TELETAŞ: A PAINFUL MEMORY, A VALUABLE LESSON

We are in a transitional period where both new and old technologies hold commercial value. We are aware of the benefits that new technologies and sectors can offer in the world of tomorrow, as history has shown us time and again. However, under the financial and managerial challenges of demonstrating R&D discipline, it often seems more feasible to focus on short-term gains. Failing to support the right technology and the right people at the right time—or even creating obstacles—can impact the fate of nations, not just individuals.

It is well-known that telecommunications, beyond being a standalone sector, has profoundly transformed socio-economic life. In our telecommunications sector, significant efforts are being made to produce value in terms of hardware, software infrastructure, and services. While we are globally competitive in many areas, unfortunately, much of the effort is centered on catching up to foreign competitors to some extent. This is because we fell short in taking the necessary steps yesterday for today’s prosperity. In some cases, we even retraced our steps. The TELETAŞ experience is one such example.

In the 1960s, due to the urgent need for telecommunications infrastructure, PTT ARLA was established with great dedication. In the following years, PTT ARLA evolved into TELETAŞ; a small team striving to produce quality through reverse engineering transformed into a company of thousands capable of meeting the needs of both domestic and foreign markets with its original designs. In the 1980s and 1990s, when the transition from analog to digital systems became a necessity and the telecommunications sector began to take its current shape, this transformation held vital importance for Turkey.

“We Acquired TELETAŞ to Shut It Down.”

As Turkey was steered towards privatization due to the management issues of state economic enterprises, the need for resources, and global trends, unfortunately, the country began this process not with enterprises that were a burden on taxpayers, but with the “easily sellable, profitable” TELETAŞ. In 1987, 40% of PTT’s shares were transferred to the Mass Housing and Public Partnership Administration, and in 1988, 22% of the administration’s shares in TELETAŞ were offered to the public. It is noted that more than 761 million TL was spent solely on television advertisements to achieve this transaction, which promised no real output beyond “20-30 million dollars in revenue.”

In 1984, a licensing agreement for System 12 digital exchanges was signed, but this process ultimately resulted in the sale of 39% of the company’s shares to a foreign firm. Consequently, TELETAŞ was not a wholly state-owned entity in 1988 when the public offering of the 22% stake occurred.

Digital Exchange Development Efforts Were Kept Secret from the Foreign Partner

System 12’s distributed control limited the impact of any faults in one module on the entire system. New features could be easily added to System 12. However, System 12 was expensive for small subscriber needs.

The experience gained from System 12, the phase of contributing to software development, and the modifications made on the model exchange gave TELETAŞ management the confidence to develop a digital exchange. However, as former managers recounted, internal tensions with the foreign partner led to efforts to develop an original digital exchange being kept secret from the foreign partner. The development of a digital exchange family was envisaged, including a first-tier digital exchange for up to 250 subscribers, a second-tier exchange for up to 2,000/3,000 subscribers, and a third tier for which no initial planning was made. While the production and delivery of first-tier digital exchanges to PTT were completed, the development efforts for the other tiers were halted.

TELETAŞ was one of the key players in meeting Turkey’s communication network digitalization needs, with System 12 digital exchanges, small digital exchanges (“LEVENT”) resulting from R&D efforts, and fully self-designed PCM (digital multiplexers).

TELETAŞ was capable of producing valuable products such as digital exchanges, digital and analog multiplexing systems, digital and analog radio links, fiber optic transmission systems, rural subscriber radio link systems, TV transmitters, office communication equipment, and power supplies.

According to data published in 1991, 40% of digital exchanges, 87% of national network analog and digital multiplexing systems, 61% of analog and digital radio link systems, and 87% of payphone machines were produced by TELETAŞ and supplied to PTT. National systems were exported to several countries, including the Soviet Union. A licensing agreement was signed with Iran to transfer technology.

A report published by the World Bank in 1992 highlighted that six of Turkey’s top 150 industrial enterprises in 1990 (including Bekoteknik, Vestel, Profilo Electronic, NETAŞ, and ASELSAN) operated in the electronics sector. TELETAŞ, ranked 46th on the list, was critical to Turkey’s economy with its export capacity and capabilities. TELETAŞ and NETAŞ played a vital role in strengthening PTT’s local capacity in telecommunications equipment procurement. These players, who invested about 5% of their sales revenue in R&D, were regarded as the center of Turkey’s overall R&D efforts in the information sector.

The First Post-Acquisition Step: Closing the R&D Department

Turkey was visibly in a promising position in telecommunications. However, following the block sale in 1994, which increased the foreign partner’s share in TELETAŞ to 65%, TELETAŞ, with all its capabilities, was completely dissolved. In a very short time, the R&D department was shut down, valuable knowledge was wasted, and the company was turned into a sales-support office.

On August 1, 1996, ANAP Deputy Adil Aşırım, a former TELETAŞ R&D employee, stated: “I was the first engineer to complete the Network Termination; we finished it in 1989. Belgium came and said, ‘we already do this.’ In 1993, when I went to Germany, my friend from Belgium told me, ‘we are just now doing your NT1.'”

A statement reportedly made by a foreign partner’s representative—”We acquired TELETAŞ to shut it down. It was stepping on our toes too much in the Asian market”—is a one-sentence summary of this painful experience.

So What Should We Focus on Now?

Foreign investments, with their potential positive outcomes, such as overcoming financial constraints, bringing new technologies to the country, and creating new employment opportunities, are seen as an important source of growth and development for national economies. The TELETAŞ experience, rather than refuting this widely accepted economic argument, proves that the potential threats of foreign investments should not be overlooked. The increasing importance of strategic technologies in determining global power balances, and the use of “investments” by various actors, particularly China, to assert their national interests, further underscore the necessity of this requirement. So much so that many states, including China, accused of monopolizing European innovations, are expanding their control over foreign investments in strategic areas.

Had we been able to protect TELETAŞ, it is highly likely that today our country would have had a world-class telecommunications infrastructure supplier. To prevent the recurrence of such losses, which we cannot express with mere “if onlys,” we must evaluate all possible consequences that foreign investments in critical areas like defense, energy, information technology, artificial intelligence, advanced robotics, and quantum technologies may have on our national security and economic independence. We must be aware of so-called investments that aim to incorporate our domestic capabilities to become unrivaled in the global market. We must not compromise on our R&D discipline.