COMPETING WITH FOREIGN COMPANIES IN TECHNOLOGY AS A LOCAL PLAYER

Dr. Alper Özbilen addressed the challenges facing Turkey’s defense industry.

Dr. Alper Özbilen, Chairman of the Board of PAVO Group, authored an article highlighting the challenges in Turkey’s defense industry. According to Özbilen, associating technological advancements with concepts like independence and sovereignty, which define the fate of nations, is not merely a coincidence. Actors with different historical backgrounds, priorities, and technical capabilities are in a fierce race to protect and strengthen their local technologies. This competition, which spans a wide spectrum, serves as a cornerstone for maintaining the status quo for some countries, while for others lagging behind, it presents a rapid development opportunity to shift the global power balance in their favor. On the subject, Özbilen states:

“The telecommunications sector, at the center of U.S. ‘espionage’ accusations against China, is one of the first areas where significant reflections of the technology race have been observed. The U.S. administration has implemented various restrictions to prevent the risk of data and communication traffic being controlled and slowed down by China. The primary concern here is the possibility that China, either deliberately or inadvertently, could gain unauthorized access channels to U.S. data through ‘backdoors.’ The fact that 5G enables the processing of larger amounts of data and its significant impact on every component of the global economy has made this risk even more critical for the U.S.”

Network security risks alone are not sufficient to fully explain the conditions of risk. In the telecommunications sector, which is an inseparable part of both individual lives and institutional processes, dependency on any global monopoly poses a significant risk. Fundamentally, this dependency increases the vulnerability of critical information and communication capabilities to direct or indirect embargoes. The time and financial costs involved in network architectural changes further highlight the level of risk.

Once a cycle of technological dependency begins, it triggers a challenging journey that is hard to reverse. This process also leads to over-attributing meanings to technology beyond its outputs, forcing institutions into new purchasing decisions in pursuit of technological gains. This state, which could be termed ‘digital fetishism,’ creates even more challenging conditions in the telecommunications sector. Although it warrants separate analysis, particular attention must be paid to this issue during the transition to 5G. In this critical technology, more relevant to industry than individual life, an accelerated and populist approach such as “let’s also transition to 5G” and fully entrusting 5G infrastructure to foreign technology monopolies will not yield favorable outcomes for Turkey.”

Furthermore, Özbilen emphasized the strategic impact and importance of the telecommunications sector in information and communication, as exemplified by the race between the U.S. and China. He noted that countries seeking to create their own national success stories based on their interests and priorities might not necessarily reduce network security risks or build cost-effective infrastructures by choosing one of these two actors. Özbilen argued that relying entirely on local technologies for network needs is neither feasible nor efficient. According to Özbilen, the key considerations in this matter include:

• Conducting R&D and innovation activities in high-value areas,
• Opposing the policies of actors offering unfair trade conditions to dominate the domestic market,
• Establishing global partnerships based on mutual benefit, and
• Fairly comparing local and foreign technologies.

With its young population and high phone and internet penetration rates, Turkey presents significant opportunities for economies of scale in the telecommunications sector. However, Özbilen noted that this potential has not been adequately utilized to date. While success has been achieved in indicators such as coverage area, speed, and capacity, this success heavily relies on foreign technologies.

Özbilen stated, “We should not wait for compelling outcomes to become concerned about the diplomatic, economic, social, and military implications of dependencies. To avoid repeatedly struggling with the same difficulties, we must transfer our experiences across different domains. In this context, I believe it is essential for Turkey, which has developed new products and solutions in fields such as electronic warfare and unmanned systems that have shifted regional balances, to spread its awareness, experience, and knowledge to other sectors.”

He further cited the painful experience of TELETAŞ, a company conducting advanced R&D in telecommunications infrastructure, being acquired by a foreign technology provider and transformed into a sales and marketing office. Özbilen expressed optimism that the sale and elimination of value-added domestic companies to foreign competitors would not be repeated under current conditions. However, he pointed out the ongoing challenges of domestic companies competing against the unfair competition and pricing policies of global monopolies, which pose unsustainable risks.

“In this context, I believe we need to reconsider what qualifies as a ‘domestic product.’ Companies that lack advanced capabilities but use ‘domestic and national’ branding as a marketing strategy are not part of the sensitivities I have mentioned above. Neither are foreign companies, which engage in assembly-based, low-value-added activities and are labeled as ‘domestic goods’ based on some bureaucratic processes.

Domestic telecommunications companies sometimes have to compete with global monopolies, which are also certified as ‘domestic’ for developing ‘local’ products, as if they were domestic competitors. I am not sure if there are other examples of this globally, but this process allows these foreign monopolies to benefit from the support designed to strengthen local advanced technology by our state and institutions.

While telecommunications infrastructures are globally dominated by about five companies, the situation is even more challenging in Turkey. More than half of the market depends on the capabilities of a Chinese global monopoly, which now also holds a ‘domestic goods’ certificate.

In the face of all diplomatic, commercial, and academic actors focusing on dependency cycles rather than fair global partnerships based on mutual benefit, I believe we must boldly echo our President Recep Tayyip Erdoğan’s statement, ‘The world is bigger than five.’ In the context of this article, I would say: ‘The telecommunications sector is bigger than five.’

The empowerment of companies operating as part of Turkey’s national narrative against global monopolies will enable us to achieve highly valuable outcomes for the future of our country.”

Source: Yerli ama Yabancı Şirketlerle Teknoloji Yarışına Girmek (defenceturk.net)