Project in the Launching Category for the successful launch of a new corporate university initiative at the 9th Annual Corporate University Xchange Excellence Awards for Excellence and Innovation in Corporate Learning, which received applications from 150 companies in different sectors and countries. 48 49

We Encourage Innovation Turkcell is the Most Admired As we strive to continue being a winning At Turkcell, we use a process called "I Company and Most Valuable Brand team, we will keep shaping and Have a Great Idea" that works via the in Turkey implementing our human resources Innovation Office and enables our Our priority is to work with the best people strategies in line with our faith in the employees to communicate original ideas and retain the best employees. With our importance of our corporate culture and that add value to the company to the human-resources programs and policies, the employees and leaders who help this relevant officials and. To date, we have we develop loyal employees who achieve culture thrive. In 2008, we updated our honored 453 Turkcell employees for their successful results. Our employee business model in line with our values innovative ideas. satisfaction rate was 86% in 2008, and reinforced our leadership model significantly above the sector average. along the themes "I am the leader of my business," "I am the leader of my team," and "I am my own leader."

“BY REMOVING BARRIERS TO COMMUNICATION, we are now the world’s Turkcell too” BY REMOVING BARRIERS TO COMMUNICATION, WE ARE NOW THE WORLD'S TURKCELL TOO

As modern technology continues to break Being listed on the NYSE has brought down barriers to communication, Turkcell Turkcell many advantages, including a is reaching beyond its boundaries and global investor base, international opening up to new markets and popularity, and global-scale management investments abroad. Our international standards. subsidiaries have played a significant role in our recent successes. As the As the World's Turkcell, we are proud to leading communication and technology see our services receive various awards company in Turkey, our goal is to go in many categories from various further every year and to turn Turkcell international organizations. into the one of the most well-known companies in the world. The Awards We Received in The First and Only Turkish 2008 Reinforced Our Success Company Listed on the NYSE in the Global Arena Our company's stocks simultaneously opened for trading on the Istanbul Stock JANUARY Exchange (ISE) and the New York Stock Exchange (NYSE), on 11 July 2000. The 1. Capital Magazine - Award for "The initial percentage of publicly traded Leaders' Favorite Company". shares was 10.5%; over time, as a result of stock sales by shareholders, this increased 2. Yıldız Technical University - named to 33.48%. "The Most Admired Company" and the company with the "Best Social Turkcell is the first and only Turkish Responsibility" and received an "Honors company listed on the NYSE. As a publicly Award". traded company whose shares are traded in both the US and Turkish stock markets, 3. League of American Communications the company has developed a corporate- Professionals (LACP) - Magellan Awards governance model in line with the Silver Medal. provisions set out by the capital markets of both countries. 4. Cubic Awards - "Best New Corporate University" (for Turkcell Academy).

FEBRUARY 5. Turkish Patent Institute 2007 Patent Awards - "Turkish Golden Patent Award".

6. Hürriyet-Kelebek Kırmızı Awards - received an award for an advertisement related to the National Football 7. 9th Annual Corporate University Xchange Contest-"Exemplary Project" in the New Corporate University, Successful Launch category (for Turkcell Academy).

MARCH 8. Galatasaray University-"The Best Company" award for 2007 in the customer relationship management category.

9. Capital Magazine survey-Turkcell was selected as "The Leader in Social Responsibility" for its support for sports and its social-responsibility projects. AS THE FIRST AND ONLY TURKISH COMPANY LISTED ON THE NYSE AND WITH DUAL LISTING, WE ARE A LEADER IN ADOPTING INTERNATIONAL STANDARDS FOR TRANSPARENCY, DISCIPLINE, MANAGEMENT QUALITY AND CORPORATE GOVERNANCE PRACTICES.

APRIL JULY 18. European Sponsorship Association 10. Turkcell-Capital-Adecco "Turkey's 14. Superbrands 2008 Award. (ESA) - top award for "Sponsorship Most Admired Companies" awards Projects that Benefit Society" (for the ceremony - awarded "Turkey's Most SEPTEMBER Kardelenler Project). Admired Company" and "The Most 15. European Call Center Awards - "Best Admired Company in the Telecom Sector". Customer Services" champion. 19. TESİD 2008 Innovation and Creativity Awards - "Creative Idea Award" in the 11. TÜHİD 7th Golden Compass Awards NOVEMBER "Big Company" category (for Turkcell 2008 - received an e-communications 16. Turkish Society for Personnel Teknoloji Araştırma ve Geliştirme A.Ş.'s award for the Turkcell-im Benim ("My Management - "Performance International Roaming Prevention Turkcell") project. Management" award. Manager).

MAY 17. 2008 HP Software Awards - DECEMBER 12. 5-E Biko - recognized as the company "Excellence in the Europe, Middle East, 20. ContactCenterWorld.com 2008 World that gives the best IT support. and Africa (EMEA) Region" award. Awards - Turkcell Global Bilgi won "Best Technological Innovation" and took third 13. GSMA Awards - "Golden Spider Best place in the "Best Customer Service" Web Site Award" and finalist in three category. categories. Turkcell's TonlaKazan A Finalist in Three Different The Winner of the IPRA 2008 (Win&Tone) Selected as the Categories at the GSMA Golden Globe Award In 2007, the Turkcell Investor Relations World's Best Mobile Awards Department initiated a project entitled Advertisement Service At the 2008 Global Mobile Awards, "Converting Company Performance into Our TonlaKazan project was chosen as organized this year for the 13th time by Value" with the goal of carrying out the "Best Mobile Advertisement Service" the GSM Association (GSMA), Turkcell investor relations activities that would at the GSMA Awards Contest, considered was a finalist in three categories. The have a positive impact on stock the Oscars of the mobile communication GSMA is an organization representing performance. This effort won the 2008 world. the global mobile-communications sector Golden Globe Award in the financial in commercial and strategic activities. Its services and investor relations category The GSMA Awards, organized by one of membership comprises 700 mobile- from the International Public Relations the most prestigious institutions in the communication operators from 218 Association (IPRA), the world's leading PR organization. The IPRA's 2008 Golden communication sector, were distributed countries. Globe Award competition drew for the 14th time this year. Turkcell was participation from 404 companies from a finalist in the "Mobile Entertainment" Our ad campaign entitled "The Chicken that Lays Tariffs," which we prepared to 52 countries and Turkcell was selected category with its TonlaKazan and Mobiwar from among 117 finalists in 28 categories. products and won the top award for better communicate our tariff structure and its advantages to potential customers, TonlaKazan, a first in the world of In 2007, company value increased by advertising. was a finalist in the "Best TV and Radio 85% based on the Turkish Lira, jumping Commercial" category, while the from TRY15 billion to TRY28 billion, a Gnçtrkcll Selected as the "Consumer Loan-SMS Campaign" was a result that placed Turkcell as the most finalist in the "Best Mobile Commercial" valuable company in Turkey in terms of World's Best Brand category. Our "Turkcell-im Benim" (My market capitalization. The secret of this With our youth club, gnçtrkcll, we won Turkcell) service, launched on 22 May success lies in our strong management, the top award in the "Best Brand" 2007, was a finalist in the "Best Mobile which supports investor relations category from the jury of the World Social Sharing Service" category. activities, the capital markets board Communication Awards (WCA), one of regulators in Turkey and the United the most prestigious organizations in its States; the performance of the Turkcell field. Investor Relations team; and the business ethics and discipline demonstrated by all employees of our company. 55

We Surpassed World Giants on the "Infotech 100" List Turkcell moved up to 25th place on the "BusinessWeek Infotech 100" list, which ranks publicly traded communication and technology companies according to the financial data provided by Standard & Poor's. In 2008, Turkcell was ranked above many of the world's leading technology companies, including Intel, Cisco, HP, LG, Samsung, and SAP. On the same list, Turkcell was ranked 24th in terms of the return on investment provided to shareholders, which it is increasing annually by 34%.

This is the fifth time in a row that Turkcell has appeared on the BusinessWeek Infotech 100, which in 2008 contained only 19 communication and technology companies from Europe, the Middle East, and Africa. Among those companies, Turkcell ranked 25th on the list.

TURKCELL WAS ONE OF JUST 19 COMMUNICATION AND TECHNOLOGY COMPANIES FROM EUROPE, THE MIDDLE EAST, AND AFRICA TO MAKE THE BUSINESSWEEK INFOTECH 100 LIST AND THE ONLY ONE FROM TURKEY. WE SERVE 62 MILLION SUBSCRIBERS IN 8 COUNTRIES WITH THE WORLD BRAND WE'VE CREATED OVER THE PAST 15 YEARS.

Honored in Three Categories We place high value on the importance of online communication with regard to at the International Business customer and investor relations and Awards continue to develop our applications in More than 1,700 companies from various this area. industries apply each year to the International Business Awards competition, one of the most prestigious We Assess Investment in the business world. In 2008, Turkcell Opportunities in International won three awards-known as "Stevie Markets Awards"-in the e-commerce, investor In addition to our investments in Turkey relations, and press relations categories in 2008, Turkcell continued to support for our web applications for "The Chicken that Lays Tariffs" ad campaign, the its international subsidiaries and utilize Turkcell Investor Relations Center, and new investment opportunities in line with the Turkcell Press Room. its strategy of global expansion.

Among the world's communication and technology companies, Turkcell is one of the most effective users of the Web. Our success in this area is demonstrated by the awards we have won from globally prestigious organizations such as the International Business Awards. 56 57

Turkcell currently operates in eight Of the 220 countries that are members Turkcell has also increased its number countries, including Turkey, serving 62 of the GSMA, 92% are now covered by of SMS agreements to 743, and made million subscribers and reaching a market Turkcell's international network. In terms MMS agreements with 89 operators in of 160 million people. of the CAMEL international-roaming 58 countries, enabling Turkcell standard for pre-paid line owner services, subscribers to send and receive messages Turkcell's infrastructure development and we provide global coverage to our to and from subscribers to most of the acquisition potential, along with its customers via 222 operators in 124 world's foreign cellular operators. marketing strategies and the value-added countries-making us a world leader in services it offers its customers, give the this regard as well. Similarly, Turkcell Company an important advantage in its also serves visitors to Turkey using mobile operations in international markets. phones with international operators.

We Cover 92% of the World ...and in Terms of Data Communication in Terms of Voice In addition to providing the most Communication... widespread and highest-quality cellular Since July 1994, Turkcell has been signing service in Turkey, Turkcell is also among international roaming agreements with the top global operators in terms of data global operators to enable pre-paid and communication, thanks to the general post-paid subscribers to use their mobile packet radio service (GPRS) coverage we phones more easily while they are have achieved abroad. We provide the abroad, and our subscribers can now highest-quality data service to our global readily contact most parts of the world. customers via 338 operators in 144 With regard to our international roaming countries and continue to expand the agreements, Turkcell is among the global reach of our international roaming giants; with the agreements we signed services via new investments. in 2008, our number of agreements with foreign operators reached 609, while the number of countries served exceeded 200. INTERNATIONAL CREDIT RATINGS

THE INTERNATIONAL RATING AGENCY STANDARD & POOR'S UPGRADED TURKCELL'S FOREIGN CURRENCY RATING FROM 'BB' TO 'BB+' AND ANNOUNCED ITS DOMESTIC CURRENCY RATING AS 'BB+.' TURKCELL NOW HAS THE HIGHEST S&P CREDIT RATING OF ANY COMPANY IN TURKEY.

TURKCELL’S INTERNATIONAL CREDIT RATINGS AS AT APRIL 10, 2009

Moody's On February 5, 2008, the international rating company Moody's affirmed Local currency rating: Ba2 Turkcell's foreign and domestic currency ratings of "Ba2" and changed the company's outlook from stable to positive, a revision that reflects Foreign currency rating: Ba2 Turkcell's robust operational and financial performance in 2007, its Outlook: Positive profitability, its sustainable cash-flow-generation capacity, and the positive momentum of its Ukrainian business interests.

FitchRatings On June 24,2008, the international rating company FitchRatings ("Fitch") Local currency rating: BBB- affirmed Turkcell's local currency rating as "BBB-" and its foreign currency credit rating as "BB," in parallel to Fitch's rating for Turkey, Foreign currency rating: BB which serves as the ceiling for a rating of any individual Turkish company. Outlook: Stable The outlook for both ratings is stable. Fitch indicated that Turkcell's credit rating reflects the company's strong operational performance despite increasing competition in 2007, its strong cash-generation potential in 2006 and 2007, and its positive credit profile.

Standard & Poor's International rating agency Standard & Poor's upgraded Turkcell's Local currency rating: BB+ foreign currency rating from "BB" to "BB+" and announced its local currency rating as "BB+." The rating agency based its upgrade on Foreign currency rating: BB+ Turkcell's continued strong performance in the dynamic and increasingly Outlook: Positive mature Turkish market, its sustainable cash-flow generation and low financial leverage, and its high cash balance, a portion of which is retained as foreign currency.

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THE SUBSIDIARIES THAT MAKE US THE WORLD'S TURKCELL

TURKCELL

TURKCELL FINANCELL TURKTELL TURKTELL A-TEL KKTCELL GLOBAL BİLGİ FİNTUR B.V. BİLİŞİM ULUSLARARASI 50% 100% 100% 41.45% 100% 100% 100%

EUROASIA BELTEL KCELL GEOCELL INTELTEK TELLCOM SUPERONLINE TELECOM TELEKOMÜNİKASYON 51% 98% 55% 100% 100% HOLDING B.V. HİZMETLERİ A.Ş. 55% 100%

TURKCELL AZERCELL MOLDCELL TURKKULE LLC ASTELIT BELARUSSIAN TEKNOLOJİ 51% 100% 100% 100% TELECOM 100% 80% Astelit began its operations in a highly competitive environment where two strong operators had equal market shares. By the end of 2008, the company's market share had reached approximately 20% and its number of subscribers had increased by 27.3% to 11.2 million. Astelit Ukraine: LLC Astelit-life:) continued to post strong operational By the beginning of February 2005, figures. In 2008, its 3 month active Turkcell’s 55% indirect subsidiary Astelit subscriber base increased by 32% and had launched its GSM operations in its 3 month active average revenue per Ukraine under the "life:)" brand name. user (ARPU) from this base increased by Of the company's shares, 45% belong to 17.3%. the System Capital Management Group. Astelit covers 93.85% of Ukraine's Due to the negative economic and political population and 84.4% of the country's conditions in Ukraine, the national territory. In 2008, the company obtained currency, the Hryvnia, lost 52% of its positive results, increasing revenues 71% value against the US dollar in 2008. over the previous year to reach US$439 Despite the negative impact of this million. Astelit also reached a positive devaluation, Astelit posted encouraging EBITDA during the entire year for the first financial and operational performance time in 2008. in 2008, and supported it with the positive EBITDA it achieved for the year.

Summary Data for Astelit 2007 2008 Change (%)

Number of Subscribers (million) Total 8.8 11.2 27.3% Active (3 months) [1] 5.4 7.1 31.5%

Average Revenue per User (ARPU) (US$) Total 3.2 3.6 12.5% Active (3 months) 5.2 6.1 17.3%

Revenue (million US$) 255.9 438.7 71.4% EBITDA [2] (20.5) 32.3 (257.6%) Net Loss (167.7) (326.5) 94.7% Capex (million US$) 206.0 155.8 (24.4%)

[1] Active subscribers are those who, in the past three months, made a transaction that brought revenue into the company. [2] EBITDA is a non-GAAP financial measure.

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Belarus: BeST As part of its efforts to capitalize on the emerging investment potential in neighboring countries, Turkcell purchased 80% of the shares in Belarusian Telecommunications Network (BeST) for $500 million from the State Assets Committee of the Republic of Belarus. The total amount will be paid in three installments: The first payment of $300 million was made on 26 August 2008 and the remaining two installments of $100 million each will be made on 31 December 2009 and 31 December 2010. When BeST announces a net profit for the entire year for the first time, an additional payment of $100 million will be made.

The acquisition of BeST is an important opportunity for Turkcell to enter a market with great growth potential. With its young and well-educated population, and its ever-expanding economy, Belarus is an attractive market in the region where Turkcell plans to grow. We will use our experience working in the Ukrainian and Commonwealth of Independent States markets to effectively differentiate BeST, currently the third-largest operator in Belarus, in a very short time. With a population of 10 million as of the end of 2008, Belarus is a very attractive market compared with other states with similar education and employment levels. With a line penetration level of 84% by the end of 2008, Belarus exhibits reasonable growth potential in this sector.

WITH ITS PROMISING FINANCIAL AND OPERATIONAL PERFORMANCE IN 2008, ASTELIT ACHIEVED A POSITIVE EBITDA FOR THE FIRST TIME. Fintur Turkcell has a 41.45% stake in Fintur Holdings BV (Fintur), which currently holds its entire interest in GSM investments in still-growing markets with relatively low penetration rates, including Kazakhstan, Moldova, Azerbaijan and Azerbaijan: Azercell Georgia: Geocell Georgia. Founded in 1996 as a joint venture of The 2001 merger of Georgia's two GSM Azertel and the Ministry of operators, Geocell and GT Mobile, These four operators, operating amidst Telecommunications of Azerbaijan, enabled Geocell to expand its coverage macroeconomic challenges and intense Azercell is the leader in the Azerbaijan area and capacity and launch pre-paid competition, acquired two million telecommunications market. Fintur owns services. As of 31 December 2008, Fintur subscribers in 2008 and increased their approximately 51% of Azercell through held a 97.5% interest in Geocell, which subscriber base to 12.8 million. Thanks direct and indirect holdings. Its superior had 1.6 million subscribers. to its growing subscriber base, Fintur's service quality, reasonable rates, pre- revenues increased by 23%, reaching paid services, and the absence of a strong US$1,823.1 million. Fintur's contribution fixed-line infrastructure in the country to Turkcell's net profit in 2008 was have contributed to Azercell's continued US$151.1 million. Last year, Fintur growth. As of the end of 2008, the distributed dividends for the first time, company had 3.5 million subscribers. paying a total of US$83 million to Turkcell. Azercell owns 51% of Azeronline, the leading Internet service provider (ISP) in Azerbaijan.

WITH 12.8 MILLION SUBSCRIBERS IN 2008, FINTUR OPERATES IN MARKETS WITH HIGH GROWTH POTENTIAL. Kazakhstan: K'Cell Moldova: MoldCell Turkish Republic of Northern K'Cell is a partnership between Fintur Moldcell, one of the three GSM operators Cyprus: KKTCell and Kazaktelekom, the national telecom in Moldova, launched operations in 2000. Established in 1999, KKTCell is a operator of Kazakhstan. K'Cell Wholly owned by Fintur, Moldcell had a subsidiary of Turkcell that operates under commenced providing services in 1999 subscriber base of 0.6 million as of a revenue-sharing agreement with the after obtaining a renewable 15-year December 31, 2008. government of the Turkish Republic of license for standard GSM network Northern Cyprus (TRNC) until the end of services. Fintur owns a 51% interest in July 2007. In 2008, KKTCell signed a K'Cell, one of the largest GSM operators replacement 18-year license revenue- in Central Asia and the leader in sharing agreement for the installation Kazakhstan in terms of subscriber base, and operation of a digital, cellular, or growth rate, amount of investments, and mobile telecommunication system with range of services. As of December 31, the TRNC Ministry of Communications 2008, K'Cell had 7.1 million subscribers. and Works. By the end of 2008, KKTCell had 324,000 subscribers. In an exciting development last year, KKTCell introduced 3G technology to Cyprus and began offering 3G services and products to the people of Northern Cyprus. Domestic Investments

İnteltek-İddaa Tellcom İnteltek, under the authority of the Turkish Tellcom Communication Services Corp, Youth and Sports Directorate and the a company within the Turkcell Group, Spor Toto Organization, provides the was founded in June 2004. Tellcom's infrastructure for the central betting driving business strategy is to become a system used for Spor Toto and İddaa complete solution and service provider games and is also responsible for risk for its corporate and individual customers. management. Turktell owns 55% of the Following its establishment, Tellcom company; Intralot, 20%; and Intralot obtained the license for long distance Iberia, 25%. telephone services (LDTS), which allows it to provide long-distance call origination Founded on April 6, 2001, İnteltek gained and termination for individual and the sole legal rights to football betting in corporate customers as well as wholesale Turkey on behalf of Spor Toto with the voice-carrying services. The company launch of İddaa in April 2004. On August received its Internet service provider 28, 2008, with its best offer of 1.4%, the license in February 2005 and was granted company won the tender that allowed a landline data transmission license in private companies to organize constant June 2005, and an infrastructure probability and paramutuel betting games operating license in March 2006. Tellcom based on sports competitions that are won a major infrastructure tender originally organized by Spor Toto. By initiated by the Turkish Electricity signing a contract with Spor Toto on Transmission Corporation (TEIAS) in August 29, 2008, it gained the business January 2007 and has been granted the rights of İddaa for the next 10 years. 10-year operational rights for a fiber- optic cable between Istanbul and Ankara. In 2007, Tellcom became the first alternative operator in Turkey to carry domestic traffic. Tellcom provides its customers with affordable packages for fiber Internet, the most advanced Internet- access technology in the world. With its fiber-optic-infrastructure investments completed in a relatively short time, Tellcom introduced its customers to 100- megabyte Internet connections in 2007. The following year, Tellcom expanded its intra-city and inter-city fiber-optic network and continued investing in its transmission network via fiber optic- based access points that it established to reach end-users in residential and industrial areas. In 2009, Tellcom plans to continue investing in its fiber-optic infrastructure. TurkKule Turkcell Teknoloji Global Bilgi Pazarlama Danışma ve Turkcell Kule is a wholly owned subsidiary Turkcell Teknoloji Araştırma ve Geliştirme Çağrı Servisi Hizmetleri A.Ş. (Global) founded in 2006. The company began A.Ş. began operating in the TUBİTAK A Turkcell subsidiary that ensures the operations in 2007 and became the first Marmara Research Center Technological highest possible quality of service for the and only tower-service provider to the Free Zone, in Istanbul's Gebze district, in company's customers, Global undertakes wireless broadcast and communications 2007. Turkcell Teknoloji offers a wide all customer relations activities except industry in Turkey. Its scope includes the variety of products and services within for face-to-face interaction, including construction and purchase of new towers the categories of network platform, telephone marketing and sales and the maintenance and renewal of service platform, SIM and terminal operations, sales support, and call-center existing ones, security services, and other solutions, and next-generation services. In 2002, Global launched its related activities. Steadfastly holding onto technologies. Turkcell Teknoloji famous "Call 7/24" brand to serve the its vision of spreading communications anticipates transforming new ideas into needs of its corporate customers in the everywhere, the company continued to value-added products with the telecommunications, media, Internet, build more towers in 2008. In 2009, cooperation of R&D companies, retail, and technology sectors. In 2006, TurkKule plans to enlarge its service area universities and research centers, and after the takeover of the face-to-face and become one of the leading other affiliated entities. channel, Global became the sole customer telecommunication players by contact point for Turkcell, employing establishing a profitable business model numerous diverse channels, including for the long term. telephone, digital TV, Web, WAP, IVR, kiosk, e-mail, and SMS. Thanks to its cutting-edge technology and highly competent workforce of approximately 5,000 employees in nine locations (including business partners), Global creates unrivaled value for its customers through providing personalized services. The company aims to be Turkey's top provider of innovative customer service solutions. Global has earned numerous awards for its operations, including the "Best People Practice" award at the 2007 European Call Center Awards and the "Best Customer Experience" and "Best Training Implementation" awards at the Istanbul Contact Center Awards. In 2008, Global added another achievement to its record of success at international contests, taking the top prize in the "Best Technological Innovation" category and winning third place in the "Best Customer Service" category at the 2008 World Awards finals organized by ContactCenterWorld.com, the largest organization representing the global call- center industry.

Companies subject to consolidation have no share in the main partnership's equity.

MOBILE COMMUNICATION SECTOR OPERATIONAL AND FINANCIAL REVIEW 2008 MOBILE COMMUNICATION SECTOR

Turkish Mobile Communication Sector Offers Growth Potential With its sustainable economic growth, young population, and relatively low penetration, minutes of usage per subscriber and average revenue per user levels, the Turkish market continues to offer opportunities.

Per Capita GDP - Average Monthly Revenue Low Mobile Line Penetration Levels per User - ARPU (USD)

50,000 Israel 40 Spain 45,000 Finland 35 Egypt 54% 40,000 Turkey 92% 30 35,000 Greece Hungary 122% Israel 126% 30,000 Italy 25 Portugal Finland 128% 25,000 Germany 131% Hungary 20 20,000 Germany Russia 133% 15,000 15 Spain 137% Turkcell 148% 10,000 (Turkey) Portugal Russia 10 5,000 Italy 153% Egypt Greece 202% 0 5

ARPU Per Capita GDP Source: Merrill Lynch (Global Wireless Matrix 4Q08). Penetration rate in 1) ARPU data as of April 2009; Source: Merrill Lynch (Global Wireless Turkey is based on the figures announced by the Telecommunication Matrix 4Q08) Authority for the end of 4th quarter of 2008. 2) Per Capita GDP; Source: Merrill Lynch (Global Wireless Matrix 4Q08)

In recent years, Turkish economic growth Mobile line penetration rate, which is has been higher than the European 120% in Europe, stands at 92% in Turkey average. In 2008, due to the global crisis, as at December 31, 2008 in a GSM market GDP growth rate dropped to 1.1%. Even served by three operators. This figure, though uncertainties continue in 2009, along with an expanding young as the impact of the crisis gradually generation, indicates that there is still diminishes, we expect rising consumer growth potential in the Turkish market confidence and spending to increase though this growth has recently slowed. usage amounts and in turn increase average revenue per user.

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Turkcell's Minute of Usage is Among the Lowest

353

244 246

153 157 168 131 134 96 102 110 121

Turkey Germany Poland Portugal Italy Egypt Greece Spain Hungary Finland France Israel (Turkcell)

Source: Merrill Lynch (Global Wireless Matrix 4Q08)

The high level of tax levied on mobile Turkish Telecommunications Sector We Continue to Closely communication services in Turkey is an The ownership structure in the sector important factor affecting the number of changed with the sale of Telsim to Monitor Competitive and minutes used per month. With taxes on Vodafone, the privatization of Turk Regulatory Developments mobile communication services of about Telekom, and the sale of Telecom Italia The major regulatory developments in 60%, Turkey is among the most heavily Mobile's share in Avea to Turk Telekom. 2008 were as follows: taxed countries for these services. This This has caused operational profitability suppresses usage rates and makes them to rise in importance and companies have Mobile Number Portability (MNP) much lower than those in Europe started to display more rational attitudes The long awaited Mobile Number generally. We believe that reducing the to competition. Portability (MNP) became effective on taxes levied on these services would November 9, 2008. We don't expect the increase usage rates and so contribute In the Turkish mobile communication balance in the market to change to the growth of the sector by significantly sector, where Mobile Number Portability significantly after this development, which increasing revenue per user. took effect on November 9, 2008, there allows the users to port their numbers was intense competition throughout between operators. As of the end of 2008, The decline in the Special Communication 2008. The competition has continued its 294,000 people had transferred their Tax from the current 25% for mobile activities with aggressive customer numbers to Turkcell. internet and 15% for fixed line internet acquisition strategies and campaigns to to 5% have triggered further expectations effect subscribers' price perceptions. For Third Generation (3G) Mobile that other taxes levied on mobile its part, Turkcell initiated customer- Communication communication sector will be decreased focused campaigns that increased usage On September 28th 2008, the Information in the near future. and strengthened customer loyalty while and Communication Technologies addressing customer needs and Authority opened a 3G license tender for The importance of data services will generating benefits in many areas of life, IMT-2000/UMTS services and increase in the near future, especially including mobile phone usage. infrastructure with the aim of delivering after the implementation of 3G four licenses. As a result of the tender, technology, which will increase content Turkcell obtained a Type A license, for availability, and hence the use of the widest frequency band, for a fee of entertainment, other content and data Euro 358 million (excluding VAT). As a services as well as voice. company that has invested in Turkey's future from start, we will continue to make the required investments and serve Turkey with the same ambition - to enable Turkish people to conveniently utilize the latest technologies and to ensure Turkey is in the mainstream of the information age. As Turkcell, we want to move Turkey to The court case is in process. The Highest Turkcell is the Market Leader the new age in communications that Admistrative Court accepted the injunction In 2008, the Turkish mobile started with 3G and to add value to the request of our Company with respect to communication market continued to grow country by providing Turkey with the setting our on-net prices to be not lower in terms of number of subscribers and, technology it deserves. than our lowest interconnect rate and according to official ICTA data, the mobile rejected the injunction request of our line penetration rate rose from 88% at Electronic Communication Law (ECL) Company about Information and the end of 2007 to 92% at the end of The Electronic Communication Law Communication Technologies Authority’s 2008. We expect mobile penetration* to prepared by the Turkish Ministry of decision to control retail pricing for mobile remain at the 2008 level of 92% in 2009. Transportation to establish a legal system operators, setting a lower ceiling for off- similar to that in the EU and harmonizes net calling prices for all operators until In 2008, in the face of even tougher EU regulations with those of the the case is concluded. competition, we increased the number Information and Communication of our subscribers by 1.6 million to 37.0 Technologies Authority were accepted by Decrease in Interconnection Fees million. On one hand, we continued to Parliament on July 31, 2008 and was The ICTA decreased the Reference Call improve customer satisfaction through enacted on November 10, 2008. Termination Rates by 33% in 2008 and our products and services and, on the this development had a negative effect other, by focusing on maintaining a Information and Communication on our 2008 financial results. Based on balance in our revenue goals, we Technologies Authority (ICTA)’s these rates, mobile call termination rates maintained our leadership of the market Current Practice on Tariffs in Turkey are 57% below the EU average. with a share of 56%. In a market where In October 2007, the Information and Thus, we believe that the mobile call number portability took effect and Communication Technologies Authority termination rates should not be lowered competition is on the rise, we managed (ICTA) announced its decision to regulate any further. However, there are no to increase our revenue and call traffic mobile regulators’ retail pricing - setting guarantees to that end. shares. a lower limit for off-net calling prices for all operators and requiring Turkcell to set its on-net prices no lower than its lowest interconnection rate. Due to the ICTA's decision, we could only launch certain commercial offers and activities until the end of February 2008.

We opened a legal case at Turkey’s Highest Administrative Court for the suspension and the annulment of the aforementioned decision on the grounds that the decision violates the License Agreement signed between us and the ICTA, the Telecommunication Law and the Competition Law.

* Penetration guidance is revised in 1Q09. Accordingly, it may differ from the Turkish Annual Report.

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In 2008, in parallel with our value- The actions we took led to an increase in We will continue maintaining our profit oriented approach, we organized the number of post-paid subscribers and focus while increasing our revenues by campaigns and prepared promotions helped us maintain our pre-paid developing new offers aimed at regions aimed at subscriber acquisition and at subscriber acquisition and made the with low mobile-line penetration, increasing customer satisfaction so as Turkcell brand much more widespread. focusing on segmented acquisiton not to lose subscribers. As a result of campaigns, new sales incentives, these efforts, our churn rate remained In 2009, we plan to maintain our market increasing usage rate, advanced data below the market average and, despite leadership and continue our customer- services, and advanced value-added decreasing interconnection revenues and oriented approach by providing high- services, in addition to our effective cost- the dilutive impact of pre-paid segment quality services and well-designed value management and cash-generation on total revenues, we managed to propositions in an increasingly intense abilities. maintain our average revenue per user competitive environment. Our customer (ARPU) at 2007 levels. orientation and focus on customer Throughout the year, we made highly segments will continue to strengthen the attractive offers for the largest community Turkcell brand. In light of the 3G services to improve consumers' price perceptions that are expected to be launched in the of Turkcell. With our new communication market during the second half of the year, theme, which we started in July, we we plan to improve customer satisfaction clearly communicated these advantages. by shaping our value-oriented offers to These actions increased customer meet new customer needs and demands. satisfaction while improving customers' perceptions of Turkcell products and services. Our brand partnerships continued in an increasing manner for our youth and corporate club in 2008. We lead the market by introducing Blackberry Bold and iPhone 3G, while further improving subscribers' perceptions of Turkcell.

By increasing the number of advantageous promotions geared towards large groups of corporate customers, and by restructuring and adapting project and office solutions, we have improved loyalty to our value added services.

WE MAINTAINED OUR LEADERSHIP POSITION WITH THE 56% MARKET SHARE WE OBTAINED IN THE MOBILE COMMUNICATION MARKET BY FOCUSING ON IMPROVING CUSTOMER SATISFACTION WITH OUR PRODUCT AND SERVICE OFFERS WHILE FOCUSING ON OUR REVENUE GOALS IN 2008. OPERATIONAL AND FINANCIAL REVIEW 2008

A Strong Performance in a Turkey was adversely impacted by the Challenging Operational Environment global financial market turmoil in 2008. Thanks to our superior service quality The GDP contracted by 6.2% in the fourth and strong brand management, we grew quarter of 2008. TRY deteriorated sharply our total number of subscriber base to by 25% against USD in the fourth quarter 37 million in 2008 while increasing the of the year and by 29.8% against USD in minutes used, and managed to increase 2008 compared to a year ago, impacting revenue, despite the challenging our USD financial results for the year end. economic conditions. The consumer confidence index declined significantly in 2008 from 93.89 to 69.90. The following discussion focuses principally on the developments and In 2009, the GDP growth rate in Turkey trends in our business in 2008. All is expected to weaken further in line with financial results below for the year ended the global economy, which may have December 31, 2008 are prepared in some impact on our operational accordance with International Financial performance. Reporting Standards ("IFRS") and expressed in US$. Even though it is hard to quantify, we believe that the developments in the macroeconomic environment and consumer confidence as well as geopolitical, regulatory and competitive dynamics in Turkey may adversely affect our results of operations, business and financial performance in 2009. Consequently, in determining our business plans we will continue to closely monitor developments in these areas and Macro Economic YE 2007 YE 2008 YE 2007 - YE 2008 take into consideration the potential impact of global volatility on the Turkish Environment Information Change % economy. TRY / USD Rate Closing Rate 1.1647 1.5123 29.8% Average Rate 1.3031 1.2768 (2.0%) Inflation Consumer Price Index 8.4% 10.1% 1.7pp GDP Growth 4.6% 1.1% (3.5pp)

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While 1 USD was equal to TRY1.1647 on During 2008, the Consumer Price Index December 31, 2007, 1 USD equaled (CPI) increased by 10.1%. The reason for TRY1.5123 on December 31, 2008. Thus providing this information is to the Turkish Lira depreciated 29.8% demonstrate the impact of exchange rate against the US dollar in 2008. However, fluctuations on IFRS financial tables that on a monthly average basis, the TRY Turkcell announced as per NYSE appreciated against the USD by requirements and the key performance approximately around 2.0%. indicators.

Summary of Operational Data YE 2007 YE 2008 YE 2008 - YE 2007 Change % Number of Total Subscribers (million) 35.4 37.0 4.5%

Number of Post-paid subscribers (million) 6.4 7.5 17.2% Number of Pre-paid Subscribers (million) 29.0 29.5 1.7% ARPU (Average Monthly Revenue per User), Blended (US$) 14.3 14.5 1,4%

ARPU - Post-paid (US$) 37.6 36.8 (2.1%) ARPU - Pre-paid (US$) 9.2 9.1 (1.1%) ARPU - Blended (TRY) 18.5 18.4 (0.5%)

ARPU - Post-paid (TRY) 48.7 46.6 (4.3%) ARPU - Pre-paid (TRY) 11.8 11.6 (1.7%) Churn Rate (%) 19.9% 23.8% 3.9 pp MoU (Average Monthly Minutes of Usage per Subscriber), Blended 76.3 95.9 25.7% Subscribers In 2008, we focused on the post-paid Our subscriber base in Turkey reached and corporate segment with attractive 37.0 million as of December 31, 2008, acquisition and retention campaigns and increasing 4.5% on annual basis. For the promoted switches from pre-paid to post- whole year, net additions stood at 1.6 paid subscriptions. On the channel front, million subscribers in a slower growing we made revisions to our existing market. subdealer network and the premium structure to increase availability of Turkcell brand and concentrate more on pre-paid subscribers. Of the gross new subscribers added in 2008, the share of post-paid acquisition improved to 15% from 11% a year ago.

YE 2008 - YE 2007 Turkcell Group Subscribers (Million) YE 2007 YE 2008 Change % Turkcell 35.4 37.0 4.5% Ukraine 8.8 11.2 27.3% Fintur 10.8 12.8 18.5% Northern Cyprus 0.3 0.3 0.0% Belarus - 0.2 - TURKCELL GROUP 55.3 61.5 11.2%

Turkcell Group Subscribers This figure includes the total number of We had approximately 61.5 million GSM GSM subscribers in Astelit, BeST, in our subscribers as of December 31, 2008. operations in the Turkish Republic of This figure is calculated by taking the Northern Cyprus ("Northern Cyprus") and number of GSM subscribers in Turkcell, Fintur. In the past, when presenting our its consolidated subsidiaries, and total group subscribers, we have unconsolidated investees. presented this figure on a proportional basis, adjusted to reflect our ownership interest in each subsidiary. We believe that the method of calculation given above is a good indicator of our Group's reach and intend to use this new method of calculation going forward.

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Profit & Loss Statement YE YE YE 2008-YE 2007 (million US$) 2007 2008 % Change Total Revenue 6,328.6 6,970.4 10.1% Direct Cost of Revenue (3,103.4) (3,409.0) 9.8% Depreciation and Amortization (793) (679.9) (14.3%) Administrative Expenses (252.8) (309.3) 22.3% Selling and Marketing Expenses (1,138.2) (1,351.7) 18.8%

EBITDA 2,627.1 2,580.3 (1.8%) EBITDA Margin 41.5% 37.0% (4.5 pp)

Net Financial Income / (Expense) (242.7) 305.3 (225.8%) Financial Expense (551.1) (136.8) (75.2%) Financial Income 308.4 442.1 43.4% Share of Profit of Associates 64.9 103.0 58.7% Income Tax Expense (322.4) (549.8) 70.5%

Net Income 1,350.2 1,836.8 36.0%

Churn Rate TRY based blended ARPU remained at Direct Cost of Revenue In 2008, the annual churn rate increased similar levels compared to a year ago at In 2008, direct cost of revenue including slightly to 23.8% from 19.9% compared TRY18.4, despite the decreasing depreciation and amortization increased to a year ago due to our large subscriber interconnect rates and the dilutive impact 9.8% in nominal terms compared to a base as well as intensified competition of pre-paid subscribers. year ago. However, as a percentage of in the Turkish market throughout the year revenue it remained flat at 48.9%, mainly due to MNP. In 2009, we expect a higher Post-paid ARPU in TRY terms decreased due to the decrease in depreciation and churn rate than in 2008 due to increasing slightly by 4.3% to TRY46.6 in 2008 year amortization expenses as a percentage competition. on year mainly due to the increase in of revenue, offset by an increase in subscriptions to minute packages and network related expenses, handset costs MoU data lines. and wages and salaries. With the positive effects of the successful tariffs and communication themes, MoU Pre-paid ARPU slightly decreased by Selling and Marketing Expenses increased by 25.7% on an annual basis 1.7% to TRY11.6 in 2008 compared to a In 2008, selling and marketing expenses to 95.9 minutes in 2008 compared to year ago, mainly due to the effects of increased by 18.8% in nominal terms to 76.3 minutes in 2007. In 2009, we believe new tariffs and campaigns. US$1,351.7 million. As a percentage of that usage will increase as our successful revenue, selling and marketing expenses incentives and loyalty programs continue. In 2009, we expect ARPU in TRY terms increased by 1.4 percentage points to to remain flat at 2008's levels. 19.4% in 2008. The primary reasons for ARPU this trend were higher selling expenses In 2008, USD based blended ARPU Revenue stemming from higher acquisitions, and remained almost flat at US$14.5. Post- In 2008, the increase in our subscriber restructuring in the sales channel, and a paid ARPU slightly decreased by 2.1% to base, the partial effect of the increase in higher pre-paid usage fee payment. US$36.8 in 2008 compared to a year ago, usage, upward price adjustments, and mainly due to depreciation of TRY against the impact of our consolidated Administrative Expenses USD. In 2008, pre-paid ARPU decreased subsidiaries contributed positively to our In 2008, General and administrative slightly by 1.1% to US$9.1 compared to revenue compared to a year ago, despite expense as a percentage of revenue a year ago. This was mainly due to the the sharp decrease in interconnection increased by just 0.4 percentage points increase in usage along with the ongoing rates. For the full year, our revenue compared to 2007 to 4.4%, mainly due Super Tariff and Bizbize Kampus. increased by 10.1% to US$6,970.4 to an increase in bad debt expense million. In 2009, we will aim to achieve following the increase in our post-paid revenue growth in TRY terms compared subscriber base. to 2008.

In 2008, an upward price adjustment at a rate of 10.1% was made. Income Tax Expense YE YE YE 2008 - YE 2007 (million US$) 2007 2008 % Change Current Tax Expense (412.5) (567.2) 37.5% Deferred Tax Income / (Expense) 90.1 17.4 (80.7%) Income Tax Expense (322.4) (549.8) 70.5%

EBITDA The difference between the total net Net Income In 2008, nominal EBITDA decreased by impact of A-Tel and the amount netted In 2008, net income increased by 36.0% 1.8% to US$2,580.3 million while the off from selling and marketing expenses to US$1,836.8 million compared to EBITDA margin decreased from 41.5% amounted to US$48.1 million and is US$1.350.2 million in 2007. This was in 2007 to 37.0%. The decrease in EBITDA recorded in the 'share of profit of equity mainly due to the positive effect of the was due to lower revenue growth accounted investees' line of our financial decrease in the translation loss in 2008 compared to increase in direct cost of statements. to US$44.5 million from US$460.8 million revenue, resulting from network-related in 2007 and higher interest income of expenses, handset costs offered as part Net Finance Income / (Expense) US$442.1 million compared to US$308.4 of our loyalty programs, selling and In 2008, we recorded net financial income in 2007. Net income margin increased marketing expenses. In 2009, there are of US$305.3 as opposed to a net financial to 26.4% in 2008 from 21.3% compared challenges in our operating environment expense of US$242.7 million in 2007. to that in 2007. notably we expect the macro environment The net financial income in 2008 was a to remain volatile and competition to result of absence of high foreign exchange Total Debt increase, which may lead to further losses incurred on structured forward As of the end of 2008, there was no cash pressure on our margins. contracts and translation losses on foreign credit related to Turkcell Group's GSM currency long position recognized in 2007 business in Turkey on our balance sheet. Share of Profit of Equity Accounted as well as our increasing cash balance. However, at the Group level, there are Investees some loans obtained from the banks. For 2008, our share in net income of Income Tax Expense Currently, our company has no financial unconsolidated investees increased by For 2008 the total taxation charge instrument in circulation in the capital 58.7% to US$103.0 million compared to increased to US$549.8 million from markets. US$64.9 million in 2007 mainly due to US$322.4 million in 2007. Fintur's successful performance in 2008. Consolidated debt amounted to US$785.9 Out of the total tax charge during 2008, million as of December 31, 2008. The results of our 50% owned subsidiary US$567.2 million related to current tax US$541.8 million of this was related to A-Tel impacted two items in our financial charges and deferred tax income totaled Turkcell's Ukrainian operations. All of statements. A-Tel's revenue generated US$17.4 million. our consolidated debt is at a floating rate from Turkcell, amounting to US$49.1 and US$655.9 million will mature in less million in 2008, is netted off from the than a year. selling and marketing expenses in our consolidated financial statements.

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Balance Sheet Analysis YE YE YE 2008 - YE 2007 (US$ million) 2007 2008 % Change Current Assets 4,049 4,070 0.5% Non-current Assets 4,420 3,998 (9.5%)

Total Assets 8,469 8,068 (4.7%)

Short-term Liabilities 2,238 2,105 (5.9%) Long-term Liabilities 300 519 73.0% Minority Interest 138 58 (58.0%) Total Equity Attributable to Equity Holders of the Company 5,793 5,386 (7.0%)

For 2008, capital expenditures totaled Turkcell generated free cash flow (cash the crisis in the global markets, we plan US$808.2 million, of which US$155.8 flow from operating activities minus to use financing techniques that spread million was related to the Ukrainian capital expenditure) of US$866.2 million the payables to the vendors related to operations. in 2008, a decrease of 37% compared to our infrastructure investments over the US$1,373.1 million in 2007. long-term. We also use financial tools to Until the end of the 3rd quarter of 2007, try to manage the exchange rate - interest our company benefited from investment Our Company has a relatively high net risks of the balance sheet by keeping our incentives. However, since the investment working capital and a healthy balance foreign-exchange denominated assets at incentives were fully utilized, we were sheet. As we aim to take the necessary optimum levels. not able to utilize any investment precautions to minimize the impact of incentives in 2008.

Consolidated Cash Flow YE YE (million US$) 2007 2008 EBITDA 2,627.1 2,580.3 LESS: Capex and Licence (783.1) (808.2) Turkcell (444.3) (388.4) Ukraine* (206) (155.8) Investment & Marketable Securities 27.1 (285.5) Net Interest Income / Expense 218.0 349.8 Other (244.7) (1,281.1) Net Change in Debt 64.2 111.5 Dividend Paid by Turkcell (411.9) (502.3) Cash Generated 1,496.7 164.5 Cash Balance 3,095.3 3,259.8

(*) The devaluation of local currency against USD is included in this line.

Profitability and Debt Pay-Back Ratios Dec. 31, 2007 Dec. 31, 2008 Gross Profit Margin 50.9% 51.1% EBITDA Margin 41.5% 37.0% Net Profit Margin 21.3% 26.4%

Total Liabilities / Equity Ratio: 42.8% 48.2% Total Debt / EBITDA Ratio: 28.9% 30.5% OTHER INFORMATION ABOUT OUR OPERATIONS

Public Announcements from February 25th, 2009 When the Financial Statements Dated December 31, 2008 are Shared With the Public Until April 10th, 2009

Resolution of the Board of Directors Related to the Invitation to the Annual General Assembly and the Meeting Agenda - March 2nd, 2009 Information about the invitation to the Annual General Assembly and the Meeting Agenda are given in page 87 of this report.

Resolution of the Board of Directors Related to Obtaining Loans - March 2nd, 2009 On the Board of Directors meeting dated February 27, 2009 our Board of Directors decided to authorize the company management to assure export financing up to US$750 million to be used for the 2G and 3G infrastructure of Turkcell Group Companies, accordingly, mandate the qualified corporations and provide guarantee for the group subsidiaries, if case of need.

Resolution of the Board of Directors Related to Making a Binding Offer to Cosmofon - March 2nd 2009 On January 21 2009, we have announced that we have made a non binding offer to Cosmofon Mobile Telecommunications Services AD Skopje (“Cosmofon”).

On February 27, 2009, our Board of Directors resolved to commence the necessary procedures to make a binding offer, directly or through one of our subsidiaries, to purchase 100% of Cosmofon and Germanos Telekom AD Skopje (“Germanos”) shares from the main shareholder, Greek originated OTE.

Cosmofon is the second biggest GSM operator with 30% market share and 650,000 subscribers whereas Germanos is a distributor with a strong dealer network serving mainly to Cosmofon in Macedonia where the population is 2 million.

Turkcell's CFO Serkan Okandan, assessing the decision regarding submitting a proposal to OTE for Cosmofon and Germanos commented that “We want to further strengthen Turkcell’s position as leader communications and technology company. Turkcell, currently operates in 8 countries where total number of subscribers reached 62 million, will continue to evaluate new businesses and investment opportunities in new countries like Macedonia”.

Supplier Agreements for the Establishment of 3G Infrastructure - March 11th, 2009 Our company signed an agreement with Ericsson Telekomünikasyon A.Ş. and HUAWEI International Pte. Ltd. to establish 3G infrastructure across Turkey.

Turkcell's CEO, Süreyya Ciliv stated, "As Turkcell, as today, so in the near future, we will continue our 3G investments in a manner that enables us to maintain our leadership in network coverage and quality. In addition to infrastructure works, we work on solutions that, thanks to the faster mobile internet brought about by 3G, present to our customers with advanced and faster products and services, available at every location, and at more reasonable prices. We will continue to invest in Turkey and Turkey's future." 78 79

A Change in Management Structure - March 13th, 2009 Cenk Serdar, who had been working in Turkcell Group since January 1, 2005 and who was the Chief Business Development Officer, resigned as of March 13, 2009.

Binding Offer Made to Cosmofon - March 13th, 2009 In line with our public disclosure dated February 27, 2009 via its wholly owned subsidiary Beltur B.V, our company made a binding offer to OTE, the Greek Operator and main shareholder of Cosmofon, and to Germanos Telekom AD Skopje (“Germanos”) with the aim of acquiring 100% of these companies' shares. The offer will be valid until June 29th, 2009.

With its 30% market share and 650,000 subscribers, Cosmofon is the second largest GSM company in Macedonia, which as a population of 2 million. Germanos is a distributor that mainly serves Cosmofon via a comprehensive dealer network.

Dispute on the Transmission Tariffs Applied by Turk Telekom – March 17th, 2009 In 2000 Turkcell filed a lawsuit against Turk Telekom over an additional payment demanded from Turkcell, due to Turk Telekom’s unilateral change of calculation methodology on its transmission tariffs.

Turk Telekom notified that Turkcell’s receivables totaling TRY30 million, along with the principal and interest, would be confiscated as a result of the unpaid tariff differences on the basis of the lawsuit filed by Turkcell, which was later rejected and an injunction obtained.

Turkcell stopped Turk Telekom’s this application by temporary injunction and sought a declaration in the Ankara 7th Court of first instance to determine that Turk Telekom was not entitled to receive this payment.

On March 16, 2009, Turkcell was officially notified that the Ankara 7th Court of first instance has rejected this lawsuit. Our company will appeal this decision.

Tendering for Games of Chance – March 30th, 2009 In its meeting dated March 27, 2009 our Board of Directors decided to submit a bid for the tender of the privatization of the games of chance, which belongs to the National Lottery General Directorate, through our wholly owned subsidiary Şans Oyunları Yatırım Holding A.Ş. which we own through our 100% owned subsidiary Turktell Bilişim Servisleri A.Ş. Our bid will either be made as a stand-alone offer or in conjunction with another legal party by forming a consortium. Our Board of Directors also mandated our management team to continue with the procedures about the related issue.

Board of Directors' Dividend Distribution Offer - March 30th, 2009 Information related to the dividend distribution proposal of the Board of Directors is given on pages 174 and 175 of this report.

Cosmofon Gains Highest Offer from Another Company - April 1st, 2009 In our disclosure dated March 13th, 2009, we announced that we made a binding offer to OTE, the Greek Operator and main shareholder of Cosmofon, and Germanos with the aim of acquiring 100% of these companies' shares.

Our company made its offer within the framework established in conformity with our business plan. However, we have been informed that the highest bid was made by another company.

News in the Media, About Turkcell Being Interested in the Purchase of HanseNet Company - April 2nd, 2009 The media has stated that our company is interested in the sale of HanseNet, an internet service provider in Germany. Our company is not interested in acquiring this company. OUR OFFICES

Office Name Address

Tepebaşı Plaza Asmalı Mescit Mh., Meşrutiyet Caddesi No. 71, Asmalı Mescit Beyoğlu - Istanbul

Maltepe Plaza Turkcell, Maltepe Yeni Mh., Pamukkale Sk. No. 3, 34880 Soğanlık Mevkii - Kartal - Istanbul

Davutpaşa Plaza Turkcell, Davutpaşa Plaza, Serçe Kale Sk. No. 2, Topkapı - Istanbul

Kartal Plaza Turkcell, Kartal Plaza, Topselvi Dipçik Sk. No. 31, Kartal- Istanbul

Adana Plaza Turkcell, Adana Plaza, Turhan Cemal Berikel Bulv. No. 212, Seyhan - Adana

Ankara Plaza Turkcell, Ankara Plaza, Eskişehir Yolu 9. Km No. 264, Söğütözü - Ankara

Antalya Plaza Turkcell, Antalya Plaza, Kızıltoprak Mah. 915 Sk. No. 3, Antalya

Bursa Plaza Turkcell, Bursa Plaza, Organize San. Bölgesi, Kırmızı Cad. No. 4, Nilüfer - Bursa

Diyarbakır Plaza Turkcell, Diyarbakır Plaza, Urfa Yolu 6. Km, Diyarbakır

Izmir Plaza Turkcell, Izmir Plaza, Ankara Asfaltı No. 64, Bornova - Izmir

Samsun Plaza Turkcell, Samsun Plaza, Mimar Sinan Mh., 60. Sokak No. 18, PK 55200 Atakum - Samsun

Trabzon Plaza Mısırlı Mahallesi, Hasan Turfanda Yolu No. 1, 61240 Çukurçayır - Trabzon

Donations Made in 2008: In 2008, our Company made cash donations to various societies and organizations to the amount of TRY6,360,254.20 in addition to a total of TRY207,171.59 in cash-equivalent donations made to various schools, societies and organizations.

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Investor Information

Shareholder Structure

Çukurova Holding A.Ş. has sold 90,200,000 shares to JP Morgan Securities Ltd. for sale to foreign investors. With the circulation of the shares with a nominal value of TRY90,200,000 on the ISE, the free float of Turkcell, which was previously 29.38%, increased to 33.48%.

As of year-end 2008, Turkcell's free float was 33.48%.

In its announcement it made to the ISE on 24 March 2009, Alfa Telecom Turkey stated that on 17 March 2009 Alfa Finance Holdings S.A. had signed a share transfer agreement with Nadash International Holdings Inc. (Nadash) that foresees the sale of 1,610 Alfa Telecom Turkey Limited (Alfa Telecom Turkey) shares, which corresponds to 32.2% of the total shares, to Nadash; and that, on the same date, it signed a share transfer agreement with Henri Services Limited (Henri) that foresees the sale of 1,500 Alfa Telecom Turkey Limited (Alfa Telecom Turkey) shares, which corresponds to 30% of the total shares, to Henri Services Limited (Henri) and that, as a result, Alfa Finance, via Çukurova Telecom Holdings Limited (CTH) and Turkcell Holdings A.Ş., owned less than 5% of the shares of Turkcell İletişim Hizmetleri A.Ş. (Turkcell).

Shareholder Value of Stake (TRY) (%) of Share Capital Turkcell Holding A.Ş. 1,122,000,000.238 51.00 Çukurova Holding A.Ş. 995,509.429 0.05 T. Genel Sigorta A.Ş. 1,558,452.599 0.07 Sonera Holding BV 287,632,179.557 13.07 MV Holding A.Ş. 51,021,712.590 2.32 Müflis Bilka Bilgi Kaynak ve İletişim San. ve Tic. A.Ş. 153,999.575 0.01 Publicly Traded* 736,638,146.012 33.48 TOTAL 2,200,000,000.000 100.00

* The share which the Board of Directors decided to endorse in black is accepted as a "publicly traded share" and is termed as a share that is circulated on the ISE.

Share Performance Turkcell shares are listed on the Istanbul Stock Exchange in the form of ordinary shares and on the New York Stock Exchange in the form of American Depositary Shares (ADS). Currently, two ADSs represent five tradable shares. Turkcell is the only Turkish company listed on the NYSE. The nominal value of Turkcell's issued share capital is TRY2,200,000,000 consisting of 2,200,000,000 shares with a nominal value of TRY1 each.

2008 Year End Highest Lowest Share Performance Symbol Closed Price in the Year* in the Year* Istanbul Stock Exchange (TRY) TCELL 8.75 12.70 6.50 New York Stock Exchange (US$) TKC 14.58 26.60 9.70

* Based on closing price

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Istanbul Stock Exchange Performance of Turkcell Shares in 2008

New York Stock Exchange Performance of Turkcell's American Depositary Shares (ADS) in 2008 INVESTOR INFORMATION COMPLIANCE WITH CORPORATE GOVERNANCE PRINCIPLES

With a market value of TRY19.2 billion, Turkcell was the highest market value company among all those listed on the ISE as at the end of 2008.

Investor Relations Turkcell had simultaneous initial public offerings on the Istanbul Stock Exchange (ISE) and the New York Stock Exchange (NYSE) on July 11th, 2000, initially offering 10.5% of its shares to the public. Over time, free float rose to 33.48% as a result of share sales by shareholders.

Turkcell is the first and only Turkish company listed on the NYSE and enjoys all the advantages of being a public company. Since its shares are traded on both the US and Turkish stock exchanges, Turkcell has shaped its corporate governance model in accordance with the requirements of both markets.

The Sarbanes Oxley Act of 2002 (SOA) was an important milestone for the development of corporate governance in the United States. The Securities and Exchange Commission (SEC) and the NYSE later imposed regulations parallel to this act. In 2003, responding to developments in the United States and other countries, the Capital Markets Board of Turkey (CMB) published its Corporate Governance Principles guide.

In general, these rules apply to transparency, accountability and responsibility in relation to the "good corporate governance" of companies. This issue is of great importance to Turkcell, a company that believes in the value of corporate governance to bring order and transparency to a company's functions and in generating value for investors and other stakeholders.

Aware that the implementation of these rules is of crucial importance to the company's institutional investors and shareholders, Turkcell Investor Relations Department works to ensure its shares remain a favorite investment tool for both domestic and overseas investors. It also works to translate the company's superior operational performance into market value and to promote the company in the most effective way possible.

Contact Information for Investor Relations Turkcell's financial information and company news are available on its website or may alternatively be obtained from the Investor Relations Department:

Tel : +90 (212) 313 18 88 Fax : +90 (212) 292 93 22 E-mail : [email protected] URL : http://www.turkcell.com.tr/en/investorRelations TURKCELL GROUP INTERNAL AUDIT AND CORPORATE RISK MANAGEMENT POLICIES

Risk Management, Internal Audit Management, Business Continuity Management, Information Security Management and Internal Fraud Management processes were launched at the Corporate Risk Management Department that was established in January 2009. These were launched to strengthen the Company's focus on corporate risk management, to make risk management widespread for Turkcell and Turkcell Group by developing a methodology, and to centralize operations carried out under various Company structures yet that affect the success of corporate risk management.

The Internal Audit Department, in compliance with the "principle of independence" and in line with CMB's Communiqué Series: X No. 19 reports directly to the Audit Committee, that is made up of the independent members of the Board of Directors, the Chief Executive Officer and the Chief Financial Officer.

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Internal Control / Internal Audit

Since Turkcell has been listed on the New York Stock Exchange in order to ensure compliance with Section 404 of the Sarbanes- Oxley Act, which is binding on public companies in the United States, Turkcell and all consolidated Turkcell Group companies have established an internal control mechanism.

Turkcell Group companies have their own internal control mechanisms that are the responsibility of the management of the respective companies, but are coordinated by Turkcell Internal Audit Department.

This mechanism assigns Turkcell Internal Audit Department the following tasks: supporting the establishment of the internal audit system, evaluating and reporting on the effectiveness of the internal control system, evaluating the reliability and accuracy of the internal audits over financial reporting of Turkcell and Group companies in compliance with the Sarbanes Oxley Act Section 404, regularly reporting to the Audit Committee and Turkcell Top Management any inaccuracies detected during this verification process and following up on corrective actions that are taken or planned to be taken.

Risk Management

Risk Management is responsible for the following tasks: defining the risks that affect Turkcell's performance towards its goals, coordinating risk analysis tasks, sharing results with Turkcell Audit Committee, Management Team the top management team and the Risk Management Board, and reporting on and following up on these results.

The motive behind determining risks is not to suspend business activities that create these risks but to decrease the probability of the risks or to decrease their possible affects. Here, the goal is to minimize unpleasent surprises, to enable Turkcell to run seamless operations, and to provide a reasonable level of assurance to the management for Turkcell to achieve its goals.

Every department in Turkcell defines the risks it faces on a regular basis and classifies them on the basis of priority. Also, the Company prepares detailed action plans for critical risks and applies these plans. These processes are coordinated by Risk Management and are reported on a regular basis.

Independent Auditor

Akis Bağ›ms›z Denetim ve Serbest Muhasebeci Mali Müşavirlik Anonim Şirketi, Yap› Kredi Plaza C Blok Kat: 17, Büyükdere Caddesi, Levent, 34330 İstanbul

Tel : +90 (212) 317 74 00 Fax : +90 (212) 317 73 00 Web : www.kpmg.com.tr

Board Committees

To date, there are two Board committees: the Corporate Governance Committee and the Audit Committee. These committees advise and make recommendations to the Board on matters that fall within their scope.

As a result of the board meeting dated June 7th, 2006, Mr. Mehmet Bülent Ergin and Mr. Oleg Malis were elected to the Corporate Governance Committee, while Mr. Colin J. Williams and Mr. Alexey Khudyakov were elected to the Audit Committee. INVESTOR INFORMATION COMPLIANCE WITH CORPORATE GOVERNANCE PRINCIPLES

Corporate Governance Committee Members: Mehmet Bülent Ergin Oleg Malis

The Corporate Governance Committee should assist the Board with the development and implementation of the Company's corporate governance principles and should present to the Board remedial proposals to that end.

It should establish a transparent system for the determination, evaluation, and training of Board member candidates. The Committee should make recommendations to the Boardwhere appropriate, regarding the Company's compensation strategy for Board members, the Chief Executive Officer, and the Chief Financial Officer. It should also make recommendations to the Board on succession plans for the Chief Executive Officer and the Chief Financial Officer.

The Committee assists the Board in relations between the Company and our shareholders. To that end, it oversees investor relations activities.

Audit Committee Members: Colin J. Williams Alexey Khudyakov

Consistent with the duties imposed on audit committees by the relevant laws and regulations, the main duties of the Audit Committee include the following:

• Assisting the Board's oversight of the quality and integrity of the Company's financial statements and related disclosure

• Overseeing the implementation and efficiency of the Company's accounting system

• Pre-approving the appointment of and services to be provided by the independent audit company

• Preparing and monitoring the agreement between the independent auditor and the Company and overseeing the performance and efficiency of the Company's independent audit system and internal audit mechanisms.

The Board should assess the independence and qualifications of the members of the Audit Committee, using outside counsel or consultants if desirable, to ensure that each qualifies for membership on the committee.

Dividend Policy

Turkcell has adopted a dividend policy, which is set out in its corporate governance guidelines.

The distribution of dividends from previous year's earnings is subject to the proposal made by the Board of Directors and upon the approval of this proposal by the General Assembly. As adopted, Turkcell's general dividend policy is to pay dividends to shareholders with due regard to trends in the Company's operating performance, financial condition, and other factors. The Board of Directors intends to distribute cash dividends in an amount of not less than 50% of Turkcell's distributable profits for each fiscal year, starting with profits for fiscal 2004. However, the payment of dividends will still be subject to the cash flow requirements of Turkcell, compliance with Turkish law, and the approval of, or amendment by, the Board of Directors and the General Assembly of Shareholders.

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With the resolution of the Ordinary Shareholders’ Meeting held on March 25th, 2008, a total of TRY648,713,951 cash dividends (TRY0.2948699 for each share with a nominal value of TRY1.00, with gross and net being equal; and TRY0.737175 for each ADR) were distributed.

Amendments Made to the Articles of Association

As a result of the tenders organized by the ICTA on November 28th, 2008, to give four licenses in relation to providing authorizations for IMT-2000/UMTS services and infrastructure, our company received a Type A license. As a requirement of the specifications of the tender, during the Extraordinary Shareholder's Meeting held on January 30th, 2009, our Articles of Association were amended by adding the following phrase to Article 3, entitled "Purpose and Subject of Activity": "To carry out operations covered by the authorization given in relation to IMT-2000/UMTS services and infrastructure".

Annual General Assembly

On February 25th, 2009, The Board of Directors of Turkcell decided that the Ordinary General Assembly of Turkcell for 2008 is to convene at Turkcell Plaza, Conference Room, Meşrutiyet Cad. 71, Tepebaş›, İstanbul on Friday, May 8th, 2009, at 15:00.

TURKCELL İLETİŞİM HİZMETLERİ A.Ş. AGENDA OF THE ANNUAL GENERAL ASSEMBLY MEETING DATED May 8th, 2009

1- Opening and election of the Presidency Board;

2- Authorizing the Presidency Board to sign the minutes of the meeting;

3- Reading the Annual Reports of the Board of Directors, the Auditors and the summary of the Independent Audit Firm's report relating to fiscal year 2008;

4- Review, discussion and approval of the Balance Sheet and profit / loss statements relating to fiscal year 2008;

5- Release of the Board members and auditors from activities and operations of the Company in year 2008;

6- Election of board members for a period of three years and determination of their remuneration;

7- Election of auditors for a period of one year and determination of their remuneration;

8- Discussion of and decision on the Board of Directors' proposal concerning the distribution of profit for year 2008;

9- Informing the General Assembly regarding the donations made in year 2008;

10- Discussion of and approval of the election of the independent audit firm realized by the Board of Directors in accordance with the article 14 of the Regulation Concerning the Independent External Audit in Capital Markets which is published by the Capital Markets Board;

11- Decision permitting the Board Members to directly or on behalf of others be active in areas falling within or outside the scope of the Company's activities and to participate in companies operating in the same business and to perform other acts in compliance with Articles 334 and 335 of the Turkish Commercial Code;

12- Wishes and hopes salutations. INVESTOR INFORMATION COMPLIANCE WITH CORPORATE GOVERNANCE PRINCIPLES

COMPLIANCE WITH CORPORATE GOVERNANCE PRINCIPLES

Corporate Governance Principles Compliance Report for 2008

Turkcell believes that high standards of corporate governance are important for perpetuating successful business practices and generating long-term economic value for the company's shareholders. Toward this end, the company has taken the necessary measures to comply with the principles of corporate governance published by the Capital Markets Board of Turkey. Accordingly, the Board of Directors within the responsibilities enumerated in its Corporate Governance Guidelines, has provided the necessary oversight for preparation of this Annual Report which contains the Compliance Report.

SECTION 1 SHAREHOLDERS

1.1 Shareholders Relations Unit Representatives of the Turkcell Investor Relations Department, in accordance with present regulations, organize meetings with analysts and investors on a regular basis to share developments related to the Company's strategy and activities, and the market, industry and legal environment in which the Company operates. Turkcell Management also shares information available to the public and answers questions by organizing meetings with media representatives at regular intervals.

An Investor Relations Department has existed since Turkcell's initial public offering. This Department reports to the CEO and operates under the supervision of the Corporate Governance Committee. The Investor Relations Department monitors all disclosures to the public in accordance with Turkcell's Disclosure Policy that seeks to provide information to the public in a timely, accurate, complete, understandable and equal manner. Representatives of the Turkcell Investor Relations Department, in accordance with present regulations, organize meetings with analysts and investors on a regular basis to share developments related to the Company's strategy and activities, and the market, industry, and the legal environment in which the Company operates. Contact information for the Investor Relations Department is available on the Company's website, www.turkcell.com.tr, and under the Investor Relations heading in the Annual Report.

Questions directed to the Department, either verbally or in writing, are answered as quickly as possible and in line with publicly available information.

1.2 Use of Right of Gaining Information of the Shareholders To increase shareholder accessibility to publicly available information without discrimination, all public announcements are submitted in English and Turkish on Turkcell's website, www.turkcell.com.tr, for the use of local and foreign shareholders on an equal basis. In addition, all public announcements are distributed by e-mail to addresses registered in the Company's database. All questions directed to the Investor Relations Department, either verbally or in writing, are answered as quickly as possible and in line with publicly available information.

Provisions for appointment of a special auditor have not been included in the Company's Articles of Association. During this reporting period, no requests for appointment of a special auditor were submitted.

1.3 Information on the General Assembly of Shareholders The Ordinary General Assembly of Shareholders was held on April 25, 2008 with a quorum of 69.45%. Also, an Extraordinary General Assembly with a meeting quorum of 72.85% was held on January 30, 2009.The participants of the General Assembly included shareholders and their representatives submitting blockage letters within the legal period, the Board of Directors,

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statutory auditors, chief executive officers, deputy executive officers, and the staff organizing the General Assembly. Invitation to the Assembly was published in the Bulletin of Turkish Trade Registry (BTTR) and various national newspapers. At the same time, invitations were sent to shareholders in foreign countries. For owners of registered shares, invitations were extended by registered letter with return receipt, as the law requires. In accordance with the Turkish Commercial Code, applications were received from shareholders of publicly traded shares up to one week before the meeting. During the General Assembly, shareholders exercised their right to ask questions. Company Management representatives answered questions. All matters advised by shareholders were duly recorded in the minutes and the minutes of the General Assembly were registered and announced in the BTTR.

1.4 Voting Rights and Minority Rights In accordance with the Company's Articles of Association, there are no privileged shares in terms of decision-making and voting rights. Holders of more than 5% of the Company's shares are represented on the Board of Directors and minority shareholders are not represented. With regard to the Company's capital, there is no mutual participation. Since the exercise of cumulative voting is optional for public companies according to the relevant communiqué of the Capital Market Board's, this method has not been used as of yet.

1.5 Dividend Policy and Time of Dividend Distribution The Dividend Policy of the Company is published in Turkcell's annual report and in the Investor Relations section of the website www.turkcell.com.tr under Corporate Governance. In accordance with our Articles of Association, there are no privileged shares and no privilege for dividend distribution. Dividend distributions are performed within the legal timeframe.

1.6 Transfer of Shares Although there are no limitations within the Articles of Association regarding the transfer of shares, Article 34 paragraph (c), sentence four, of the authorizing regulation relating to telecommunication services and its infrastructure states that written approval by the Telecommunications Authority is required for "actions of gaining or transferring shares which shall result in a change of control."

SECTION 2 PUBLIC DISCLOSURE AND TRANSPARENCY

2.1 Company Disclosure Policy The Company's Disclosure Policy Framework Document regarding public announcements was prepared in accordance with the domestic and international capital markets regulations to which Turkcell is subject. Shareholders were informed of this policy at the 2005 Ordinary General Assembly. The Disclosure Policy Framework Document is published in the Investor Relations section of the Company's website, www.turkcell.com.tr, under Corporate Governance following the Ordinary General Assembly. Turkcell makes public announcements in accordance with local and international capital markets regulations and complies with regulations and directives of the Capital Markets Board of Turkey (CMB), the Istanbul Stock Exchange (ISE), the Securities Exchange Commission of the United States of America (SEC), and the New York Stock Exchange (NYSE). Turkcell's Disclosure Policy seeks to provide information to the public in a timely, accurate, inclusive, understandable and equitable manner. The Disclosure Policy is executed under the supervision of the Investor Relations Department. INVESTOR INFORMATION COMPLIANCE WITH CORPORATE GOVERNANCE PRINCIPLES

2.2 Announcements of Material Events During 2008, the company sent 38 announcements to domestic and international capital markets. These announcements were prepared in Turkish and English since the Company is listed on the Istanbul Stock Exchange as well as the New York Stock Exchange. English announcements were also sent to the SEC.

2.3 Company Website and its Content The address of the Company's website is www.turkcell.com.tr. Information for shareholders is presented in the Investor Relations section under these headings:

a. Turkish GSM Market b. Shareholder Structure c. Corporate Governance i. Board of Directors ii. Corporate Governance Principles iii. Board of Directors Committees iv. Dividend Distribution Policy v. Articles of Association vi. Ethical Rules vii. Disclosure Policy viii. Corporate Governance Compliance Report d. Announcements e. Financial and Operational Data i. Financial Reports ii. Balance Sheet Analysis iii. Income Statement Analysis iv. Cash Flow Analysis v. Key Operational Data vi. Debt Information vii. Outlook viii. International Operations ix. Investor Kit f. Financial Calendar g. Share Information i. Interactive Share Charts ii. Investment Calculator iii. Ticker Symbols iv. Analyst Coverage h. FAQ i. Contact Us

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2.4 Announcement of the Real Person Final Dominant Shareholder/Shareholders The shareholder structure of our company is as follows:

Shareholder Value of Stake (TRY) % of Share Capital Turkcell Holding A.Ş. 1,122,000,000.238 51.00 Çukurova Holding A.Ş. 995,509.429 0.05 T. Genel Sigorta A.Ş. 1,558,452.599 0.07 Sonera Holding BV 287,632,179.557 13.07 MV Holding A.Ş. 51,021,712.590 2.32 Müflis Bilka Bilgi Kaynak ve İletişim San. ve Tic. A.Ş. 153,999.575 0.01 Publicly Traded* 736,638,146.012 33.48 TOTAL 2,200,000,000.000 100.00

2.5 Disclosure on Insider Traders Turkcell's Disclosure Policy contains guidelines concerning the Blackout Period Practice relating to insider trading issues. In accordance with these guidelines, employees are prohibited from selling or purchasing Turkcell securities during the blackout period. Turkcell staff with access to material information that can affect the price of capital market instruments are restricted from selling or purchasing Turkcell securities regardless of blackout periods.

SECTION 3 STAKEHOLDERS

3.1 Informing Stakeholders In addition to the legislation that is currently in effect, company policies and procedures have been created to inform Company staff and stakeholders.

3.2 Participation of Stakeholders in Management Although there is no special provision for the participation of stakeholders in management, relevant information is shared with Turkcell's business partners, staff and other stakeholders through defined and regular meeting (such as staff communication meetings, platforms where the staff can communicate their ideas and suggestions, Supplier Day for the supply chain, Business Partner Day for the firms Turkcell works with on value-added services, and dealer meetings).

3.3 Human Resources Policy Being the most admired company and the company of preference for employees, our human resources strategy has as its highest priority to recruit and maintain the best personnel. With the aim of realizing this strategy, we implement innovative and pioneering human resources policies.

We are confident that we can maintain our leadership by developing and motivating our highly qualified human resources. In this regard, we invest in human resources, and focus on projects that will support corporate values and on practices that will develop our human resources.

To create a high performance team, as a matter of priority we determine and maintain our skills. To this end, we apply a structured talent management process involving all members of the management team.

Through Turkcell Academy, we continuously support the development of our employees and meet their developmental needs via alternative development solutions. INVESTOR INFORMATION COMPLIANCE WITH CORPORATE GOVERNANCE PRINCIPLES

We see our employees as our internal customers and, with the goal of understanding their needs and expectations, we help them gain experiences that make a difference via our human-oriented approach which values each of them.

Turkcell Human Resources places great emphasis on achieving a balance between employee satisfaction and benefit to the company in all our operations. In this regard, we conduct annual employee surveys to assess employee satisfaction and loyalty and take necessary action.

Turkcell reviews its processes and organizational structure on a regular and systematic basis and carries out improvements and restructuring activities to maintain its competitive and leading stance. Turkcell believes that the most important key to differentiation and success is to turn individual information into corporate memory and utilize this information accurately and effectively. In this context, it develops platforms that provide an environment that utilizes reliable, updated, and vital information. As a pioneering company tuned for innovation, Turkcell believes in change and differentiation and it values people. We believe that it is our priority to provide our employees with a high performance work environment. To his end, we will continue to implement innovative and pioneering human resources policies.

3.4 Information about Relationships with Customers and Suppliers Turkcell uses an approach in line with global quality standards wherever the company has contact with and/or provides services to its customers. The company tests all products and services with the customer's perspective in mind so as to better understand and feel customers' experiences, to determine the inefficiencies in the system, processes, and human resources, and if necessary to make timely corrective adjustments to systems or processes related to that specific experience. Turkcell also regularly measures and analyzes services and its approach throughout business channels to identify areas of improvement and to make adjustments that simplify the lives of its customers and ensure their satisfaction.

Various company procedures are in force to ensure compliance with the ISO 9001: 2000 quality certificate concerning working conditions and performance related to suppliers and customers. Additionally, relations with suppliers and customers are governed by laws and the Company's "Common values and Ethics" and related regulations.

3.5 Social Responsibility In addition to its contribution to the national economy, Turkcell supports numerous social responsibility projects with the aim of contributing to the development of well qualified human resources in our country and adding value to society in a wide range of areas such as education, technology, sports, culture and art.

One of these projects is the Kardelen (Snowdrops) Project, which we conduct in partnership with the Society for Supporting Modern Life. As part of this project, 10,000 girls who would otherwise be denied educational resources due to a lack of finances are given scholarships. Since 2000, 20,000 students have been given Turkcell scholarships as part of this project. 7,470 Snowdrops have graduated from high school, 1,902 have passed the University Entrance Examination, and 363 have graduated from university and started their careers.

The Bridge of Hearts project was carried out in partnership with the Ministry of Education with the goal of enabling 100,000 children from 81 Turkish cities to learn more about their country and to grow up as self-confident individuals. The tour that began in June 2008 ended in August of that year.

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Turkcell expanded the coverage of its Sports Schools For Free project, which it has been supporting since 2000, and changed its name to Those Running to the Future. In April 2007, we included 38 additional schools in 23 cities in this project, allowing us to provide the chance to participate in sports activities to around 15,000 children a year.

Turkcell is the main sponsor of the Turkish National Soccer Team and the Turkish National Basketball Team and, starting with the 2005-2006 season, the company became the name sponsor of the Turkcell Super League for five seasons.

Turkcell believes financial support is vital for the sustainability of the recent achievements of Turkish soccer teams. It is the sponsor of 14 Anatolian teams in the Turkcell Super League. In short, the company continues to support Turkish Soccer.

As a contribution to the occupational competency of sports columnists who work in Anatolia, Turkcell organizes TSYD-Turkcell Sports Press Seminars all over Anatolia in partnership with the Turkish Sports Columnists' Association. More than a thousand sports columnists and 2,500 university students have participated in these seminars held in 17 cities over the last two years.

Turkcell has supported the Istanbul Film Festival, organized by the Istanbul Culture and Arts Foundation (I KSV), a non-profit organization, for six years. It has also supported the International Jazz Festival for the last nine years and it has been the official communications sponsor of IKSV since 2005. The project to restore Bodrum's antique theatre started in 1998 under the co-sponsorship of Ericsson and Turkcell. After the restoration of the antique Myndos Door and the Ottoman Shipyard were completed, the restoration of Bodrum's antique theatre was started in June 2002 as the third leg of the project. The restoration was completed in one year and the theatre was opened to public. In the field of technology, Turkcell has been aiding the development of Turkey's IT and telecommunications sectors for 11 years through the support it has given to the CeBIT Eurasia Exhibition.

Turkcell Mobile Future Competition supports creative work by young technology enthusiasts, and so encourages innovation and creativity.

Turkcell provides mobile telephone services through a comprehensive network of base stations. For every base station, Turkcell and the company building and equipping the base station perform safety tests. Nevertheless, 107 lawsuits were filed in 2008 claiming that particular base stations harmed human or environmental health or violated neighborhood laws. In the year, verdicts on 24 such lawsuits were handed down and of these 13 were settled in the Company's favor and 11 against.

SECTION 4 BOARD OF DIRECTORS

4.1 Structure and Creation of the Board of Directors and Independent Members Information regarding the structure of the Board of Directors can be found in the Investor Relations section of Turkcell's website (www.turkcell.com.tr). INVESTOR INFORMATION COMPLIANCE WITH CORPORATE GOVERNANCE PRINCIPLES

The Company's Board of Directors is made up of the following:

Mehmet Emin Karamehmet Chairman Mehmet Bülent Ergin Member Aimo Eloholma Member Tero Erikki Kivisaari Member Oleg Malis Member Alexey Khudyakov Member Colin J. Williams Member

All the members of the Board of Directors are non-executives. Colin J. Williams, as the independent member of the Board of Directors, satisfies CMB Corporate Governance Principles as well as the SEC's independence criteria.

At the Ordinary General Assembly held on April 25, 2008; it was resolved to give members of the Board of Directors necessary discharges and authority in accordance with articles 334 and 335 of the Turkish Commercial Code.

4.2 Qualifications of the Board of Directors Qualifications for membership on the Board of Directors are described in the Corporate Governance Guidelines. The Guidelines provide that the Corporate Governance Committee together with the members of the Board of Directors, annually review the appropriate skills and characteristics required for the Board members in the context of the current structure of the Board. Each board member is required to set aside significant time to devote to Board activities, to enhance his/her knowledge of the global telecommunications industry and related industries and to annually attend at least 75% of scheduled Board meetings. Each Board member is encouraged to limit the number of other public company boards on which he or she serves and to be mindful of his or her other existing and planned future commitments, so that such other directorships and commitments do not materially interfere with his or her service as an effective and active member of the Company's Board. Additionally, the Corporate Governance Committee constructs a compliance program for new members to be elected to the Board and oversee this program.

4.3 Vision and Strategic Objectives of the Company The Company's vision and strategic targets are presented in the section entitled "About Turkcell" on the website www.turkcell.com.tr as well as in the Annual Report.

4.4 Risk Management and Internal Control Mechanisms Since its establishment in 1993, Turkcell İletişim Hizmetleri A.Ş. has been involved in alternative capital markets to fund and support changing financial structures during the process of operational growth. In the performance of its corporate obligations, Turkcell has complied with various regulations, laws and rules since 1994. These obligations are liable to change, not only according to the financial regimes of the area in which the Company is active, but according to the requests and obligations of the markets from which it is funded.

Being listed on the New York Stock Exchange, Turkcell complies with SEC regulations and the Sarbanes Oxley Law Section 404, as do all publicly traded companies in the US, as well as with Corporate Governance Principles since it is also listed on the Istanbul Stock Exchange. Accordingly, Turkcell has formulated an internal control mechanism for itself and for the consolidated group companies which, in audit scope, are in line with Corporate Governance Principles.

Risk Management, Internal Audit Management, Business Sustainability Management, Information Security Management and Internal Fraud Management processes were introduced at the Corporate Risk Management Department that was established in January 2009.These strengthen the Company's focus on corporate risk management, expand risk management throughout Turkcell and the Turkcell Group by developing methodology, and they centralize operations carried out under various Company structures that affect the success of corporate risk management.

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The Internal Audit Department, in compliance with the "principle of independence" and in line with CMB's Communiqué Series: X No.19 directly reports to the Audit Committee formed by the independent members of the Board of Directors, the Chief Executive Officer and the Chief Financial Officer.

The internal control mechanism within Group companies that fall under the responsibility of related companies is coordinated and audited by Turkcell Internal Audit Department.

Within the framework of this mechanism, the Internal Audit Department ensures that Turkcell's financial statements as well as Group companies are reliable and accurate and its activities are in compliance with related laws. The Internal Audit Department analyzes processes to increase the effectiveness and the efficiency of their operations and identifies their existing and potential risks while contributing to finding solutions that will minimize or eliminate these risks.

The effectiveness of the internal control system is tested and assessed at regular intervals and corrections are implemented and followed up as indicated by the findings.

Turkcell formulated its Business Continuity Plans in 2000, involving its Technical operations. In 2004, by broadening its scope, the Business Continuity Plan has been positioned as Business Continuity Management in such a way that encompasses all of Turkcell's business functions. The Business Continuity Plan covers several subjects, including natural disasters, terrorist attacks, loss of critical staff or information, and its effects to our dealers and suppliers.

The Business Continuity Plan aims to mitigate risks against disasters by means of geographical dispersion. By courtesy of our geographically widespread technical infrastructure, our plans to manage a disaster from a remote center have been structured. We have the ability to keep additional capacity on main switchboards or support them with mobile switchboards.

Base station maintenance teams are positioned on a regional basis throughout the country. In case of emergency, teams have action plans to back up each other. In cases when a damaged base station cannot be operational within a certain time, a mobile base station is sent to maintain urgent coverage.

In addition, the Regulatory Management Department that supervises sector regulations and competition issues also performs risk management with regulation strategies.

4.5 Authority and Responsibilities of the members of the Board of Directors and Executives Related language stated in the Company's Articles of Association is as follows: "The Board is fully authorized to carry out the affairs of the Company and management of Company assets and the activities relating to the Company purpose and subject matter other than those that have to be solely carried out by the General Assembly." Additionally, within the context of enhancing the Company's corporate governance practices, the Board's responsibilities and duties are also reflected in the Corporate Governance Guidelines, which can also be found on the Company website.

4.6 Activities of the Board of Directors The Board of Directors organized 11 regular meetings during 2008 and gathered several times off the calendar. The primary activities of the Board of Directors are described in the Corporate Governance Guidelines and a summary is posted under the Corporate Governance Principles heading of the Company's website. In addition, a Corporate Governance Secretariat has been created to coordinate information flow between the members of the Board. Members of the Board receive no weighted or negative voting rights.

4.7 Prohibition of Carrying Out Transactions with the Company and Prohibition of Competition Permission contained in Articles 334 and 335 of the Turkish Commercial Code regarding the prohibition of carrying out transactions with the Company and competitors has been granted to members of the Board of Directors by the General Assembly. INVESTOR INFORMATION COMPLIANCE WITH CORPORATE GOVERNANCE PRINCIPLES

4.8 Ethical Rules Turkcell's statement of Common Values and Ethical Rules has been announced and distributed to all Company employees and managers. This statement is shared with each new employee during his/her orientation program, and each employee signs a letter of undertaking indicating that this statement is an inseparable part of the contract of employment.

Revisions to Common Values and Ethical Rules are shared with Turkcell employees via internal communication channels. A summary of the Ethical Guidelines are published on the company website, www.turkcell.com.tr, within the Investor Relations section under Corporate Governance. These rules and guidelines are complementary to other policies currently published or to be published in the future by the Company.

There is an ethical committee structure in regards to the management of Common Values and Business Ethics in Turkcell, which reports to the Audit Committee. The Committee of Assessment of Turkcell's Common Values and Business Ethics has been established to define, examine, update and develop Turkcell's Common Values and Business Ethics guidelines and to evaluate and resolve potential violations.

4.9 Number, Structure and Independence of the Committees Established on the Board of Directors Within the Board of Directors, there is an Audit Committee and a Corporate Governance Committee. Each committee serves as consultant to the Board, providing advice and counsel. Statutes regarding business principles govern each committee. Audit Committee and Corporate Governance Committee members are non-executive members of the Board of Directors. The chairman of the Corporate Governance Committee is not referred to as independent according to the criteria of CMB Corporate Governance Principles. Information regarding these committees can be found under the Investor Relations section of the website www.turkcell.com.tr under 'Corporate Governance'.

4.10 Financial Rights provided for the Board of Directors Members of the Board of Directors receive an attendance fee. No loans have been granted to any members of the Company's Board of Directors or managers nor have any other special favors such as sureties been given.

96 TURKCELL İLETİŞİM HİZMETLERİ A.Ş. AND ITS SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENT AND INDEPENDENT AUDIT REPORT 98 99 100 101

TURKCELL İLETİŞİM HİZMETLERİ A.Ş. AND ITS SUBSIDIARIES Consolidated Financial Statements As At And For The Year Ended 31 December 2008

CONSOLIDATED BALANCE SHEET 102 CONSOLIDATED INCOME STATEMENT 103 CONSOLIDATED STATEMENT OF RECOGNIZED INCOME AND EXPENSE 104 CONSOLIDATED STATEMENT OF CASH FLOWS 105 NOTE 1 REPORTING ENTITY 106 NOTE 2 BASIS OF PREPARATION 106 NOTE 3 SIGNIFICANT ACCOUNTING POLICIES 107 NOTE 4 DETERMINATION OF FAIR VALUES 115 NOTE 5 FINANCIAL RISK MANAGEMENT 116 NOTE 6 SEGMENT REPORTING 117 NOTE 7 ACQUISITIONS OF SUBSIDIARIES 121 NOTE 8 REVENUE 122 NOTE 9 PERSONNEL EXPENSES 122 NOTE 10 FINANCE INCOME AND EXPENSES 123 NOTE 11 INCOME TAX EXPENSE 123 NOTE 12 PROPERTY, PLANT AND EQUIPMENT 125 NOTE 13 INTANGIBLE ASSETS 127 NOTE 14 EQUITY ACCOUNTED INVESTEES 129 NOTE 15 OTHER INVESTMENTS 130 NOTE 16 OTHER NON-CURRENT ASSETS 130 NOTE 17 DEFERRED TAX ASSETS AND LIABILITIES 131 NOTE 18 TRADE RECEIVABLES AND ACCRUED INCOME 133 NOTE 19 OTHER CURRENT ASSETS 133 NOTE 20 CASH AND CASH EQUIVALENTS 133 NOTE 21 CAPITAL AND RESERVES 134 NOTE 22 EARNINGS PER SHARE 136 NOTE 23 OTHER NON-CURRENT LIABILITIES 136 NOTE 24 LOANS AND BORROWINGS 136 NOTE 25 EMPLOYEE BENEFITS 139 NOTE 26 DEFERRED INCOME 139 NOTE 27 PROVISIONS 139 NOTE 28 TRADE AND OTHER PAYABLES 140 NOTE 29 FINANCIAL INSTRUMENTS 141 NOTE 30 OPERATING LEASES 145 NOTE 31 GUARANTEES AND PURCHASE OBLIGATIONS 146 NOTE 32 CONTINGENCIES 146 NOTE 33 RELATED PARTIES 159 NOTE 34 GROUP ENTITIES 163 NOTE 35 SUBSEQUENT EVENTS 163 TURKCELL İLETİŞİM HİZMETLERİ A.Ş. AND ITS SUBSIDIARIES Consolidated Balance Sheet As at 31 December (Amounts expressed in thousands of US Dollars unless otherwise indicated except share amounts)

Note 2008 2007 Assets Property, plant and equipment 12 2,096,070 2,221,895 Intangible assets 13 1,452,895 1,375,403 Investments in equity accounted investees 14 313,723 664,385 Other investments 15 34,614 42,354 Due from related parties 33 45,349 68,871 Other non-current assets 16 54,007 44,171 Deferred tax assets 17 1,144 2,446 Total non-current assets 3,997,802 4,419,525

Inventories 19,457 23,424 Other investments 15 689 28,218 Due from related parties 33 64,013 52,482 Trade receivables and accrued income 18 587,385 558,563 Other current assets 19 138,788 291,534 Cash and cash equivalents 20 3,259,792 3,095,300 Total current assets 4,070,124 4,049,521 Total assets 8,067,926 8,469,046

Equity Share capital 21 1,636,204 1,636,204 Share premium 21 434 434 Capital contributions 21 18,202 - Reserves 21 (706,384) 931,913 Retained earnings 21 4,437,071 3,224,526 Total equity attributable to equity holders of Turkcell İletişim Hizmetleri A.Ş. 5,385,527 5,793,077

Minority interest 21 58,116 138,128 Total equity 5,443,643 5,931,205

Liabilities Loans and borrowings 24 130,020 140,404 Employee benefits 25 26,717 27,229 Provisions 27 4,490 - Other non-current liabilities 23 227,511 - Deferred tax liabilities 17 130,491 132,388 Total non-current liabilities 519,229 300,021

Bank overdraft 20 4,372 2,125 Loans and borrowings 24 655,909 619,555 Income taxes payable 11 126,585 443,194 Trade and other payables 28 964,421 759,019 Due to related parties 33 21,032 17,978 Deferred income 26 250,386 324,815 Provisions 27 82,349 71,134 Total current liabilities 2,105,054 2,237,820

Total liabilities 2,624,283 2,537,841

Total equity and liabilities 8,067,926 8,469,046

The notes on page 106 to 163 are an integral part of these consolidated financial statements. 102 103

TURKCELL İLETİŞİM HİZMETLERİ A.Ş. AND ITS SUBSIDIARIES Consolidated Income Statement For The Year Ended 31 December (Amounts expressed in thousands of US Dollars unless otherwise indicated except share amounts)

Note 2008 2007 2006

Revenue 8 6,970,408 6,328,580 4,700,307 Direct cost of revenue (3,409,013) (3,103,427) (2,627,890) Gross profit 3,561,395 3,225,153 2,072,417

Other income 14,136 7,799 8,050 Selling and marketing expenses (1,351,692) (1,138,154) (827,516) Administrative expenses (309,349) (252,841) (154,917) Other expenses (17,990) (22,423) (6,467) Results from operating activities 1,896,500 1,819,534 1,091,567

Finance income 10 442,099 308,368 184,015 Finance expenses 10 (136,769) (551,142) (108,038) Net finance income/(expense) 305,330 (242,774) 75,977

Share of profit of equity accounted investees 14 102,990 64,906 78,616 Profit before income tax 2,304,820 1,641,666 1,246,160

Income tax expense 11 (549,758) (322,418) (413,242) Profit for the period 1,755,062 1,319,248 832,918

Attributable to: Equity holders of Turkcell İletişim Hizmetleri A.Ş. 1,836,824 1,350,162 875,491 Minority interest (81,762) (30,914) (42,573) Profit for the period 1,755,062 1,319,248 832,918

Basic and diluted earnings per share 22 0.834920 0.613710 0.397951 (in full USD)

The notes on page 106 to 163 are an integral part of these consolidated financial statements. TURKCELL İLETİŞİM HİZMETLERİ A.Ş. AND ITS SUBSIDIARIES Consolidated Statement of Recognized Income and Expense For The Year Ended 31 December (Amounts expressed in thousands of US Dollars unless otherwise indicated except share amounts)

2008 2007 2006

Foreign currency translation differences (1,458,366) 811,302 (135,275) Net change in fair value of available-for-sale securities (5,360) 2,666 2,015 Income and expense recognized directly in equity (1,463,726) 813,968 (133,260)

Profit for the period 1,755,062 1,319,248 832,918

Total recognized income for the period 291,336 2,133,216 699,658

Attributable to: Equity holders of Turkcell İletişim Hizmetleri A.Ş. 363,504 2,178,398 741,400 Minority interest (72,168) (45,182) (41,742) Total recognized income for the period 291,336 2,133,216 699,658

The notes on page 106 to 163 are an integral part of these consolidated financial statements. 104 105

TURKCELL İLETİŞİM HİZMETLERİ A.Ş. AND ITS SUBSIDIARIES Consolidated Statement of Cash Flows For The Year Ended 31 December (Amounts expressed in thousands of US Dollars unless otherwise indicated except share amounts)

Note 2008 2007 2006 Cash flows from operating activities

Profit for the period 1,755,062 1,319,248 832,918 Adjustments for: 369,540 1,264,562 1,072,156 Depreciation 12 433,942 532,915 498,533 Amortization of intangibles 13 245,985 260,062 231,480 Net finance income/(expense) 10 (349,219) 11,784 (67,660) Income tax expense 11 549,758 322,418 413,242 Share of profit of equity accounted investees (151,629) (111,254) (94,021) Loss/(gain) on sale of property, plant and equipment (6,931) 3,869 (1,279) Translation reserve (344,346) 137,317 17,530 Amortization of transaction costs of borrowings - 5,100 7,996 Deferred income (3,293) 102,351 66,335 Gain on sale of a subsidiary (4,727) - - 2,124,602 2,583,810 1,905,074

Change in trade receivables 18 (145,670) (177,819) (11,552) Change in due from related parties 33 2,124 26,698 6,153 Change in inventories (267) (10,128) (2,512) Change in prepaid expenses 16-19 (16,590) (9,034) (19,331) Change in other current assets 19 (10,618) 24,482 (247) Change in other non-current assets 16 (10,704) (24,782) 17,053 Change in due to related parties 33 (6,541) 10,302 945 Change in trade and other payables 66,690 15,285 105,795 Change in other current liabilities 206,537 67,457 (37,823) Change in other non-current liabilities 52,452 (9,029) 2,267 Change in employee benefits 25 5,773 5,931 1,801 Change in provisions 29,704 23,832 (2,261) 2,297,492 2,527,005 1,965,362 Interest paid (25,050) (37,024) (42,879) Income tax paid (687,292) (347,202) (67,592) Dividend received 14 89,235 13,397 - Net cash from operating activities 1,674,385 2,156,176 1,854,891

Cash flows from investing activities Proceeds from sale of property plant and equipment 16,693 7,657 3,609 Proceeds from currency option contracts 14,655 17,807 - Proceeds from sale of available-for-sale financial assets 78,542 36,698 20,490 Proceeds from settlement of held-to-maturity investments - 8,586 9,218 Interest received 354,211 250,423 161,536 Dividends received - 18,756 21,558 Acquisition of property, plant and equipment 12 (603,568) (564,859) (370,377) Acquisition of intangibles 13 (193,219) (206,985) (234,382) Acquisition of subsidiaries, net of cash acquired 7 (309,967) - - Acquisition of minority interest - - (17,591) Payment of currency option contracts premium (4,970) (8,501) - Acquisition of equity accounted investees and other investments - - (163,432) Acquisition of available-for-sale financial assets (47,549) (119) (56,718) Acquisition of held-to-maturity investments - - (6,407) Net cash used in investing activities (695,172) (440,537) (632,496)

Cash flows from financing activities Payment of transaction costs - (205) (51,472) Dividends paid (556,973) (457,625) (342,166) Proceeds from issuance of loans and borrowings 601,000 498,666 772,434 Repayment of borrowings (487,999) (435,038) (862,386) Change in minority interest 72,199 127,220 87,745 Reimbursement of borrowing costs - 11,983 - Proceeds from capital contribution 18,202 - - Net cash used in financing activities (353,571) (254,999) (395,845)

Effects of foreign exchange rate fluctuations on balance sheet items (418,945) 276,837 4,940

Net increase in cash and cash equivalents 206,697 1,737,477 831,490 Cash and cash equivalents at 1 January 3,093,175 1,598,355 808,153 Effect of exchange rate fluctuations on cash and cash equivalents (44,452) (242,657) (41,288) Cash and cash equivalents at 31 December 3,255,420 3,093,175 1,598,355

The notes on page 106 to 163 are an integral part of these consolidated financial statements. TURKCELL İLETİŞİM HİZMETLERİ A.Ş. AND ITS SUBSIDIARIES Notes To The Consolidated Financial Statements As At And For The Year Ended 31 December (Amounts expressed in thousands of US Dollars unless otherwise indicated except share amounts)

1. REPORTING ENTITY Turkcell İletişim Hizmetleri Anonim Şirketi (the “Company”) was incorporated in Turkey on 5 October 1993 and commenced its operations in 1994. The address of the Company’s registered office is Turkcell Plaza, Meşrutiyet Caddesi No. 71, 34430 Tepebaşı /Istanbul. It is engaged in establishing and operating a Global System for Mobile Communications (“GSM”) network in Turkey and regional states. In April 1998, the Company signed a license agreement (the “License”) with the Ministry of Transportation and Communications of Turkey (the “Turkish Ministry”), under which it was granted a 25 year GSM license in exchange for a license fee of US$500,000. The License permits the Company to operate as a stand-alone GSM operator and releases it from some of the operating constraints in the Revenue Sharing Agreement, which was in effect prior to the License. Under the License, the Company collects all of the revenue generated from the operations of its GSM network and pays the Undersecretariat of Treasury (the “Turkish Treasury”) an ongoing license fee equal to 15% of its gross revenue from Turkish GSM operations. The Company continues to build and operate its GSM network and is authorized to, among other things, set its own tariffs within certain limits, charge peak and off-peak rates, offer a variety of service and pricing packages, issue invoices directly to subscribers, collect payments and deal directly with subscribers. Following the 3G tender by the Information Technologies and Communications Authority regarding the authorization for providing IMT-2000/UMTS services and infrastructure, the Company has been granted the A Type license providing the widest frequency band, at a consideration of EUR 358 million (excluding Value Added Tax (“VAT”) ). Payment will be made in cash following the necessary approvals and expected to take place in March 2009. On 25 June 2005, the Turkish government declared that GSM operators are required to pay 10% of their existing monthly ongoing license fee to the Turkish Ministry as a universal service fund contribution in accordance with Law No: 5369. As a result, starting from 30 June 2005, the Company pays 90% of the ongoing license fee to the Turkish Treasury and 10% to the Turkish Ministry as universal service fund. In July 2000, the Company completed an initial public offering with the listing of its ordinary shares on the Istanbul Stock Exchange and American Depositary Shares, or ADSs, on the New York Stock Exchange. As at 31 December 2008, two significant founding shareholders, Sonera Holding BV and Çukurova Group, directly and indirectly, own approximately 37.1% and 13.8%, respectively of the Company’s share capital and are ultimate counterparties to a number of transactions that are discussed in the related party footnote. On 28 November 2005, upon completion of a series of transactions, Alfa Group acquired 13.2% indirect ownership in the Company through its Altimo subsidiary. On the basis of publicly available information, Alfa Group transferred control over 50% of its previously held shares to Nadash International Holdings Inc. in January 2008. The consolidated financial statements of the Company as at and for the year ended 31 December 2008 comprise the Company and its subsidiaries (together referred to as the “Group”) and the Group’s interest in one associate and one joint venture. Subsidiaries of the Company, their locations and their business are given in note 34. The Company’s and each of its subsidiaries’, associate’s and joint venture’s financial statements are prepared as at and for the year ended 31 December 2008.

2. BASIS OF PREPARATION (a) Statement of compliance The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRSs”) as issued by the International Accounting Standards Board (“IASB”). The Group’s consolidated financial statements were approved by the Board of Directors on 25 February 2009.

(b) Basis of measurement The accompanying consolidated financial statements are based on the statutory records, with adjustments and reclassifications for the purpose of fair presentation in accordance with IFRSs as issued by the IASB. They are prepared on the historical cost basis adjusted for the effects of inflation during the hyperinflationary period lasted by 31 December 2005, except that the following assets and liabilities are stated at their fair value: derivative financial instruments and financial instruments classified as available-for-sale. The methods used to measure fair value are further discussed in note 4.

(c) Functional and presentation currency The consolidated financial statements are presented in US Dollars (“USD”), rounded to the nearest thousand. Moreover, all financial information expressed in New Turkish Lira (“TRY”), Euro (“EUR”) and Swedish Krona (“SEK”) have been rounded to the nearest thousand. The functional currency of the Company and its consolidated subsidiaries located in Turkey and Turkish Republic of Northern Cyprus is TRY. The functional currency of Euroasia Telecommunications Holding BV (“Euroasia”) and Financell BV (“Financell”) is USD. The functional currency of East Asian Consortium BV (“Eastasia”) is EUR. The functional currency of LLC Astelit (“Astelit”), Global Bilgi LLC (“Global LLC”) and UkrTower LLC (“UkrTower”) is Ukrainian Hryvnia. The functional currency of Belarussian Telecommunications Network (“Belarussian Telecom”) is Belarussian Roubles (“BYR”).

(d) Use of estimates and judgments The preparation of financial statements requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected.

106 107

TURKCELL İLETİŞİM HİZMETLERİ A.Ş. AND ITS SUBSIDIARIES Notes To The Consolidated Financial Statements As At And For The Year Ended 31 December (Amounts expressed in thousands of US Dollars unless otherwise indicated except share amounts)

Information about significant areas of estimation, uncertainty and critical judgments in applying accounting policies that have the most significant effect on the amounts recognised in the consolidated financial statements are described in notes 4, 7 and 32 and detailed analysis with respect to accounting estimates and critical judgments of bad debts, useful lives or expected patterns of consumption of the future economic benefits embodied in depreciable assets, income taxes and revenue recognition are provided below:

Key sources of estimation uncertainty In note 29, detailed analysis is provided for the foreign exchange exposure of the Group and risks in relation to foreign exchange movements.

Critical accounting judgments in applying the Group’s accounting policies Certain critical accounting judgments in applying the Group’s accounting policies are described below:

Allowance for doubtful receivables The impairment losses in trade and other receivables are based on management’s evaluation of the volume of the receivables outstanding, historical collection trends and general economic conditions. Should economic conditions, collection trends or any specific industry trend worsen compared to management estimates, allowance for doubtful receivables recognised in consolidated financial statements may not be sufficient to cover bad debts.

Useful lives of assets The useful economic lives of the Group’s assets are determined by management at the time the asset is acquired and regularly reviewed for appropriateness. The Group defines useful life of its assets in terms of the assets’ expected utility to the Group. This judgment is based on the experience of the Group with similar assets. In determining the useful life of an asset, the Group also follows technical and/or commercial obsolescence arising on changes or improvements from a change in the market. The useful life of the licenses are based on duration of the sold license agreement. The GSM license that is held by Belarussian Telecom, newly acquired consolidated subsidiary, expires in 2015. According to the Share Purchase Agreement signed, the State Committee on Property of the Republic of Belarus committed to grant the license from the acquisition date of 26 August 2008 for a period of 10 years and such license shall be extended for an additional 10 years for an insignificant consideration. In the consolidated financial statements, amortization charge is recorded on the assumption that the license will be extended.

Commission fees Commission fees relate to services performed in relation to betting games where the Group acts as an agent in the transaction rather than as a principal. In the absence of specific guidance under IFRSs on distinguishing between an agent and a principal, management considered the following factors: • The Group does not take the responsibility for fulfilment of the games. • The Group does not collect the proceeds from the final customer and it does not bear the credit risk. • The Group earns a stated percentage of the total turnover.

Revenue recognition In arrangements which include multiple elements, the Group considers the elements to be separate units of accounting in the arrangement. Deliverables are accounted separately where a market for each deliverable exists and if the recognition criterion is met individually. The arrangement consideration is allocated to each deliverable in proportion to the fair value of the individual deliverables.

Income taxes The calculation of income taxes involves a degree of estimation and judgment in respect of certain items whose tax treatment cannot be finally determined until resolution has been reached with the relevant tax authority or, as appropriate, through formal legal process. As part of the process of preparing the consolidated financial statements, the Group is required to estimate the income taxes in each of the jurisdictions and countries in which they operate. This process involves estimating the actual current tax exposure together with assessing temporary differences resulting from differing treatment of items, such as deferred revenue and reserves for tax and accounting purposes. The Company management assesses the likelihood that the deferred tax assets will be recovered from future taxable income, and to the extent the recovery is not considered probable the deferred asset is adjusted accordingly. The recognition of deferred tax assets is based upon whether it is probable that future taxable profits will be available, against which the temporary differences can be utilized. Recognition, therefore, involves judgment regarding the future financial performance of the particular legal entity in which the deferred tax asset has been recognized.

3. SIGNIFICANT ACCOUNTING POLICIES The accounting policies set out below have been applied consistently to all periods presented in these consolidated financial statements, and have been applied consistently by the Group entities. TURKCELL İLETİŞİM HİZMETLERİ A.Ş. AND ITS SUBSIDIARIES Notes To The Consolidated Financial Statements As At And For The Year Ended 31 December (Amounts expressed in thousands of US Dollars unless otherwise indicated except share amounts)

(a) Basis of consolidation (i) Subsidiaries Subsidiaries are entities controlled by the Group. Control exists when the Group has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. In assessing control, potential voting rights that currently are exercisable or convertible are taken into account. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases. The accounting policies of subsidiaries are changed as necessary to align them with the policies adopted by the Group. Losses that exceed the minority interest in the equity of a subsidiary may create a debit balance on minority interests only if the minority has a binding obligation to fund the losses and is able to make an additional investment to cover the losses. Unless this is the case, the losses are attributed to the Company’s majority interest within the profit for the period. If the subsidiary subsequently reports profits then these profits are allocated to the parent until the share of losses absorbed previously by the parent has been recovered.

(ii) Acquisition from entities under common control Business combinations arising from transfers of interests in entities that are under the control of the shareholder that controls the Group are excluded from the scope of International Financial Reporting Standards No. 3 (“IFRS 3”) “Business Combinations” and are accounted for as if the acquisition had occurred at the beginning of the earliest comparative period presented or, if later, at the date that common control was established. The assets and liabilities acquired from entities under common control are recognised at the carrying amounts recognised previously in the Group’s controlling shareholder’s consolidated financial statements. The components of equity of the acquired entities are added to the same components within the Group equity.

(iii) Associates and jointly controlled entities (equity accounted investees) Associates are those entities in which the Group has significant influence, but not control, over the financial and operating policies. Significant influence is presumed to exist when the Group holds between 20 and 50 percent of the voting power of another entity. Joint ventures are those entities over whose activities the Group has joint control, established by contractual agreement and requiring unanimous consent for strategic financial and operating decisions. Associates and jointly controlled entities (equity accounted investees) are accounted for using the equity method and are initially recognised at cost. The Group’s investment includes goodwill identified on acquisition, net of any accumulated impairment loss. The consolidated financial statements include the Group’s share of the income and expenses and equity movements of equity accounted investees, after adjustments to align the accounting policies with those of the Group, from the date that significant influence or joint control commences until the date that significant influence or joint control ceases. When the Group’s share of losses exceeds its interest in an equity accounted investee, the carrying amount of that interest (including any long-term investments) is reduced to nil and recognition of further losses is discontinued except to the extent that the Group has an obligation or has made payments on behalf of the investee. The Group’s equity accounted investees as at 31 December 2008 are Fintur Holdings BV (“Fintur”) and A-Tel Pazarlama ve Servis Hizmetleri AŞ (“A-Tel”).

(iv) Transactions eliminated on consolidation Intragroup balances and transactions, and any unrealised income and expenses arising from intragroup transactions, are eliminated in preparing the consolidated financial statements. Unrealised gains arising from transactions with equity accounted investees are eliminated against the investment to the extent of the Group’s interest in the investee. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment.

(v) Minority interests Where a put option is granted by the Group to the minority shareholders in existing subsidiaries that provides for settlement in cash or in another financial asset, the Group recognised a liability for the present value of the estimated exercise price of the option. The interests of the minority shareholders that hold such put options are derecognised when the financial liability is recognised. The corresponding interests attributable to the holder of the puttable minority interests are presented as attributable to the equity holders of the parent and not as attributable to those minority shareholders. The difference between the put option liability recognised and the amount of minority interest derecognised is recorded under equity. Subsequent changes in the fair value of the put options granted to the minority shareholders in existing subsidiaries are also recognised in equity, except the imputed interest on the liability is recognised in the consolidated income statement.

(b) Foreign currency (i) Foreign currency transactions Transactions in foreign currencies are translated to the respective functional currencies of Group entities at exchange rates at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the reporting date are retranslated to the functional currency at the exchange rate at that date. Foreign currency differences arising on translation of foreign currency transactions are recognised in the income statement. The foreign currency gain or loss on monetary items is the difference between amortised cost in the functional currency at the beginning of the period, adjusted for effective interest and payments during the period, and the amortised cost in foreign currency translated at the exchange rate at the end of the period. Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are retranslated to the functional currency at the exchange rate at the date that the fair value was determined. Foreign currency differences arising on retranslation are recognised in profit or loss, except for differences arising on the retranslation of available-for-sale equity instruments, which are recognised directly in equity.

(ii) Foreign operations The assets and liabilities of foreign operations, including fair value adjustments arising on acquisition, are translated to USD at foreign exchange rates ruling at the reporting date. The income and expenses of foreign operations are translated to USD at exchange rates approximating to the exchange rates at the dates of the transactions. 108 109

TURKCELL İLETİŞİM HİZMETLERİ A.Ş. AND ITS SUBSIDIARIES Notes To The Consolidated Financial Statements As At And For The Year Ended 31 December (Amounts expressed in thousands of US Dollars unless otherwise indicated except share amounts)

Foreign currency differences arising on retranslation are recognized directly in a separate component of equity. Since 1 January 2005, the Group’s date of transition to IFRSs, such differences have been recognized in the foreign currency translation reserve. When a foreign operation is disposed of, in part or in full, the relevant amount in the foreign currency translation reserve is transferred to profit or loss. Foreign exchange gains and losses arising from a monetary item receivable from or payables to a foreign operation, the settlement of which is neither planned nor likely in the foreseeable future, are considered to form part of a net investment in a foreign operation and are recognised directly in equity in the foreign currency translation reserve.

(iii) Translation from functional to presentation currency Items included in the financial statements of each entity are measured using the currency of the primary economic environment in which the entities operate, normally under their local currencies. The consolidated financial statements are presented in USD, which is the presentation currency of the Group. The Group uses USD as the presentation currency for the convenience of investor and analyst community. Assets and liabilities for each balance sheet presented (including comparatives) are translated to USD at exchange rates at the balance sheet date. Income and expenses for each income statement (including comparatives) are translated to USD at monthly average exchange rates. Foreign currency differences arising on retranslation are recognised directly in a separate component of equity.

(iv) Net investment in foreign operations Foreign currency differences arising from the translation of the net investment in foreign operations are recognized in foreign currency translation reserve. They are transferred to the income statement upon disposal of the foreign operations.

(c) Financial instruments (i) Non-derivative financial instruments Non-derivative financial instruments comprise investments in equity and debt securities, trade and other receivables, cash and cash equivalents, loans and borrowings, and trade and other payables. Non-derivative financial instruments are recognised initially at fair value plus, for instruments not at fair value through profit or loss, any directly attributable transaction costs. Subsequent to initial recognition, non-derivative financial instruments are measured as described below: Cash and cash equivalents comprise cash balances and call deposits. Bank overdrafts that are repayable on demand and form an integral part of the Group’s cash management are included as a component of cash and cash equivalents for the purpose of the statement of cash flows. Accounting for finance income and expenses is discussed in note 3(m).

• Held-to-maturity investments If the Group has the positive intent and ability to hold debt securities to maturity, then they are classified as held-to-maturity. Held-to-maturity investments are measured at amortised cost using the effective interest method, less any impairment losses.

• Available-for-sale financial assets The Group’s investments in equity securities and certain debt securities are classified as available-for-sale financial assets. Subsequent to initial recognition, they are measured at fair value and changes therein, other than impairment losses (see note 3(h)(i)), and foreign exchange gains and losses on available-for-sale monetary items (see note 3(b)(i)), are recognised directly in equity. When an investment is derecognised, the cumulative gain or loss in equity is transferred to profit or loss.

• Financial assets at fair value through profit or loss An instrument is classified as financial asset at fair value through profit or loss if it is held for trading or is designated as such upon initial recognition. Financial instruments are designated at fair value through profit or loss if the Group manages such investments and makes purchase and sale decisions based on their fair value in accordance with the Group’s risk management or investment strategy. Upon initial recognition, attributable transaction costs are recognised in profit or loss when incurred. Financial instruments at fair value through profit or loss are measured at fair value, and changes therein are recognised in profit or loss.

• Estimated exercise price of put options Under the terms of certain agreements, the Group is committed to acquire the interests owned by minority shareholders in consolidated subsidiaries, if these minority interests wish to sell their share of interests. As the Group has unconditional obligation to fulfil its liabilities under these agreements, International Accounting Standards No: 32 (“IAS 32”) “Financial instruments: Disclosure and Presentation”, requires the value of such put option to be presented as a financial liability on the balance sheet for the present value of the estimated option redemption amount. The Group accounted such transactions under the anticipated acquisition method and the interests of minority shareholders that hold such put option are derecognised when the financial liability is recognised. The Group accounted the difference between the amount recognised initially for the exercise price of the put option and the carrying amount of minority in equity.

• Other Other non-derivative financial instruments are measured at amortised cost using the effective interest method, less any impairment losses. TURKCELL İLETİŞİM HİZMETLERİ A.Ş. AND ITS SUBSIDIARIES Notes To The Consolidated Financial Statements As At And For The Year Ended 31 December (Amounts expressed in thousands of US Dollars unless otherwise indicated except share amounts)

(ii) Derivative financial instruments The Group holds derivative financial instruments to hedge its foreign currency risk exposures arising from operational, financing and investing activities. In accordance with its treasury policy, the Group engages in forward and option contracts. However, these derivatives do not qualify for hedge accounting and are accounted for as trading instruments. Embedded derivatives are separated from the host contract and accounted for separately if a) the economic characteristics and risks of the host contract and the embedded derivative are not closely related, b) a separate instrument with the same terms as the embedded derivative would meet the definition of a derivative, and c) the combined instrument is not measured at fair value through profit or loss. Derivatives are recognised initially at fair value; attributable transaction costs are recognised in profit or loss when incurred. Subsequent to initial recognition, derivatives are measured at fair value, and changes therein are recognized in profit or loss.

(d) Property, plant and equipment (i) Recognition and measurement Items of property, plant and equipment are stated at cost adjusted for the effects of inflation during the hyperinflationary period lasted by 31 December 2005 less accumulated depreciation (see below) and accumulated impairment losses (see note 3(h)(ii)). Cost includes expenditure that is directly attributable to the acquisition of the asset. The cost of self-constructed assets includes the cost of materials and direct labor, any other costs directly attributable to bringing the asset to a working condition for its intended use, and the costs of dismantling and removing the items and restoring the site on which they are located, if any. Borrowing costs related to the acquisition or constructions of qualifying assets are recognized in profit or loss as incurred or capitalized during the period. When parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items of property, plant and equipment. Gains/losses on disposal of an item of property, plant and equipment are determined by comparing the proceeds from disposal with the carrying amount of property, plant and equipment and are recognized net within other income or other expenses in profit or loss.

(ii) Subsequent costs The cost of replacing part of an item of property, plant and equipment is recognized in the carrying amount of the item if it is probable that the future economic benefits embodied within the part will flow to the Group and its cost can be measured reliably. The carrying amount of the replaced item is derecognised. The costs of the day-to-day servicing of property, plant and equipment are recognised in profit or loss as incurred.

(iii) Depreciation Depreciation is recognized in the profit or loss on a straight-line basis over the estimated useful lives of each part of an item of property, plant and equipment. Leased assets are depreciated over the shorter of the lease term or their useful lives unless it is reasonably certain that the Group will obtain ownership by the end of the lease term. Land is not depreciated. The estimated useful lives for the current and comparative periods are as follows: Buildings 21 – 50 years Network infrastructure 3 – 8 years Equipment, fixtures and fittings 4 – 5 years Motor vehicles 4 – 5 years Central betting terminals 1 – 10 years Leasehold improvements 5 years Depreciation methods, useful lives and residual values are reviewed at least annually unless there is a triggering event.

(e) Intangible assets Intangible assets that are acquired by the Group which have finite useful lives are measured at cost adjusted for the effects of inflation during the hyperinflationary period lasted by 31 December 2005 less accumulated amortization (see below) and accumulated impairment losses (see note 3(h)(ii)).

(i) Goodwill Goodwill or negative goodwill arises on the acquisition of subsidiaries, associates and joint ventures. Goodwill represents the excess of the cost of the acquisition over the Group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities of the acquire. When the excess is negative (negative goodwill), it is recognised immediately in profit or loss.

Subsequent measurement Goodwill is measured at cost less accumulated impairment losses. In respect of equity accounted investees, the carrying amount of goodwill is included in the carrying amount of the investment.

110 111

TURKCELL İLETİŞİM HİZMETLERİ A.Ş. AND ITS SUBSIDIARIES Notes To The Consolidated Financial Statements As At And For The Year Ended 31 December (Amounts expressed in thousands of US Dollars unless otherwise indicated except share amounts)

(ii) Subsequent expenditure Subsequent expenditure is capitalised only when it increases the future economic benefits embodied in the specific asset (that is purchased from independent third parties) to which it relates. All other expenditure, including expenditure on internally generated goodwill and brands, is recognised in profit or loss as incurred. Capitalized costs generally relate to the application of development stage; any other costs incurred during the pre and post-implementation stages, such as repair, maintenance or training, are expensed as incurred. Subsequent expenditures of the Company do not relate to research and development activities. iii) Amortization Amortization is recognized in the profit or loss on a straight line basis over the estimated useful lives of intangible assets unless such useful lives are indefinite from the date that they are available for use. The estimated useful lives for the current and comparative periods are as follows: Computer software 3 – 8 years GSM and other telecommunications license 3 – 25 years Transmission lines 10 years Central betting system operating right 1 year Customer base 2 – 8 years Brand name 10 years Customs duty and VAT exemption right 4.4 years

(f) Leased assets Leases in terms of which the Group assumes substantially all the risks and rewards of ownership are classified as finance leases. Upon initial recognition, the leased asset is measured at an amount equal to the lower of its fair value or the present value of the minimum lease payments. Subsequent to initial recognition, the asset is accounted for in accordance with the accounting policy applicable to that asset. Other leases are operating leases and the leased assets are not recognized on the Group’s balance sheet.

(g) Inventories Inventories are measured at the lower of cost or net realizable value. Net realisable value is the estimated selling price in the ordinary course of business, less selling expenses. The cost of inventory is determined using the weighted average method and includes expenditure incurred in acquiring the inventories and bringing them to their existing location and condition. As at 31 December 2008, inventories mainly consist of simcards, scratch cards and handsets.

(h) Impairment (i) Financial assets A financial asset is assessed at each reporting date to determine whether there is any objective evidence that it is impaired. A financial asset is considered to be impaired if objective evidence indicates that one or more events have had a negative effect on the estimated future cash flows of that asset. An impairment loss in respect of a financial asset measured at amortised cost is calculated as the difference between its carrying amount and the present value of the estimated future cash flows discounted at the original effective interest rate. An impairment loss in respect of an available-for-sale financial asset is calculated by reference to its fair value. Individually significant financial assets are tested for impairment on an individual basis. The remaining financial assets are assessed collectively in groups that share similar credit risk characteristics. All impairment losses are recognised in profit or loss. Any cumulative loss in respect of an available-for-sale financial asset recognised previously in equity is transferred to profit or loss. An impairment loss is reversed if the reversal can be related objectively to an event occurring after the impairment loss was recognised. For financial assets measured at amortised cost and available-for-sale financial assets that are debt securities, the reversal is recognised in profit or loss. For available-for-sale financial assets that are equity securities, the reversal is recognised directly in equity.

(ii) Non-financial assets The carrying amounts of the Group’s non-financial assets, other than inventories, and deferred tax assets are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated. The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. For the purpose of impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or group of assets (the “cash-generating unit”). An impairment loss is recognised if the carrying amount of an asset or its cash-generating unit exceeds its estimated recoverable amount. Impairment losses are recognised in profit or loss. Impairment losses recognised in respect of cash-generating units are allocated first to reduce the carrying amount of any goodwill allocated to the units and then to reduce the carrying amount of the other assets in the unit (group of units) on a pro rata basis. TURKCELL İLETİŞİM HİZMETLERİ A.Ş. AND ITS SUBSIDIARIES Notes To The Consolidated Financial Statements As At And For The Year Ended 31 December (Amounts expressed in thousands of US Dollars unless otherwise indicated except share amounts)

An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment losses recognised in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been recognised.

(i) Employee benefits (i) Retirement pay liability In accordance with existing labor law in Turkey, the Company and its subsidiaries in Turkey are required to make lump-sum payments to employees who have completed one year of service and whose employment is terminated without cause or who retire, are called up for military service or die. Such payments are calculated on the basis of 30 days' pay maximum full TRY 2,260 as at 31 December 2008 (equivalent to full US$1,494 as at 31 December 2008), which is effective from 1 January 2009, (31 December 2007: full TRY 2,030 (equivalent to full US$1,342 as at 31 December 2008)) per year of employment at the rate of pay applicable at the date of retirement or termination. Reserve for retirement pay is computed and reflected in the consolidated financial statements on a current basis. The reserve has been calculated by estimating the present value of future probable obligation of the Company and its subsidiaries in Turkey arising from the retirement of the employees.

(ii) Defined contribution plans A defined contribution plan is a post-employment benefit plan under which an entity pays fixed contributions into a separate entity and will have no legal or constructive obligation to pay further amounts. Obligations for contributions to defined contribution plans are recognised as an employee benefit expense in profit or loss when they are due. The assets of the plan are held separately from the consolidated financial statements of the Group. The Company and other consolidated companies that initiated defined contribution retirement plan are required to contribute a specified percentage of payroll costs to the retirement benefit scheme to fund the benefits. The only obligation of the companies with respect to the retirement plan is to make the specified contributions.

(j) Provisions A provision is recognised if, as a result of a past event, the Group has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability.

Onerous contracts A provision for onerous contracts is recognized when the expected benefits to be derived by the Group from a contract are lower than the unavoidable cost of meeting its obligations under the contract. The provision is measured at the present value of the lower of the expected cost of terminating the contract and the expected net cost of continuing with the contract. Before a provision is established, the Group recognizes any impairment loss on the assets associated with that contract. The Company did not recognize any provision for onerous contracts as at 31 December 2008.

Site restoration In accordance with one of the Group’s subsidiary published environmental policy and applicable legal requirements, a provision for site restoration at base stations’ locations and future dismantling costs of base station equipment is provided.

(k) Revenue Revenues are recognized as the fair value of the consideration received or receivable, net of returns, trade discounts and rebates. Communication fees include postpaid revenues from incoming and outgoing calls, additional services, prepaid revenues, interconnect revenues and roaming revenues. Communication fees are recognized at the time the services are rendered. With respect to prepaid revenues, the Group generally collects cash in advance by selling scratch cards to distributors. In such cases, the Group does not recognize revenue until the subscribers use the telecommunications services. Deferred income is recorded under current liabilities. In connection with campaigns, both post-paid and pre-paid services may be bundled with handset or other goods / services and these bundled services and products involve consideration in the form of fixed fee or a fixed fee coupled with continuing payment stream. Loyalty programs for both post-paid and pre-paid services may be bundled with other services. Deliverables are accounted separately where a market for each deliverable exists and if the recognition criterion is met individually. Costs associated with each deliverable are recognized at the time of revenue recognized. The arrangement consideration is allocated to each deliverable in proportion to the fair value of the individual deliverables. Revenues allocated to handsets given in connection with campaigns are recognized under other revenues. Revenue from sale of handsets, which is included in other revenue, is recognised when the significant risks and rewards of ownership have been transferred to the buyer, collection is probable, the associated costs and possible return of goods can be estimated reliably, there is no continuing management involvement with the goods and the amount of revenue can be measured reliably. Commission fees mainly comprised of net takings earned to a maximum of 7% of gross takings, as a head agent of fixed odds betting games starting from 15 March 2007 and 4.3% commission recognized based on the para-mutual and fixed odds betting games operated on Central Betting System.

112 113

TURKCELL İLETİŞİM HİZMETLERİ A.Ş. AND ITS SUBSIDIARIES Notes To The Consolidated Financial Statements As At And For The Year Ended 31 December (Amounts expressed in thousands of US Dollars unless otherwise indicated except share amounts)

Prior to 15 March 2007, under the former head agency agreement, head agency commission fees were earned to a maximum of 12% of gross takings. In relation to the new contract signed with Spor Toto Teşkilat Müdürlüğü (“Spor Toto”) on 29 August 2008, commission rate applicable will decrease to 1.4% effective from March 2009. Commission revenues are recognized at the time all the services related with the games are fully rendered. Under the head agency agreement, Inteltek Internet Teknoloji Yat›r›m ve Dan›şmanl›k A.Ş. (“Inteltek”) is obliged to undertake any excess payout, which is presented on net basis with the commission fees. Monthly fixed fees represent a fixed amount charged to postpaid subscribers on a monthly basis without regard to the level of usage. Fixed fees are recognized on a monthly basis when billed. Simcard sales are recognized upfront upon delivery to subscribers, net of returns, discounts and rebates. Simcard costs are also recognized upfront upon sale of the simcard to the subscriber. Call center revenues are recognized at the time services are rendered. The revenue recognition policy for other revenues is to recognise revenue as services are provided.

(l) Lease payments Payments made under operating leases are recognized in profit or loss on a straight-line basis over the term of the lease. Lease incentives received are recognized as an integral part of the total lease expense, over the term of the lease. Minimum lease payments made under finance leases are apportioned between the finance expense and the reduction of the outstanding liability. The finance expense is allocated to each period during the lease term so as to produce a constant periodic rate of interest on the remaining balance of the liability.

(m) Finance income and expenses Finance income comprises interest income on funds invested (including available-for-sale financial assets), late payment interest income, gains on the disposal of available-for-sale financial assets, changes in the fair value of financial assets at fair value through profit or loss and gains on derivative instruments that are recognised in profit or loss. Interest income is recognised as it accrues, using the effective interest method. Finance expenses comprise interest expense on borrowings, unwinding of the discount on provisions, changes in the fair value of financial assets at fair value through profit or loss and impairment losses recognised on financial assets. Borrowing costs that are recognised in profit or loss or capitalized are accounted using the effective interest method. Foreign currency gains and losses are reported on a net basis.

(n) Transactions with related parties A related party is essentially any party that controls or can significantly influence the financial or operating decisions of the Group to the extent that the Group may be prevented from fully pursuing its own interests. For reporting purposes, investee companies and their shareholders, key management personnel, shareholders of the Group and the companies that the shareholders have a relationship with are considered to be related parties.

(o) Income taxes Income tax expense comprises current and deferred tax. Income tax expense is recognised in profit or loss except to the extent that it relates to items recognised directly in equity, in which case it is recognised in equity. Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years. Deferred tax is recognised using the balance sheet method, providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for the following temporary differences: the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit, and differences relating to investments in subsidiaries and jointly controlled entities to the extent that they probably will not reverse in the foreseeable future. Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the reporting date. Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realised simultaneously. A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available against which temporary difference can be utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised.

(p) Earnings per share The Group presents basic earnings per share (“EPS”) data for its ordinary shares. Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the period. Diluted EPS is equal to basic EPS because the Group does not have any convertible notes or share options granted to employees. TURKCELL İLETİŞİM HİZMETLERİ A.Ş. AND ITS SUBSIDIARIES Notes To The Consolidated Financial Statements As At And For The Year Ended 31 December (Amounts expressed in thousands of US Dollars unless otherwise indicated except share amounts)

(q) Segment reporting A segment is a distinguishable component of the Group that is engaged either in providing related products or services (business segment) or in providing products or services within a particular economic environment (geographical segment), which is subject to risks and returns that are different from those of other segments. Segment information is presented in respect of the Group’s business and geographical segments. The Group’s primary format for segment reporting is based on geographical segment and secondary segment reporting is based on business segments. Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Unallocated items comprise mainly investments and related revenue, loans and borrowings and related expenses and income tax assets and liabilities. Segment capital expenditure is the total cost incurred during the period to acquire property, plant and equipment, and intangible assets other than goodwill.

(r) New standards and interpretations not yet adopted A number of new standards, amendments to standards and interpretations are not yet effective at 31 December 2008, and have not been applied in preparing these consolidated financial statements: • IFRS 8 “Operating Segments” introduces the “management approach” to segment reporting. IFRS 8, which becomes mandatory for the Group’s 2009 consolidated financial statements, will require the disclosure of segment information based on the internal reports regularly reviewed by the Group’s Chief Operating Decision Maker in order to assess each segment’s performance and to allocate resources to them. Currently, the Group presents segment information in respect of its business and geographical segments (see note 6). • Revised IAS 23 “Borrowing Costs” removes the option to expense borrowing costs and requires that an entity capitalize borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset as a part of the cost of that asset. The revised IAS 23 will become mandatory for the Group’s 2009 consolidated financial statements and will not constitute a change in accounting policy for the Group. • IFRIC 13 “Customer Loyalty Programmes” addresses the accounting by entities that operate, or otherwise participate in, customer loyalty programmes for their customers. It relates to customer loyalty programmes under which the customer can redeem credits for awards such as free or discounted goods or services. IFRIC 13, which becomes mandatory for the Group’s 2009 consolidated financial statements, is not expected to have significant impact on the consolidated financial statements. • Revised IAS 1 “Presentation of Financial Statements” (2007) introduces as a financial statement “the statement of comprehensive income”, which represents changes in equity during a period other than those changes resulting from transactions with owners in their capacity as owners. Total comprehensive income may be presented in either a single statement of comprehensive income (effectively combining both the income statement and all non-owner changes in equity in a single statement), or in an income statement and a separate statement of comprehensive income. The revised standard does not change the recognition, measurement or disclosure of transactions and events that are required by other IFRS’s. Revised IAS 1, which becomes mandatory for the Group’s 2009 consolidated financial statements, is expected to have a limited impact on the presentation of the consolidated financial statements. • Revised IFRS 3 “Business Combinations” (2008) incorporates the following changes that are likely to be relevant to the Group’s operations: - The definition of a business has been broadened, which is likely to result in more acquisitions being treated as business combinations. - Contingent consideration will be measured at fair value, with subsequent changes therein recognised in profit or loss. - Transaction costs, other than share and debt issue costs, will be expensed as incurred. - Any pre-existing interest in the acquiree will be measured at fair value with the gain or loss recognised in profit or loss. - Any non-controlling (minority) interest will be measured at either fair value, or at its proportionate interest in the identifiable assets and liabilities of the acquiree, on a transaction-by-transaction basis. Revised IFRS 3, which becomes mandatory for the Group’s 2010 consolidated financial statements, will be applied prospectively and therefore there will be no impact on prior periods in the Group’s 2010 consolidated financial statements. • Amended IAS 27 “Consolidated and Separate Financial Statements” (2008) requires accounting for changes in ownership interests by the Group in a subsidiary, while maintaining control, to be recognised as an equity transaction. When the Group loses control of a subsidiary, any interest retained in the former subsidiary will be measured at fair value with the gain or loss recognised in profit or loss. The amendments to IAS 27, which become mandatory for the Group’s 2010 consolidated financial statements, are not expected to have a significant impact on the consolidated financial statements. • Amendment to IFRS 2 “Share-based Payment – Vesting Conditions and Cancellations” clarifies the definition of vesting conditions, introduces the concept of non-vesting conditions, requires non-vesting conditions to be reflected in grant-date fair value and provides the accounting treatment for non-vesting conditions and cancellations. The amendments to IFRS 2 will become mandatory for the Group’s 2009 consolidated financial statements, with retrospective application and are not expected to have any impact on the consolidated financial statements. • Amendments to IAS 32 “Financial Instruments”: Presentation and IAS 1 Presentation of Financial Statements – Puttable Financial Instruments and Obligations Arising on Liquidation requires puttable instruments, and instruments that impose on the entity an obligation to deliver to another party a pro rata share of the net assets of the entity only on liquidation, to be classified as equity if certain conditions are met. The amendments, which become mandatory for the Group’s 2009 consolidated financial statements, with retrospective application required, are not expected to have any impact on the consolidated financial statements. 114 115

TURKCELL İLETİŞİM HİZMETLERİ A.Ş. AND ITS SUBSIDIARIES Notes To The Consolidated Financial Statements As At And For The Year Ended 31 December (Amounts expressed in thousands of US Dollars unless otherwise indicated except share amounts)

• The International Financial Reporting Interpretations Committee (“IFRIC”) issued on 3 July 2008 an interpretation IFRIC 16 “Hedges of a Net Investment in a Foreign Operation”. IFRIC 16 applies to an entity that hedges the foreign currency risk arising from its net investments in foreign operations and wishes to qualify for hedge accounting in accordance with IAS 39. It does not apply to other types of hedge accounting. The interpretation is effective for annual periods beginning on or after 1 October 2008 and is not expected to have any effect on the consolidated financial statements. • The IFRIC issued on 3 July 2008 an Interpretation, IFRIC 15 “Agreements for the Construction of Real Estate”. The Interpretation will standardize accounting practice across jurisdictions for the recognition of revenue among real estate developers for sales of units, such as apartments or houses before construction is complete. The Interpretation is effective for annual periods beginning or after 1 January 2009 and is not expected to have any effect on the consolidated financial statements. • Eligible Hedged Items (amendment to IAS 39 “Financial Instruments: Recognition and Measurement”) introduces application guidance to illustrate how the principles underlying hedge accounting should be applied in the designation of i) a one-sided risk in a hedged item and ii) inflation in a financial hedged item. The amendment is effective, with retrospective application, for annual periods beginning on or after 1 July 2009 and is not expected to have any effect on the consolidated financial statements. • IFRIC 17, “Distributions of Non-cash Assets to Owners”, requires entities to recognise certain distributions of non-cash assets at fair value, and to recognise in profit or loss the difference between the fair value of the assets distributed and their carrying amounts. IFRIC 17 provides guidance on when and how a liability for certain distributions of non-cash assets is recognised and measured, and how to account for settlement of that liability. Transactions within its scope will need to be measured at fair value. IFRIC 17 is effective for annual periods beginning on or after July 2009; earlier application is permitted only if IFRS 3 Business Combinations (2008), IAS 27 Consolidated and Separate Financial Statements (2008) and the related amendments to IFRS 5 are applied at the same time. • IFRIC 18 “Transfers of Assets from Customers” provides guidance on transfers of property, plant and equipment (or cash to acquire it) for entities that receive such contributions from their customers. IFRIC 18 applies prospectively to transfers of assets from customers received on or after July 2009; earlier application is permitted provided that the necessary valuations and other information were obtained at the time that those transfers occurred. The interpretation is not expected to have significant effect on the consolidated financial statements.

4. DETERMINATION OF FAIR VALUES A number of the Group’s accounting policies and disclosures require the determination of fair value, for both financial and non-financial assets and liabilities. Fair values have been determined for measurement and/or disclosure purposes based on the following methods. When applicable, further information about the assumptions made in determining fair values is disclosed in the notes specific to that asset or liability.

(i) Property, plant and equipment The fair value of property, plant and equipment recognised as a result of a business combination is based on market values. The market value of property is the estimated amount for which a property could be exchanged on the date of valuation between a willing buyer and a willing seller in an arm’s length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently and without compulsion. The market value of items of plant, equipment, fixtures and fittings is based on the quoted market prices for similar items.

(ii) Intangible assets The fair value of the brand acquired in the Superonline Uluslararas› Elektronik Bilgilendirme Telekomünikasyon ve Haberleşme Hizmetleri A.Ş. (“Superonline”) business combination is based on the discounted estimated royalty payments that have been avoided as a result of the brand being owned. The fair value of customer base acquired in the Superonline business combination are valued using the multi-period excess earnings method, whereby the subject asset is valued after deducting a fair return on all other assets that are part of creating the related cash flows. The fair value of custom duty and VAT exemption agreement in the Belarussian Telecom business combination is based on the incremental cash flows method (cost saving approach) and this was used for the valuation analysis. The fair value of Mobile telephony licenses (GSM&UMTS) in the Belarussian Telecom business combination is based on the Greenfield (build- out) method, which is estimated to be appropriate and commonly used for the valuation of licenses, and this was used for the valuation analysis. The fair value of other intangible assets is based on the discounted cash flows expected to be derived from the use and eventual sale of the assets.

(iii) Investments in equity and debt securities The fair value of financial assets at fair value through profit or loss, held-to-maturity investments and available-for-sale financial assets is determined by reference to their quoted bid price or over the counter market price at the reporting date. The fair value of held-to-maturity investments is determined for disclosure purposes only.

(iv) Trade and other receivables / due from related parties The fair values of trade and other receivables and due from related parties are estimated as the present value of future cash flows, discounted at the market rate of interest at the reporting date. TURKCELL İLETİŞİM HİZMETLERİ A.Ş. AND ITS SUBSIDIARIES Notes To The Consolidated Financial Statements As At And For The Year Ended 31 December (Amounts expressed in thousands of US Dollars unless otherwise indicated except share amounts)

(v) Derivatives The fair value of forward exchange contracts and option contracts are based on their listed market price, if available. If a listed market price is not available, then fair value is estimated by discounting the difference between the contractual forward price and the current forward price for the residual maturity of the contract using a risk-free interest rate (based on government bonds) or option pricing models.

(vi) Non-derivative financial liabilities Fair value, which is determined for disclosure purposes, is calculated based on the present value of future principal and interest cash flows, discounted at the market rate of interest at the reporting date. For finance leases, the market rate of interest is determined by reference to similar lease agreements.

(vii) Exercise price of financial liability related to minority share put option The Group measures the estimated exercise price of the financial liability originating from put options granted to minorities as the present value of estimated option redemption amount. Present value of the estimated option redemption amount is based on the fair value of estimation for the company subject to the put option. The Company has estimated a value based on multiple approaches including income approach (discounted cash flows) and market approach (comparable market multiples). The average of the values determined as of 31 August 2013, which the exercise date of the put option, is then discounted back to 31 December 2008.

5. FINANCIAL RISK MANAGEMENT The Group has exposure to the following risks from its use of financial instruments: • Credit risks • Liquidity risks • Market risk This note presents information about the Group’s exposure to each of the above risks, the Group’s objectives, policies and processes for measuring and managing risk, and the Group’s management of capital. The Company management has overall responsibility for the establishment and oversight of the Group’s risk management framework. The Group’s risk management policies are established to identify and analyse the risks faced by the Group, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Group’s activities. The instant impact of the global turmoil across global financial markets came out to be a sharp increase in foreign currency exchange rates in Turkey. Consequently, the depreciation of TRY against USD and EUR was 29.8% and 25.2%, respectively as at 31 December 2008 when compared to the exchange rates as at 31 December 2007. Please refer to note 29 for additional information on the Group’s exposure to this turmoil.

Credit risk Credit risk is the risk of a financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Group’s receivables from customers and investment securities. Management has a credit policy in place and the exposure to credit risk is monitored on an ongoing basis. The Group may require collateral in respect of financial assets. Also, the Group may demand letters of guarantee from third parties related to certain projects or contracts. The Group may also demand certain pledges from counterparties if necessary in return for the credit support it gives related to certain financings. In monitoring customer credit risk, customers are grouped according to whether they are an individual or legal entity, ageing profile, maturity and existence of previous financial difficulties. Trade receivables and accrued service income are mainly related to the Group’s subscribers. The Group exposure to credit risk on trade receivables is influenced mainly by the individual payment characteristics of postpaid subscribers. Investments are preferred to be in liquid securities and mostly with counterparties that have a credit rating equal or better than the Group. Some of the collection banks have credit ratings that are lower than the Group’s, or they may not be rated at all, however, policies are in place to review the paid-in capital and rating of counterparties periodically to ensure credit worthiness. Transactions involving derivatives are with counterparties with whom the Group has signed agreements and which have sound credit ratings. At the reporting date, there were no significant concentrations of credit risk. The maximum exposure to credit risk is represented by the carrying amount of each financial asset in the balance sheet.

116 117

TURKCELL İLETİŞİM HİZMETLERİ A.Ş. AND ITS SUBSIDIARIES Notes To The Consolidated Financial Statements As At And For The Year Ended 31 December (Amounts expressed in thousands of US Dollars unless otherwise indicated except share amounts)

The Group establishes an allowance for doubtful receivables that represents its estimate of incurred losses in respect of receivables from subscribers. This allowance includes the specific loss component that relates to individual subscribers exposures, and adjusted for a general provision which is determined based on historical data of payment statistics. Impairment loss as a percentage of revenues represented 0.9% of revenues for the year ended 31 December 2008. If impairment loss as a percentage of revenues increased to 1.5% of revenues, the impairment loss would have been increased by US$38,878, negatively impacting profit for the year ended 31 December 2008.

Liquidity risk Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group’s reputation. Typically, the Group ensures that it has sufficient cash and cash equivalents to meet expected operational expenses, including financial obligations.

Market risk Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will affect the Group’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return on risk.

Currency risk The Group is exposed to currency risk on certain revenues such as roaming revenues, purchases and certain operating costs such as roaming expenses and network related costs and resulting receivables and payables, borrowings, deferred payments related to the acquisition of Belarussian Telecom and financial liability in relation to put option for the acquisition of minority shares of Belarussian Telecom that are denominated in a currency other than the respective functional currencies of Group entities, primarily TRY for operations conducted in Turkey. The currencies in which these transactions are primarily denominated are EUR, USD and SEK. Derivative financial instruments such as forward contracts and options are used to hedge exposure to fluctuations in foreign exchange rates. The Group uses forward exchange contracts to hedge its currency risk. The Group’s investments in its equity accounted investee Fintur and its subsidiaries in Ukraine and Republic of Belarus are not hedged with respect to the currency risk arising from the net assets as those net investments are considered to be long-term in nature.

Interest rate risk The Group has not entered into any type of derivative instrument in order to hedge interest rate risk as at 31 December 2008.

6. SEGMENT REPORTING Geographical segments: The primary format, geographical segments, is based on the dominant source and nature of the Group’s risk and returns as well as the Group’s internal reporting structure. In presenting information on the basis of geographical segments, segment revenue is based on the geographical location of the entities. Segment assets are based on the geographical location of the assets. The Group comprises the following main geographical segments: Turkey, Ukraine, Republic of Belarus and Turkish Republic of Northern Cyprus.

Business segments: In presenting information on the basis of business segments, segment revenue is based on the operational activity of the entities. Segment assets are based on the intended use of the assets. The Group comprises the following main business segments: Telecommunications and betting businesses. Communication fees, handset revenues, monthly fixed fees, simcard revenues are the main types of product and services included in the telecommunications business. Commission fees are the type of service only included in the betting business. 64,906 78,616 (3,854) (14,624) 102,990 64,906 305,330 (242,774) (14,624) 1,583 (549,758) (322,418) (242,774) 75,977 (322,418) (413,242) 1,896,500 1,819,534 1,755,062 1,319,248 1,819,534 1,091,567 1,319,248 832,918 Eliminations Consolidated Eliminations Consolidated Other 108,951 81,284 151,104 108,951 Turkish Republic of Ukraine Northern Cyprus Other Turkish Republic of Republic of Turkey Ukraine Northern Cyprus Belarus 2007 2006 2007 2006 2007 2006 2007 2006 2007 2006 2007 2006 5,275 1,251 1,230 - 5,995 5,384 - - (12,500) (6,635) - - (44,045) (2,668) 5,997,191 4,545,744 254,051 87,949 89,838 73,249 - - (12,500) (6,635) 6,328,580 4,700,307 1,928,611 1,236,455 (108,042) (154,934) 13,631 7,243 (90) - 48 1,220 1,834,158 1,089,984 5,991,916 4,544,493 252,821 87,949 83,843 67,865 - - - - 6,328,580 4,700,307 Turkey 2008 2007 2008 2007 2008 2007 2008 2007 2008 2007 2008 2007 2008 2007 (48,114) (44,045) 1,959,157 1,928,611 (68,600) (108,042) 23,424 13,631 (16,133) - (156) (90) 2,662 48 1,900,354 1,834,158 investees accounted investees of equity accounted Income tax expense Net finance income/(expense) Net finance income/(expense) Share of profit/(loss) equity Income tax expense Geographical segments Total segment revenue 6,460,266Segment result 5,997,191Unallocated expense, net 438,693Results from operating activities 254,051 86,246Share of profit/(loss) 89,838Profit for the period 466 - -Total segment revenue - (15,263) (12,500) 6,970,408Results from operating activities 6,328,580 Profit for the period Segment result Unallocated income/(expense), net TURKCELL İLETİŞİM HİZMETLERİ A.Ş. AND ITS SUBSIDIARIES Notes To The Consolidated Financial Statements As At And For Year Ended 31 December (Amounts expressed in thousands of US Dollars unless otherwise indicated except share amounts) Total external revenuesInter-segment revenue 6,456,081 5,991,916 436,716 4,185 252,821 77,147 5,275 83,843 1,977 464 1,230 9,099 - 5,995 - 2 ------6,970,408 (15,263) 6,328,580 (12,500) - - Total external revenues Inter-segment revenue 118 119 Consolidated Consolidated Consolidated 8,067,926 8,469,046 1,047,377 1,336,758 2,624,283 2,537,841 3,316,235 3,170,393 Other Other Other ------783,113 532,915 604,759 498,533 - - 207,019 515,079 313,723 664,385 - - - - 260,062 231,480 Northern Cyprus Republic of Belarus Northern Cyprus Republic of Belarus Northern Cyprus Republic of Belarus Turkish Republic of Turkish Republic of Turkish Republic of --- Ukraine Ukraine Ukraine Turkey Turkey Turkey 2008 2007 2008 2007 2008 20072008 2008 2007 2007 20082007 2008 2007 2006 2007 2008 2008 2007 2007 2007 2006 2008 2007 2007 2006 2008 2007 2007 2006 2008 2007 2007 2006 2007 2006 362,015 474,745 65,449540,249 52,452474,745 391,731 4,132 452,708 205,963 52,452 5,718 200,237 40,085 36,901 2,346 12,791 5,718 - 5,740 - - 433,942 532,915 106,704 149,306 - 1,434,628 1,096,780 121,996 91,561 9,755 12,694 9,827 - 700 48 1,576,906 1,201,083 3,192,844 3,730,627 593,164 708,005 65,705 70,570 586,242 - 2 125,066 4,437,957 4,634,268 investees Amortization of intangible assets 225,570 198,293 32,189 32,259 2,303 928 TURKCELL İLETİŞİM HİZMETLERİ A.Ş. AND ITS SUBSIDIARIES Notes To The Consolidated Financial Statements As At And For Year Ended 31 December (Amounts expressed in thousands of US Dollars unless otherwise indicated except share amounts) Total assets Total liabilities Segment liabilities Unallocated liabilities Segment assets Investment in equity accounted Unallocated assets Capital expenditure, including goodwill 640,341Depreciation 540,249Amortization of intangible assets 155,762 200,490 205,963 225,570Capital expenditure 17,549Depreciation 35,539 36,901 32,189 550,926 3,379 - 2,303 6,577 - - - 1,364,578 783,113 - - 245,985 260,062 2007 2006 Consolidated Consolidated 2008 2007 2007 2006 6,935 783,113 604,759 Other operations Other operations 2008 2007 2007 2006 3,300 22,369 1,354 31,992 22,369 1,364,578 783,113 20,660 62,728 174,571 4,437,957 4,634,268 Betting Betting 2008 2007 1,354 2007 2006 Telecommunications Telecommunications 2008 2007 759,390 594,524 4,345,540 4,439,037 29,689 6,776,162 6,130,425 176,237 181,2966,130,425 4,517,011 18,009 181,296 16,859 6,970,408 172,372 6,328,580 16,859 10,924 6,328,580 4,700,307 Revenue from external customers Capital expenditure, including goodwillSegment assets 1,310,680 759,390Revenue from external customers 21,906 Capital expenditure TURKCELL İLETİŞİM HİZMETLERİ A.Ş. AND ITS SUBSIDIARIES Notes To The Consolidated Financial Statements As At And For Year Ended 31 December (Amounts expressed in thousands of US Dollars unless otherwise indicated except share amounts) Business segments 120 121

TURKCELL İLETİŞİM HİZMETLERİ A.Ş. AND ITS SUBSIDIARIES Notes To The Consolidated Financial Statements As At And For The Year Ended 31 December (Amounts expressed in thousands of US Dollars unless otherwise indicated except share amounts)

7. ACQUISITIONS OF SUBSIDIARIES

Acquisition of Belarussian Telecom On 29 July 2008, Beltel Telekomünikasyon Hizmetleri A.Ş. (“Beltel”) signed a Share Purchase Agreement (“SPA”) to acquire 80% stake in Belarussian Telecom, which is specialized in rendering of services using GSM Technologies. On 26 August 2008, the control over Belarussian Telecom is acquired from the State Committee on Property of the Republic of Belarus for a consideration of US$500,000. On 26 August 2008, US$300,000 of the total consideration is paid and the remaining payments amounting to US$200,000 will be made in two equal installments on 31 December 2009 and 31 December 2010, respectively. An additional payment of US$100,000 will be made to the seller when Belarussian Telecom records a full-year positive net income for the first time.

Results of operations of Belarussian Telecom for four months period ended 31 December 2008 amounting to US$(13,865) are included in the accompanying consolidated financial statements. If the acquisition had occured on 1 January 2008, management estimates that consolidated revenue would have been US$6,971,137 and consolidated profit attributable to equity holders of the Company would have been US$1,814,358. The acquisition had the following effect on the Group’s assets and liabilities on the acquisition date:

Pre-acquisition Fair value Recognized values Note carrying amounts adjustments on acquisition Property, plant and equipment 12 173,917 5,956 179,873 Intangible assets 13 24,340 182,370 206,710 Other assets 4,061 - 4,061 Cash and cash equivalents 24 - 24 Loans and borrowings (21,463) 476 (20,987) Other liabilities (3,557) - (3,557) Deferred tax liabilities - (49,617) (49,617) Net identifiable assets and liabilities 177,322 139,185 316,507 Share of the Company on net identifiable assets and liabilities (80%) 253,205 Goodwill on acquisition 285,857

Consideration paid, satisfied in cash (300,000) Cash acquired 24 Net cash outflow (299,976)

Consideration payable in relation to the acquisition as of acquisition date (239,062)

In accordance with the SPA, Beltel also agreed to grant a put option to the minority shareholder by giving the right to sell its entire stake (20%) to Beltel at fair value after 5 years from the closing date. The Group recognized a liability in relation to the put option and derecognized minority interest (note 23).

The difference amounting to US$12,302 between the amount recognised initially for the exercise price of the put option and the carrying amount of the minority interest is recorded in equity.

Pre-acquisition carrying amounts were determined based on applicable IFRSs immediately before the acquisition. The values of assets, liabilities and contingent liabilities recognized on acquisition are their estimated fair values (see note 4 for methods used in determining fair values).

The goodwill recognised on the acquisition is attributable mainly to the synergies expected to be achieved from integrating Belarussian Telecom into the Group’s telecommunications business in the region.

Acquisition of Superonline and disposal of Bilyoner shares On 21 May 2008, Turktell Bilişim Servisleri A.Ş. (“Turktell”) signed an agreement with Çukurova Group to acquire 100% stake in Superonline, which is specialized in rendering of internet and telecommunications services and to sell 55% share in Bilyoner Interaktif Hizmetler AS ("Bilyoner"). On 23 September 2008, the control over Superonline was acquired from Çukurova Group through the transfer of 55% shares of Bilyoner. TURKCELL İLETİŞİM HİZMETLERİ A.Ş. AND ITS SUBSIDIARIES Notes To The Consolidated Financial Statements As At And For The Year Ended 31 December (Amounts expressed in thousands of US Dollars unless otherwise indicated except share amounts)

The Group accounted the acquisition of Superonline in accordance with IFRS 3, the consideration paid being the fair value of Bilyoner's shares. The Group recognized a gain on disposal of Bilyoner shares in the consolidated income statement based on the fair value of Bilyoner's shares. Results of operations of Superonline for three months period ended 31 December 2008 amounting to US$(4,016) are included in the accompanying consolidated financial statements. If the acquisition had occured on 1 January 2008, management estimates that consolidated revenue would have been US$7,001,234 and consolidated profit attributable to equity holders of the Company would have been US$1,829,502.

The acquisition of Superonline had the following effect on the Group’s assets and liabilities on the acquisition date:

Pre-acquisition Fair value Recognized values Note carrying amounts adjustments on acquisition Property, plant and equipment 12 1,617 (840) 777 Intangible assets 13 117 10,078 10,195 Other assets 8,159 - 8,159 Cash and cash equivalents 510 - 510 Total liabilities (31,150) - (31,150) Deferred tax liabilities - (1,848) (1,848) Net identifiable assets and liabilities (20,747) 7,390 (13,357) Share of the Company on net identifiable assets and liabilities (100%) (13,357) Goodwill on acquisition 21,617

Consideration, transfer of shares* (8,260) Cash acquired 510 Cash disposed through transfer of Bilyoner shares (10,502) Net cash effect of the transaction (9,992)

* Transaction was made through the transfer of shares in regards to sale of 55% stake in Bilyoner and purchase of 100% stake in Superonline. Therefore, the purchase accounting of Superonline is based on the fair value of the disposed shares in Bilyoner amounted to US$8,260.

8. REVENUE

2008 2007 2006 Communication fees 6,576,857 5,976,890 4,406,680 Commission fees on betting business 176,237 181,296 172,372 Monthly fixed fees 65,081 54,816 57,599 Simcard sales 28,189 20,767 20,960 Call center revenues 16,604 12,925 10,237 Other revenues 107,440 81,886 32,459 6,970,408 6,328,580 4,700,307

9. PERSONNEL EXPENSES 2008 2007 2006 Wages and salaries (*) 501,327 385,192 262,198 Increase in liability for long-service leave 8,083 8,487 5,736 Contributions to defined contribution plans 4,182 1,253 1,014 513,592 394,932 268,948

* Wages and salaries include compulsory social security contributions.

122 123

TURKCELL İLETİŞİM HİZMETLERİ A.Ş. AND ITS SUBSIDIARIES Notes To The Consolidated Financial Statements As At And For The Year Ended 31 December (Amounts expressed in thousands of US Dollars unless otherwise indicated except share amounts)

10. FINANCE INCOME AND EXPENSES

Recognised in profit or loss: 2008 2007 2006 Interest income on bank deposits 359,408 241,055 133,640 Late payment interest income 43,479 37,188 29,391 Premium income on option contracts 14,655 17,807 11,708 Interest income on available-for-sale financial assets 8,328 303 794 Net gain on disposal of available-for-sale financial assets transferred from equity 6,494 1,673 1,445 Interest income on unimpaired held-to-maturity investments - 890 1,219 Other interest income 9,735 9,452 5,818 Finance income 442,099 308,368 184,015

Discount interest expense on financial liabilities measured at amortised cost (51,448) (42,137) (61,512) Net foreign exchange loss (44,452) (460,754) (41,288)

Litigation late payment interest expense (30,501) (15,602) (2,516) Option premium expense (4,970) (8,501) - Debt extinguishment cost - (17,549) - Other (5,398) (6,599) (2,722) Finance expense (136,769) (551,142) (108,038) Net finance income/(expense) recognised in profit or loss 305,330 (242,774) 75,977

Late payment interest income is interest received from subscribers who pay monthly invoices after due date specified on the invoices.

Interest expense on borrowings capitalized on fixed assets amounts to US$11,375, US$11,268 and US$7,089 for the year ended 31 December 2008, 2007 and 2006, respectively.

11. INCOME TAX EXPENSE 2008 2007 2006 Current tax expense Current period (567,169) (412,521) (310,665) (567,169) (412,521) (310,665)

Deferred tax benefit Origination and reversal of temporary differences 14,893 56,769 14,036 Benefit of investment incentive recognized 2,518 31,369 29,959 Utilisation of previously unrecognised tax losses - 1,965 6,237 Reduction in tax rate - - (152,809) 17,411 90,103 (102,577) Total income tax expense (549,758) (322,418) (413,242)

Reconciliation of effective tax rate The reported income tax expense for the year ended 31 December 2008, 2007 and 2006 are different than the amounts computed by applying the statutory tax rate to profit before income tax of the Company, as shown in the following reconciliation:

2008 2007 2006

Profit for the period 1,755,062 1,319,248 832,918 Total income tax expense 549,758 322,418 413,242 Profit excluding income tax 2,304,820 1,641,666 1,246,160 TURKCELL İLETİŞİM HİZMETLERİ A.Ş. AND ITS SUBSIDIARIES Notes To The Consolidated Financial Statements As At And For The Year Ended 31 December (Amounts expressed in thousands of US Dollars unless otherwise indicated except share amounts)

2008 2007 2006 Income tax using the Company’s domestic tax rate 20% (460,964) 20% (328,333) 20% (249,232) Effect of tax rates in foreign jurisdictions (1)% 17,909 - 7,960 (1)% 8,954 Tax exempt income - 6,178 (1)% 9,724 (1)% 7,703 Non deductible expenses 2% (42,206) 2% (25,118) 1% (13,452) Tax incentives - 2,518 (2)% 31,369 (2)% 29,959 Change in tax rate --- - 12% (152,809) Recognition of previously unrecognized tax losses - - - 1,965 (1)% 6,237 Unrecognized deferred tax assets 4% (83,841) 2% (28,319) 3% (37,120) Deferred taxes on undistributed earnings of subsidiary --- - 1% (15,109) Difference in effective tax rate of equity accounted investees (1)% 22,937 (1)% 14,621 - - Other 1% (12,289) (1)% (6,287) - 1,627 Total income tax expense 24% (549,758) 20% (322,418) 33% (413,242)

The income taxes payable of US$126,585 as at 31 December 2008 represents the amount of current income tax provision in respect of related taxable profit for the year ended 31 December 2008 netted off with advance tax payments made for the year.

The income tax payable of US$443,194 as at 31 December 2007 represents the amount of income taxes payable in respect of related taxable profit for the year ended 31 December 2007.

The Turkish entities within the Group are subject to corporate tax at the rate of 20%. In Turkey, there is no procedure for a final and definitive agreement on tax assessments. Companies file their tax returns at the end of April following the close of the accounting year to which they relate. Tax authorities may, however, examine such returns and the underlying accounting records and may revise assessments within five years. Advance tax returns are filed on a quarterly basis.

Corporate tax is applied on taxable corporate income, which is calculated from the statutory accounting profit by adding back non-deductible expenses, and by deducting tax exempt income.

In Turkey, the transfer pricing provisions have been stated under the Article 13 of Corporate Tax Law with the heading of “disguised profit distribution via transfer pricing”. The General Communiqué on disguised profit distribution via Transfer Pricing, dated 18 November 2007 sets details about implementation.

If a taxpayer enters into transactions regarding sale or purchase of goods and services with related parties, where the prices are not set in accordance with arm's length principle, then related profits are considered to be distributed in a disguised manner through transfer pricing. Such disguised profit distributions through transfer pricing are not accepted as tax deductible for corporate income tax purposes.

124 125 15,398 17,252 94,028 149,267 326,714 153,962 308,769 357,298 328,272 3,377 3,648 Effect of movements in Balance at - - 25,313 - 64,223 - 21,016 - -- 663,137 14,842 3,841,990 - 45,214 - 1,041,403 6,649,292 - 770,892 4,427,397 - 270,511 2,221,895 2,651 55,903 - (463,633) 52,947 (42) (122) (188) (124) 707 819 (5,033) 1,286 (4,866) 1,304 17,747 (8,522) 14,870 (8,609) 11,785 77,39329,474 (394,103) 460,982 862,675 5,483,739 43,213 (8,820) 15,601 17,818 67,443 123,369 267,187 452,268 253,266 131,830 292,483 253,708 3,063,148 501,390 (385,685) 4,476,792 5,439,818 576,128 (408,057) 3,522,827 532,915 (399,237) 1,916,991 Balance at 1 January 2007 Additions Disposals Transfers exchange rates 31 December 2007 Leasehold improvements Motor vehicles Construction in progress Leasehold improvements Equipment, fixtures and fittings Motor vehicles Accumulated Depreciation Network infrastructure (All Operational) Land and buildings Equipment, fixtures and fittings TURKCELL İLETİŞİM HİZMETLERİ A.Ş. AND ITS SUBSIDIARIES Notes To The Consolidated Financial Statements As At And For Year Ended 31 December (Amounts expressed in thousands of US Dollars unless otherwise indicated except share amounts) 12. PROPERTY, PLANT AND EQUIPMENT Cost or deemed cost Network infrastructure (All Operational) Land and buildings Total Total Total property, plant and equipment - (988,221) 3,202,862 - (80,745) 260,872 - (3,705) 12,092 - (24,151) 82,300 - (34,968) 116,304 - (1,131,790) 3,674,430 1 (35,662) 132,628 694 (3,771) 14,737 through Effect of Balance at Acquisitions - 2,958 (76,646) 269,094 ------108,871 (46,142) 436,107 (42) (96) 1,072 (83,858) 280,986 (928) 140,513 (1,569,015) 5,770,500 (506) (422) 140,513 (437,225) 2,096,070 (464) (832) 26,917 (1,322,936) 4,636,948 Disposal of business movements in 31 December ------8,285 3,240 - (343,045) 94,028 12,566 (143) 15,398 1,252 (853) 17,252 1,610 (1,048) 328,272 6,839 (614) 326,714 18,626 (3,681) 149,267 2,281 (276) 357,298 8,537 (5,207) 153,962 2,960 (462) 11,829 308,769 407,654 3,841,990 399,217 (49,660) 5,483,739 187,343 (56,974) 319,691 6,649,292 614,943 (64,305) 4,427,397 433,942 (54,613) 2,221,895 181,001 (9,692) Balance at 1 January 2008 Additions Disposals Transfers subsidiary combinations exchange rates 2008 TURKCELL İLETİŞİM HİZMETLERİ A.Ş. AND ITS SUBSIDIARIES Notes To The Consolidated Financial Statements As At And For Year Ended 31 December (Amounts expressed in thousands of US Dollars unless otherwise indicated except share amounts) Cost or deemed cost Total Total Total property, plant and equipment Accumulated Depreciation and Impairment Losses Network infrastructure (All Operational) Land and buildings Motor vehicles Leasehold improvements Land and buildings Network infrastructure (All Operational) Depreciation expenses for the year ended 31 December 2008, 2007 and 2006 are US$433,942, US$532,915 US$498,533, respectively. Equipment, fixtures and fittings Equipment, fixtures and fittings Leasehold improvements Motor vehicles Construction in progress 126 127

TURKCELL İLETİŞİM HİZMETLERİ A.Ş. AND ITS SUBSIDIARIES Notes To The Consolidated Financial Statements As At And For The Year Ended 31 December (Amounts expressed in thousands of US Dollars unless otherwise indicated except share amounts)

Leased assets The Group leases equipment under a number of finance lease agreements. At the end of each of the lease period, the Group has the option to purchase the equipment at a beneficial price. As at 31 December 2008, net carrying amount of fixed assets acquired under finance leases amounted to US$68,050 (31 December 2007: US$95,751).

Property, plant and equipment under construction Construction in progress consisted of expenditures in GSM network of the Company, Astelit, K›br›s Mobile Telekomünikasyon Limited Şirketi (“K›br›s Telekom”) and Belarussian Telecom and non-operational items as at 31 December 2008 and 2007.

As at 31 December 2008, a mortgage is placed on Izmir and Davutpaşa buildings amounting to US$992 and US$331, respectively (31 December 2007: US$1,288 and US$429, respectively).

13. INTANGIBLE ASSETS

In April 1998, the Company signed the License with the Turkish Ministry, under which it was granted a GSM license, which is amortized over 25 years with a carrying amount of US$433,280 as at 31 December 2008 (31 December 2007: US$602,070). The amortization period of the license will end in 2023. Effects of Balance at movements Balance at 1 January in exchange 31 December Cost 2007 Additions Disposals Transfers rates 2007 GSM and other telecommunication operating licenses 902,427 29,972 - 16,636 168,520 1,117,555 Computer Software 1,565,334 13,391 (3,472) 188,137 309,381 2,072,771 Transmission Lines 31,286 1,917 - - 6,471 39,674 Central Betting System Operating Right 4,038 55 - - 835 4,928 Customer Base 1,255 - - - 260 1,515 Other 84 245 - 20 (254) 95 Construction in progress 47,565 161,405 - (204,793) - 4,177 Total 2,551,989 206,985 (3,472) - 485,213 3,240,715

Accumulated Amortization GSM and other telecommunication operating licenses 327,829 50,341 - - 63,411 441,581 Computer Software 966,513 205,052 (766) - 219,992 1,390,791 Transmission Lines 18,986 3,467 - - 4,332 26,785 Central Betting System Operating Right 2,711 1,173 - - 692 4,576 Customer Base 1,255 - - - 260 1,515 Other 27 29 - - 8 64 Total 1,317,321 260,062 (766) - 288,695 1,865,312

Total intangible assets 1,234,668 (53,077) (2,706) - 196,518 1,375,403 - 116 360 -- 4,655 51,101 - 244,642 - 270 1,718 262 (23) - (1,132) 5,476 - (356,329) 1,212,943 - (757) 3,871 - (1,108) 3,826 - (9,120) 31,431 - - (99,886)- 398,677 - (372) 1,337 -- (6,733) 23,585 - (464,946) 1,644,715 680 (488,834) 1,743,264 218 4,655 5,204 (349) 6,370 Acquisitions Effects of Balance at - - - - 51,101 - - - 18,218 3,329- 22,506 - - - 244,642 - - (6) (2) Disposal of through business movements in 31 December - (1,036) ------(38) ------(1,536) 415,903 (750,061) 3,097,610 - (1,076) - (460) 415,903 (285,115) 1,452,895 - 24,612 (52) 91,185 (254,225) 986,447 - - - - - (183,477) ------4,628 - - - - 139 95 1,177 (36) 64 66 (30) 4,928 1,576 (9) 113 4,576 361 (3) 4,177 180,259 1,515 194 1,515 39,674 877 26,785 3,533 441,581 57,020 1,117,5552,072,771 7,372 1,958 (585) 158,752 (1,478) 1,390,791 180,044 (527) 3,240,715 193,219 (630) 1,865,3121,375,403 245,985 (52,766) (560) (70) Balance at 1 January 2008 Additions Disposals Transfers subsidiary combinations exchange rates 2008 Brand name Computer Software Transmission Lines Central Betting System Operating Right GSM and other telecommunication operating licenses Amortization expenses for the year ended 31 December 2008, 2007 and 2006 are US$245,985, US$260,062 US$231,480, respectively. TURKCELL İLETİŞİM HİZMETLERİ A.Ş. AND ITS SUBSIDIARIES Notes To The Consolidated Financial Statements As At And For Year Ended 31 December (Amounts expressed in thousands of US Dollars unless otherwise indicated except share amounts) Cost Total Total Total intangible assets Other Construction in progress Customer Base Customs duty and VAT exemption right Goodwill Customer Base Customs duty and VAT exemption right Goodwill Transmission Lines Central Betting System Operating Right Brand name Accumulated Amortization GSM and other telecommunication operating licenses Computer Software Other 128 129 Total Current Non-current Total Current Non-current 566,511 1,994,070503,958 2,560,581 1,678,151 465,965 2,182,109 1,007,747 251,203 1,473,712 89,062 340,265 Direct cost Profit for the 92,791 (95,033)31,472 7,058 (4,868) 24,208 98,129 (83,128) 1,888 41.45% 418,485 1,390,361 1,808,846 235,264 31,355 266,619 41.45% 492,587 1,786,728 2,279,315 443,808 962,823 1,406,631 50.00% 85,473 287,790 373,263 15,939 57,707 73,646 50.00% 73,924 207,342 281,266 22,157 44,924 67,081 Revenue of revenue period 1,486,390 (609,494)1,161,432 262,850 (463,277) 194,790 1,823,095 (739,410) 364,545 1,921,224 (822,538)1,579,181 366,433 (704,527)1,192,904 269,908 (468,145) 218,998 Ownership Assets Assets Assets Liabilities Liabilities Liabilities 2007 Fintur (associate) A-Tel (joint venture)* 2006 Fintur (associate) A-Tel (joint venture)** * Figures mentioned in the above table includes fair value adjustments that arose during acquisition of A-Tel. 2006. ** Since A-Tel was acquired in August 2006, summary financial information of is given for the five months ended 31 December 31 December 2007 Fintur (associate) A-Tel (joint venture)* A-Tel (joint venture)* 31 December 2008 Fintur (associate) TURKCELL İLETİŞİM HİZMETLERİ A.Ş. AND ITS SUBSIDIARIES Notes To The Consolidated Financial Statements As At And For Year Ended 31 December (Amounts expressed in thousands of US Dollars unless otherwise indicated except share amounts) 14. EQUITY ACCOUNTED INVESTEES The Group’s share of profit in its equity accounted investees for the year ended 31 December 2008, 2007 and 2006 are US$102,990 , US$64,906 US$78,616, respectively. Summary financial and not adjusted for the percentage ownership held information for equity accounted investees adjusted the accounting policy differences some events under similar circumstances by the Group is as follows: 2008 Fintur (associate) A-Tel (joint venture)* TURKCELL İLETİŞİM HİZMETLERİ A.Ş. AND ITS SUBSIDIARIES Notes To The Consolidated Financial Statements As At And For The Year Ended 31 December (Amounts expressed in thousands of US Dollars unless otherwise indicated except share amounts)

The Company’s investment in Fintur and A-Tel amounts to US$207,019 and US$106,704 respectively as at 31 December 2008 (31 December 2007: US$515,079 and US$149,306).

During 2009, Fintur distributed a total dividend of US$200,000. The Group received its share of dividend in December 2008 at the amount of US$82,900 and decreased investment in Fintur by US$82,900.

In April 2008, the privatization of the Republic of Azerbaijan’s 35.7% ownership in Azercell Telecom B.M. (“Azercell”), a 51% owned consolidated subsidiary of Fintur, was completed. The minority shareholders in Azercell acquired the 35.7% shares of Republic of Azerbaijan increasing their effective ownership in Azercell to 49%. One of the minority shareholders was also granted a put option, giving the shareholder the right to sell its 42.2% stake to Fintur at fair value in certain deadlock situations regarding material decisions at the General Assembly. Fintur has initially accounted for the present value of the estimated option redemption amount as a provision and derecognized the minority interest. The difference between the present value of the estimated option redemption amount and the derecognized minority interest amounting to US$662,534 is accounted under equity, in accordance with the Group’s accounting policy. As a result of this, the Group’s investme nt in Fintur decreased by US$274,620.

During March 2008 and February 2007, at the General Assembly meeting of A-Tel, it has been decided to distribute dividends and accordingly the Company reduced the carrying value of its investment in A-Tel by the dividends declared of TRY 12,543 (equivalent to US$8,294 as at 31 December 2008) and TRY 37,448 (equivalent to US$24,762 as at 31 December 2008) as at 31 December 2008 and 2007, respectively.

15. OTHER INVESTMENTS

Non-current investments: 2008 2007 Country of Ownership Carrying Ownership Carrying incorporation (%) Amount (%) Amount Aks Televizyon Reklamc›l›k ve Filmcilik Sanayi ve Ticaret A.Ş. (“Aks TV”) Turkey 6.24 22,393 6.24 29,077 T Medya Yat›r›m Sanayi ve Ticaret A.Ş. (“T-Medya”) Turkey 10.23 12,221 9.23 13,277 34,614 42,354

In 2003, the Group acquired a 6.24% interest in Aks TV and an 8.23% interest in T-Medya, media companies owned by Çukurova Group. On 27 June 2007, T-Medya took over Asl› Gazetecilik ve Matbaac›l›k A.Ş. and, by this restructuring, interest of the Group in T-Medya increased from 8.23% to 9.23%. As a result of the acquisition of Superonline, interest of the Group in T-Medya increased to 10.23%.

Investment in Aks TV and T-Medya is classified as available-for-sale financial assets. However, there is not active market available for these equity instruments, and application of valuation techniques is impracticable. Accordingly, the Company measured these investments at cost.

Current investments: 2008 2007 Available-for-sale government bonds, treasury bills 689 1,738 Available-for-sale foreign investment equity funds - 26,480 689 28,218

Interest bearing available-for-sale USD denominated and EUR denominated government bonds and treasury bills with a carrying amount of US$403 and US$286, respectively as at 31 December 2008 (31 December 2007: USD denominated US$1,440 and EUR denominated US$298) have stated interest rates of Libor+1.0% (31 December 2007: Libor+1.0%-Libor+1.6%) and Euribor+1.8% (31 December 2007: Euribor+1.8%), respectively and mature in 1 to 2 years (31 December 2007: 2 to 3 years).

The Group’s exposure to credit, currency and interest rate risks related to other investments is disclosed in note 29.

16. OTHER NON-CURRENT ASSETS

2008 2007 VAT receivable 20,579 - Prepaid expenses 17,921 28,365 Prepayment for subscriber acquisition cost 7,652 6,347 Deposits and guarantees given 5,840 5,621 Others 2,015 3,838 54,007 44,171 130 131

TURKCELL İLETİŞİM HİZMETLERİ A.Ş. AND ITS SUBSIDIARIES Notes To The Consolidated Financial Statements As At And For The Year Ended 31 December (Amounts expressed in thousands of US Dollars unless otherwise indicated except share amounts)

Subscriber acquisition costs are subsidies paid to dealers for engaging a fixed term contract with the subscriber that require a minimum consideration.

17. DEFERRED TAX ASSETS AND LIABILITIES

Unrecognised deferred tax assets Deferred tax assets have not been recognised in respect of the following items: 2008 2007 Deductible temporary differences 4,841 457 Tax losses 125,875 48,604 Total unrecognised deferred tax assets 130,716 49,061

The deductible temporary differences do not expire under current tax legislation. Turkish tax legislation does not allow companies to file tax returns on a consolidated basis. Therefore, deferred tax assets have not been recognised in respect of these items resulting from certain consolidated subsidiaries because it is not probable that future taxable profit will be available against which the Group can utilise the benefits therefrom.

As at 31 December 2008, expiration of tax losses is as follows:

Year Originated Amount Expiration Date 2004 1,097 2009 2005 1,089 2010 2006 4,191 2011 2007 12,667 2012 2008 80,218 2013 thereafter 99,262

As at 31 December 2008, net operating loss carry forwards which will be carried indefinitely are as follows:

Year Originated Amount 2004 21,189 2005 55,090 2006 96,541 2007 37,626 2008 216,482

Recognised deferred tax assets and liabilities Deferred tax assets and liabilities as at 31 December 2008 and 2007 are attributable to the following:

Assets Liabilities Net 2008 2007 2008 2007 2008 2007

Property, plant & equipment and intangible assets 166 872 (168,802) (201,602) (168,636) (200,730) Investment - - (10,267) (7,816) (10,267) (7,816) Provisions 10,070 12,813 - - 10,070 12,813 Trade and other payables 45,242 54,749 (1,003) - 44,239 54,749 Other items 4,883 11,436 (9,642) (917) (4,759) 10,519 Tax credit carry forwards 6 523 - - 6 523 Tax assets / (liabilities) 60,367 80,393 (189,714) (210,335) (129,347) (129,942) Set off of tax (59,223) (77,947) 59,223 77,947 - - Net tax assets / (liabilities) 1,144 2,446 (130,491) (132,388) (129,347) (129,942) 6 523 2007 2008 186 322 Effect of Balance at Effect of Balance at - - (37,357) (200,730) - (14,185) 44,239 -- 5,339 8,115 (10,267) (4,759) ---- (2,482)- 3,950 7,204 2,856 (7,816) 12,813 54,749 10,519 - (25,507) (129,942) 93 33,188 (129,347) 98 36,838 (168,636) (5) (3,105) 10,070 ------(476) Acquired in Acquired in - - -- - (50,989) - - - - 343 367 (703) 3,675 - 47,545 523 5,275 (5,074) 12,813 54,749 10,519 (23,942) 1,025 47,13012,455 (38,267) (3,461) (1,331) (7,816) (8,133) (30,246) 24,912 (193,208) 90,104 (1,331) (129,942) 17,411 1,368 (51,465) (227,822) 64,449 (200,730) 46,147 Balance at Recognised Recognised in business Disposal of movements in 31 December Balance at Recognised Recognised in business Disposal of movements in 31 December 1 January 2007 in profit or loss equity combinations subsidiary exchange rates 1 January 2008 in profit or loss equity combinations subsidiary exchange rates Property, plant & equipment and intangible assets Property, plant & equipment and intangible assets Investment Provisions Trade and other payables Other items Tax credit carry forwards Movement in temporary differences as at 31 December 2008 and 2007 are follows: Total Total TURKCELL İLETİŞİM HİZMETLERİ A.Ş. AND ITS SUBSIDIARIES Notes To The Consolidated Financial Statements As At And For Year Ended 31 December (Amounts expressed in thousands of US Dollars unless otherwise indicated except share amounts) Investment Provisions Trade and other payables Other items Tax credit carry forwards 132 133

TURKCELL İLETİŞİM HİZMETLERİ A.Ş. AND ITS SUBSIDIARIES Notes To The Consolidated Financial Statements As At And For The Year Ended 31 December (Amounts expressed in thousands of US Dollars unless otherwise indicated except share amounts)

18. TRADE RECEIVABLES AND ACCRUED INCOME 2008 2007 Receivables from subscribers 298,294 277,519 Accrued service income 175,429 167,194 Accounts and checks receivable 105,822 87,538 Receivables from Türk Telekomunikasyon AS (“Türk Telekom”) 7,840 26,312 587,385 558,563

Trade receivables are shown net of allowance for doubtful debts amounting to US$196,637 as at 31 December 2008 (31 December 2007: US$181,746). The impairment loss recognized for the year ended 31 December 2008, 2007 and 2006 are US$65,678, US$35,142 and US$30,513, respectively.

Letters of guarantee received with respect to the accounts and checks receivable are amounted to US$165,310 and US$109,322 as at 31 December 2008 and 2007, respectively.

The accrued service income represents revenues accrued for subscriber calls (air-time), which have not been billed. Due to the volume of subscribers, there are different billing cycles; accordingly, an accrual is made at each period end to accrue revenues for rendered but not yet billed.

Receivables from Türk Telekom as at 31 December 2008 and 2007 represent net amounts that are due from Türk Telekom under the Interconnection Agreement. The Interconnection Agreement provides that Türk Telekom will pay to the Company for Türk Telekom’s fixed-line subscribers’ calls to GSM subscribers.

The Group’s exposure to credit and currency risks and impairment losses related to trade receivables are disclosed in note 29.

19. OTHER CURRENT ASSETS 2008 2007 Pre-paid expenses 54,899 61,056 Prepayment for subscriber acquisition cost 23,822 14,704 VAT receivable 22,979 27,688 Interest income accruals 19,760 36,338 Advances to suppliers 9,157 14,196 Receivable from personnel 3,488 1,878 Restricted cash - 125,304 Other 4,683 10,370 138,788 291,534

Subscriber acquisition costs are subsidies paid to dealers for engaging a fixed term contract with the subscriber that require a minimum consideration.

As at 31 December 2007, restricted cash represents amounts deposited at banks as guarantees in connection with the loans used by the Group, which was released on 24 January 2008.

20. CASH AND CASH EQUIVALENTS 2008 2007 Cash in hand 4,567 205 Cheques received 599 999 Banks 3,254,582 3,093,906 - Demand deposits 149,149 185,551 - Time deposits 3,105,433 2,908,355 Bonds and bills 44 190 Cash and cash equivalents 3,259,792 3,095,300 Bank overdrafts used for cash management purposes (4,372) (2,125) Cash and cash equivalents in the statement of cash flows 3,255,420 3,093,175

As at 31 December 2008, cash and cash equivalents amounting to US$50,000 (31 December 2007: US$60,000) were deposited in banks, that are owned and/or controlled by Çukurova Group, a significant shareholder of the Company.

The Group’s exposure to interest rate risk and a sensitivity analysis for financial assets and liabilities are disclosed in note 29. - 18,202 - (286,922) -- - (342,166) ------Minority Total Reserve for - - - - - 46,795 46,795 - - - - 18,202 - - - - - 137,647 137,647 - (286,922) - - (286,922) - - - - - (17,591) (17,591) - - - - - 87,745 87,745 - - - (502,334) (502,334) (54,639) (556,973) - - - (411,913) (411,913) (45,712) (457,625) - - - (43,786) - - - - (342,166) (342,166) - -- - (108,561) - - - (121,945) - - - - (197,238) ------2,666 -- 825,570- 1,350,162 2,178,398 (5,360) (45,182) 2,133,216 - (1,467,960) 1,836,824 363,504 (72,168) 291,336 - 2,015 - (135,275) 875,491 742,231 (42,573) 699,658 - - - Attributable to equity holders of the Company ------43,786 - - 108,561 - 121,945 - - - - - 434 148,273- 2,815 434 -- (155,972) 256,834 2,394,838 4,026,592 5,481 91,375 4,117,967 - 669,598 3,224,526 5,793,077 138,128 5,931,205 - - 434 104,487- 800 - (20,697) 2,102,537 3,626,527 63,794 3,690,321 ------434 148,273- 2,815 434 - (155,972) 256,834 2,394,838 4,026,592 5,481 91,375 4,117,967 - 669,598 3,224,526 5,793,077 138,128 5,931,205 - 18,202 ------Share Capital Share Legal Fair Value Minority Put Translation Retained Capital Contribution Premium Reserves Reserve Option Reserve Earnings Total Interest Equity 197,238 1,636,204 1,636,204 1,438,966 1,636,204 1,636,204 1,636,204 18,202 434 378,779 121 (286,922) (798,362) 4,437,071 5,385,527 58,116 5,443,643 Capital contribution granted Change in reserve for minority put option - Change in minority interest Change in minority interest Dividends to shareholders Dividends paid Change in minority interest Dividends to shareholders Acquisition of minority shares Total recognized income and expense Total recognized income and expense 21. CAPITAL AND RESERVES Reconciliation of movement in capital and reserve Balance at 31 December 2006 Balance at 1 January 2007 Transfer to legal reserves Balance at 31 December 2007 Balance at 1 January 2008 Transfer to legal reserves Balance at 31 December 2008 TURKCELL İLETİŞİM HİZMETLERİ A.Ş. AND ITS SUBSIDIARIES Notes To The Consolidated Financial Statements As At And For Year Ended 31 December (Amounts expressed in thousands of US Dollars unless otherwise indicated except share amounts) Balance at 1 January 2006 Increase in capital Transfer to legal reserves Total recognized income and expense 134 135

TURKCELL İLETİŞİM HİZMETLERİ A.Ş. AND ITS SUBSIDIARIES Notes To The Consolidated Financial Statements As At And For The Year Ended 31 December (Amounts expressed in thousands of US Dollars unless otherwise indicated except share amounts)

Share capital As at 31 December 2008, common stock represented 2,200,000,000 (31 December 2007: 2,200,000,000) authorized, issued and fully paid shares with a par value of TRY 1 each. In accordance with the Law No. 5083 with respect to TRY, on 9 May 2005, par value of each share is registered to be one TRY.

In connection with the redenomination of the Turkish Lira and as per the related amendments of Turkish Commercial Code, in order to increase the nominal value of the shares to TRY 1, 1,000 units of shares, each having a nominal value of TRY 0.001 shall be merged and each unit of share having a nominal value of TRY 1 shall be issued to represent such shares. The Company is still in the process of merging 1,000 existing ordinary shares, each having a nominal value of TRY 0.001 to one ordinary share having a nominal value of TRY 1 each. After the share merger which appears as a provisional article in the Articles of Association to convert the value of each share with a nominal value of TRY 0.001 to TRY 1, all shares will have a value of TRY 1. Although the merger process has not been finalized, the practical application is to state each share having a nominal value of TRY 1 which is consented by Capital Markets Board of Turkey (“CMB”). Accordingly, number of shares data is adjusted for the effect of this merger.

Capital contribution The holders of shares are entitled to receive dividends as declared and are entitled to one vote per share at meetings of the Company. Capital contribution comprises the contributed assets and certain liabilities that the government settled on behalf of the Group that do not meet the definition of a government grant which the government is acting in its capacity as a shareholder.

Translation reserve The translation reserve comprises all foreign currency differences arising from the translation of the financial statements of foreign and domestic operations from their functional currencies to presentation currency of USD.

Fair value reserve The fair value reserve comprises the cumulative net change in the fair value of available-for-sale financial assets until the investments are derecognized or the asset is impaired.

Legal reserve Under the Turkish Commercial Code, Turkish companies are required to set aside first and second level legal reserves out of their profits. First level legal reserves are set aside 5% of the distributable income per statutory accounts each year. The ceiling on the first legal reserves is 20% of the paid-up capital. The reserve requirement ends when the 20% of paid-up capital level has been reached. Second legal reserves correspond to 10% of profits actually distributed after the deduction of the first legal reserves and the minimum obligatory dividend pay-out (5% of the paid-up capital). There is no ceiling for second legal reserves and they are accumulated every year.

Reserve of minority put option liability The reserve for minority put option liability includes the difference between the put option liability granted to the minority shareholders in existing subsidiaries recognised and the amount of minority interest derecognized. Subsequent changes in the fair value of the put option liability are also recognised in this reserve.

Dividends The Company has adopted a dividend policy, which is set out in its corporate governance guidance. As adopted, the Company’s general dividend policy is to pay dividends to shareholders with due regard to trends in the Company’s operating performance, financial condition and other factors.

The Board of Directors intends to distribute cash dividends in an amount of not less than 50% of the Company’s lower of distributable profit based on the financial statements prepared in accordance with the accounting principles accepted by the CMB or statutory records, for each fiscal year starting with profits for fiscal year 2004. However, the payment of dividends will still be subject to cash flow requirements of the Company, compliance with Turkish law and the approval of and amendment by the Board of Directors and the General Assembly of Shareholders.

On 27 February 2008, Board of Directors of the Company decided to distribute dividends amounting to TRY 648,714 (equivalent to US$428,959 and US$502,334 as at 31 December 2008 and 25 April 2008, respectively), which represented 50% of distributable income. This represents a net cash dividend of full TRY 0.294870 (equivalent to full US$0.228334 in full as at 25 April 2008). Dividend distribution was approved at ordinary General Assembly meeting dated 25 April 2008 and dividend distribution was started on 20 May 2008. TURKCELL İLETİŞİM HİZMETLERİ A.Ş. AND ITS SUBSIDIARIES Notes To The Consolidated Financial Statements As At And For The Year Ended 31 December (Amounts expressed in thousands of US Dollars unless otherwise indicated except share amounts)

2008 2007 2006 TRY USD TRY USD* TRY USD* Cash dividends 648,714 502,334 567,040 411,913 509,075 342,166 Stock dividends - - - - 345,113 231,962 648,714 502,334 567,040 411,913 854,188 574,128

*USD equivalents of dividends are computed by using the Central Bank of Turkey’s TRY/USD exchange rate on 25 April 2008, 23 March 2007 and 22 May 2006, which are the dates that the General Assembly of Shareholders approved the dividend distribution.

On 3 March 2008, Board of Directors of Inteltek decided to distribute dividends amounting to TRY 152,733 (equivalent to US$100,994 and US$121,419 as at 31 December 2008 and 28 March 2008, respectively). Dividend distribution was approved at ordinary General Assembly meeting dated 28 March 2008 and dividend distribution was started on 15 April 2008.

22. EARNINGS PER SHARE

The calculation of basic and diluted earnings per share as at 31 December 2008 were based on the profit attributable to ordinary shareholders for the year ended 31 December 2008, 2007 and 2006 of US$1,836,824, US$1,350,162 and US$875,491, respectively and a weighted average number of shares outstanding during the year ended 31 December 2008, 2007 and 2006 of 2,200,000,000 calculated as follows:

2008 2007 2006 Numerator: Net profit for the period 1,836,824 1,350,162 875,491

Denominator: Weighted average number of shares 2,200,000,000 2,200,000,000 2,200,000,000

Basic and diluted earnings per share 0.834920 0.613710 0.397951

23. OTHER NON-CURRENT LIABILITIES 2008 Consideration payable in relation to acquisition of Belarussian Telecom 149,163 Financial liability in relation to put option 77,524 Other non-current liabilities 824 227,511

Consideration payable in relation to acquisition of Belarussian Telecom represents the present value of long-term deferred payments to the seller. Total deferred payments amount to US$300,000, of which US$100,000 will be paid on 31 December 2010. The present value of this liability amounted to US$87,344 as at 31 December 2008. Payment of an additional US$100,000 is contingent on financial performance of Belarussian Telecom, and based on management’s estimations, expected to be paid during the first quarter of 2015 (note 7). The present value of the contingent consideration is US$61,819 as at 31 December 2008.

Minority shareholders in Belarussian Telecom were granted a put option, giving the shareholders the right to sell its entire stake to Beltel at fair value during a specified period (note 7). The Group accounted for the present value of the estimated option redemption amount as a provision and derecognized the minority interest. The Company has estimated a value based on multiple approaches including income approach (discounted cash flows) and market approach (comparable market multiples). The average of the values determined as of 31 August 2013, which is the exercise date of the put option, is then discounted back to 31 December 2008.

24. LOANS AND BORROWINGS

This note provides information about the contractual terms of the Group’s interest-bearing loans and borrowings, which are measured at amortized cost. For more information about the Group’s exposure to interest rate, foreign currency and liquidity risk and payment schedule for interest bearing loans, see note 29.

136 137

TURKCELL İLETİŞİM HİZMETLERİ A.Ş. AND ITS SUBSIDIARIES Notes To The Consolidated Financial Statements As At And For The Year Ended 31 December (Amounts expressed in thousands of US Dollars unless otherwise indicated except share amounts)

2008 2007 Non-current liabilities Unsecured bank loans 124,405 140,404 Finance lease liabilities 5,615 - 130,020 140,404 Current liabilities Current portion of unsecured bank loans 639,599 - Unsecured bank facility 13,020 494,098 Current portion of finance lease liabilities 3,290 69 Current portion of secured bank loans - 125,388 655,909 619,555

Significant portion of the loans are borrowed by Financell.

The EUR denominated loan with carrying amount of US$125,388 as at 31 December 2007, whose maturity was June 2008, was paid before its maturity on 24 January 2008.

As at 31 December 2008, the Group is not subject to any financial covenants or ratios with respect to its borrowings.

Finance lease liabilities are payable as follows: 2008 2007 Present value Present value Future minimum of minimum Future minimum of minimum lease payments Interest lease payments lease payments Interest lease payments Less than one year 3,819 529 3,290 72 3 69 Between one and five years 6,086 471 5,615 -- - More than five years ------9,905 1,000 8,905 72 3 69 - - - - - 69 457 2007 750,761 759,959 ------rate value amount 8.0% 72 2008 783,273 785,929 ------Euribor+0.7% - Libor+0.6%-0.8% 23,494 - Libor+0.6% 449,000 Euribor+0.8% 20,500 23,571 117,469 449,423 20,686 125,388 rate value amount 6.9% 9,905 8,905 ? RR* 5,785 6,152 RR+2% 16,583 17,350 Year of Interest Nominal interest Face Carrying Nominal interest Face Carrying BYR 2020 Floating BYR 2010 Floating EUR 2008EUR Floating 2008 Floating USD 2009 Floating Libor+1.25% 588,000 589,129 USD 2009-2011USD 2008 Fixed Fixed USD 2012 Floating Libor+2.3% 150,000 151,373 Libor+2.3% 140,226 140,365 USDUSD 2008 2008 Floating Floating USD 2009 Floating Libor+0.6% 13,000 13,020 Currency maturity rate type Unsecured bank loans TURKCELL İLETİŞİM HİZMETLERİ A.Ş. AND ITS SUBSIDIARIES Notes To The Consolidated Financial Statements As At And For Year Ended 31 December (Amounts expressed in thousands of US Dollars unless otherwise indicated except share amounts) Terms and conditions of outstanding loans are as follows: * Refinancing rate of the National Bank Republic Belarus. due to loan repayment before the maturity. ** Guarantee of the bank loan is restricted cash deposited at banks amounted to US$125,304, which was released on 24 January 2008 Unsecured bank loans Unsecured bank loans Finance lease liabilities Finance lease liabilities Unsecured bank loans Unsecured bank loans Unsecured bank loans Unsecured bank loans Secured bank loans** Other unsecured bank loans Unsecured bank loans 138 139

TURKCELL İLETİŞİM HİZMETLERİ A.Ş. AND ITS SUBSIDIARIES Notes To The Consolidated Financial Statements As At And For The Year Ended 31 December (Amounts expressed in thousands of US Dollars unless otherwise indicated except share amounts)

25. EMPLOYEE BENEFITS

International Accounting Standard No. 19 (“IAS 19”) “Employee Benefits” requires actuarial valuation methods to be developed to estimate the enterprise’s obligation under defined benefit plans. The liability for this retirement pay obligation is recorded in the accompanying consolidated financial statements at its present value using a discount rate of 6.3%.

Movement in the reserve for employee termination benefits as at 31 December 2008 and 2007 are as follows: 2008 2007 Balance at 1 January 27,229 17,648 Provision set during the period 6,734 6,184 Payments made during the period (2,235) (3,108) Unwind of discount 1,349 2,303 Effect of change in foreign exchange rate (6,360) 4,202 Balance at 31 December 26,717 27,229

Obligations for contributions to defined contribution plans are recognized as an expense in the consolidated income statement as incurred. The Group incurred US$4,182, US$1,253 and US$1,014 in relation to defined contribution retirement plan for the years ended 31 December 2008, 2007 and 2006, respectively.

26. DEFERRED INCOME

Deferred income primarily consists of counters sold but not used by prepaid subscribers and it is classified as current as at 31 December 2008. The amount of deferred income is US$250,386 and US$324,815 as at 31 December 2008 and 2007, respectively.

27. PROVISIONS

Non-current provisions: Site restoration Balance at 1 January 2008 - Provision made during the period 5,369 Effect of change in foreign exchange rate (879) Balance at 31 December 2008 4,490

Provisions for site restoration at base stations’ locations and future dismantling costs of base station equipment is set in accordance with Belarussian Telecom’s published environmental policy and applicable legal requirements.

Current provisions: Legal Bonus Total Balance at 1 January 2007 9,459 19,775 29,234 Provision made during the period 14,478 41,040 55,518 Provisions used during the period - (21,605) (21,605) Unwind of discount - (93) (93) Effect of change in foreign exchange rate 1,957 6,123 8,080 Balance at 31 December 2007 25,894 45,240 71,134

Balance at 1 January 2008 25,894 45,240 71,134 Provision made during the period 51,380 45,610 96,990 Provisions used during the period (20,592) (41,662) (62,254) Provisions reversed during the period (6,472) - (6,472) Unwind of discount - (52) (52) Effect of change in foreign exchange rate (5,952) (11,045) (16,997) Balance at 31 December 2008 44,258 38,091 82,349 TURKCELL İLETİŞİM HİZMETLERİ A.Ş. AND ITS SUBSIDIARIES Notes To The Consolidated Financial Statements As At And For The Year Ended 31 December (Amounts expressed in thousands of US Dollars unless otherwise indicated except share amounts)

In note 32, under legal proceedings section, detailed explanations are given with respect to legal provisions under the captions “Disputes on Türk Telekom Transmission Lines Leases”, “Dispute on Special Communication Taxation Regarding Prepaid Card Sales” and “Inquiry of Information Technologies and Communications Authority on Campaigns”.

The bonus provision totalling to US$38,091 comprises only the provision for the year ended 31 December 2008 and is planned to be paid in March 2009.

28. TRADE AND OTHER PAYABLES

The breakdown of trade and other payables as at 31 December 2008 and 2007 is as follows:

2008 2007 Taxes and withholdings payable 261,962 258,566 Payables to other suppliers 196,645 195,624 Payables to Ericsson companies 106,256 85,689 Consideration payable in relation to acquisition of Belarussian Telecom 93,458 - Selling and marketing expense accrual 77,646 48,705 Roaming expense accrual 71,149 39,637 License fee accrual 48,837 41,196 Interconnection accrual 37,448 8,256 Information Technologies and Communication Authority share accrual 17,799 21,979 Interconnection payables 16,369 7,284 Deposits and guarantees taken from agents 8,292 8,295 Payables to Turkish Republic of Northern Cyprus Telecommunication authority 1,613 - Maintenance expense accrual 918 2,228 Payables to Turkish Republic of Northern Cyprus Tax Office 825 3,000 Other 25,204 38,560 964,421 759,019

Taxes and withholdings include VAT payable, special communications tax, frequency usage fees payable to Information Technologies and Communication Authority and personnel income taxes.

Balances due to other suppliers are arising in the ordinary course of business.

Payables to Ericsson companies comprise due to Ericsson Turkey, Ericsson Sweden and Ericsson AB arising from fixed asset purchases, site preparation and other services.

Consideration payable in relation to acquisition of Belarussian Telecom represents present value of short-term deferred payments to the seller. Total deferred payment amounts to US$300,000, of which US$100,000 will be paid on 31 December 2009. The remaining consideration is classified under Other non-current liabilities section (note 23).

Selling and marketing expense accrual is mainly resulted from services received from third parties related to marketing activities of the Company which are not yet invoiced.

Interconnection accrual represents net balance of uninvoiced call termination services received from other operators and interconnection services rendered to other operators.

In accordance with the license agreement, Turkcell pays 90% of the ongoing license fee, which equals 15% of its gross revenue, to the Turkish Treasury and 10% as universal service fund to the Turkish Ministry.

Payables to interconnection suppliers arise from voice and SMS termination services rendered by other GSM operators.

The Group’s exposure to currency and liquidity risk related to trade and other payables is disclosed in note 29.

140 141

TURKCELL İLETİŞİM HİZMETLERİ A.Ş. AND ITS SUBSIDIARIES Notes To The Consolidated Financial Statements As At And For The Year Ended 31 December (Amounts expressed in thousands of US Dollars unless otherwise indicated except share amounts)

29. FINANCIAL INSTRUMENTS

Credit risk Exposure to credit risk: The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk at the reporting date was:

Note 2008 2007 Due from related parties-non current 33 45,349 68,871 Other non-current assets 16 7,001 7,671 Available-for-sale financial assets 15 689 28,218 Due from related parties-current 33 64,013 52,482 Trade receivables and accrued income 18 587,385 558,563 Other current assets 19 25,305 169,378 Cash and cash equivalents 20 3,255,225 3,095,095 3,984,967 3,980,278

The maximum exposure to credit risk for trade receivables arising from sales transactions including those classified as due from related parties at the reporting date by type of customer is:

2008 2007 Receivable from subscribers 473,662 443,705 Receivables from distributors and other operators 143,490 137,363 Other 6,753 10,577 623,905 591,645

Impairment losses: The movement in the allowance for impairment in respect of trade receivables as at 31 December 2008 and 31 December 2007 is as follows:

2008 2007 Balance at 1 January 181,746 133,615 Impairment loss recognised 65,678 35,142 Impairment loss recognised through acquisition of business combination 2,872 - Write-off (1,674) (16,876) Effect of change in foreign exchange rate (51,985) 29,865 Balance at 31 December 196,637 181,746

The impairment loss recognised of US$65,678 for the year ended 31 December 2008 relates to its estimate of incurred losses in respect of trade receivables.

The allowance accounts in respect of trade receivables is used to record impairment losses unless the Group is satisfied that no recovery of the amount owing is possible; at that point the amount considered irrecoverable and is written off against the trade receivable directly. )- 2007 ------125,388 (127,950) (127,950) - - - - - 69 (69) (69) ------758,223 (767,125) 2,125 (767,125) (2,125) (2,125) ------17,978 (18,362) (18,362) ------(100,000) - - 2008 2007 138% 2,237,820 3,095,300 2008 8,905 (9,905) (1,556) (2,265) (2,839) (3,245) 4,372 (4,372) (4,372) - - 21,032 (21,353) (21,353) - - 77,524 (89,165) - - - (89,165) amount cash flows or less months years years 5 years amount cash flows or less months years years 5 years 777,024 (837,416) (77,901) (554,363) (14,114) (180,890) (10,148) 634,502 (710,339) (479,020) (40,620) (11,065) (179,634 242,621 (300,000) - (100,000) (100,000) Carrying Contractual 6 months 6-12 1-2 2-5 More than Carrying Contractual 6 months 6-12 1-2 2-5 More than 2,105,054 2,001,284 (2,142,514) (985,485) (656,628) (116,953) (273,300) (110,148) 1,538,285 (1,625,970) (1,394,651) (40,620) (11,065) (179,634) - to acquisition of Belarussian Telecom put option Unsecured bank loans Non-derivative financial Liabilities Secured bank loans Liquidity risk The following are the contractual maturities of financial liabilities, including estimated interest payments: TOTAL Current cash debt coverage ratio as at 31 December 2008 and 2007 is follows: TURKCELL İLETİŞİM HİZMETLERİ A.Ş. AND ITS SUBSIDIARIES Notes To The Consolidated Financial Statements As At And For Year Ended 31 December (Amounts expressed in thousands of US Dollars unless otherwise indicated except share amounts) Cash and cash equivalentsCurrent liabilities Current cash debt coverage ratio 3,259,792 155% Finance lease liabilities Trade and other payablesBank overdraft 869,806 (880,303) (880,303) - - Due to related parties Consideration payable in relation Financial liability in relation to 142 143

TURKCELL İLETİŞİM HİZMETLERİ A.Ş. AND ITS SUBSIDIARIES Notes To The Consolidated Financial Statements As At And For The Year Ended 31 December (Amounts expressed in thousands of US Dollars unless otherwise indicated except share amounts)

Exposure to currency risk The Group’s exposure to foreign currency risk based on notional amounts is as follows: 2007 USD EUR SEK Foreign currency denominated assets Due from related parties-non current 68,871 770 - Other non-current assets 5 2,136 - Other investments 27,920 203 - Due from related parties-current 6,681 97 - Trade receivables and accrued income 31,710 2,839 10 Other current assets 4,595 949 3 Cash and cash equivalents 1,806,527 88,416 5,901 1,946,309 95,410 5,914 Foreign currency denominated liabilities Loans and borrowings-non current (140,226) - - Loans and borrowings-current (469,500) (96,000) - Trade and other payables (74,706) (43,799) (198,919) Due to related parties (546) (700) - (684,978) (140,499) (198,919) Net exposure 1,261,331 (45,089) (193,005)

2008 USD EUR SEK Foreign currency denominated assets Due from related parties-non current 45,371 - - Other non-current assets 1-- Other investments 403 202 - Due from related parties-current 15,634 804 - Trade receivables and accrued income 28,905 9,899 10 Other current assets 1,947 933 - Cash and cash equivalents 874,103 408,695 1,392 966,364 420,533 1,402 Foreign currency denominated liabilities Loans and borrowings-non current (155,615) - - Other non-current liabilities (310,899) - - Loans and borrowings-current (558,174) - - Trade and other payables (264,586) (69,877) (3,091) Due to related parties (1,444) (7,747) - (1,290,718) (77,624) (3,091) Net exposure (324,354) 342,909 (1,689)

The following significant exchange rates are applied during the period:

Average Rate Reporting Date Closing Rate 2008 2007 2008 2007 USD 1.2768 1.3031 1.5123 1.1647 EUR 1.8816 1.7827 2.1408 1.7102 SEK 0.1949 0.1918 0.1945 0.1798

Sensitivity analysis The basis for the sensitivity analysis to measure foreign exchange risk is an aggregate corporate-level currency exposure. The aggregate foreign exchange exposure is composed of all assets and liabilities denominated in foreign currencies. The analysis excludes net foreign currency investments. Changes in the fair values of forward contracts and currency options are also included in the sensitivity analysis if any; however, offsetting changes in the valuation of the underlying transaction are not included. TURKCELL İLETİŞİM HİZMETLERİ A.Ş. AND ITS SUBSIDIARIES Notes To The Consolidated Financial Statements As At And For The Year Ended 31 December (Amounts expressed in thousands of US Dollars unless otherwise indicated except share amounts)

10% strengthening of the New Turkish Lira against the following currencies as at 31 December 2008 and 31 December 2007 would have increased/(decreased) profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular interest rates, remain constant. Profit or loss 2008 2007 USD 32,435 (126,133) EUR (48,542) 6,621 SEK 22 2,980

10% weakening of the New Turkish Lira against the following currencies as at 31 December 2008 and 31 December 2007 would have increased/(decreased) profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular interest rates, remain constant. Profit or loss 2008 2007 USD (32,435) 126,133 EUR 48,542 (6,621) SEK (22) (2,980)

Interest rate risk As at 31 December 2008 and 2007 the interest rate profile of the Group’s interest-bearing financial instruments was:

2008 2007 Effective Effective interest Carrying interest Carrying Note rate amount rate amount Fixed rate instruments Time deposits 20 USD 5.7% 932,394 5.7% 1,788,951 EUR 6.2% 595,131 5.8% 132,758 TRY 24.7% 1,572,390 19.5% 985,766 Other 1.7% 5,518 - 880 Restricted cash 19 - - 4.3% 125,304 Finance lease obligations 24 6.9% (8,905) 8.3% (69)

Variable rate instruments Available-for-sale securities 15 Foreign inv. equity funds - - * 26,480 Gov. bonds, treasury bills USD 5.6% 403 6.5% 1,440 EUR 5.1% 286 4.7% 298 Secured bank loans 24 EUR floating rate loans - - 4.4% (125,388) Unsecured bank loans 24 USD floating rate loans 5.6% (753,522) 6.7% (610,474) EUR floating rate loans - - 5.3% (23,571) BYR floating rate loans 8.1% (23,502) - - Other - - - (457)

* Effective interest rate is not calculated for foreign investment equity funds since they have no coupon payments.

144 145

TURKCELL İLETİŞİM HİZMETLERİ A.Ş. AND ITS SUBSIDIARIES Notes To The Consolidated Financial Statements As At And For The Year Ended 31 December (Amounts expressed in thousands of US Dollars unless otherwise indicated except share amounts)

Cash flow sensitivity analysis for variable rate instruments: A change of 100 basis points in interest rates as at 31 December 2008 would have increased/(decreased) equity and profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular foreign exchange rates, remain constant. The analysis is performed on the same basis as at 31 December 2008 and 2007.

Profit or loss Equity 100 bp 100 bp 100 bp 100 bp increase decrease increase decrease 31 December 2008 Variable rate instruments (6,191) 6,191 3 (3) Cash flow sensitivity (net) (6,191) 6,191 3 (3)

31 December 2007 Variable rate instruments (4,898) 4,898 32 (32) Cash flow sensitivity (net) (4,898) 4,898 32 (32)

Fair values The fair values of financial assets and liabilities together with the carrying amounts shown in the balance sheet are as follows:

2008 2007 Carrying Fair Carrying Fair Note Amount Value Amount Value Financial assets Due from related parties-non current 33 45,349 45,349 68,871 68,871 Other non-current assets* 16 7,001 7,001 7,671 7,671 Available-for-sale securities 15 689 689 28,218 28,218 Due from related parties-current 33 64,013 64,013 52,482 52,482 Trade receivables and accrued income 18 587,385 587,385 558,563 558,563 Other current assets* 19 25,305 25,305 169,378 169,378 Cash and cash equivalents 20 3,259,792 3,259,792 3,095,300 3,095,300

Financial liabilities Loans and borrowings–non current 24 (130,020) (130,020) (140,404) (140,404) Consideration payable in relation to acquisition of Belarussian Telecom 23-29 (242,621) (242,621) - - Financial liability in relation to put option 23 (77,524) (77,524) - - Bank overdrafts 20 (4,372) (4,372) (2,125) (2,125) Loans and borrowings–current 24 (655,909) (655,909) (619,555) (619,555) Trade and other payables 28 (869,806) (869,806) (758,223) (758,223) Due to related parties 33 (21,032) (21,032) (17,978) (17,978) 1,988,250 1,988,250 2,442,198 2,442,198 Unrecognized gain --

* Non-financial instruments such as prepaid expenses and advances given are excluded from other current assets and other non-current assets. The methods used in determining the fair values of financial instruments are discussed in note 4.

30. OPERATING LEASES

The Company entered into various operating lease agreements. For the year ended 31 December 2008, 2007 and 2006, total rent expenses for operating leases were US$263,805, US$206,543 and US$149,734, respectively. TURKCELL İLETİŞİM HİZMETLERİ A.Ş. AND ITS SUBSIDIARIES Notes To The Consolidated Financial Statements As At And For The Year Ended 31 December (Amounts expressed in thousands of US Dollars unless otherwise indicated except share amounts)

31. GUARANTEES AND PURCHASE OBLIGATIONS

As at 31 December 2008, outstanding purchase commitments with respect to the acquisition of property, plant and equipment, inventory, purchase of sponsorship and advertisement services and 3G license amount to US$847,009 (31 December 2007: US$139,540). Out of total purchase commitments US$563,893 represents commitments in relation to property, plant and equipment and intangible assets.

As at 31 December 2008, the Group is contingently liable in respect of bank letters of guarantee obtained from banks given to customs authorities, private companies and other public organizations amounting to TRY 330,907 (equivalent to US$218,811 as at 31 December 2008) (31 December 2007: TRY 243,267 equivalent to US$208,867 as at 31 December 2007).

32. CONTINGENCIES

License Agreements Turkcell: On 27 April 1998, the Company signed the License Agreement with the Turkish Ministry. In accordance with the License Agreement, the Company was granted a 25 year GSM license for a license fee of US$500,000. The License Agreement permits the Company to operate as a stand-alone GSM operator. Under the License, the Company collects all of the revenue generated from the operations of its GSM network and pays the Turkish Treasury and Turkish Ministry an ongoing license fee and universal service fund, respectively, equal to 15% of its gross revenues from Turkish GSM operations. The Company is authorized to, among other things, set its own tariffs within certain limits, charge peak and off-peak rates, offer a variety of service and pricing packages, issue invoices directly to subscribers, collect payments and deal directly with subscribers.

In February 2002, the Company renewed its License with the Information Technologies and Communications Authority (former name of the Telecommunications Authority), and became subject to a number of new requirements, including those regarding the build-out, operation, quality and coverage of the Company's GSM network, prohibitions on anti-competitive behavior and compliance with national and international GSM standards. Failure to meet any requirement in the renewed License, or the occurrence of extraordinary unforeseen circumstances, can also result in revocation of the renewed License, including the surrender of the GSM network without compensation, or limitation of the Company's rights thereunder, or could otherwise adversely affect the Company's regulatory status. Certain conditions of the renewed License Agreement include the following:

Coverage: The Company had to attain geographical coverage of 50% and 90% of the population of Turkey with certain exceptions within three years and five years, respectively, of the License's effective date.

Service offerings: The Company must provide certain services in addition to general GSM services, including free emergency calls and technical assistance for subscribers, free call forwarding to police and other public emergency services, receiver-optional short messages, video text access, fax capability, calling and connected number identification and restrictions, call forwarding, call waiting, call hold, multi-party and third-party conference calls, billing information and barring of a range of outgoing and incoming calls.

Service quality: In general, the Company must meet all the technical standards determined and updated by the European Telecommunications Standards Institute and Secretariat of the GSM MoU. Service quality requirements include that call blockage cannot exceed 5% and unsuccessful calls cannot exceed 2%.

Tariffs: Information Technologies and Communications Authority sets the initial maximum tariffs in TRY and USD. Thereafter, the revised License provides that the Information Technologies and Communications Authority will adjust the maximum tariffs at most every six months or, if necessary, more frequently. The Company is free to set its own tariffs up to the maximum tariffs.

Rights of the Information Technologies and Communications Authority, Suspension and Termination: The revised License is not transferable without the approval of the Information Technologies and Communications Authority. In addition, the License Agreement gives the Information Technologies and Communications Authority certain monitoring rights and access to the Company’s technical and financial information and allows for inspection rights, and gives certain rights to suspend operations under certain circumstances. Also, the Company is obliged to submit financial statements, contracts and investment plans to the Information Technologies and Communications Authority.

146 147

TURKCELL İLETİŞİM HİZMETLERİ A.Ş. AND ITS SUBSIDIARIES Notes To The Consolidated Financial Statements As At And For The Year Ended 31 December (Amounts expressed in thousands of US Dollars unless otherwise indicated except share amounts)

The Information Technologies and Communications Authority may suspend the Company’s operations for a limited or an unlimited period if necessary for the purpose of public security and national defense. During period of suspension, the Information Technologies and Communications Authority may operate the Company’s GSM network.

The Company is entitled to any revenues collected during such period and the Licensee's term will be extended by the period of any suspension. The revised License may also be terminated upon a bankruptcy ruling against the Company or for other license violations, such as operating outside of its allocated frequency ranges, and the penalties for such violations can include fines, loss of frequency rights, revocation of the license and confiscation of the network management centre, the gateway exchanges and central subscription system, including related technical equipment, immovables and installations essential for the operation of the network.

Based on the enacted law on 3 July 2005 with respect to the regulation of privatization, gross revenue description based for the calculation of ongoing license fee and universal service fund has been changed. According to this new regulation, interest charges for late collections, and indirect taxes such as VAT, and other expenses are excluded from the description of gross revenue. Calculation of gross revenue for ongoing license fee and universal service fund according to the new regulation is effective after Dan›ştay’s approval on 10 March 2006.

Belarussian Telecom: Belarussian Telecom owns a license issued on 18 March 2005 for a period of 10 years and is valid till 18 March 2015. Based on the SPA dated 29 July 2008 between the State Committee on Property of the Republic of Belarus (“the seller”), Beltel and the Company, the seller granted an extention on the license to render standard GSM services until 26 August 2018. Besides, the license shall be extended for an additional ten years and the seller shall provide relevant official documents for such evidency authorization until 31 December 2009.

Under its license, Belarussian Telecom has several coverage requirements to increase its geographical coverage gradually starting from the date of the license until 2017. However, Belarussian Telecom’s period of execution in relation to coverage requirements are extended for three years starting from the acquisition date.

Astelit: Astelit owns two GSM activity licenses, one is for GSM–900, one is for DCS–1800. As at 31 December 2008, Astelit owns twenty GSM–900, DCS 1800, D-AMPS and Radiorelay frequency licenses which are regional or national. In addition to the above GSM licenses, Astelit owns four licenses for local fixed line phone connection with wireless access using D-AMPS standard.

According to licenses, Astelit should adhere to state sanitary regulations to ensure that equipment used does not injure the population by means of harmful electro-magnetic emissions. Licenses require Astelit to inform authorities about start/end of operations in three months; about changes in incorporation address in 10 days. Also, Astelit must present all the required documents for inspection by Ukrainian Telecommunications Authority at their request. The Ukrainian Telecommunications Authority may suspend the operations of Astelit for a limited or an unlimited period if necessary because of the expiration of licenses, upon mutual consent, or in case of violation of terms of radio frequencies use. If such a violation is determined, Ukrainian Telecommunications Authority notifies Astelit of provisions violated and sets deadline for recovery. If the deadline is not met, licenses may be terminated.

Tellcom İletişim Hizmetleri A.Ş.: Tellcom İletişim Hizmetleri A.Ş. (“Tellcom”) acquired Long Distance Traffic Carrying Services License, Data Transmission Overland License, Infrastructure License and Internet Service Provider License. Long Distance Traffic Carrying Services License is valid for 15 years and the remaining licenses are valid for 25 years.

Superonline: Superonline acquired Long Distance Traffic Carrying Services License, Data Transmission Overland License, Satellite License and Internet Service Provider License. Long Distance Traffic Carrying Services License is valid for 15 years and the remaining licenses are valid for 25 years.

Inteltek: Inteltek signed a contract on 30 July 2002 which provides for the installation, support and operation of an on-line central betting system as well as maintenance and support for the provision of football betting games. The Central Betting System Contract was scheduled to expire on 30 March 2008. TURKCELL İLETİŞİM HİZMETLERİ A.Ş. AND ITS SUBSIDIARIES Notes To The Consolidated Financial Statements As At And For The Year Ended 31 December (Amounts expressed in thousands of US Dollars unless otherwise indicated except share amounts)

Inteltek signed another contract with Gençlik ve Spor Genel Müdürlüğü (“GSGM”) on 2 October 2003 which authorized Inteltek to establish and operate a risk management center and become head agent for fixed odds betting. The Fixed Odds Betting Contract was scheduled to expire in October 2011. However, in relation to the lawsuits related to the operations of Inteltek, GSGM ceased the implementation of the Fixed Odds Betting Contract starting from March 2007. Following this annulment decision, Spor Toto and Inteltek signed a new Fixed Odds Betting Contract on 15 March 2007, with less-advantageous conditions compared to previous contract signed in 2003, that expired on 1 March 2008.

Inteltek signed a new Fixed Odds Betting Contract with Spor Toto, which took effect on 1 March 2008. At the same time, Inteltek signed a new Central Betting System Contract with Spor Toto, which took effect on 31 March 2008 as having the same conditions with the current contract but to be valid for one year utmost until the operation started as a result of the new tender.

On 28 August 2008, Spor Toto conducted a tender which allowed private companies to organize fixed odds and paramutual betting in sports games. Inteltek, gave the best offer for the tender. On 29 August 2008, Inteltek signed a contract with Spor Toto, receiving the rights to run the sport betting business for the next ten years. New commission rate, which is 1.4% of gross takings (until 1 March 2009, commission rate is 1% of gross takings), will be applicable starting from March 2009.

Kı brı s Telekom: On 27 April 2007, K›br›s Telekom signed the License Agreement for Installation and Operation of a Digital, Cellular, Mobile Telecommunication System (“Mobile Communication License Agreement”) with the Ministry of Communications and Works of the Turkish Republic of Northern Cyprus which is effective from 1 August 2007, replacing the existing GSM-Mobile Telephony System Agreement dated 25 March 1999. In accordance with the Mobile Communication License Agreement, K›br›s Telekom was granted an 18 year GSM 900, GSM 1800 and IMT 2000/UMTS license for GSM 900, GSM 1800 frequencies while the usage of IMT 2000/UMTS frequency bands is subject to the fulfilment of certain conditions.

On 14 March 2008, K›br›s Telekom was awarded a 3G infrastructure license at a cost of US$10,000 including VAT, which was paid at the end of March 2008. Under the terms of the license, the system had to be operational by mid-October 2008.

Under the Mobile Communication License Agreement, K›br›s Telekom also pays the tax authorities of Turkish Republic of Northern Cyprus an ongoing license fee on monthly basis equal to 15% of gross revenues excluding accrued interest charges for the late payments, indirect taxes and accrued revenues for reporting purposes, payments made to third parties for value added services, interconnection revenues, roaming income from own subscribers after the related payment made to other operators.

Interconnection Agreements The Company has entered into interconnection agreements with a number of operators in Turkey and overseas including Türk Telekom, Telsim Mobil Telekomünikasyon Hizmetleri A.Ş. (“Telsim”), Vodafone Telekomünikasyon A.Ş. (“Vodafone”), Avea İletişim Hizmetleri A.Ş. (“Avea”), Milleni.com GMBH (“Milleni.com”) and Globalstar Avrasya Uydu Ses ve Data İletişim A.Ş. (“Globalstar”). The Access and Interconnection Regulation (the “Regulation”) became effective when it was issued by the Information Technologies and Communications Authority on 23 May 2003.

The Regulation is driven largely by a goal to improve the competitive environment. Under the Regulation, the Information Technologies and Communications Authority may compel all telecommunications operators to accept another operator’s request for use of and access to its network. All telecommunications operators in Turkey may be required to provide access to other operators on the same terms and qualifications provided to their shareholders, subsidiaries and affiliates.

In accordance with the Regulation, the telecommunications providers in Turkey (including Türk Telekom) were obliged to renew their interconnection agreements within two months following the issuance of the Regulation. As a result of intervention by the Information Technologies and Communications Authority, the Company entered into supplemental agreements with Türk Telekom on 10 November 2003, Telsim on 21 November 2003, and Globalstar on 11 December 2003, with amended tariffs and tariff adoption procedures. The interconnection agreement with Avea (formerly TT&TIM) was last renewed on 20 January 2006. On 24 May 2006, shares of Telsim were transferred to Vodafone and a new interconnection agreement was signed between the Company and Vodafone at the end of July 2006.

On 21 February 2005, Tellcom and Milleni.com have signed an agreement to provide telecommunications services to each other whereby Milleni.com may convey calls to the Company’s switch and the Company may convey calls to Milleni.com's switch, in both cases, for onward transmission to their destinations.

In addition, the Information Technologies and Communications Authority has required operators holding significant market power, as well as Türk Telekom, to share certain facilities with other operators under certain conditions and to provide co-location on their premises for the 148 149

TURKCELL İLETİŞİM HİZMETLERİ A.Ş. AND ITS SUBSIDIARIES Notes To The Consolidated Financial Statements As At And For The Year Ended 31 December (Amounts expressed in thousands of US Dollars unless otherwise indicated except share amounts)

equipment of other operators at a reasonable price. The Information Technologies and Communications Authority has also required telecommunications operators to provide number portability, which means allowing users to keep the same phone numbers even after they switch from one network to another starting from 9 November 2008.

Under a typical interconnection agreement, each party agrees, among other things to permit the interconnection of its network with the Company’s network to enable calls to be transmitted to, and received from, the GSM system operated by each party in accordance with technical specifications set out in the interconnection agreement. Typical interconnection agreements also establish understandings between the parties relating to a number of key operational areas, including call traffic management, quality and performance standards, interconnection interfaces and other technical, operational and procedural aspects of interconnection.

The Company’s interconnection agreements usually provide that each party will assume responsibility for the safe operation of its own network. Each party is also typically responsible for ensuring that its network does not endanger the safety or health of employees, contractors, agents or customers of the other party or damage, interfere with or cause any deterioration in the operation of the other party’s network.

Interconnection agreements also specify the amount of the payments that each party will make to the other for traffic originated on one network but switched to the other. These payments vary by contract, and in some cases, may require the Company to pay the counterparty less, the same amount, or a greater amount per minute, for traffic originating on the Company’s network but switching to the counterparty’s network, than it receives for a similar call originating on another network and switched to the Company’s network.

There are no minimum payment obligations under the interconnection agreements; however, failure to carry the counterparty’s traffic may expose the Company to financial and other penalties or loss of interconnection privileges for its own traffic.

On 16 January 2007, Information Technologies and Communications Authority published “Standard Interconnection Reference Tariffs” for Türk Telekom and GSM operators. In accordance with the recommendation, the fee determined for the Company is full TRY 0.140/minute (equivalent to full US$0.093/minute as at 31 December 2008) between 1 January 2007 and 28 February 2007. From 1 March 2007, the fee is full TRY 0.136/minute (equivalent to full US$0.090/minute as at 31 December 2008). These “Standard Interconnection Reference Tariffs” were not necessarily directly applicable to the Company’s interconnection agreements unless explicitly stated by the Information Technologies and Communications Authority at the end of the settlement procedure. However, full TRY 0.136/minute (equivalent to full US$0.090/minute as at 31 December 2008) has been started to be applied between Türk Telekom and the Company starting from 1 March 2007.

On 1 April 2008, Information Technologies and Communications Authority published “Standard Interconnection Reference Tariffs” for Türk Telekom and GSM operators. In accordance with the recommendation, the fee determined for the Company is full TRY 0.091/minute (equivalent to full US$0.060/minute as at 31 December 2008) effective from 1 April 2008. These “Standard Interconnection Reference Tariffs” are not necessarily directly applicable to the Company’s current or future interconnection agreements unless explicitly stated by the Information Technologies and Communications Authority at the end of the settlement procedure. The Company has recognized interconnection revenues and cost in accordance with “Standard Interconnection Reference Tariffs” starting from 1 April 2008.

Legal Proceedings The Group is involved in various claims and legal actions arising in the ordinary course of business described below.

Dispute on Türk Telekom Transmission Lines Leases Effective from 1 July 2000, Türk Telekom annulled the discount of 60% that it provided to the Company based on its regular ratio, which had been provided for several years, and, at the same time, Türk Telekom started to provide a discount of 25% being subject to certain conditions. The Company filed a lawsuit against Türk Telekom for the application of the agreed 60% discount. However, on 30 July 2001, the Company had been notified that the court of appeal upheld the decision made by the commercial court allowing Türk Telekom to terminate the 60% discount. Accordingly, the Company paid and continues to pay transmission fees to Türk Telekom based on the 25% discount. Although Türk Telekom did not charge any interest on late payments at the time of such payments, the Company recorded an accrual amounting to a nominal amount of TRY 3,023 (equivalent to US$1,999 as at 31 December 2008) for possible interest charges as at 31 December 2000. On 9 May 2002, Türk Telekom requested an interest amounting to a nominal amount of TRY 30,068 (equivalent to US$19,882 as at 31 December 2008).

The Company did not agree with Türk Telekom's interest calculation and, accordingly, obtained an injunction from the commercial court to prevent Türk Telekom from collecting any amounts relating to this interest charge. Also, the Company initiated a lawsuit against Türk Telekom on the legality of such interest. On 25 December 2008, the Court rejected the case. The Company will appeal the decision. As at 31 December 2008, based on the management opinion, the Company recorded a provision of TRY 66,497 (equivalent to US$43,971 as at 31 December 2008). TURKCELL İLETİŞİM HİZMETLERİ A.Ş. AND ITS SUBSIDIARIES Notes To The Consolidated Financial Statements As At And For The Year Ended 31 December (Amounts expressed in thousands of US Dollars unless otherwise indicated except share amounts)

Dispute on National Roaming Agreement During the third quarter of 2001, the Company was approached by Is-Tim to negotiate a national roaming agreement. These negotiations did not result in a mutual agreement. Therefore, the discussions continuing under the supervision of the Information Technologies and Communications Authority have been subject to several lawsuits. On 26 November 2001, the Company initiated an arbitration suit in International Chamber of Commerce (“ICC”) against Turkish Ministry and Information Technologies and Communications Authority. On 25 November 2003, ICC rendered a decision stating that the case is not under its jurisdiction. The Company initiated a lawsuit for the annulment of this decision. The First Instance Court rejected the case and the Company appealed against said decision. The Supreme Court annulled the decision of the First Instance Court in favor of the Company. On 13 September 2006, local court decided to execute the Supreme Court’s decision. On 22 May 2007, the Court rejected the case. The Company appealed the decision.

In a letter dated 14 March 2002, the Information Technologies and Communications Authority subjected Is-Tim’s request for national roaming to the condition that it be reasonable, economically proportional and technically possible. Nevertheless, the Information Technologies and Communications Authority declared that the Company is under an obligation to enter a national roaming agreement with Is-Tim within a 30 day period. The Company initiated a lawsuit against Information Technologies and Communications Authority. On 14 March 2006, Dan›ştay decided to cancel the process dated 14 March 2002 but rejected the Company’s request for cancellation of the regulation on procedures and policies with respect to national roaming. Information Technologies and Communications Authority appealed the decision. The appeal process is still pending.

The Information Technologies and Communications Authority decided that the Company has not complied with its responsibility under Turkish regulations to provide national roaming and fined the Company by nominal amount of approximately TRY 21,822 (equivalent to US$14,430 as at 31 December 2008). On 7 April 2004, the Company made the related payment. On 3 January 2005, with respect to the Dan›ştay’s injunction, Information Technologies and Communications Authority paid back nominal amount of TRY 21,822 (equivalent to US$14,430 as at 31 December 2008). On 13 December 2005, Dan›ştay decided the cancellation of the administrative fine but rejected the Company’s request for cancellation of the regulation on procedures and policies with respect to national roaming. Information Technologies and Communications Authority appealed the decision. The case is still pending. Based on the management opinion, the Company has not recorded any accrual as at 31 December 2008. On 27 October 2006, Telecom Italia SPA and TIM International N.V. initiated a lawsuit against the Company and Telsim claiming that the Company violated competition law since demand of roaming has not been met. Telecom Italia SPA and TIM International N.V. requested US$2,000 with respect to this claim. On 23 July 2007, the Court sent the file to expert the examination. Expert report has been sent to the Court. The expert report is in favor of the Company. On 29 December 2008, the Court rejected the case. Such decision has been appealed by Telecom Italia SPA and TIM International N.V. Based on the management opinion, the Company has not recorded any accrual as at 31 December 2008.

Investigation of the Competition Board The Competition Board commenced an investigation of business dealings between the Company and the mobile phone distributors in October 1999. The Competition Board decided that the Company disrupted the competitive environment through an abuse of a dominant position in the Turkish mobile market and infringements of certain provisions of the Law on the Protection of Competition. As a result, the Company was fined a nominal amount of approximately TRY 6,973 (equivalent to US$4,611 as at 31 December 2008) and was enjoined to cease these infringements. The Company initiated a lawsuit before Dan›ştay for the injunction and cancellation of the decision. On 15 November 2005, Dan›ştay cancelled the Competition Board’s decision on the ground that Competition Board infringed the procedural rules governing the investigation process.

After the cancellation of the Competition Board’s decision, the Competition Board has given the same decision again on 29 December 2005. On 10 March 2006, the Company initiated a lawsuit before Dan›ştay for the injunction and cancellation of the Competition Board’s decision dated 29 December 2005. Dan›ştay rejected the injunction request of the Company. The Company has objected to this rejection decision. Dan›ştay rejected the Company’s objection request. The Company appealed the decision.

Based on the decision of Competition Board, Ankara Tax Office requested the Company to pay TRY 6,973 (equivalent to US$4,611 as at 31 December 2008) through the payment order dated 4 August 2006. On 25 September 2006, the Company made the related payment and initiated a lawsuit for the injunction and cancellation of this payment order. The Court rejected the Company’s injunction request.

The Company has objected to such decision, however, objection is rejected. The court dismissed the lawsuit, and the Company appealed this decision. The Company ceased to accrue for TRY 6,973 (equivalent to US$4,611 as at 31 December 2008) on its consolidated financial statements as at and for the period ended 31 December 2008 due to the aforesaid payment on 25 September 2006.

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TURKCELL İLETİŞİM HİZMETLERİ A.Ş. AND ITS SUBSIDIARIES Notes To The Consolidated Financial Statements As At And For The Year Ended 31 December (Amounts expressed in thousands of US Dollars unless otherwise indicated except share amounts)

Investigation of the Information Technologies and Communications Authority on International Voice Traffic In May 2003, the Company was informed that the Information Technologies and Communications Authority had initiated an investigation against the Company claiming that the Company has violated Turkish laws by carrying some of its international voice traffic through an operator other than Türk Telekom. The Company is disputing whether Türk Telekom should be the sole carrier of international voice traffic. On 5 March 2004, the Information Technologies and Communications Authority fined the Company a nominal amount of approximately TRY 31,731 (equivalent to US$20,982 as at 31 December 2008). On 9 April 2004, the Company made the related payment. With respect to the Dan›ştay’s injunction on 5 November 2004, Information Technologies and Communications Authority paid back the nominal amount. Information Technologies and Communications Authority appealed this decision. General Assembly of Administrative Courts of Dan›ştay rejected the appeal request of Information Technologies and Communications Authority. On 26 December 2006, Dan›ştay decided to accept the Company’s claim and annul the decision of and the penalty given by the Information Technologies and Communications Authority. Information Technologies and Communications Authority appealed the decision and the appeal process is pending.

On 2 March 2005, Türk Telekom notified the Company that it has damaged Türk Telekom because of the interconnection agreement signed with Milleni.com. Accordingly, Türk Telekom requested the Company to pay nominal amount of TRY 219,149 (equivalent to US$144,911 as at 31 December 2008) of principal and nominal amount of TRY 178,364 (equivalent to US$117,942 as at 31 December 2008) of interest, which make a sum of nominal amount of TRY 397,513 (equivalent to US$262,853 as at 31 December 2008) until 7 March 2005. In addition, Türk Telekom initiated a lawsuit against the Company with respect to the same issue requesting an amount of TRY 450,931 (equivalent to US$298,176 as at 31 December 2008) of which TRY 219,149 (equivalent to US$144,911 as at 31 December 2008) is principal and TRY 231,782 (equivalent to US$153,265 as at 31 December 2008) is interest charged until 30 June 2005. The Court sent the file to expert examination. According to the expertise report filed in October 2007, interconnection agreement between the Company and Milleni.com damaged Türk Telekom’s interest amounting to TRY 288,400 (equivalent to US$190,703 as at 31 December 2008) or TRY 279,227 (equivalent to US$184,637 as at 31 December 2008). The Company objected to the expertise report. On 6 November 2007, the Court ruled to obtain an additional expertise report. Additional expertise report has been sent to the parties and the report is consistent with the previous expertise report. The Company objected to the additional expertise report. The Company requested another expertise report. On 27 November 2008, the Court ruled to obtain an additional expertise report. Management believes that the aforementioned request has no legal basis. Moreover, the Company obtained an independent opinion dated 23 October 2007 which supports the management opinion from an expert who is not designated by the Court. The case is still pending.

Based on the management opinion, the Company has not recorded any accruals with respect to this matter in its consolidated financial statements as at and for the period ended 31 December 2008.

Dispute on Special Communication Taxation Regarding Prepaid Card Sales On 18 September 2003, the Ministry of Finance issued a report stating that by applying discounts for pre-paid card sales for the period between June - December 2002, the Company calculated the special communication tax on post-discounted amounts. Pursuant to this report, the Tax Office delivered to the Company a notice, asserting deficiencies in special communication tax declarations and requesting a special communication tax payment amounting to nominal amount of TRY 6,992 (equivalent to US$4,623 as at 31 December 2008) and a tax penalty of nominal amount of TRY 9,875 (equivalent to US$6,530 as at 31 December 2008). The tax court accepted the Company’s request for cancellation of special communication tax declarations. The tax office appealed this decision. Dan›ştay did not accept the Tax Court decision. The Company applied for the correction of the decision. On 25 June 2007, Dan›ştay rejected the correction of decision. On 28 September 2007, Local Court complied with Dan›ştay’s decision and rejected the lawsuit for the principle tax amount and accepted the part of the case related to the tax penalty saying that the penalty was excessively applied than it was required. The Company appealed the decision.

On 3 December 2007, Tax Office delivered a notice to the Company requesting a special communication tax payment amounting to nominal amount of TRY 6,992 (equivalent to US$4,623 as at 31 December 2008), a tax penalty of a nominal amount of TRY 6,992 (equivalent to US$4,623 as at 31 December 2008) and accrued interest of nominal amount of TRY 16,813 (equivalent to US$11,118 as at 31 December 2008). The Company made the related payment with respect to special communication tax and tax penalty totaling to a nominal amount of TRY 13,984 (equivalent to US$9,246 as at 31 December 2008) on 28 December 2007. Besides, the Company filed a lawsuit on 28 December 2007 for the cancellation of accrued interest amounting to nominal amount of TRY 16,813 (equivalent to US$11,118 as at 31 December 2008) with respect to Local Court decision dated 28 September 2007. The Court rejected the Company’s injunction request. The Company objected to the decision, however, the objection request was not accepted. As a result of the settlement between the Company and the Tax Office, the Company decided to withdraw its request.

The Company filed a lawsuit on 28 January 2008 for the cancellation of Tax Office decision with respect to the Company’s aforementioned payment not to be deemed as a special communication tax and tax penalty. The Court rejected the Company’s cancellation request. The Company objected to the decision. As a result of the settlement between the Company and the Tax Office, the Company decided to withdraw its request. TURKCELL İLETİŞİM HİZMETLERİ A.Ş. AND ITS SUBSIDIARIES Notes To The Consolidated Financial Statements As At And For The Year Ended 31 December (Amounts expressed in thousands of US Dollars unless otherwise indicated except share amounts)

The Company filed a lawsuit on 12 February 2008 against the Tax Office for the cancellation of the payment orders issued by the Tax Office for the above mentioned tax payments and requested preliminary injunction. The Court rejected the Company’s cancellation request. The Company objected to the decision. As a result of the settlement between the Company and the Tax Office, the Company decided to withdraw its request.

The Law on the Settlement Procedure and Collection of Certain Public Receivables numbered 5736 was put into force on 27 February 2008 following its approval by the Grand National Assembly General Committee. The law provides a new settlement opportunity and easy payment conditions for the tax debts of taxpayers. It has been stipulated that tax receivables assessed additionally, arbitrarily or by the administration, yet whose period allowed for settlement or initiating litigation has not ended as of the effective date of the Code, or for which settlement has been requested, and the settlement meeting has not been held yet or has been held but the period allowed for accepting the final offer has not ended, and receivables that have been subject to a litigation and not yet final; shall be subject to a new settlement and the settled amount shall be divided into installments under convenient conditions. On 26 March 2008, the Company submitted a written application to the Tax Offices for the dispute on special communication taxation regarding prepaid card sales.

According to the settlement made with Tax Offices Coordination Settlement Commission under Ministry of Finance Revenue Administration (“Settlement Commission”) on 18 November 2008, the special communication tax and penalty regarding the dispute paid by the Company amounted to TRY 13,984 (equivalent to US$9,246 as at 31 December 2008) was settled at TRY 2,750 (equivalent to US$1,818 as at 31 December 2008). In addition, the late payment interest in which the Company had a provision of TRY 16,813 (equivalent to US$11,118 as at 31 December 2008) settled at TRY 7,044 (equivalent to US$4,658 as at 31 December 2008). The Company deducted these settlement gains from its monthly special communication tax payments.

As at 31 December 2008, the Company filed a lawsuit against the Tax Office for the cancellation of the tax assessment, applied for the year 2003 amounted to TRY 47,130 (equivalent to US$31,165 as at 31 December 2008), on the ground that accruals regarding special communication tax during the sales of prepaid simcards performed by the Company are miscalculated. The Company management believes that the subject amount will also be settled with Settlement Commission and will not lead to a financial risk. Accordingly, the Company has not recorded any accruals with respect to this matter in its consolidated financial statements as at and for the period ended 31 December 2008.

Disputes on annulment of fixed odds betting tender related to establishment and operation of risk management center head agency The tender on fixed odds betting tender related to establishment and operation of risk management center head agency held by GSGM and the Fixed Odds Betting Contract dated 2 October 2003 signed as a result of the said tender between GSGM and İnteltek were challenged by Reklam Departman› Bas›n Yay›n Prodüksiyon Yap›mc›l›k Dan›şmanl›k ve Ticaret Limited Şirketi (“Reklam Departman›) and Gtech Avrasya Teknik Hizmet ve Müşavirlik A.Ş. (“Gtech”) with the claim of suspension of execution and annulment.

For the lawsuit initiated by Gtech, Council of State decided for the suspension of the tender. Following this decision, the Fixed Odds Betting Contract dated 2 October 2003 between GSGM and Inteltek was terminated by GSGM based on the said decision of Council of State and the Code numbered 5583 came into effect which allowed Spor Toto to hold a new tender and sign a new contract which would be valid until 1 March 2008. On 15 March 2007, GSGM held a new tender, at which Inteltek became the preferred bidder and reacquired the right to operate until 1 March 2008. On the other hand, Inteltek initiated two lawsuits against GSGM on the ground that the termination of the Fixed Odds Betting Contract dated 2 October 2003 was unjustified and to determine that the aforementioned contract is valid under law and is in force. The court decided to reject Inteltek’s claim on 10 July 2007. Inteltek appealed the court’s decision. Inteltek’s appeal was rejected by the Court on 5 February 2008 and Inteltek applied for correction of decision. The Supreme Court rejected the appeal. Inteltek appealed the decision. The Supreme Court decided to approve the decision.

On 27 February 2008, the Turkish parliament passed a new law that allowed Spor Toto to sign a new Fixed Odds Betting Contract with Inteltek, having the same terms and conditions with the latest contracts signed with Spor Toto and to be valid for up to one year, until operations start under the new tender which Spor Toto is allowed to hold in accordance with the same law. Inteltek signed a new Fixed Odds Betting contract with Spor Toto, which took effect on 1 March 2008.

On 28 August 2008, Spor Toto conducted a tender which allowed private companies to organize fixed odds and paramutual betting in sports games. Inteltek, gave the best offer with 1.4% for the tender. On 29 August 2008, Inteltek signed a contract with Spor Toto, receiving the rights to run the sport betting business for the next ten years. New commission rate will be applicable starting from March 2009.

Based on the management opinion, the Company has not recorded any accruals with respect to these matters in its consolidated financial statements as at and for the period ended 31 December 2008.

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TURKCELL İLETİŞİM HİZMETLERİ A.Ş. AND ITS SUBSIDIARIES Notes To The Consolidated Financial Statements As At And For The Year Ended 31 December (Amounts expressed in thousands of US Dollars unless otherwise indicated except share amounts)

Dispute with Spor Toto I On 9 November 2005, Spor Toto sent a notification letter to Inteltek claiming that Inteltek is obliged to pay nominal amount of TRY 3,292 (equivalent to US$2,177 as at 31 December 2008) due to the difference in the reconciliation methods. Spor Toto claims that the reconciliation periods should be six-month independent periods whereas Inteltek management believes that those periods should be cumulative as stated in the agreement. Inteltek did not pay the requested amount.

A lawsuit for determination of evidence has been initiated against Inteltek by Spor Toto on behalf of GSGM. In this lawsuit, Spor Toto has requested from the Court to determine if Inteltek was responsible for the revenue which was not transferred to the Spor Toto’s accounts in due time, and collection risk was belonging to Inteltek, Inteltek was responsible for the revenue in the amount of TRY 1,527 (equivalent to US$1,010 as at 31 December 2008) which was not paid and not collected until the date of the lawsuit and final accounts should be resolved after every period of six-months for settlement, by accepting the periods of six-months for settlement as periods independent from each other. On 22 February 2007, the Court rejected the case and decided that the collection risk is with GSGM and Inteltek is not responsible for the uncollected amount of TRY 1,527 (equivalent to US$1,010 as at 31 December 2008) and also rejected the demand of GSGM that the reconciliation period should be six-month independent periods. GSGM appealed the Court’s decision. Supreme Court rejected the appeal request of GSGM. Following the Supreme Court’s decision, GSGM applied for the correction of the decision. GSGM’s correction of decision request was rejected by the Court and the decision was finalized.

Based on the decision of Supreme Court, Inteltek reversed the previously accrued amount of TRY 3,292 (equivalent to US$2,177 as at 31 December 2008) and its overdue interest accrual amount of total TRY 1,894 (equivalent to US$1,252 as at 31 December 2008). Furthermore, Inteltek reclaimed TRY 2,344 (equivalent to US$1,550 as at 31 December 2008) principal and TRY 977 (equivalent to US$646 as at 31 December 2008) accrued interest which was paid in the 1st and 3rd reconciliation periods. Inteltek has initiated a lawsuit on 21 February 2008 to collect this amount. On 3 December 2008, the Court ruled to obtain an expertise report. The case is still pending. The Company has not recorded any income accruals with respect to latter lawsuit in its consolidated financial statements as at and for the period ended 31 December 2008.

Dispute with Spor Toto II On 29 January 2007, Spor Toto sent a letter to Inteltek claiming that duplicate payments have been made to Inteltek under the two separate agreements that Inteltek operates under and it would keep these duplicate payments in an escrow account until settlement of this issue. Following this letter, on 27 February 2007, Inteltek initiated a lawsuit against Spor Toto stating that all payments made with respect to the contracts between Inteltek and Spor Toto are valid under law. The Supreme Court’s investigation report resulted in favor of Inteltek and whereon as at 31 December 2008 Spor Toto released the deducted amount of TRY 2,494 (equivalent to US$1,649 as at 31 December 2008) for the period between 26 December 2006 and 26 March 2007. Therefore, on 29 April 2008 the Court decided that there is no need to render a verdict on this case. Such decision has been appealed by Inteltek.

Dispute on call termination fee Telsim has initiated a lawsuit claiming that the Company has not applied the reference interconnection rates determined by the Information Technologies and Communications Authority, and has charged interconnection fees exceeding the ceiling rates approved by Information Technologies and Communications Authority and requested an injunction to be applicable starting from 1 August 2005, to cease this practice and requested a payment of its damages totalling to nominal amount of TRY 26,109 (equivalent to US$17,264 as at 31 December 2008) including principal, interest and penalty on late payment. On 6 April 2006, the case was rejected. Telsim appealed this decision. On 11 December 2007, Supreme Court approved the local court decision. Telsim applied for the correction of the decision. Supreme Court rejected Telsim’s request and the decision has been finalized.

There has been a disagreement between the Company and Avea with respect to interconnection rates applied between March 2005 and July 2006. Avea raised an objection on the invoices the Company had issued during the said period claiming that the Company had not applied the reference interconnection rates determined by the Information Technologies and Communications Authority, and had charged interconnection fees exceeding the ceiling rates approved by Information Technologies and Communications Authority. Between March 2005 and July 2006, Avea issued return invoices amounting to TRY 78,030 (equivalent to US$51,597 as at 31 December 2008) which represents the amount exceeding the ceiling rates approved by Information Technologies and Communications Authority and the Company booked such invoices as a reduction of revenue. The Company management believes that the Interconnection Agreement signed between the Company and Avea on 9 March 2001 should be binding with respect to tarifing instead of the reference interconnection rates determined by the Information Technologies and Communications Authority. A similar case with Telsim, at which Telsim was claiming that the Company should have applied the reference interconnection rates determined by the Information Technologies and Communications Authority was rejected on 6 April 2007 and approved by Supreme Court on 11 December 2007. Therefore, in November 2007, the Company issued return invoices including taxes amounting to TRY 78,030 (equivalent to US$51,597 as at 31 December 2008) and recognized revenue amounting to TRY 54,566 (equivalent to US$36,081 as at 31 December 2008) in its consolidated financial statements for the year ended 31 December 2007. TURKCELL İLETİŞİM HİZMETLERİ A.Ş. AND ITS SUBSIDIARIES Notes To The Consolidated Financial Statements As At And For The Year Ended 31 December (Amounts expressed in thousands of US Dollars unless otherwise indicated except share amounts)

Dispute with Iranian Ministry in connection with the GSM tender process The Company believes the Iranian Ministry has not properly implemented the laws and regulations passed by the Iranian Parliament in connection with the GSM tender process, which was won by the Consortium. As a result, the Company has brought a claim in Iranian courts seeking to compel the Ministry to implement the laws and regulations passed by the Iranian Parliament in connection with the GSM tender process. Such injunction order was rejected in April 2006. The Company has initiated an arbitration process against Islamic Republic of Iran for not abiding by the provisions of the Agreement on Reciprocal Promotion and Protection of Investments.

Dispute with the Information Technologies and Communications Authority with respect to temporary set call termination fees The interconnection agreement with Türk Telekom provided for a renegotiation of pricing terms on call termination fees after 31 December 2004, and in the event that the parties could not agree on new terms by 28 February 2005, for referral to the Information Technologies and Communications Authority for resolution. As the parties were unable to agree on new terms, Türk Telekom referred the matter to the Information Technologies and Communications Authority, which has set temporary call termination fees for calls terminating on each operator’s network starting from 10 August 2005.

On 7 October 2005, the Company filed a lawsuit against Information Technologies and Communications Authority for the injunction and cancellation of this decision, which has set temporary call termination fees for calls terminating on each operator’s network starting from 10 August 2005 and the Court rejected the Company’s preliminary injunction request. The Company has appealed this decision. The appeal request has been rejected. On 4 July 2007, the Court decided that the lawsuit is not under its jurisdiction. Dan›ştay rejected injunction request of the Company and the Company objected to the decision. On 1 June 2006, Information Technologies and Communications Authority issued reference call termination fees for the Company and Türk Telekom. In addition, on 26 July 2006, Information Technologies and Communications Authority issued final call termination fees for the Company and Türk Telekom.

On 10 July 2006 and 14 August 2006, the Company filed two lawsuits before Ankara Administrative Court for the injunction and cancellation of reference call termination fees together with the final termination fees set as full TRY 0.140/minute (equivalent to full US$0.093/minute as at 31 December 2008) for calls terminating on Türk Telekom and the Company’s network through the decisions of Information Technologies and Communications Authority dated 1 June 2006 and 26 July 2006. On 9 October 2006, the Administrative Court rejected injunction request of the Company dated 10 July 2006. The Company objected to this decision. On 22 November 2006, Administrative Court has rejected the objection request. The Court decided that the lawsuit is not under its jurisdiction and transferred the file to Dan›ştay. On 21 September 2007, Dan›ştay rejected the injunction request of the Company dated 14 August 2006 and the Company objected to the decision. However, such objection was also rejected.

On 12 September 2007, the Company filed another lawsuit on Dan›ştay for the injunction and cancellation of call termination fees between the Company and Türk Telekom which have been set as TRY 0.140/minute (equivalent to full US$0.093/minute as at 31 December 2008) between 1 January 2007 and 28 February 2007 and full TRY 0.136/minute (equivalent to full US$0.090/minute as at 31 December 2008) starting from 1 March 2007. The Court rejected the injunction request of the Company. The Company objected to the decision and the objection was rejected by the Court.

On 22 October 2008, the Company filed another lawsuit against the part of Information Technologies and Communications Authority’s “Standard Interconnection Reference Tariffs” that determines reference fee for the Company is TRY 0.091/minute (equivalent to full US$0.060/minute as at 31 December 2008) for Türk Telekom, Vodafone and Avea, together with and the decision declared on 26 August 2008 that Interconnection fee between the Company and Vodafone is determined TRY 0.091/minute (equivalent to full US$0.060/minute as at 31 December 2008). The case is still pending.

On 27 October 2008, the Company filed another lawsuit against the part of Information Technologies and Communications Authority’s “Standard Interconnection Reference Tariffs” that determines reference fee for the Company is TRY 0.091/minute (equivalent to full US$0.060/minute as at 31 December 2008) for Türk Telekom, Vodafone and Avea, together with and the decision declared on 26 August 2008 that Interconnection fee between Company and Avea is determined TRY 0.091/minute (equivalent to full US$0.060/minute as at 31 December 2008). The case is still pending.

In addition, call termination fees between the Company and Vodafone and the Company and Avea are set through ‘Reconciliation procedure’ and ‘Call termination fees’ issued on 1 June 2006 by Information Technologies and Communications Authority. These call termination fees are effective from March 2006, May 2006 and July 2006 for Telsim, Vodafone and Avea, respectively. On 14 August 2006, the Company filed a lawsuit with the Ankara Administrative Court for the injunction and cancellation of call termination fees between the Company and Avea which have been set as full TRY 0.140/minute (equivalent to full US$0.093/minute as at 31 December 2008) for calls terminating on the Company’s network. On 19 December 2006, the Ankara Administrative Court dismissed the case, deciding that it does not have jurisdiction over the case. 154 155

TURKCELL İLETİŞİM HİZMETLERİ A.Ş. AND ITS SUBSIDIARIES Notes To The Consolidated Financial Statements As At And For The Year Ended 31 December (Amounts expressed in thousands of US Dollars unless otherwise indicated except share amounts)

The case has been transferred to Dan›ştay. On 21 September 2007, the Court rejected the injunction request of the Company. The Company objected to this decision. On 26 September 2007, the Company filed a lawsuit on Dan›ştay for the injunction and cancellation of call termination fees between the Company and Avea which have been set as full TRY 0.136/minute (equivalent to full US$0.090/minute as at 31 December 2008) for calls terminating on the Company’s network. The court rejected the Company’s injunction request and the Company objected to this decision. The case is still pending.

Additionally, on 23 August 2006, the Company also filed a lawsuit with the Ankara Administrative Court for the injunction and cancellation of call and SMS termination fees between Turkcell and Vodafone (Telsim for the period between 1 March-24 May 2006) which have been set as full TRY 0.140/minute (equivalent to full US$0.093/minute as at 31 December 2008) for calls terminating and full TRY 0.0297/unit (equivalent to full US$0.0196/unit as at 31 December 2008) for SMS terminating on the Company’s network. The Ankara Administrative Court dismissed the case on 29 August 2006, deciding that it does not have jurisdiction over the case. The case has been transferred to Dan›ştay. On 1 May 2007, the Court rejected the injunction request of the Company and the Company objected to this decision. The Court rejected this objection of the Company. The case is still pending.

Dispute with the Türk Telekom with respect to call termination fees As mentioned above, Information Technologies and Communications Authority has set temporary call termination fees for calls terminating on each operator’s network starting from 10 August 2005. However, Türk Telekom did not apply these termination fees for the international calls. Therefore, on 22 December 2005, the Company filed a lawsuit against Türk Telekom to cease this practice and requested collection of its damages totaling to nominal amount of TRY 11,970 (equivalent to US$7,915 as at 31 December 2008) including principal, interest and penalty on late payment covering the period from August 2005 until October 2005. The file is under expert examination. The case is still pending.

On 19 December 2006, the Company initiated another lawsuit against Türk Telekom claiming that Türk Telekom has not applied call termination tariffs for international calls set by Information Technologies and Communications Authority for the period between November 2005 and October 2006 amounting to nominal amount of TRY 23,726 (equivalent to US$15,689 as at 31 December 2008) including principal, interest and penalty on late payment. The file is currently under expert examination. The Court decided to consolidate this lawsuit and the lawsuit explained in the foregoing paragraph. The case is still pending.

On 2 November 2007, the Company initiated another lawsuit against Türk Telekom claiming that Türk Telekom has not applied call termination tariffs for international calls set by Information Technologies and Communications Authority for the period between November 2006 and 1 March 2007 amounting to nominal amount of TRY 6,836 (equivalent to US$4,520 as at 31 December 2008) including principal, interest and penalty on late payment. The Court also decided to consolidate this lawsuit with the first lawsuit dated 22 December 2005.

Dispute with Avea on SMS interconnection termination fees On 28 February 2006, Avea initiated a lawsuit against the Company claiming that although there was an agreement between the Company and Avea stating that both parties would not charge any SMS interconnection termination fees, the Company has charged SMS interconnection fees for the messages terminating on its own network and also assumed liabilities for the messages terminating on Avea’s network and made interconnection payments to Avea after deducting the net balance of those SMS charges and accruals. Avea requested provisions of Interconnection Agreement regarding SMS pricing to be applied and requested collection of its losses amounting to nominal amount of TRY 12,275 (equivalent to US$8,117 as at 31 December 2008) for the period between February 2005 and December 2005 with its accrued interest till payment. On 10 October 2006, the Court decided that charging SMS interconnection termination fees violates the agreement between the Company and Avea, and the Company should pay Avea’s losses amounting to nominal amount of TRY 12,275 (equivalent to US$8,117 as at 31 December 2008) for the period between February 2005 and December 2005 with its accrued interest till payment. The Company appealed the decision. The Supreme Court rejected the Company’s request and the Company applied for the correction of the decision. Such request rejected and the decision was finalized.

The Company made the principal and interest payment for the period between February 2005 and December 2005 on 6 November 2006 in order not to be under legal action for collection and additional interest charge.

On 22 December 2006, Avea requested provisions of Interconnection Agreement regarding SMS pricing to be applied and requested collection of its losses amounting to nominal amount of TRY 6,480 (equivalent to US$4,285 as at 31 December 2008) for the period between January 2006 and August 2006 with its accrued interest till payment. On 25 November 2008, the Court decided in favor of Avea. The Company has appealed the decision. An accrual including with the late payment interest amounting to TRY 11,040 (equivalent to US$7,300 as at 31 December 2008) has been provided related to this dispute in the consolidated financial statements as at 31 December 2008. TURKCELL İLETİŞİM HİZMETLERİ A.Ş. AND ITS SUBSIDIARIES Notes To The Consolidated Financial Statements As At And For The Year Ended 31 December (Amounts expressed in thousands of US Dollars unless otherwise indicated except share amounts)

In line with the court decision stating that charging SMS interconnection termination fees violates the agreement between the Company and Avea, neither SMS interconnection revenue nor SMS interconnection expense has been recognized from February 2005 to 23 March 2007.

The Company has also applied to the Information Technologies and Communications Authority to set SMS interconnection prices between the Company and Avea. On 7 March 2007, the Information Technologies and Communications Authority determined the SMS termination fees between the Company and Avea effective from 23 March 2007.

Dispute on value added taxation with respect to roaming services The Tax Office claimed that the Company should have paid VAT on the invoices issued by foreign GSM operators for the international calls originated by the Company’s subscribers and terminating on those foreign GSM operators’ networks during the year 2000. It has been notified that, based on the calculation made by the Tax Office, the Company should pay nominal amount of TRY 19,791 (equivalent to US$13,087 as at 31 December 2008) for VAT and penalty fee. Moreover, the Tax Office also claimed that the Company should have paid VAT on the invoices issued by foreign GSM operators for the international calls originated by the Company’s subscribers and terminating on those foreign GSM operators’ networks during the years 2001 and 2002 amounting to nominal amount of TRY 15,972 (equivalent to US$10,561 as at 31 December 2008) and TRY 23,863 (equivalent to US$15,779 as at 31 December 2008) for VAT and penalty fee, respectively.

Management decided not to pay such amounts and initiated judicial processes on 6 April 2006 for VAT and penalty fee for the year 2000 and on 13 July 2006 for VAT and penalty fees for the years 2001 and 2002. On 28 June 2007, the Court rejected the case. The Company appealed this decision. Dan›ştay accepted the Company’s injunction request on 17 January 2008. The appeal process is still pending.

On the same subject, Tax Office issued the Company tax assessment notes; and the Company initiated lawsuits for cancellation of such notes. On 22 November 2007, the Court rejected such lawsuits and the Company appealed these decisions. Dan›ştay rejected the Company’s injunction request and the appeal process is still pending.

On 4 October 2007, the Company initiated a lawsuit requesting injunction and cancellation of payment requests for aforementioned VAT tax and tax penalty amounts. The injunction request of the Company has been rejected. The Company objected to the decision. Administrative Court rejected the Company’s objection. On 2 April 2008, the Court accepted the injunction request of cancellation of payment notices. Appeal request of the Tax office to the above mentioned decision was rejected by the Istanbul Administrative Court. Management believes that the Company will prevail in this matter. Accordingly, the Company has not recorded any accruals with respect to this matter in its consolidated financial statements as at and for the period ended 31 December 2008.

The Law on the Settlement Procedure and Collection of Certain Public Receivables numbered 5736 was put into force on 27 February 2008 following its approval by the Grand National Assembly General Committee. The law provides a new settlement opportunity and easy payment conditions for the tax debts of taxpayers. It has been stipulated that tax receivables assessed additionally, arbitrarily or by the administration, yet whose period allowed for settlement or initiating litigation has not ended as of the effective date of the Code, or for which settlement has been requested, and the settlement meeting has not been held yet or has been held but the period allowed for accepting the final offer has not ended, and receivables that have been subject to a litigation and not yet final; shall be subject to a new settlement and the settled amount shall be divided into installments under convenient conditions. On 26 March 2008, the Company submitted a written application to the Tax Offices for the dispute on value added taxation with respect to roaming services.

On 18 November 2008, Settlement Commission decided the VAT, late payment interest and duty charge amounts as TRY 2,000 (equivalent to US$1,322 as at 31 December 2008), TRY 6,381 (equivalent to US$4,219 as at 31 December 2008) and TRY 175 (equivalent to US$116 as at 31 December 2008), respectively. TRY 17,588 (equivalent to US$11,630 as at 31 December 2008) portion of gain on settlement was deducted in November 2008 VAT declaration based on the payment made amounted to TRY 19,588 (equivalent to US$12,952 as at 31 December 2008) in October 2007 related to original VAT of the aforementioned transactions. Late payment interest and fee amounts which were TRY 6,381 (equivalent to US$4,219 as at 31 December 2008) and TRY 175 (equivalent to US$116 as at 31 December 2008), respectively were declared in November 2008 VAT declaration and paid in December 2008.

Dispute on ongoing license fee based on the amended license agreement Based on the law enacted on 3 July 2005 with respect to the regulation of privatization, gross revenue description used for the calculation of ongoing license fee has been changed. According to this new regulation, accrued interest charges for the late payments, taxes such as indirect taxes, and accrued revenues are excluded from the description of gross revenue. Calculation method of gross revenue for ongoing license fee stipulated in the law according to the new regulation shall be valid as of the application date of the Company with the claim of amendment of its license agreement in compliance with the said Law. In the meanwhile, the Company realized the payments including above-mentioned items between 21 July 2005 and 10 March 2006, when the amendment in license agreement was effective. On 21 April 2006, following the license 156 157

TURKCELL İLETİŞİM HİZMETLERİ A.Ş. AND ITS SUBSIDIARIES Notes To The Consolidated Financial Statements As At And For The Year Ended 31 December (Amounts expressed in thousands of US Dollars unless otherwise indicated except share amounts)

agreement amended pursuant to the Law, the Company initiated a lawsuit against Turkish Treasury for the difference between the payments that were realized starting from 21 July 2005 until 10 March 2006 and the amount which will accrue in compliance with the Law totalling TRY 111,316 (equivalent to US$73,607 as at 31 December 2008) including interest of TRY 8,667 (equivalent to US$5,731 as at 31 December 2008). On 9 May 2007, the Court decided that the case is not under its jurisdiction and the Company appealed for this decision. The file was sent to the Supreme Court due to our appeal request. On 13 March 2008, the Supreme Court decided in line with the Local Court decision and the Company applied for the correction of the decision. The appeal request was rejected.

Also, on 9 June 2008, the Company filed a lawsuit before Administrative Court for the difference between the aforementioned period amounting to TRY 102,649 (equivalent to US$67,876 as at 31 December 2008) and interest amounting to TRY 68,276 (equivalent to US$45,147 as at 31 December 2008) till to the date the case is filed. The Administrative Court rejected the case, and the Company appealed the decision.

The above-mentioned enacted law dated 3 July 2005 also assigned Information Technologies and Communications Authority for the revision of license agreement according to new regulation. However, Information Technologies and Communications Authority did not finalize such revision in a timely manner. Therefore, on 5 May 2006, the Company has also initiated a lawsuit against the Information Technologies and Communications Authority before Administrative Court for the delay of the revision in license agreement preventing the new regulation to become effective until 10 March 2006. By this lawsuit, the Company has requested payment totalling TRY 102,649 (equivalent to US$67,876 as at 31 December 2008). On 22 March 2007, the Court decided that the case is not under its jurisdiction. On 12 March 2008, the Company decided to withdraw from its appeal against the Information Technologies and Communications Authority regarding principal amounting to TRY 102,649 (equivalent to US$67,876 as at 31 December 2008). On 21 March 2008, the Court decided to dismiss the case as a result of the Company’s withdrawal.

Dispute on Information Technologies and Communications Authority fee payment based on the amended license agreement Based on the 9th article of the new license agreement dated 10 March 2006, the Company has been obliged to pay 0.35% of its yearly gross revenue once a year as Information Technologies and Communications Authority Fee. However, in the previous license agreement, the Company was obliged to pay 0.35% of its yearly gross revenue after deducting ongoing license fee, universal service fund and other indirect taxes from the calculation base whereas in the new agreement, these aforementioned payments are not deducted from the base of the calculation. Therefore, on 12 April 2006, the Company has initiated a lawsuit for the cancellation of the 9th article of the new license agreement. However, the Court rejected the Company’s injunction request. The Company objected to the Court’s decision and the Court rejected the Company’s objection request.

On 21 June 2006, Information Technologies and Communications Authority notified the Company that the Information Technologies and Communications Authority Fee for the year 2005 which had been already paid in April 2006 should have been calculated according to the new license agreement dated 10 March 2006 instead of the previous license agreement which was effective in the year 2005. Therefore, Information Technologies and Communications Authority requested the Company to pay additional TRY 4,011 (equivalent to US$2,652 as at 31 December 2008). The Company made the payment and initiated a lawsuit for the injunction and cancellation of the aforesaid decision of Information Technologies and Communications Authority. On 30 May 2007, the Court rejected the Company’s injunction request. The Company objected to the decision. Ankara Regional Administrative Court rejected the objection request of the Company.

On 2 October 2007, the Company filed a lawsuit claiming that Information Technologies and Communications Authority fee for the year 2006 which had been already paid in April 2007 should have been calculated according to the previous license agreement which was valid between 1 January 2006 and 9 March 2006. The Court rejected the Company’s injunction request. The Company objected to the decision and the Administrative Court rejected the Company’s objection request.

Dispute on receivables from Avea regarding call termination fees Based on the 21st Article of the Access and Interconnection Regulation, the operators may retrospectively apply the final call termination fees determined by Information Technologies and Communications Authority under the reconciliation procedure. Therefore, on 29 August 2006, the Company has initiated a lawsuit against Avea for the collection of its damages totaling to nominal amount of TRY 32,334 (equivalent to US$21,381 as at 31 December 2008) including principal, interest and penalty on late payment covering the period from 30 June 2004 until 7 July 2006 which is the announcement date of the reference call termination fees issued by Information Technologies and Communications Authority on June 2006. On 20 February 2007, the court has dismissed the case. The Company appealed the said decision.

Dispute on validity of the General Assembly Meeting On 21 August 2006, Sonera Hoding BV filed a lawsuit with an injunction request for the purpose of determination of the invalidity of the Company’s General Assembly Meeting with an ordinary agenda including dividend distribution and appointment of members of the Board of Directors, held on 22 May 2006 and the invalidity of all resolutions taken in this meeting. TURKCELL İLETİŞİM HİZMETLERİ A.Ş. AND ITS SUBSIDIARIES Notes To The Consolidated Financial Statements As At And For The Year Ended 31 December (Amounts expressed in thousands of US Dollars unless otherwise indicated except share amounts)

Dispute on Türk Telekom Transmission Tariffs On 19 January 2007, the Company initiated a lawsuit against Türk Telekom claiming that Türk Telekom charged transmission on erroneous tariffs between 1 June 2004 and 1 July 2005. The Company requested a nominal amount of TRY 8,136 (equivalent to US$5,380 as at 31 December 2008) including interest. The case is still pending.

Dispute on Türk Telekom Interconnect Costs On 26 April 2007, Türk Telekom initiated a lawsuit against the Company claiming that interconnect costs declared by the Information Technologies and Communications Authority for the determination of Standard Reference Interconnection Tariffs do not reflect the actual costs. On 19 December 2007, the Court rejected the case. Türk Telekom appealed the decision and the appeal process is pending.

Dispute on the Audit Committee Member On 21 July 2006, Alexey Khudyakov was appointed to the audit committee as an observer member. On 26 January 2007 the CMB informed the Company that Alexey Khudyakov’s current status, as an observer member on the audit committee does not satisfy the requirements under Article 25 “Committees Responsible for Auditing” of the CMB. The CMB has stated that steps must be taken urgently in order to comply with Article 25. In March 2007, the Company commenced a lawsuit to suspend the execution and to annul the decision of the CMB. The court rejected the Company’s suspension of execution request. The Company objected to the decision. On 15 August 2007, the Local Ankara Administrative Court accepted the Company’s objection request and suspended the said decision of CMB. However, on 18 January 2008, Ankara 14th Administrative Court rejected the case. The Company appealed the decision. On 9 April 2008, State of Council rejected the injunction request of the Company. The appeal process is still pending.

On 15 October 2008, the CMB decided on an administrative penalty amounting to TRY 11 (equivalent to US$7 as at 31 December 2008) since the Company did not fulfil the decision of CMB dated 26 January 2007 and required the Company to inform its shareholders at the next General Assembly Meeting. The Company commenced a lawsuit before the Council of State seeking to suspend the execution and to annul the decision of the CMB with respect to the administrative penalty. The Council of State rendered a lack of jurisdiction decision on the ground that the Administrative Court of Ankara is not designated.

Dispute on Mobile Number Portability On 29 March 2007, the Company initiated a lawsuit against the Information Technologies and Communications Authority claiming stay of order for and the annulment of the Regulation on Mobile Number Portability issued by the Information Technologies and Communications Authority on 1 February 2007 on the ground that vested rights of the Company arising out the concession agreement were violated by the said regulation. The Court rejected the Company’s injunction request and the Company objected to the decision. The Court rejected the Company’s objection request. Avea and Vodafone requested to participate in the case as interveners and the Court accepted this request. The case is still pending.

Inquiry of Information Technologies and Communications Authority on Campaigns According to the decision of Information Technologies and Communications Authority dated 15 March 2007, a pre-inquiry has been decided to start regarding the campaigns in which free minutes or counters are given to the new subscribers in the introduction sets in order to determine their conformity with telecommunications legislation. Information Technologies and Communications Authority decided to make an investigation on this issue. Investigation report has been notified to the Company and legal arguments of the Company have been requested. The Company submitted its legal arguments to the Information Technologies and Communications Authority on 20 October 2007.

On 21 May 2008, Information Technologies and Communications Authority decided that the Company damaged the subscribers’ financial interests related to the campaigns in which free minutes or counters are given and requested TRY 32,088 (equivalent to US$21,218 as at 31 December 2008). The Company has benefited from the early payment option and deserved a 25% discount and paid TRY 24,066 (equivalent to US$15,914 as at 31 December 2008) on 1 August 2008. On 10 July 2008, the Company filed a lawsuit for the injunction and cancellation of the Information Technologies and Communications Authority’s decision. The Court rejected the Company’s injunction request. The Company objected to the decision, however, the Court rejected the Company’s request. The case is still pending.

Dispute on Payment Request of Savings Deposits Insurance Fund On 26 July 2007, Savings Deposits Insurance Fund (“SDIF”) requested TRY 15,149 (equivalent to US$10,017 as at 31 December 2008) to be paid in one month period on the ground that the stated amount is recorded as receivable from the Company in the accounting records of Telsim, which is taken over by SDIF. On 20 September 2007, the Company filed a lawsuit for the injunction and cancellation of the SDIF’s request. Dan›ştay accepted the injunction request of the Company. SDIF objected to injunction decision of Dan›ştay. The case is still pending. SDIF issued payment orders for the above mentioned amount and, on 19 October 2007, the Company initiated a lawsuit for the cancellation of the payment request of SDIF. The Court accepted the injunction request of the Company. SDIF objected the decision. On 6 February 2008, the Court accepted the Company’s suspension of execution request. SDIF objected to this decision and such objection request was also rejected by the Court. The case is still pending. 158 159

TURKCELL İLETİŞİM HİZMETLERİ A.Ş. AND ITS SUBSIDIARIES Notes To The Consolidated Financial Statements As At And For The Year Ended 31 December (Amounts expressed in thousands of US Dollars unless otherwise indicated except share amounts)

Based on the management opinion, the Company has not recorded any accruals with respect to this matter in its consolidated financial statements as at and for the period ended 31 December 2008.

Letter from Turkish Treasury Regarding Ongoing License Fee Deduction for 2006 Sales Discounts At the end of 2006, Tax Auditors of the Company claimed that gross revenue in the statutory accounts should include discounts given to distributors although the Company recorded these discounts in a separate line item as sales discounts.

Starting from 2007, the Company started to deduct discounts given to distributors from gross revenue and present them on a net basis. Accordingly, the Company decided that, it has paid excess ongoing license fee and universal service fund for the year 2006 totalling TRY 51,254 (equivalent to US$33,891 as at 31 December 2008). In a letter dated 23 February 2007, the Company requested ongoing license fee amounting to TRY 46,129 (equivalent to US$30,503 as at 31 December 2008) and interest accrued amounting to TRY 5,020 (equivalent to US$3,319 as at 31 December 2008) from Turkish Treasury and universal service fund amounting to TRY 5,125 (equivalent to US$3,389 as at 31 December 2008) and interest accrued amounting to TRY 558 (equivalent to US$369 as at 31 December 2008) from Turkish Ministry to be paid in 10 days. Since Turkish Treasury and Turkish Ministry have not made any payment, the Company started to deduct these amounts from existing ongoing monthly payments. As at 31 December 2007, the Company deducted TRY 51,254 (equivalent to US$33,891 as at 31 December 2008) from existing monthly ongoing license fee and universal service fund payments.

Turkish Treasury send a letter to the Company dated 17 July 2007 and rejected deducting ongoing licensee fees that relates to 2006 from current year payments. Accordingly, TRY 2,960 (equivalent to US$1,957 as at 31 December 2008) that is deducted from ongoing license fee payment for May 2007 has been requested from the Company. The Company has not made the related payment and continued to deduct ongoing license fee and universal service fee amount related to discounts given to distributors for the year 2006.

Besides, the Company filed two lawsuits on ICC in order to determine that the Company is not obliged to pay ongoing license fee and Information Technologies and Communications Authority Fee in accordance with the 8th and 9th Articles of the License, respectively, on discounts given to distributors.

Management believes that the Company has the legal right to make deductions with respect to this issue. Accordingly, the Company has not recorded any provisions with respect to this matter in its consolidated financial statements.

Dispute with Information Technologies and Communications Authority on Tariffs Between October 2007 and February 2008, Information Technologies and Communications Authority made announcements about its decision to control retail pricing for mobile operators, setting a lower ceiling for off-net calling prices for all operators and asking the Company to set its on-net prices to be not lower than its lowest interconnect rate. The Company filed lawsuits before Dan›ştay requesting an injunction and annulment of the aforementioned decision on the ground that said decision is violating Telecommunications Law, Competition Law and License Agreement between the Company and Information Technologies and Communications Authority. On 26 May 2008, Dan›ştay accepted the injunction request of the Company with respect to set its on-net prices to be not lower than its lowest interconnect rate and rejected the injunction request of the Company about Information Technologies and Communications Authority’s decision to control retail pricing for mobile operators, setting a lower ceiling for off-net calling prices for all operators. Information Technologies and Communications Authority objected to the decision. The Court rejected the objection request of Information Technologies and Communications Authority. Information Technologies and Communications Authority objected to the decision. Dan›ştay rejected the Information Technologies and Communications Authority’s request.

33. RELATED PARTIES

Transactions with key management personnel: Key management personnel comprise the Group’s directors and key management executive officers.

As at 31 December 2008 and 2007, none of the Group’s directors and executive officers has outstanding personnel loans from the Company.

In addition to their salaries, the Group also provides non-cash benefits to directors and executive officers and contributes to a post-employment defined plan on their behalf. The Group is required to contribute a specified percentage of payroll costs to the retirement benefit scheme to fund the benefits. TURKCELL İLETİŞİM HİZMETLERİ A.Ş. AND ITS SUBSIDIARIES Notes To The Consolidated Financial Statements As At And For The Year Ended 31 December (Amounts expressed in thousands of US Dollars unless otherwise indicated except share amounts)

Total compensation provided to key management personnel is US$7,912, US$12,439 and US$3,899 for the year ended 31 December 2008, 2007 and 2006, respectively.

The Company has agreements or protocols with several of its shareholders, consolidated subsidiaries and affiliates of the shareholders. The Company's management believes that all such agreements or protocols are on terms that are at least as advantageous to the Company as would be available in transactions with third parties and the transactions are consummated at their fair values. None of these balances are secured.

Other related party transactions:

Due from related parties – long-term 2008 2007 Digital Platform İletişim Hizmetleri A.Ş. (“Digital Platform”) 40,690 64,220 Other 4,659 4,651 45,349 68,871 Due from related parties – short-term 2008 2007 Digital Platform 19,356 6,960 KVK Teknoloji Ürünleri A.Ş. (“KVK Teknoloji”) 18,394 5,612 A-Tel 18,126 27,470 Superonline - 7,078 Other 8,137 5,362 64,013 52,482 Due to related parties – short-term 2008 2007 ADD Production Medya A.Ş. (“ADD”) 11,688 7,224 Hobim Bilgi İşlem Hizmetleri A.Ş. (“Hobim”) 3,752 5,876 KVK Teknoloji 723 - Betting Organization Operation and Promotion Company SA (“Betting SA”) 704 891 Kyivstar GSM JSC (“Kyivstar”) 653 499 Estore Elektronik Tic. ve Sanal Mağ. Hiz. A.Ş. (“Estore”) 122 2,389 Other 3,390 1,099 21,032 17,978

Substantially, all of the significant due from related party balances is from Çukurova Group companies.

Due from Digital Platform, a company whose majority shares are owned by Çukurova Group, mainly resulted from receivables from call center revenues, financial support for borrowing repayments and advances given for current and planned sponsorships. On 23 December 2005, a “Restructuring Framework Agreement” was signed between Digital Platform and the Company. The agreement includes the restructuring of the Group’s receivables from Digital Platform in exchange for sponsorship and the advertisement services that the Company will receive on Digital Platform’s infrastructure. Under the agreement, Digital Platform commits to pay amounts due to the Group through 15 July 2011 along with the interest in cash and advertisement services. US$60,046 represents present value of future cash flows and services discounted using imputed interest rate. As at 31 December 2008, US$40,690 of the balance is classified as long-term due from related parties in accordance with the revised repayment schedule. Besides, the Company paid US$4,425 to Digital Platform within the scope of the agreement during the year ended 31 December 2008.

Due from and Due to KVK Teknoloji, a company whose majority shares are owned by Çukurova Group, mainly resulted from simcard and scratch card sales to this company and payables in relation to activation fees and subsidies for sales.

Due from A-Tel, a 50-50 joint venture of the Company and SDIF, resulted from simcard and scratch card sales to this company and payables in relation to activation fees and subsidies for sales.

Due from ADD, a company whose shares are owned by Çukurova Group, resulted from advances given for advertisement and sponsorship services rendered by this company.

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TURKCELL İLETİŞİM HİZMETLERİ A.Ş. AND ITS SUBSIDIARIES Notes To The Consolidated Financial Statements As At And For The Year Ended 31 December (Amounts expressed in thousands of US Dollars unless otherwise indicated except share amounts)

Due to Hobim, a company whose majority shares are owned by Çukurova Group, resulted from the invoice printing services rendered by this company.

Due to Betting SA, whose majority shares are owned by one of the shareholders of Inteltek, resulted from the consultancy services received for the operations of Inteltek.

Due to Kyivstar, whose shares are owned by one of the shareholders of the Company, mainly resulted from call termination and international traffic carriage services received.

Due to Estore, a company whose majority shares are owned by Çukurova Group, resulted from handset purchases regarding loyalty campaigns.

The Group’s exposure to currency and liquidity risk related to due from/(due to) related parties is disclosed in note 29.

Transactions with related parties Intragroup transactions that have been eliminated are not recognized as related party transaction in the following table.

Revenues from related parties 2008 2007 2006 Sales to KVK Teknoloji Simcard and prepaid card sales 860,711 627,148 532,658 Sales to A-Tel Simcard and prepaid card sales 132,594 141,188 209,852 Sales to Kyivstar Telecommunications services 63,581 40,165 8,487 Sales to Digital Platform Call center revenues and interest charges 20,281 16,797 12,618 Sales to Millenicom Telekomunikasyon A.Ş. (“Millenicom”) Telecommunications services 12,996 12,399 11,928

Related party expenses 2008 2007 2006 Charges from ADD Advertisement and sponsorship services 165,250 167,477 136,171 Charges from KVK Teknoloji Dealer activation fees and others 103,386 88,564 59,527 Charges from Kyivstar Telecommunications services 63,799 36,060 13,286 Charges from A-Tel (*) Dealer activation fees and others 49,065 45,110 57,716 Charges from Hobim Invoicing and archieving services 20,865 17,163 13,169 Charges from Betting SA Consultancy services 9,842 8,740 13,438 Charges from Millenicom Telecommunications services 8,501 11,117 10,812

* Charges from A-Tel have been eliminated to the extent of the Company’s interest in A-Tel for the year ended 31 December 2008, 2007 and 2006 amounting to US$49,065, US$45,110 and US$57,716, respectively.

The significant agreements are as follows:

Agreements with KVK Teknoloji: KVK Teknoloji, incorporated on 23 October 2002, one of the Company’s principal simcard distributors, is a Turkish company, which is affiliated with some of the Company's shareholders. In addition to sales of simcards and scratch cards, the Company has entered into several agreements TURKCELL İLETİŞİM HİZMETLERİ A.Ş. AND ITS SUBSIDIARIES Notes To The Consolidated Financial Statements As At And For The Year Ended 31 December (Amounts expressed in thousands of US Dollars unless otherwise indicated except share amounts)

with KVK Teknoloji, in the form of advertisement support protocols, each lasting for different periods pursuant to which KVK Teknoloji must place advertisements for the Company’s services in newspapers. The objective of these agreements is to promote and increase handset sales with the Company's prepaid and postpaid brand simcards, thereby supporting the protection of the Company’s market share in the prevailing market conditions. The prices of the contracts were determined according to the cost of advertising for KVK Teknoloji and the total advertisement benefit received, reflected in the Company’s market share in new subscriber acquisitions. Distributors’ campaign projects and market share also contributed to the budget allocation.

Agreements with A-Tel: A-Tel is involved in the marketing, selling and distributing the Company’s prepaid systems. A-Tel is a 50-50 joint venture of the Company and SDIF. A-Tel acts as the only dealer of the Company for Muhabbet Kart (a prepaid card), and receives dealer activation fees and simcard subsidies for the sale of Muhabbet Kart. In addition to the sales of simcards and scratch cards through an extensive network of newspaper kiosks located throughout Turkey, the Company has entered into several agreements with A-Tel for sales campaigns and subscriber activations.

Agreements with Kyivstar: Alfa Group, a minor shareholder of the Company, holds the majority shares of Kyivstar. Astelit is receiving call termination and international traffic carriage services from Kyivstar.

Agreements with Digital Platform: Digital Platform, a direct-to-home digital television service company under the Digiturk brand name, is a subsidiary of one of the Company’s principal shareholders, Çukurova Group. Digital Platform acquired the broadcasting rights for Turkish Super Football League by the tender held on 15 July 2004, until 31 May 2008 and the broadcasting rights were extended until 31 May 2010 with a new agreement dated 5 May 2005. On 23 December 2005, “Restructuring Framework Agreement” was signed between Digital Platform and the Company. The Company also has an agreement related to the corporate group SMS services that the Company offers to Digital Platform, and an agreement for call center services provided by the Company's subsidiary Global Bilgi Pazarlama Dan›şma ve Çağr› Servisi Hizmetleri A.Ş. (“Global”).

Agreements with Millenicom: European Telecommunications Holding AG (“ETH”), a subsidiary of Çukurova Group, holds the majority shares of Millenicom. Millenicom is rendering and receiving call termination and international traffic carriage services to and from the Company.

Agreements with ADD: ADD, a media planning and marketing company, is a Turkish company owned by one of the Company's principal shareholders, Çukurova Group. The Company is operating a media purchasing agreement with ADD, which is revised on 1 September 2008 and is effective until 31 August 2009. The purpose of this agreement is to benefit from the expertise and bargaining power of ADD against third parties, regarding the formation of media purchasing strategies for both postpaid and prepaid brands. Additionally, ADD is a party of the sponsorship and advertisement agreements which are integral part of “Restructuring Framework Agreement” signed between the Company and Digital Platform.

Agreements with Hobim: Hobim, one of the leading data processing and application service provider companies in Turkey, is owned by Çukurova Group. The Company has entered into invoice printing and archiving agreements with Hobim under which Hobim provides the Company with scratch card printing services, monthly invoice printing services, manages archiving of invoices and subscription documents for an indefinite period of time. Prices of the agreements are determined as per unit cost plus profit margin.

Agreements with Betting SA: Betting SA is incorporated under the laws of Greece, owned by one of the major shareholders of Inteltek. Inteltek signed a service agreement with Betting SA which was revised on 14 May 2007 to get consultancy services including monitoring operations, providing continuous evaluation of betting, maximizing game revenues of fixed odds betting, operating fixed odds betting games in the most efficient manner, with integrity and securely.

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TURKCELL İLETİŞİM HİZMETLERİ A.Ş. AND ITS SUBSIDIARIES Notes To The Consolidated Financial Statements As At And For The Year Ended 31 December (Amounts expressed in thousands of US Dollars unless otherwise indicated except share amounts)

34. GROUP ENTITIES

The Group’s ultimate parent company is Turkcell. Subsidiaries of the Company as at 31 December 2008 and 2007 are as follows:

Subsidiaries

Ownership Interest Name Country of incorporation Business 2008 (%) 2007 (%) K›br›s Telekom Turkish Republic of Northern Cyprus Telecommunications 100 100 Global Turkey Customer relations management 100 100 Information technology, value added Turktell Turkey GSM services investments 100 100 Tellcom Turkey Telecommunications 100 100 Turktell Uluslararas› Yat›r›m Holding A.Ş. Turkey Telecommunications investments 100 100 Turkcell Kurumsal Sat›ş ve Dağ›t›m Hizmetleri A.Ş. Turkey Telecommunications 100 100 Eastasia Netherlands Telecommunications investments 100 100 Turkcell Teknoloji Araşt›rma ve Geliştirme A.Ş. Turkey Research and Development 100 100 Kule Hizmet ve İşletmecilik A.Ş. Turkey Telecommunications infrastructure business 100 100 Sans Oyunlar› Yat›r›m Holding A.Ş. Turkey Betting business investments 100 100 Financell Netherlands Financing business 100 100 Rehberlik Hizmetleri A.Ş. Turkey Telecommunications 100 - Beltur BV Netherlands Telecommunications investments 100 - Surtur BV Netherlands Telecommunications investments 100 - Beltel Turkey Telecommunications investments 100 - Turkcell Gayrimenkul Hizmetleri A.Ş. Turkey Property investments 100 - Global LLC Ukraine Customer relations management 100 - UkrTower Ukraine Telecommunications infrastructure business 100 - Superonline Turkey Telecommunications 100 - Corbuss Kurumsal Telekom Servis Hizmetleri A.Ş. Turkey GSM services 99 99 Belarussian Telecom Republic of Belarus Telecommunications 80 - Inteltek Turkey Betting business 55 55 Euroasia Netherlands Telecommunications 55 55 Astelit Ukraine Telecommunications 55 55 Bilyoner Turkey Betting business - 55

35. SUBSEQUENT EVENTS

According to the Article No:33 of the Ministry of State, it has been decided to change the name of New Turkish Lira as Turkish Lira removing the phrase “New” which is executed on 1 January 2009 in accordance with the first item of Law No: 5083. TURKCELL İLETİŞİM HİZMETLERİ A.Ş. AND ITS SUBSIDIARIES

DEMATERIALIZATION OF THE SHARE CERTIFICATES OF THE COMPANIES THAT ARE TRADED ON THE STOCK EXCHANGE

It was decided by the Capital Markets Board (“the Board”) as per article 10/A included in the Capital Markets Act (CMA) No. 2499 to commence the dematerialization system.

As per the Temporary Article 2 of the Board’s Communiqué Series: IV No. 28 on the “Procedures and Principles of Keeping the Records of Dematerialized Capital Market Instruments”, it is set forth that all of the share certificates of the companies that are traded in ISE shall be collectively dematerialized and the related procedures and principles are regulated in the said Communiqué.

Legal and actual dematerialization of the share certificates has commenced on November 28, 2005.

Beginning from 28 November 2005, it is prohibited for the companies listed in ISE to issue new share certificates as a result of capital increases. The new share certificates arising out of capital increases shall be transferred to the accounts of the rightful owners by registration of securities.

It is obligatory for the share certificates that are not dematerialized and that are kept physically by their rightful owners to be delivered to our Company (“Issuer”) or an authorized broker for their registration with “Central Registry Agency” that is under supervision and control of the Board until the end of 31 December 2007.

In addition, as per the Temporary Article 6 of the Capital Markets Act the financial rights attached to the share certificates, which are not dematerialized until the end of 31 December 2007, shall be monitored in a dematerialized manner at the Central Registry Agency from that day on and in case the share certificates are dematerialized, their financial rights shall be transferred to the accounts of the rightful owners. Any financial rights related to management for the share certificates that are not dematerialized after 31 December 2007 shall be exercised by Central Registry Agency until the dematerialization process of existing shares completed. Implementation principles for the aforementioned article shall be found in the letter of the Central Registry Agency dated 30 January 2008 and numbered 294.

The share certificate records of our Company shall be kept by Central Registry Agency and the issuer in electronic form, which is formed by the Central Registry Agency.

.

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ACCOMMODATION OF THE SHARE CAPITAL OF THE COMPANY AND NOMINAL VALUES OF THE SHARE CERTIFICATES TO THE NEW TURKISH LIRA

As per article 6 titled “Share Capital” of the Articles of Association of the Company, the Code numbered 5083 Regarding the Currency Unit of Turkish Republic Government and the Code numbered 5274 Regarding the Amendment of Turkish Commercial Code, the share capital of the Company has been made compatible with the New Turkish Lira and such resolution was approved at the Ordinary General Assembly Meeting on 29 April 2005.

Provisions regarding making nominal values of the share certificates of the Company compatible with the New Turkish Lira are regulated in the temporary article of the Company’s Articles of Association and such article was approved at the Ordinary General Assembly Meeting on 29 April 2005. The temporary article reads as follows:

“As per the Code numbered 5274 Regarding the Amendment of Turkish Commercial Code, in order to increase the nominal value of the shares to 1.- (One) New Turkish Liras, 1,000 (One thousand) units of shares, each having a nominal value of 1,000.- (One thousand) Turkish Liras shall be merged and 1.- (One) unit of share having a nominal value of 1.- (One) New Turkish Liras shall be issued to represent such shares. Fraction receipt shall be issued for the shares that could not be complemented up to TRY 1. In relation to such change, the shareholders’ rights arising out of their shares are reserved. Concerning such transaction, the 1st, 2nd, 3rd and 4th series of share certificates, which represent the existing share capital, shall be merged in the 5th series. In connection with the transactions of share change and merger of series, the shareholders rights arising out of their shares are reserved.

The transactions regarding the change in share certificates shall be commenced by the Board of Directors of the Company after the dematerialization of Capital Markets instruments is put into practice and within the framework of related regulations.” TURKCELL İLETİŞİM HİZMETLERİ A.Ş. AND ITS SUBSIDIARIES

THE BOARDS DIVIDEND DISTRIBUTION PROPOSAL

In accordance with the Capital Markets Board (“CMB”) Communiqué Serial: IV, No: 27 on “Principles Regarding Distribution of Dividends and Interim Dividends To Be Followed by the Publicly Held Joint Stock Corporations Subject to Capital Market Law”, through considering the minimum ratio of the dividend distribution, determined by 2008/6 numbered weekly bulletin of CMB, and the dividend distribution policy that was adopted by our Company, pursuant to the Corporate Governance Principles by the Board of Directors resolution dated

November 24, 2004 and numbered 366; the Board of Directors of our Company presents the following dividend distribution proposal, to be evaluated and determined at the Ordinary General Assembly Meeting of our Company which will be held on May 8, 2009.

1- As a result of the activities of our Company, pertaining to the period between January 1, 2008 and December 31, 2008, our Company’s profit, calculated according to the consolidated financial statements, which were audited independently in accordance with the Capital Markets Board Communiqué Serial: XI numbered 29, named “Communiqué Regarding the Financial Reporting in Capital Markets” is TRY 3,016,415,970- and the commercial profit calculated according to the provisions of Turkish Commercial Code is TRY 3,721,273,637-,

2- TRY 2,312,800,788 - after tax profit calculated according to the consolidated financial statements shall be taken as the basis for dividend distribution in accordance with the decree which was published on 12 January 2009 regarding “Announcement Regarding Dividend Distribution Of Profits Related To 2008 Accounting Period” which had been decided during the meeting of the Capital Markets Board (CMB) dated 09 January 2009 and numbered 1/6. ,

3- Within the framework of article 466 of the Turkish Commercial Code (TCC), it is obligatory to set aside first legal reserve up to the 20% of the paid in/issued capital of a company. The first legal reserve of our Company set aside in its commercial records amounts to TRY 323,585,664- as of 31 December 2008. The 20% of the paid in/issued capital of our Company is TRY 440,000,000- Hence; for the year 2008, the first legal reserve that shall be set aside is TRY 116,414,336 which is the difference between TRY 440,000,000- which is the 20% of the paid in/issued capital of the Company and TRY 323,585,664- which is the first legal reserve amount set aside in the commercial records as of 31 December 2008.,

4- TRY 2,196,386,452- is the distributable dividend of the Company, pertaining to year 2008, which is the difference between TRY 2,312,800,788-, the basis for dividend distribution as stated in the consolidated financial reports of the Company and TRY 116,414,336- , which is the first legal reserve amount, as mentioned hereinabove and TRY 2,202,953,878- calculated by adding TRY 6,567,426- which is the aggregate amount of the donations made during the year, to the above mentioned amount shall be taken as the first dividend basis,

5- TRY 440,590,776-, which is 20%, the percentage declared by the Capital Markets Board as the minimum dividend distribution percentage for the year 2008, of the first dividend basis, amounting to TRY 2,202,953,878- shall be distributed as the first cash dividend and the secondary reserve amounting to TRY 98.819.323- shall be separated from the rest of the net distributable current year profit,

a. The total amount of TRY 1.098.193.226, which shall be distributed in cash, shall be distributed from previous years profits,

b. As the total amount of TRY 1.098.193.226-, as mentioned hereinabove which shall be distributed in cash, has been obtained by the investment incentive utilized within the scope of the investments made during the period prior to April 24, 2003 and investment allowance withholding has been calculated on the same amount in this regard, it shall be distributed without any withholding tax deductions,

c. In this respect, an amount of TRY 0.4991787-, net and gross, shall be paid in cash equally, to our shareholders for each share, having a nominal value of TRY 1.- (One Turkish Lira),

The aggregate net amount of cash dividend payment shall be TRY 1.098.193.226-,

6- TRY 2.097.567.129- which is the remaining distributable profit after the cash dividend distribution shall be:

a. Regarded as extraordinary reserves and set aside within the Company,

b. The withholding tax deductions shall be applicable on the amount, which shall be transferred to 2009 financial year as extraordinary reserves, in case such amount shall be subject to redistribution.

7- Cash dividend payment to our Company’s shareholders, shall commence on May 18, 2009 and shall continue for 15 days in İstanbul Head Office, Çiftehavuzlar, İzmir and Ankara branches of Finans Yat›r›m Menkul Değerler A.Ş. and also in Central Registry Agency located at Süzer Plaza Askerocağ› Cad. No: 15 K: 2 34367 Elmadağ - Şişli, İstanbul and shall be made in exchange of the dividend share denominations for year 2008, provided that the physical shares held by the shareholders are registered by the Central Registry Agency and brokerage house authorized for keeping the shares.

THE BOARD 166 167 ABSTRACT OF AUDITOR'S REPORT TO GENERAL ASSEMBLY OF TURKCELL İLETİŞİM HİZMETLERİ A.Ş.

Name of the Company : TURKCELL İLETİŞİM HİZMETLERİ A.Ş.

Headquarters : İstanbul

Issued Share Capital : TRY 2,200,000,000

Field of Operations : Mobile Communication Services

Names, surnames : İbrahim Alpay DEMİRTAŞ, Hamit Sedat ERATALAR term of duty of auditors : 1 (One) Year whether they are company shareholder and/or employees : Neither is a company shareholder or employee

Number of Board of Directors Meetings : Hamit Sedat Eratalar attended 11 ordinary Board of Directors Attended, Board of Directors Meetings meetings in addition to the extraordinary Board of Directors Held meetings. İbrahim Alpay Demirtaş attended none.

Board of Auditors meetings were held four times.

The scope of the examination performed on the partnership : The quarterly examinations performed on the statutory accounts, books and records, the dates of such examination books and records revealed that they were kept and the conclusions drawn there from and maintained in an orderly and accurate manner.

The number of counts performed on the Treasury as : The Treasury was counted four times and it was Required under Article 353.Paragraph 1, Sub clause 3 o noted that actual assets and the records were in The Turkish Commercial Code and the results thereof coherence.

Dates of examinations performed pursuant to Article 353 : The monthly examinations revealed that securities Paragraph 1, Sub clause 4 of the Turkish Commercial were complete and coherent with the books and records. code and the results thereof

Complaints filed in regards to irregularities and : There were no complaints filed in regards proceedings undertaken in respect thereof to irregularities.

We have examined the accounts and transactions of Turkcell İletişim Hizmetleri A.Ş. for the period 01.01.2008 - 31.12.2008 pursuant to Turkish Commercial Code, the Company's Articles of Association and other legislation and in accordance with the generally accepted Accounting principles and standards.

In our opinion the accompanying Balance Sheet as of December 31, 2008 reflects the actual financial position of Turkcell İletişim Hizmetleri A.Ş. where as the Income Statement for the 01.01.2008 - 31.12.2008 period fairly and accurately reflect operational results of the Company, and that the proposal for dividend distribution is in line with the pertinent law and the Company's Articles of Association.

We respectfully submit the Balance Sheet and Income Statement for approval and the release of Board of Directors.

Sincerely, Auditor Auditor İBRAHİM ALPAY DEMİRTAŞ HAMİT SEDAT ERATALAR

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Turkcell İletişim Hizmetleri A.Ş. Turkcell Plaza Meşrutiyet Cad. No. 153 Tepebaşı, 34430 İstanbul Tel: +90(212) 313 1000 Faks: +90(212) 313 1010 www.turkcell.com.tr