ANNUAL REPORT 2008

“Turkey’s Turkcell”

CONTENTS

Our Vision / Strategic Priorities / Our Values /Operational and Financial Data SummaryLetter From The ChairmanBoard of DirectorsMessage from the CEOThe Management TeamManagers of Turkcell AffiliatesOur Contribution to the Economy and Employment in Turkey Is WidelyAppreciatedWe Respond to Your Confidence With Strong Value PropositionsWe Continue to Offer the Most Recent Technologies in TurkeyWe Carry Out Projects That Add Value to Society, Reflecting OurCommitment to Social ResponsibilityBy Removing Barriers to Communication, We are Now the World'sTurkcell TooMobile Communication Sector, Operational and Financial Review 2008Investor Information, Compliance with Corporate Governance PrinciplesConsolidated Financial Statement and Independent Audit ReportDematerialization of the Share Certificates of the Companies That are Tradedon the Stock ExchangeThe Board's Dividend Distribution ProposalAbstract of Auditor's Report to General Assembly of Turkcell İletişimHizmetleri A.Ş.

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OUR VISIONTo ease and enrich the lives of our customers with leading communication and technological solutions.

STRATEGIC PRIORITIESAs 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.

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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 ppAverage 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%

OPERATIONAL AND FINANCIAL DATA SUMMARY

In 2008, in addition to its GSM networks inUkraine, Northern Cyprus, Azerbaijan,Kazakhstan, Georgia and Moldova, Turkcellacquired an 80% share of BelarusianTelecommunications Network (BeST) inBelarus. Operating in an attractive andgrowing market with a young population,BeST will draw on the experience gainedfrom our successful operation in Ukraine andcapitalize on Turkcell's strong eco-system.

Threat of RecessionThe economic and financial shockwaves ofthe collapse of mortgage-based securities inthe United States reverberated throughoutthe world in 2008, leading to a credit crunchand posing a serious threat of recession andhigh unemployment in countries throughoutthe region.

In Turkey, the negative effects of the globalturmoil were felt from the second half of2008. After seven years of uninterruptedgrowth, economic activity contracted sharplyin the fourth quarter of 2008 and GNP isexpected to decline further in 2009.

The forecast for Central Asia and the Caucasus- where Turkcell through Fintur hasoperations in Azerbaijan, Kazakhstan andGeorgia - is grim; the IMF foresees growthslowing to less than 2% in 2009 for a regionthat experienced a growth rate of 6% in 2008and 12% in 2007.

In Eastern Europe - where we are active inMoldova, Belarus and Ukraine - there wasa precipitous collapse of industrial productionin the first quarter of 2009. The unstablepolitical and macro environment in Ukraine,which caused a steep depreciation of thelocal currency in 2008, is a matter of concern.

We are monitoring the potential impact ofglobal volatility on our businesses in Turkeyas well as in other regions and the effect thismay have on our financial performance andadjusting our business plans accordingly.

In a world beset by financial woes and aneconomic slowdown, Turkcell Group gainedsix million subscribers in 2008, posted US$7.0billion in net revenues and US$1.8 billion innet income to become an even more forcefulcompetitor in the local as well as in theregional telecom market. Fortified by a strongcash position and driven by a strategic growthplan that emphasizes new businesses andtechnologies in addition to its core activityof mobile communications, Turkcell is well-positioned to continue to do well in 2009despite the bleak economic outlook.

As the second biggest GSM operator inEurope and the 13th largest in the world,Turkcell from the beginning has sought togrow through international ventures whilebuilding its market position in Turkey. At theend of 2008, Turkcell's subscriber base totaled62 million people in eight countries, including37 million in our home market, Turkey, andtouching a population of 160 million.

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LETTER FROM THE CHAIRMAN

Going forward, the Turkcell Group remainskeen to grow internationally, eitherthrough new operations or by formingalliances that contribute to our economiesof scale and create synergies. We are alsolooking at possible mergers andacquisitions.

A Vibrant and Resilient SectorThe telecommunication industry in Turkeyand around the world shows encouragingsigns of resilience to the recent economicdownturn. Specifically, the mobiletelecommunications sector remainsvibrant, reflecting its position as a necessityrather than a luxury. With mobile linepenetration in Turkey verging on 92%overall, Turkcell's challenge in its homemarket is to retain its customers andincrease usage, particularly of ValueAdded Services, and to become one of themajor fixed broadband providers servicinghigh premium individual and corporatesegments.

The acquisition of a third-generation (3G)license in late November means thatTurkcell is in a position to do exactly that.3G technologies enable network operatorsto offer users a wider range of moreadvanced services while achieving greaternetwork capacity through improvedspectral efficiency. Turkcell intends tolaunch Turkey's first commercial 3Gnetworks in mid-2009.

Turkcell has invested $9.2 billion since itsinception - $7.6 billion of this in Turkey- making it one of the most significantinvestors in the Turkish economy. We areeager to invest further in the future ofTurkey to introduce the latest technologiesand create employment. In 2009, we planto invest $1.6 billion, thereby underliningour position as Turkey's leadingcommunications and technology company.

By introducing the most up-to-datetechnologies to Turkey, Turkcell hascreated room for growth in theconvergence of communications andinformation technologies. We will remainfocused on this area and turn it toadvantage for our future business, one ofwhich will certainly be fixed broadband.The progress in fiber roll out started byour subsidiary Tellcom is creating pleasingsynergies, which will increase further with3G implementation.

We are looking at new businessopportunities in communications andtechnology that offer the potential for highreturns or are critical for sustaining ourcompetitive advantage. The TurkcellTechnology R&D Center, which wasfounded in 2007, represents a critical stepforward in our creation of newtechnologies and it promises to becomethe core of a thriving Turkish Silicon Valley.

Investing in People and CorporateGovernanceTurkcell's eco-system includes 235business partners and 18,000 saleschannels. Turkcell Group itself providesdirect employment opportunities toapproximately 10,355 people.

As our business grows, we invest evenmore in people. We are particularly proudto have created jobs in the developingcities of Eastern Turkey by establishingcall centers in Erzurum and Diyarbakır.

At Turkcell, we take our responsibilitiesto all our stakeholders very seriously. Asthe only Turkish company listed on theNew York Stock Exchange, Turkcell issubject to all SEC regulations, includingcompliance with the Sarbanes-Oxley Act.Without a doubt, the Sarbanes-Oxley Actof 2002 is the single most important pieceof legislation affecting corporategovernance, financial disclosure and thepractice of public accounting since the USsecurities laws of the early 1930s.

Turkcell has made tremendous progressin meeting the rigorous requirements ofthis legislation and indeed is a model inTurkey for its effective internal controlstructure and transparent financialreporting procedures. Good corporategovernance is essential to generatingvalue for investors and other stakeholders.We are proud to have won theInternational Public Relations Association's2008 Golden World Award in the financialservices and investor relations categoryfor translating performance into value.

We are also proud of our contribution tothe Turkish national budget. In 2008,Turkcell paid TRY5.6 billion in taxes to theTurkish Treasury on revenue of TRY8.8billion, a vital 3.3% of Turkey's total taxrevenues.

We are also proud of the role we haveplayed in educating girls fromdisadvantaged families in the lessdeveloped eastern provinces, sponsoringstudent exchanges and supporting sportsin Turkey.

Turkcell's shareholders stand unitedbehind the company and take an activerole in its development. I would like tothank my fellow board members for theirinvolvement and dedication. On behalf ofthe Board, I would like to express ourappreciation for the very successfulperformance of Turkcell's managementteam in a rapidly changing economicenvironment. We believe that Turkcell willgo from strength to strength in the yearahead as it continues to expand its rangeof products and to serve an ever largersubscriber base in Turkey and the Eurasiaregion.

Mehmet Emin KARAMEHMET

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

BOARD OF DIRECTORS

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Mehmet Emin Karamehmet wasappointed Chairman of the Board ofDirectors on September 30, 1993. Hewas re-appointed on May 22, 2006.He is also Chairman and a memberof the Board of Directors of ÇukurovaHolding Companies. Mr. Karamehmetattended Robert College in Turkeyand Dover College in Kent, England.

MEHMET EMİN KARAMEHMETCHAIRMAN OF THE BOARD-ÇUKUROVAHOLDİNG A.Ş.

* The term of office of Board of Directors is three years upon the selection.

Oleg Malis was appointed to theBoard of Directors on May 22, 2006.He is also Senior Vice President ofAltimo. Mr. Malis began working forAltimo in 2005. Between 2003 and2005, Mr. Malis was Senior VicePresident and M&A Director at GoldenTelecom, a post he took after hefounded Investelectrosvyaz andCorbina Telecom. Mr. Malis holds adegree in Ergonomics and SystemsEngineering from Moscow StateAviation Technical University.

OLEG MALISMEMBER

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He was a long-term board memberand Vice Chairman of the InternationalCorrugated Packaging Institution, theEuropean Federation of Packaging,and the Federation of PaperProducers. Mr. Williams is thefounding President of Propak Europeand was a board member of theGreater Philadelphia Chamber ofCommerce between 2002 and 2004.From 1988 to 2001, Mr. Williams wasthe President of SCA Packaging, priorto which he served as the ManagingDirector of Bowater, a corrugatedpackaging company, for four years.From 1978 to 1984, he was first theSales Director and then the GeneralManager of Chicopee in theNetherlands, a non-woven fabricscompany of Johnson & Johnson. Mr.Williams holds a masters degree inchemical engineering, an MBA infinance from New York University,and an honorary doctorate from LundUniversity in Norway.

Colin J. Williams was appointed tothe Board of Directors on May 22,2006. He serves as a Voting Memberand Chairman of the Audit Committeeof Turkcell's Board of Directors. He isalso Supervisory Director andChairman of the Supervisory Boardof Treofan, a packaging film company,with activities in Europe, NorthAmerica, and South Africa. He isChairman of Clondalkin and Chair ofthe Audit and RemunerationCommittees of Clondalkin, a consumerand industrial packaging company;and chairman of Dewhurst, anindustrial textiles company. FromJanuary 2001 to December 2004, Mr.Williams served as President of SCA,North America, which is active in thepackaging sector, and in personalcare and paper tissue products.

COLIN J. WILLIAMSMEMBER

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Mehmet Bülent Ergin was firstappointed to the Turkcell Board ofDirectors on April 29, 2005. He wasre-appointed on May 22, 2006.Previously, he worked at Hochtief AGwith responsibility for the constructionof the First Bosphorus Bridge and atTekfen A.Ş. on the Iraq-Turkeypipeline project. Mr. Ergin continuedhis career at Çukurova Holding as amanager of Çukurova İthalat veİhracat T.A.Ş., and a board memberof Maysan A.Ş. and Baytur TradingS.A. Currently, Mr. Ergin is Chairmanof the Board of Directors of GenelDenizcilik Nakliyatı A.Ş., Show TV,and Akşam Gazetesi and a memberof the Board of Directors at ÇukurovaHolding. Mr. Ergin graduated fromRobert College with a degree in CivilEngineering.

MEHMET BÜLENT ERGİNMEMBER

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Tero Erkki Kivisaari was appointed tothe Board of Directors on May 14,2007. Mr. Kivisaari has managedTeliaSonera in Eurasia since May 1,2007. In addition, he is Chairman ofthe Board of Directors of FinturHoldings B.V. and a member of theBoard of Directors of MegaFon.Previously, Mr. Kivisaari served asthe Chief Financial Officer and VicePresident of TeliaSonera in Eurasia,having been an Associate Professorof Finance at the Helsinki School ofEconomics. He holds a master'sdegree in Finance.

TERO ERKKI KIVISAARIMEMBER

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Aimo Eloholma was appointed to theBoard of Directors on August 22,2007. He previously served on theBoard of Directors from 2003 to 2004.He joined TeliaSonera in 1974 andheld management and executivepositions in data communications,sales and marketing, businessdevelopment and corporate planning,and international operations.Currently, he is the Head ofInternational Business Support atTeliaSonera Eurasia, Chairman of theBoard of Directors of MegaFon, anda member of the Board of Directorsof Fintur Holding, TeliaSonera UTAHolding, TeliaSonera Asia Holding,and Telecom Invest. Mr. Eloholmaholds a Master of Science in ElectricalEngineering from Helsinki Universityof Technology and he has also studiedEconomics and BusinessAdministration.

AIMO ELOHOLMAMEMBER

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Alexey Khudyakov was appointed tothe Board of Directors on May 22,2006. He also serves on the Board ofDirectors of Kyivstar. He is VicePresident of Altimo, which he joinedin 2004 from Alpha Bank, where hehad worked as a Vice Presidentmanaging Alfa Group's investmentsin Golden Telecom and Kyivstar. Mr.Khudyakov worked for the Moscowoffice of McKinsey & Co. from 1998to 2002. He is a non-executive boardmember of Turkcell. He is also anObserver Member of Turkcell's Boardof Directors' Audit Committee. Mr.Khudyakov was named to the AuditCommittee under Rule 10A-3(b)(iv)(D)of the Securities Exchange Act of 1934.He holds an MBA from INSEAD anda master's degree in AppliedMathematics and Physics from theMoscow Institute of Physics andTechnology.

ALEXEY KHUDYAKOVMEMBER

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We performed strongly in 2008 in the midstof the most difficult conditions the businessworld has ever seen. We continued to generatecash and to increase our revenues throughoutthe year, despite the global macroeconomicvolatility and the political, regulatory, andcompetitive challenges in our operatingenvironment. We achieved sound results inthe face of these challenges and intensecompetition. Though the Turkish liradepreciated by 23.5% against the US dollarin the last quarter of the year, we still postedan increase in consolidated revenue of 10.1%to $7.0 billion and an increase in net incomeof 36% to $1.8 billion, while EBITDA declinedby only 2% to $2.6 billion. In 2008, TurkcellGroup's subscriber base increased to 62million, including those of our subsidiariesabroad.

A Very Difficult Operating EnvironmentAt the beginning of the year, Turkey's financialmarkets were adversely affected by globaleconomic worries and rising political tensionin the country. The impact of the globaleconomic downturn became more severe inthe second half of the year. The 2008 globalcrisis has slowed GDP growth to a significantdegree in our major markets, depressedconsumer confidence and caused a steepdevaluation in local currencies.

With regard to the regulatory environment,the Information and CommunicationTechnologies Authority's decision in September2007 to intervene in the retail pricing of mobileoperators and to set minimum and maximumprices has negatively affected our marketingand communications activities. In the firstquarter of the year we lost subscribers for thefirst time in our history due to the limitationson our campaign activities.

We posted a worse than expected performancein terms of the increase in the churn rate andthe decrease in average revenue per subscriber.This situation, together with the suddenreduction by 33% of interconnection rateseffective April 1, led to a drop in the value ofour stock and dismayed our shareholders.

Growth in our core business, the mobilecommunications market, slowed due tomacroeconomic developments. In a period inwhich we were obliged to limit our campaignand communication activities, aggressivepromotions launched by our competitors togain subscribers and campaigns directed tosales channels and price perceptions,intensified price competition towards the endof the year. This development was exacerbatedby the start of Mobile Number Portability.

We Continue to Lead the Turkish MarketWith Distinctive Value Propositions Despiteall ChallengesI am proud that we posted a net gain insubscribers for the year, given the introductionof Mobile Number Portability on November 9,though, frankly, this is not a surprise. Afterwe regained our ability to launch newcampaigns, which publicized the attractivenessof our brand and our distinctive valuepropositions, we improved our operationalperformance within a short period in thesecond half of 2008. Throughout the year, weincreased subscriber numbers and our shareof traffic and revenue in the face of acceleratingcompetition.

In Turkey, we maintained our marketleadership by growing our subscriber base to37.0 million. We generated stickiness throughvalue added services and maintained ourmarket share particularly in premiumsegments.

In 2008, we continued to differentiate Turkcellfrom the competition by further emphasizingour value propositions. In 2008, we madeconsolidated capital expenditure of $808million, including that in Turkey, and thisreinforced the outstanding quality of our mobilecommunication services. We designed andeffectively communicated many tailored offersthroughout the year, providing the mostadvantageous pricing for the largestcommunity. We emphasized non-exclusivechannels for increased availability andeffectiveness of our sales channel and focusedon enhancing our Value Added Services. Co-branding offers for youth and corporate clubmembers provided benefits worth TRY120million to six million members. We are proudto have widened our reach by adding theconcept "Turkcell benefits Turkey the most" asour sixth value proposition.

Turkcell's Direct Contribution to the TurkishEconomy and PopulationWe are proud that over the years Turkcell hasbuilt a valuable brand. As a company with akeen awareness of our social responsibilities,in 2008 we continued to invest in our brandwhile making a direct contribution to Turkeyand its economy.

The Call Centers we opened in Erzurum in2006 and in Diyarbakır in 2008 gainedrecognition from the United Nations as a“Model Project” and have created jobs for1,160 young people in these economicallydisadvantaged areas.

In 2008, Turkcell reported consolidatedrevenues of TRY8.8 billion. In the same period,Turkcell's direct contribution to the Turkisheconomy totaled TRY5.6 billion, including TRY2billion in communication taxes, TRY900 millionin VAT and TRY1.2 billion Treasury share.

The summer student exchange program,“Bridge of Hearts”, conducted with the Ministryof Education, brought 100,000 students fromrural areas to the cities and sent city-dwellersto villages and small towns in an ambitiousprogram to highlight Turkey's diversity andpromote understanding and tolerance. Turkcellis determined to improve the education ofwomen in Turkey, especially those from theless developed areas. Since 2000, Turkcell hasmade it possible for 20,000 girls to go toschool, with some gaining admission touniversity and starting a professional career.We also supported the National Football andBasketball teams and sponsored meaningfulprojects that contribute to Turkey's socialdevelopment.

The Contribution of our InternationalSubsidiaries Continues to GrowWe were especially pleased with Astelit, whichhas been making serious inroads into theUkrainian market. Astelit increased its 3-monthactive subscriber base by 31.5% to 7.1 million,accounting for 63% of the total subscriberbase. Despite the 52% devaluation of theUkrainian Hryvnia against the U.S. dollar,Astelit increased its revenues by 71.4% to$438.7 million while recording a positiveEBITDA of $32.3 million, marking its first fullyear of profitability.

SÜREYYA CİLİV, CEO "WE PERFORMED STRONGLY IN 2008 DESPITE THE CHALLENGES IN OUR OPERATINGENVIRONMENT."

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MESSAGE FROM THE CEO

Through our international joint venture Fintur,our holdings in Kazakhstan, Azerbaijan,Moldova and Georgia strengthened theirposition in their respective markets. As Fintur'soperations continued to grow, the net profitto Turkcell, calculated according the equitypick up method, totaled $151 million and adividend of $83 million was paid for the firsttime.

Another highpoint of the year was KKTCELL'slaunch of the first 3G services, video callingand mobile broadband in the Turkish Republicof Northern Cyprus.

In Belarus, we finalized the acquisition of80% of BeST and we have started networkroll out and rebranding activities.

More Challenges AheadThe challenges we face will increase. The“Great Recession”, in the words of the IMF,will cause global economic growth to shrinkin 2009 for the first time since the SecondWorld War, as consumer and businessconfidence remains weak.

As for regulation, a possible reduction in theinterconnection rates may be on the ICTA'sagenda. European Union countries saw areduction of 12% on average in mobileinterconnection charges in 2008 whereasTurkey's rates were cut by 33%. The mobileinterconnection rates that went into effect onApril 1, 2008 in Turkey are 57% below theaverage for European countries. Thus, we donot feel a further reduction by the ICTA in themobile interconnection rates is justified.

Going forward, we hope more dynamic andfair competitive elements to emerge as aresult of liberalization of the fixed line market.However, we see that the competition is solelyfocused on the mobile communication marketfor the time being.

We are Determined to Grow by SeizingNew Business Opportunities at Home andAbroadTurkcell, as Turkey's leading communicationsand technology company, is in an excellentposition to maneuver in an increasinglychallenging operating environment. Thanksto our unimpaired ability to generate cashand our prudent financial management weare able to consider growth opportunities innew international markets while retainingour focus on new business opportunities inTurkey.

The global economic slump will undoubtedlytake a toll on Turkey in 2009 as GDP growthweakens. We remain cautious and willcontinue to monitor developments andanticipate their effects.Although we expect mobile line penetrationto remain at the 2008 level of 92%, we believewe can achieve revenue growth in TRY terms.We are aware of the increased pressure onexpenditures in a difficult environment.However, we are pledged to double ourinvestments in 2009. We plan to invest $1.3billion in Turkey, reflecting our steadfast beliefin our country's future, and to investapproximately $300 million on ourinternational subsidiaries.

Appetite for GrowthTurkcell was awarded an A-type 3G licenseby submitting the high bid of Euro 358 million.This license, which has the widest frequencyband, will differentiate us from our rivals interms of quality, coverage area and speed.The advent and development of 3G will leadto a significant improvement in content andsolutions and thus contribute positively to ourcurrent ecosystem of distributor chains andinfrastructure, content and solution partners.Implementation of 3G, a milestone for theTurkish market, is expected by mid-2009.

By supporting new generation smart phones,such as the Blackberry Bold and iPhone 3Gwhich, as a technological leader, weintroduced to the Turkish market, we willemphasize our Value Added Services. Webelieve that a reduction of mobile internettaxes from 25% to 5% and the implementationof 3G offer the greatest potential for the growthof our VAS revenues, which increased by 27%in 2008 to make up 14% of the group'sconsolidated revenue.

We believe that mobility, internet, andconvergence offer good growth opportunities.Our Turkish broadband business, Tellcom,continued with its fiber optic network roll outin Turkey's major cities with the objective ofbecoming a major player in the fixedbroadband business. We intend to takeadvantage of an enhanced level of synergybetween Tellcom and our own network andto focus on growth opportunities in fixedbroadband following the liberalization inTurkey that is expected to take place in May.

We believe that there is a need forrestructuring and reform in the fixed line andbroadband sector so as to create a competitive,liberal environment through the participationof alternative players and we hope that thesereforms are implemented as soon as possible.We are convinced that Turkey's growthpotential will be enhanced through this muchneeded restructuring and liberalization.

In closing, I would like to extend my thanksto the entire Turkcell team that has made us"Turkey's Turkcell". Their dedication,intelligence, enthusiasm and imaginationenabled our company to meet its goals andobjectives. The consistent support of our Boardhas been invaluable while the loyalty of ourcustomers is, of course, the bedrock of oursuccess, now and in the future.

Süreyya CİLİV

THE MANAGEMENT TEAM

08Important 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 March13, 2009.

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Süreyya Ciliv joined Turkcell on January 9,2007. Between 2000 and 2007, he servedin various management positions inMicrosoft Global Sales, Marketing andService Group in the USA, having previouslyworked as Microsoft Turkey CountryManager from 1997 to 2000. Prior to 1997,Mr. Ciliv was the General Manager andChairman of Novasoft Systems Inc., acompany he established in Boston, USA.Mr. Ciliv earned an MBA from HarvardUniversity in 1983 after graduating withhonors in 1981 from the University ofMichigan in Industrial & OperationsEngineering and Computer Engineering.

SÜREYYA CİLİVCHIEF EXECUTIVE OFFICER

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Lale Saral Develioğlu joined Turkcell in2003 and has held her present post sinceJune 19, 2006. Prior to this position, shewas the Consumer Marketing Division Headof Turkcell. Starting her career at Unilever,Ms. Develioğlu served as Marketing andBrand Director of Unilever in variousmarkets. She is a graduate of theDepartment of Industrial Engineering ofBoğaziçi University. She also holds amaster's degree in ManagementEngineering from Rensselear PolytechnicInstitute, New York.

LALE SARAL DEVELİOĞLUCHIEF MARKETING OFFICER

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Cenk Bayrakdar joined Turkcell in 2002. Heserved as Chief Service and ProductDevelopment Officer from April 1, 2006. Priorto this appointment, he was Content Servicesand Partnering Management Division Headin Turkcell. Mr. Bayrakdar started his careerat Koç Holding as a management trainee. Heworked at Arçelik, where he was in chargeof Information Systems and a ProductionTeam Leader. Subsequently, he worked atCorbuss and Turktell as a BusinessDevelopment Manager. He graduated fromIstanbul Technical University, Department ofElectronic and Communications Engineeringand holds a master's degree in IndustrialEngineering from Texas A&M University.

CENK BAYRAKDARCHIEF INFORMATION AND COMMUNICATIONTECHNOLOGIES OFFICER

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İlter Terzioğlu has served as Chief NetworkOperations Officer since April 1, 2006. Hehas worked in the communications sectorsince 1993 and served as Assistant GeneralManager at Ericsson, Superonline and ShowTV. He is a graduate of the Department ofEconometrics at Istanbul University.

İLTER TERZİOĞLUCHIEF NETWORK OPERATIONS OFFICER

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Emre Sayın joined Turkcell as ChiefCorporate Sales Officer in 2007 and iscurrently the Chief Consumer Sales Officer.Mr. Sayın worked for Evyap Pazarlama veTic. A.Ş. as the Deputy Manager in chargeof Marketing in 2005-2006 and for KodakA.Ş. as the General Manager from 2002 to2005. Prior to that, he was the DeputyMarketing Officer for Microsoft Turkey from1999 to 2002. He worked at UnileverTurkey, from 1992 to 1999 as manager forChain Stores, Commercial Marketing andMarketing. He graduated from BoğaziçiUniversity in Industrial Engineering andholds a master's degree from RutgersUniversity.

EMRE SAYINCHIEF CONSUMER SALES OFFICER

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Ekrem Yener joined Turkcell as the ChiefEnterprise Group Officer in 2007 and iscurrently the Chief Corporate BusinessOfficer. Mr. Yener, worked as the AnkaraRegional Manager of Microsoft Turkey, wasappointed Microsoft's Deputy GeneralManager in charge of Marketing, and thenDeputy General Manager in charge ofBusiness and Strategy Developmentbetween 2004 and 2007. Graduating fromIstanbul Technical University's Departmentof Metallurgical Engineering in 1982, heearned a master's degree in MaterialsScience from the University of California atBerkeley in 1986 and an MBA in MarketingManagement from Kellogg University in2002.

EKREM YENERCHIEF CORPORATE BUSINESS OFFICER

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Tayfun Çataltepe joined Turkcell as its ChiefCorporate Strategy and InternationalExpansion Officer in 2007 and is currentlythe Chief Corporate Strategy & RegulationOfficer. After graduating from the ElectronicEngineering Department of BoğaziçiUniversity, Mr. Çataltepe received his MBAfrom Michigan Technology University andhis doctorate from the University of California.He worked as a Research and DevelopmentEngineer in the Bell Laboratories and thenat AT&T as IP Network and Service Planningprojects manager. After AT&T, he joinedAycell as Deputy General Manager in chargeof Technical Operations. Then, he workedas the Deputy General Manager in chargeof Network Operations and Regulation inAvea. From 2006 to 2007 he worked at Ernst& Young in charge of European TelecomSector Post-merger and AcquisitionCorporate Integration Services.

TAYFUN ÇATALTEPECHIEF CORPORATE STRATEGY ANDREGULATION OFFICER

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Koray Öztürkler joined Turkcell in 1998 andsince April 9, 2008 he has been ChiefCorporate Affairs Officer, which includestaking charge of corporate communications.Previously, he served as InternationalBusiness Development Director and thenas Head of Investor Relations at Turkcell.He started his career in the USA atAccenture Consulting and went on to workat Yapı Kredi Bank. He graduated fromJohnson C. Smith University in Marketingand earned an MBA majoring inManagement Information Systems fromMercer University.

KORAY ÖZTÜRKLERCHIEF CORPORATE AFFAIRS OFFICER

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Orhan Gemicioğlu was born in Lüleburgaz,Turkey, in 1944. He completed his firstdegree at Istanbul University's School ofLaw in 1967 and, since joining the IstanbulBar in 1970, he has worked as an attorney.Mr. Gemicioğlu has provided legal counselto many companies in various sectors. Since1986, he has developed an expertise intelecommunications law. He has served asTurkcell Group's Legal Counsel since theCompany's establishment and he has beeninvolved in all of Turkcell's major projectsto the present.

ORHAN GEMİCİOĞLUTURKCELL GROUP LEGAL COUNSEL

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Selen Kocabaş joined Turkcell in 2003 and,since May 1, 2003, she has held the post ofChief Business Support Officer in charge ofHuman Resources, Internal Communications,Turkcell Academy, Turkcell GroupOrganizational Development, Procurementand Contract Management, and AdministrativeAffairs. Mrs. Kocabaş started her professionalcareer as a Management Trainee at KoçHolding and worked in the Human ResourcesDepartment at Arçelik. She went on to workas Human Resources Coordinator for Marshalland as Human Resources Director at DanoneSA. She is a graduate in Economics fromIstanbul University and holds a master'sdegree in Human Resources Managementfrom Marmara University.

SELEN KOCABAŞCHIEF BUSINESS SUPPORTOFFICER

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Serkan Okandan joined Turkcell in 2000and he has held his present post sinceJanuary 1, 2006. Prior to this appointment,he was the Financial Control and ReportingDivision Head of Turkcell. Mr. Okandanstarted his professional career atPricewaterhouseCoopers in 1992. He thenworked for DHL and Frito Lay as FinancialController. Serkan Okandan is a graduateof Economics from Boğaziçi University.

SERKAN OKANDANCHIEF FINANCIAL OFFICER

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MANAGERS OF TURKCELL AFFILIATES

ASTELIT

TANSU YEĞENGLOBAL BİLGİ

BAHADIR PEKKANTURKCELL TEKNOLOJİ

SEMİH İNCEDAYITURKKULE

EKREM ÖZORBEYİ

INTELTEK

AHMET SEZERKKTCELL

DAĞHAN FELLAHOĞLUTELLCOM

MURAT ERKANBeST

ÖZCAN ERMİŞ

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Tansu Yeğen was appointed ChiefExecutive Officer of Astelit in February2007. Before joining Turkcell, he heldseveral managerial positions in well-known international companieswhere he gained experience of theIT/Telecom business. He has garnereda number of professional awards.Before Astelit, he was CEO of AppleIMC Turkey. From 1999 to 2005, hewas the Deputy General Manager ofMicrosoft Turkey. Prior to those posts,he held managerial positions inHewlett Packard Turkey and DigitalEquipment Turkey. Mr. Yeğenreceived his MBA from MarmaraUniversity and he holds an Electricaland Electronic Engineering degreefrom Boğaziçi University.

ASTELIT

TANSU YEĞENBahadır Pekkan started working forGlobal Bilgi A.Ş., Turkey's leading callcenter, at the beginning of 2005, afterholding managerial positions invarious local and internationalcompanies. At Global Bilgi, Mr.Pekkan served as the Chief FinancialOfficer and then, from June 1st, 2006,as the General Manager. Born inIstanbul in 1967, Mr. Pekkan is agraduate of Saint Benoit High Schooland the Department of Mathematicsof Boğaziçi University. He also holdsmasters degrees in Capital Markets& Stock Exchanges from MarmaraUniversity and in Finance-Accountingfrom Yeditepe University.

GLOBAL BİLGİ

BAHADIR PEKKANSemih İncedayı took up his presentpost as General Manager of TurkcellTeknoloji in April 2007, having joinedTurkcell in December 2006. He hadpreviously held managerial positionsin Borusan Telekom for two years andTelsim for four years, after workingfor Koç Group for ten years. Mr.İncedayı was born in Istanbul in 1965and he graduated from Middle EastTechnical University in ComputerEngineering in 1988 after attendingIstanbul Erkek High School.

TURKCELL TEKNOLOJİ

SEMİH İNCEDAYI

Ekrem Özorbeyi has been the GeneralManager of Turkkule since July 1,2008. Mr. Özorbeyi started to workat Telsim as a Planning Engineer in1995, and continued on at Netaş from1996 to 1998. He started to work asTurkcell's Radio Network ProjectCoordinator in 1998 and, in 1999, hewas appointed Cell Planning UnitManager and then as Radio NetworkDivision Head in July 2006. Hecompleted his undergraduate degreeat Yıldız Technical University between1982 and 1986 and then completedhis graduate degree at the sameuniversity. He continued his academicstudies at Innsbrug University inAustria between 1992 and 1993.

TURKKULE

EKREM ÖZORBEYİ

Murat Erkan joined the Tellcom familyin 2008 as General Manager. Havingstarted his career at Toshiba, Mr.Erkan then became an ApplicationEngineer at Biltam Engineering. Thenbecame Turkey's first SystemsEngineer at Cisco where he also heldthe posts of Technology Leader SystemEngineering and BusinessDevelopment Manager, and RegionalSales Manager for projects withcompanies like Koç.net, Superonline,Doğan Online, Kablo Net, Ultra TVand Turkcell. Prior to Tellcom, heworked as the Business Unit Managerat Aneltech responsible for providingsolutions to the telecoms, mobilecommunications, information andcommunications technology, defenseand industrial product sectors.Mr. Erkan graduated from theDepartment of Electronics andTelecommunications Engineering atYıldız Technical University in 1992.

Ahmet Sezer has served as theGeneral Manager of İnteltek since2001. After starting his career as anengineer, a position he held until1997, Mr. Sezer became VicePresident at Intertech A.Ş. and VestelGroup of Companies. In 1998, he wasappointed General Manager of VestelConsultancy and ProfessionalServices. He graduated from theDepartment of ElectronicCommunications Engineering atİstanbul Technical University in 1982.

INTELTEK

AHMET SEZER

Dağhan Fellahoğlu joined the Turkcellfamily in 2008 and, since 1 August2008, he's been serving as theGeneral Manager of KKTCELL. Hisexpertise, developed from holdingsenior positions in local and foreigntelecommunications and IT markets,rests in marketing, sales, productmanagement and network design.Between 1996 and 2008, Mr.Fellahoğlu served in various seniormanagement positions in Ericsson inTurkey, Sweden and, recently, inSouth East Asia and Singapore. He isa graduate of the Department ofElectric and Electronic Engineeringof Eastern Mediterranean University.

KKTCELL

DAĞHAN FELLAHOĞLUTELLCOM

MURAT ERKAN

1 2 3 4

5 6 7 8 BeST

ÖZCAN ERMİŞ

Özcan Ermiş has served as theIndividual Sales and MarketingDirector at life:) Ukraine since 2006and, since September 2008, he hasalso been serving as the GeneralManager of life:) Belaurs . Mr. Ermişhas managed to expand thesubscriber base of life:) significantlyand he is also in charge of increasingthe monthly revenue per subscriberand profitability. Until 2004, he servedas the Sales and Marketing Directorof Vodafone Turkey, having servingas the Marketing Director of Telsimuntil 2003. Mr. Ermiş transferred tothe telecommunications sector viaRumeli Telekom in 1995, though hestarted his career in the automotivesector as a marketing manager in1992. Born in 1970, Mr. Ermiş is agraduate of the Department ofMechanical Engineering of BoğaziçiUniversity and he is a member ofGroup for Strategies and MarketingGroup (GSMA), the Association ofMechanical Engineers of Turkey, andBoğaziçi University AlumniAssociation.

WIDELY APPRECIATED"

"OUR contribution to theeconomy and

employment IN TURKEY IS

As Turkcell, we believe that corporationshave a social responsibility to contributeto the national economy and society. Inthis regard, in the face of global economicchallenges and intense competition, asTurkey's Turkcell, we have sustained ourcommitment to our country and to ourpeople, notably through our investmentsin Turkey's underdeveloped eastern cities,creating employment, generating taxrevenue, and undertaking socialresponsibility projects.

We Employ Approximately2,000 People at OurDiyarbakır and Erzurum CallCentersThe call centers we opened in Erzurumin 2006 and in Diyarbakır in 2008provide job opportunities to young peoplewhile contributing to the nationaleconomy and to the development ofeastern Turkey.

Turkey has a large, young population, soemployment is critical. Our call centersin Diyarbakır and Erzurum, the prioritizedcities in development are on a par interms of technology and facilities withcall centers in more developed parts ofTurkey and handle calls from all over thecountry.

We operate our call centers throughGlobal Bilgi. There are ten centers -Yalova, Izmir, Erzurum, and Diyarbakırwith one center each and Istanbul withsix. At the end of 2008, 4,635 peopleworked at these call centers. A furthercall center in Ukraine employed 327people at the end of 2008.

Our Erzurum Call Center, opened in 2006and employing a thousand people, wasselected as an 'Exemplary Project' by theWorld Bank in its Development Reportfor 2009.

Diyarbakır Call Center was establishedafter the Erzurum Call Center, our firstinvestment in Eastern Anatolia, with aninvestment of $12.3 million. TheDiyarbakır Call Center is a vital part ofour strategy of contributing to theeconomic and social development of thatpart of our country.

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IN A WORLD WITH A SHRINKING ECONOMY AND MULTINATIONALCOMPANIES SHEDDING EMPLOYEES, NUMBER OF EMPLOYEES ATTURKCELL GROUP ROSE TO 10,355 IN 2008 WITH THE CALL CENTERSWE OPENED IN EASTERN AND SOUTHEASTERN ANATOLIA.

WE CONTRIBUTE TO THE TURKISH ECONOMYTHROUGH THE EMPLOYMENT WE CREATE, THETAX REVENUE WE GENERATE, AND THEINVESTMENTS WE MAKE IN TECHNOLOGY

Continuing our investments, we plan toprovide employment to 1,000 youngpeople by the end of 2009 at ourDiyarbakır Call Center. The Center wasopened on 20 October 2008 on a 6,600square meter site and we expect it toreach a service capacity of 2.5 millionminutes a month. The young peopleemployed at the Diyarbakır Call Centerwere chosen from graduates of the localDicle University who had completed theCustomer Relations DevelopmentProgram organized by Turkcell Academyand the University.

Turkcell Global Bilgi “WorldChampion for Best TechnologicalInnovation”As Turkey's leading customer relationshipmanagement center, Global Bilgi isgaining international recognition. GlobalBilgi was nominated world champion inthe "Best Technological InnovationCategory" at ContactCenterWorld.com's2008 World Awards, seeing offcompetition from the USA, Europe, theMiddle East, Africa, and the Asia Pacificregion. Organized since 2003, the WorldAwards select the best call centers fromaround the world. Global Bilgi also wonthird place in the "Best Customer Service"category.

Our "Best Technological Innovation"category award was won on the strengthof our special product the "ccDashboard",which distinguishes us for performancemanagement and efficiency. Our "BestCustomer Service" category award wasgiven for applications such as "fairsolution, solution at first call" for projectsthat make our customers feel special.

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Opening of the Diyarbakır Call Center

Turkcell Ecosystem Contributes to theTurkish EconomyWe give great importance to theecosystem Turkcell has created. Throughour partnerships, we provide ourcustomers with solutions and servicesthat add value. Thanks to the ecosystemthat we have formed with our 202business partners, we provide more than500 services to our corporate andindividual customers. Turkcell is Turkey'stechnology locomotive and the Company'sbusiness partners operate not only inTurkey but also in various other countries,including Ukraine, the UK, the UnitedArab Emirates, as well as countries inAfrica.

We Provide Employment forApproximately 36,000 Peoplethrough our Sales ChannelWe have created employment for around36,000 people via our sales channels.Turkcell is a big family that contributesto the livelihood of around 143,000people. We take Turkcell's quality to everycorner in Turkey with over 80,000 countersales points via our digital channels,ATMs, POSs, kiosks, call centers, theinternet, WAP, retail chains, SMS, DigitalTV, and USSD.

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Our R&D Attracts Attention from theEuropean UnionAs a result of our increasing R&D efforts,we took part in the European Union's 7thEnvironment Program and EUREKA R&Devents, in addition to TÜBİTAK's R&Dfunds, which we joined at the end of2006. Our involvement enabled manyfirms in our ecosystem to become involvedin European Union R&D programs.

In June 2008, Turkcell was nominated tothe Board of Cooperation for SustainedEuropean Leadership inTelecommunications (CELTIC), which isEUREKA's R&D group in thetelecommunications area. Our nominationgained the approval of twelve gianttelecommunication companies in Europethat are also Board members. CELTICsupports R&D projects that developsolutions in information andcommunication technologies (ICT). Aspart of this initiative and with guidancefrom leading players in Europe, theCompany works on projects valued at upto Euro 1 billion. This involvement allowsTurkcell to play an active role indetermining R&D issues, creatingstrategies, developing projects, andselecting proposed projects.

We Contribute to the Development ofInformation Technology andTelecommunication SectorsWe continued to contribute to thedevelopment of information technologyand telecommunication sectors in Turkeythrough our support of the CeBIT Eurasiafair. This huge event, which we havesponsored for the last 11 years, plays animportant role by gathering the sector'splayers on a single platform whileincreasing technology awarenessgenerally.

We Generated About 3.3% ofTurkey's Tax Revenue andPaid TRY5.6 billion to theTurkish TreasuryIn addition to the contribution we maketo employment, as Turkey's Turkcell, wecontribute to the national economythrough the tax revenue we generate. In2008, we paid a total of TRY5.6 billionin taxes, of which TRY2 billion wascommunication tax, about TRY900 millionwas value added tax, and TRY1.2 billionwas the Treasury share. Altogether, wepaid 3.3% of all taxes collected by statein 2008. As Turkey's Turkcell, we areproud of the contribution we make to ourcountry's economy.

We Contribute to the TurkishEconomy by Developing OurOwn TechnologyWe transform our locally developedinformation and technology into globalvalues. We utilize highly qualified humanresources in our R&D activities to developand retain this expertise locally, therebyreversing the brain drain and allowingus to grow with the companies in ourecosystem and to export technology byopening ourselves to foreign markets.

We have over 200 partner companies inour ecosystem and we either receivehuman resources services from them orcarry out turn-key projects with themand we include these firms in our directdevelopment activities.

As part of our service and productdevelopment efforts, we employ close to700 people, 200 of which are engaged inR&D work. Our R&D development makesus an exemplary organization in the globalarena in terms of communications andtechnology. By developing technology usingour own resources, we gain costadvantages, speed and flexibility for theCompany and these lead to competitiveadvantages for the Turkcell Group andcontribute to the Turkish economy.

We opened a new building in the Gebze-TÜBİTAK Marmara Research CenterTechnology Free Zone in May 2008.Enclosing 6,000 square meters, we plan toturn Turkcell Technology into a technologydevelopment base by increasing the numberof personnel from the current 300 to 500people in line with our strategic goals. Theservice and product development teamscompleted 415 projects in 2008. This is a35% increase over the previous year. As aresult of these projects, we have appliedfor 10 patents.

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

"WE RESPOND TO YOUR CONFIDENCEWITH strong

value propositions"

We have significantly differentiated ourCompany from its competitors throughoffering the widest coverage, best quality,widest service network, the mostreasonable tariffs, and the greatestproduct diversity and variety ofapplications (many of which we pioneeredinternationally). In addition to oursuperior quality, our campaigns playedan important role in enticing individualand corporate customers to Turkcellthroughout the year, especially duringthe transition to mobile numberportability implemented in November2008.

We Continue to Lead inCoverage and QualitySince we were established, we haveinvested in delivering our services toevery corner of Turkey.

Covering more than 780,000 squarekilometers, Turkey is the second largestcountry in Europe after Russia. At theend of 2008, we had covered 84.3% ofthis vast land (in other words an areaequal to Germany and Italy combined)and 98.8% of the Turkish population.

At the beginning of 2008, Turkcell wasthe only mobile operator to cover allresidential areas with populations of1,000 people or more. We also cover93.5% of the residential areas withpopulations between 500 and 1,000people. Our investments since ourestablishment totaled $7.6 billion at theend of 2008 and our base stationsnumbered 15,100. At the end of 2008,98.9% of our network was supported byEDGE technology.

We Made Our Mobile Fleet Strongerin 2008We have developed mobile satellitecommunication vehicles to enableconnections in regions that aregeographically isolated from the normalcellular network. We have distributedthese vehicles to all over Turkey toimprove our response rate inemergencies. In 2008, we doubled ourmobile fleet so we can provide moreservices at more locations with the highestquality service.

BY THE END OF 2008, TURKCELL WAS THE ONLY OPERATOR IN TURKEYTO COVER ALL SETTLEMENTS WITH POPULATIONS OF 1,000 PEOPLEOR MORE.

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OUR CUSTOMERS BENEFITTED FROM OUR QUALITYSERVICES AND THE MOST ADVANTAGEOUS TARIFFOPTIONS

We Emphasize EnvironmentalProtection in Addition to Quality andCoverageThanks to technological advances, mosttelecom operators have stabilized theirenergy consumption at 1995 levels,despite the rising number of subscribers.The mobile communications sector helpsreduce CO2 emissions by decreasing theneed for travel and developing moreintelligent home and office environments.In this regard, mobile communicationscompanies help optimize energyconsumption through an awareness oftheir social responsibilities.

At Turkcell, we have increased thenumber of our environmentally sensitivebase stations and improved theirutilization of alternative energy sourcesfor the energy supply of base stations insome regions.

Turkcell contributes to the Turkisheconomy with energy-efficient solutions.

Alternative Energy SystemsIn locations where the national grid isunavailable for geographic or costreasons, solar and wind power is used.Alternative energy provides up to 4.5 kWof energy savings per region.

Passive Cooling SystemThis system decreases the need for activeair conditioning by making use of internaland external temperature differences.When the environmental temperature isabove or below preset limits, this systemadjusts the internal temperature of thebase station by turning on the fan or theair conditioner according to the suitabilityof the external temperature, therebyoptimizing energy consumption.

Turkcell Radio Network Energy Savingsvia Active ApplicationsCurrently, the energy savings we haveobtained total 15,460 MW annually,which correspond to a drop in CO2emissions of 19,300 tons. In other words,these savings equal the total energyconsumption of 15,000 families or a cityof 60,000 people.

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We Made a Difference in 2008through Economic Offers thatEased our Customers' LivesWe provide customer satisfaction via ourhigh value offers. In 2008, we conducted800 campaigns to meet the needs andusage habits of our individual andcorporate customers.

As Turkey's leading communications andtechnology company, we strive to provideour customers with the highest quality,most widely available and most economicmobile communications services. Withthe tariff alternatives we developed in2008, we continued to focus on customersatisfaction and to maintain ourleadership by presenting attractive offersto the largest subscriber network of anycompany.

We structured our new tariff model as along-term investment to reinforce ourintimate and sincere brand image andthe loyalty of our customers. In additionto reinforcing customer loyalty, we alsogained an increased number of newcustomers while raising usage periods.

With the "Load and Win" (Pomegranate)campaign, launched in February, weenabled our individual pre-paid line usersto win bonus minutes each time theyloaded pre-paid units.

We Presented Distinctive Services toour Subscribers through TurkcellPlatinum and Turkcell Gold WorldsIn 2008, we continued to provide ourcustomers with benefits via the highestquality communications services availableat all locations. In February, we launchedthe unique Turkcell Gold and TurkcellPlatinum worlds to enable our customersto experience the benefits of Turkcell tothe fullest and to provide better servicesto our customers through distinctive,tailored solutions.

Turkcell Platinum offers customers priceprivileges, a private personal assistant,mobile team support for cell phones,distinctive brand advantages, specialsurprises and consultancy andorganization services related to sociallife. For our Gold customers, in additionto price and handset privileges, we offerexclusive customer services and a freeassistant service.

The Super Tariff, launched in July 2008,is our most popular tariff;

With the Alo Packages, which are themost economic way of talking for post-paid lines, and our new campaignslaunched in July, all Turkcell subscriberscontinued to call home or businessnumbers at very low prices;

With the "Home Turkcell From Turkcell"campaign, launched in April, we broughta big technological advance to ourcustomers and enabled them to use theircell phones from their homes atreasonable prices;

In April, we launched the "BizbizeKampüs" tariff to students and youngpeople aged under 25 and this tariffbecame our most popular tariff for youngpeople;

In November, we launched a newcampaign with the slogan "Hey TurkcellUser, Which are Your Lucky Days?", whichallowed our subscribers to talk to millionsof other Turkcell owners for free for twodays a week for a period of two months;

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WE CONTINUED TO MAKE A DIFFERENCE IN 2008 BY PRESENTINGADVANTAGEOUS TARIFF OPTIONS AND SOLUTIONS TO OUR CORPORATESUBSCRIBERS TO MEET THEIR VARIOUS USAGE NEEDS.

23

Advantageous Offers to our CorporateSubscribers Continued in 2008We continued to make a difference in2008 by presenting advantageous tariffoptions and solutions to our corporatesubscribers to meet their various usageneeds.

With the Şirketiçi 2400 option, launchedin April, we provided our corporatesubscribers with a very advantageousintra-company tariff;

With the İşteHerkes option, launched inAugust, we enabled companies on theİşTcell tariff to call all other companiesusing İşTcell tariff over intra-companyrates;

In July, we doubled the number ofminutes we offered to our subscribersusing discounted intra-Turkcell packages,without changing the tariff price;

With the HerYöne minute packages,launched in May, we enabled oursubscribers to connect through all otherdomestic operators and so helped ourcorporate subscribers to bring their costsdown.

We Continued to Make a Differencewith Value Added ServicesWe continued to expand our range ofvalue added services in line with oursubscribers' expectations and needs. Withproducts and services unique to Turkeyand the world, we increased subscribersatisfaction and loyalty while theincreased penetration of these productsand services also raised our revenues.Since the day we were established, wehave maintained our leadership of thesector in terms of service speed andflexibility.

The McDonald's Campaign YieldsTRY45.64 Million in BenefitsOur subscribers had 6.4 million freemeals at 110 McDonald's restaurants in21 cities in 2008. In all, 1.38 millionpeople benefited from our McDonald'sCampaign in 2008, making use ofTRY45.64 million in benefits.

Partnerships With 13 Brands in ClothingCampaign Generate TRY26 Million inBenefitsWe collaborated with 13 brands underthe gnçtrkcll Clothing Campaign in 2008.Benefits of TRY26 million were createdat Aldo, Accessorize, Koton, Mavi Jeans,Collezione, Mudo, Collin's, Polo Garage,Hotiç, Lescon, Steve Madden, So Chic,and Seven Hill shops. Our campaigncovered 860 shops in 60 cities and a totalof 1 million purchases at discountedprices were made.

We Brought Added Value toCustomers through Co-BrandingOffersThroughout 2008, we provided around6 million Turkcell users with a total ofTRY120 million in benefits through ourco-branding offers for gnçtrkcll and İşTcellbrand.

Via gnçtrkcll, which, with 15 millionmembers, is Turkey's largest youthorganization, we provided widespreadand long-lasting brand benefits throughour collaboration with brands that arepopular among young people.

TRY18 Million Benefit via CinemaCampaignThe gnçtrkcll cinema campaign attractedgreat attention and our subscribers usedit to obtain 4.5 million cinema tickets in2008. Of these, more than 2.25 milliontickets were given free of charge tognçtrkcll members. More than 1 millionsubscribers made use of this campaignin 2008, visiting 186 cinemas in 51 cities,and they benefited to the tune of TRY18million.

İşTcell

İşTcell Brand Collaborations EasedLives of Our Individual and CorporateSubscribers and Provided Benefits ofTRY21 Million

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Widest Distribution Networkthrough 1,087 TurkcellCommunication Centers and16,419 Points of SaleIn line with our goal of delivering ourservices promptly, we distribute ourproducts all over Turkey via ninedistributors and one service provider.

Our dealer network has become Turkey'slargest retail chain. It comprises 1,087Turkcell Communication Centers in 81cities. These centers sell only Turkcellproducts and operate under eightregional offices.

With a team of 50, we serve ourcustomers at three Turkcell Shops wherecustomer satisfaction and experience isheld at the forefront.

During the second quarter of 2008,Turkcell Distribution Centers (TDC) wereestablished to provide products, ease ofprocurement, and to standardizemerchandising and display practices atTurkcell Sales Points (TSP) around thecountry. At the end of 2008, 57 TDCs wereserving 16,419 TSPs operating undereight regional offices.

We also serve our customers via 200online sales channels .

Turkcell Benefits Turkey the MostSince the day we were established, wehave been developing through ourprinciple of offering the highest qualityservices and the latest technologies.

We improve the Turkcell brand and itsquality daily by focusing on our mainbusiness area via five value offers thatwe developed. In addition, we contributeincreasingly to society as well as to thenational economy.

As part of this effort, we contribute to theTurkish economy and society under theconcept "Turkcell Benefits Turkey theMost" and in this vein we have widenedour current five value propositions inJanuary 2009 by adding this new conceptas our sixth value proposition. We areproud to be Turkey's Turkcell and areconfidently moving towards becomingthe world's Turkcell via our internationalprojects.

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

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“WE CONTINUE TO OFFERthe most recent technologies

in Turkey”

We also work on projects developingtechnologies to increase the effectivenessof communication in other sectors.

By selling the products and services wehave developed, we contribute to ourtechnology exports. We carry our R&Dprojects to strategic areas by beingactively involved in international R&Dplatforms that shape the technologicalfuture.

As the intensity of our R&D efforts hasincreased, we have identified a need toconsolidate our operations into technoparks. As part of this effort, we acceleratedour R&D work in 2007 by establishingTurkcell Technology Research andDevelopment Corporation in Turkey's oneand only Technology Free-Zone.

With projects that involve applicationssuch as telemetry, field automation, andvehicle tracking that we developed in2008, we helped our corporate customersto significantly decrease their costs.

With the İşte KimKimdir service, launchedin May, we are helping companies toimprove their internal communications.Their employees can use this service toretrieve the telephone numbers of theircolleagues by entering names or retrievenames by entering telephone numbers.

With the İştePosta mail service, launchedin cooperation with Google in March2008, we are supporting small andmiddle-sized companies in their effortsto obtain e-mail addresses that includetheir company names and web domainsfree of charge.

Turkey is the World Leaderin Mobile SignatureApplicationsTurkcell Mobil İmza (Mobile Signature)is accepted as an Entrepreneurial Initiativeby the World GSM Association (GSMA),an institution representing 850 operatorsand over 180 mobile communicationcompanies.

With our well equipped, strongtechnological infrastructure, we areconfidently developing new technologies.We provide our customers with servicesthat enrich and ease their lives bycombining the latest technologies withthe highest quality services.

Our investments in 3G will increase oursubscribers' daily usage of value addedservices. In addition to voice services, weplan to provide mobile services and bringthe latest technologies to our customers.We will invest to this end.

We Bring the Most Recent Technologyto TurkeyWith our products and services such asmobile signature, m-education,EvTurkcell, Flexible SIM, ande-Government, we make the lives of alarge portion of the population easierand we develop products and theinfrastructure that makes a difference,particularly in service quality.

WE OFFER TURKEY A WIDE PRODUCT RANGEUTILIZING THE NEWEST TECHNOLOGIES

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For the first time ever, the GSMA has puta Turkish project on its “initiative” list.Eighteen operators from 15 countries arefollowing up on this solution underTurkey's leadership. With this project, afirst in the world, we have againdemonstrated that we are movingconfidently towards becoming a gianttechnology and communication company.

New Collaborations for MobileInternetWe reinforced the mobile internet worldin 2008 by offering services in partnershipwith strong brands, including Google,Facebook, Yahoo, Microsoft and Mynet,Garanti, Ntvmsnbc, and Kariyer.net.

Turkcell mobile subscribers can searchin Google, access Facebook and uploadpictures to their profiles via MMS ordownload a full-feature version of YahooGo. They can make Garanti Bank accounttransactions, surf in Mynet, readnewspapers, and send e-mails and, mostimportantly, thanks to "turkcell-iminternet", they can experience the internetas they do on their computers, evenaccessing popular websites with a singleclick via the main page of turkcell-im.

We provided our customers with moreunique services by making Windows LiveMessenger available for the first time inTurkey through our collaboration withMicrosoft.

WE MAKE IT EASIER FOR MILLIONS TO ENJOY THEIR LIVES AND DOBUSINESS WITH OUR PRODUCTS AND SERVICES THAT MAKE ADIFFERENCE.

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We Continue to Invest withConfidence in TurkeyThe transition to 3G technology is vitalfor the development of new businessopportunities and branches in the Turkishtelecommunications sector and forinvesting in new technology and attractingforeign investors. 3G is Turkey's door tothe future: it will be a driving force fornational economic growth, accelerateour Company's growth, and bring otherbenefits such as local know-howaccumulation and increased technologyusage, exports and employment, and askilled labor force. Together, thesebenefits will increase Turkey'sinternational competitiveness and createsignificant opportunities for youngentrepreneurs to access the global arena.It will open the door to many innovativeservices to meet important needs inTurkey, especially in health and education.

As a result of the 3G tender held onNovember 28, Turkcell generated Euro358 million (excluding VAT) for Turkeyin payment for its license. With 3G,Turkcell is investing in the future ofTurkey.

We are a Pioneering Company inTurkey in the Field of TechnologyTurkish people love new technology andthey embrace it quickly. The average agein our country is 28, so we have a veryyoung population and it is open toinnovations and new technology.

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With the Type-A license we obtained fromthe 3G tender, we will continue ourleadership in terms of coverage andservice quality with the 3G infrastructureand we will provide new products andservices that will become anindispensable part of our subscribers'lives.

The faster data transmission rate providedby 3G infrastructure, in addition to dataservices, enables us to provide web-basedservices that enrich our subscribers' sociallives. Fast mobile internet will createadditional value not only for young peoplebut also for professionals who want towork outside of their offices.

3G Application Underway withKKTCellKKTCell, our wholly owned subsidiary inthe Turkish Republic of Northern Cyprus,received its 3G license in March 2008.With 3G communication technology,KKTCell subscribers have gained accessto high-speed data transfer allowingmobile broadband, video calls, mobiletelevision and many other value addedservices and the exclusivity of "connectingto the world faster". During the first twoweeks, 54,000 subscribers startedreceiving 3G services from KKTCell and10,000 data cards were sold.

3G WILL ACCELERATE THE GROWTH OF THE NATIONAL ECONOMY THROUGHLOCAL KNOWLEDGE ACCUMULATION, TECHNOLOGY USAGE, EXPORTS,EMPLOYMENT AND A SKILLED WORKFORCE.

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Blackberry Bold and iPhone 3GBy launching the 3G-enabled BlackberryBold for the first in Turkey, we haveenhanced our market leadership. Withthis initiative, Turkey became the thirdcountry in the world to launch this service.Also, in line with our focus of increasingour value added services revenues, welaunched iPhone 3G to increase thepenetration of smart phones.

Mobile internet has brought change toour lives. iPhone 3G carries the mobileinternet and multimedia experience tothe furthest point possible.

In addition to all the revolutionary featuresof iPhone, iPhone 3G contains iPhone 2.0software. This software doubles the speedof 3G network access and the deviceincorporates a new generation GPS thatenables its users to utilize location-basedmobile services. We are delighted tointroduce this prestigious device, whichhas attracted much attention in Turkey.

AS A LEADER IN THE FIELD OF TECHNOLOGY IN TURKEY, WE HAVEPIONEERED THE INTRODUCTION OF 3G-ENABLED DEVICES INTO THETURKISH MARKET.

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We Continue to Offer the MostInnovative and LifeFacilitating Products

Cooperation Between IstanbulMetropolitan Municipality, Turkcelland İsbak is a First in the World

‹BBCepTrafik Sends Information on TrafficConditions in Istanbul to Mobile PhonesIn January, we presented Istanbul withthe İBBCepTrafik service in cooperationwith Istanbul Metropolitan Municipality.Currently 400,000 people use theİBBCepTrafik application. This service hasbecome one of the most widely usedservices in the world with a usage rateof over 15 million.

“İBBCepTrafik +”, developed usingMicrosoft software technologies on theWindows Mobile platform, has a"intelligent location detection" featurethat downloads the video captures to theuser's cell phone from the closest trafficcams via base stations.

With a superior touch-screen, the usercan easily get the desired information,zoom in and out of an Istanbul road map,and find a destination by clicking orsliding his/her finger on the screen.

When business or home addresses aredefined in the system, the "Travel Planner"feature can tell you the most suitabletime to start your journey.

İBBCepTrafik+ is a world's first for its"location-based service" feature.

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e-Government Gatewaye-Government Gateway provides accessto public services from a single address.Started in December 2008, thisapplication allows Turkcell subscribersto make use of e-government servicescategorized under the headings of "OurCitizens", "Business" and "State" and theycan use their mobile signature in a safeand economic way. e-Governmentservices include online services such asobtaining social security institution (SSK)service summaries, information aboutcourt cases, unemployment benefitapplications and follow-ups, Ministry ofEducation examination locations andresults, and various other public services.

"Open or Lock" Your Door Using YourCell PhoneTurkcell Mobile Signature Service startedwith banking applications and continuedwith municipality services, e-commerce,and e-health applications. Now it can beused with the Mobile Door SecuritySystem developed in partnership withKale Kilit.

The Mobile Door Security System workswith a Turkcell SIM card placed in theKale X10 Intelligent Lock Systemdeveloped by Kale Kilit company. Itenables you to open or lock your doorvia the Turkcell Mobile Signature systemusing your cell phone from any corner ofthe world.

Turkcell Mobile EducationWe developed the Turkcell mobileeducation platform by considering theeducational needs and expectations ofinstitutions. This new system offerseducational material in the form of stilland moving images, audio, and texts foremployees who wish to receive self-development training.

Mobile WalletNFC technology enables users to use theircell phones as a credit card,transportation card or ID by allowingthem to be read by an electronic reader.Turkcell played a leading role indetermining the standards for NFCtechnology by taking an active role inworkshops organized by the GSMA. As aresult, four out of 12 pilot applicationsagreed for NFC technology were realizedby us in partnership with Garanti Bank.

Turkcell Mobile PaymentIn August we launched the MobilePayment System, a first in Turkey. Thissystem enables Turkcell subscribers tomake payments via a single text messagewithout a credit card or change. The mostappreciated version of this application isthe service that enabled users to pay theirparking lot fees to İsPark, an affiliate ofIstanbul Metropolitan Municipality.

Turkcell Healthwww.saglik365.comThe www.saglik365.com health portal,for which we are the main sponsor, waslaunched During CeBit 2008. TheSağlık365 portal enables the healthinstitutions, application providers, andagencies to present multimedia content,interactive applications and campaignsto individuals and physicians. Users canaccess physicians via the web and mobilechannels. Sağlık365 provides individualswith comprehensive medical information,daily health news, and interactiveapplications and it communicates healthawareness campaigns and socialresponsibility projects to a large audience.

Rural Tele-Medicine ProjectIn 2008, we started the Rural Tele-Medicine Project in Adıyaman inpartnership with the Ministry of Health,United Nations Development Project, Inteland the Turkish Association of FamilyPhysicians. As part of this project, familyphysicians and nurses in Çakırhöyük andAhmetkoca villages of Adıyaman carriedout assessments using mobile EKG anddiabetes devices and shared the resultsof patients at risk with expert physicians.

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TURKCELL WEBSITE AND ONLINE ADVERTISEMENT CAMPAIGNS WON14 AWARDS IN 2008.

These Awards Underlined OurSuccesses.

Tone and Win Service"Tone and Win" service became the 2009champion in the Best MobileAdvertisement Service category of theGSMA Awards, the Oscar of the mobilecommunication world. It operates on the"RingBackTone" platform and enablesusers to win units/minutes as they listento advertisements. With 7.5 millionmembers, the Turkcell Mobile MarketingDepartment operates on one of Europe'slargest authorized databases and, in2008, the department created 650projects and worked in cooperation with276 brands in 13 sectors. Turkcell MobileMarketing's services and campaignsreached over 19 million customers in2008.

WebAs one of the top companies forinvestment in web services, we used newtechnologies and applications on thedigital platform to the fullest extentpossible in 2008. With micro sites withvideo production, demos that giveinformation about our services, gadgetsand interactive media usage, wecontinued to create innovativetechnologies and rolled out 17 new microsites and demos.

We changed the whole design of gnçtrkcll,the youth club of Turkey, and created aweb platform full of music, games andcinema content for the young people. Inthe games section, we provided reviewsof PC and mobile games, a feature thatmade www.gnctrkcll.com unique inTurkey.

In 2008, we gained 14 awards for Turkcellwebsites and online advertisingcampaigns. Our official web site,www.turkcell.com.tr, was nominatedTurkey's best corporate website in a webrankings survey conducted by the Swedishcompany Hallvarsson & Hallvarsson.

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“WE CARRY OUT PROJECTS THAT ADDVALUE TO SOCIETY, reflecting

our commitment to socialresponsibility”

At Turkcell, we believe that any supportgiven to an individual and society is acontribution to Turkey as a whole. AsTurkey's Turkcell, we support economic,environmental, cultural and socialdevelopment for a sustainable world andwe do this in partnership with ouremployees, their families and ourcommunity, to improve the quality of life.With our awareness of socialresponsibility, we continue to carry outprojects that add value to society whilereaching a wide audience.

AS TURKEY'S TURKCELL, WE CONTRIBUTETO INDIVIDUAL AND SOCIAL DEVELOPMENTIN THE COUNTRY

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Building Bridges Between100,000 HeartsBridge of Hearts is a project carried outin partnership with the Ministry ofEducation. The goal of the project is toenable 100,000 young people from 81Turkish cities to learn more about theircountry, to visit places they haven't seenbefore, and to discover different cultures.As part of this project, the studentstraveled from one end of Turkey to theother and made new friends.

The children were students aged 13 to17 from grades seven through ten. Theyjoined cultural activities organized incities chosen by the Ministry of Educationand established long lasting friendships.During the journey, each student washosted by a family who had a child of thesame age as the guest student, allowingthe host children to guide their guestsaround the city.

AS PART OF THE "BRIDGE OF HEARTS" PROJECT, 100,000 STUDENTSTRAVELED FROM ONE END OF TURKEY TO THE OTHER, MAKING NEWFRIENDS ALONG THE WAY.

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Runners to the FutureWe also expanded the coverage of ourSports Schools For Free project, whichwe have supported since 2000. We alsochanged its name to “Runners to theFuture”. In April 2007, we included 38additional schools in this project. Withthis recent expansion, we annuallyprovide about 15,000 children with thechance to participate in sports activities.

Kardelenler (Snowdrops)Women make up 75% of Turkey'silliterate population which means thattwo in ten women in Turkey are illiterate.With this in mind, the Kardelen Projectwas publicly announced on 28 August2000 at a press conference organized bythe Ministry of Family Affairs and Women,the Society for Supporting Modern Life,and Turkcell. This project providedscholarships around Turkey for 5,000girls who showed the ambition anddetermination to complete theireducation.

We expanded the project in 2007 byincreasing the number of scholarshipsawarded annually to 10,000. Since 2000,20,000 students have received Turkcellscholarships under this project. 7,420Snowdrops graduated from high school,1,902 passed the University EntranceExamination, and 363 graduated fromuniversity and started their careers.

The Leadership Program, a supportprocess for the Kardelen Project, aims tocontribute to the development of thesocial and behavioral skills of Snowdropswho have a chance to continue theireducation at university. This Programwas created in 2004 in parallel with theKardelen Project and it has now becomea part of it. The program started with 46participants in its first year and this yearit expanded further to reach 160 girls.

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AS PART OF THE KARDELEN PROJECT, WHICH BEGAN IN 2000, WE HAVEPROVIDED SCHOLARSHIPS TO 20,000 GIRLS WHO HAVE SHOWN THEAMBITION AND DETERMINATION TO STUDY.

Our goal is to ensure the continuation ofthe successful development of Turkishfootball and to increase competition bycontributing to the transformation of thecountry's four most popular teams into"the Big Four".

In addition to our sponsorship of the 14Anatolian clubs, we will provide financialsupport worth US$500,000 to the TurkcellSuper League champion for the 2008-2009 season, US$300,000 to the second-place team, and US$200,000 to the third-place finisher or the team that participatesin the Union of European FootballAssociations (UEFA) Cup. We will alsogive US$100,000 each to the Turkish teamthat ends up among the 32 qualifyingteams after the group matches for theUEFA Cup and the Turkish team thatmaintains its position in the ChampionsLeague. Additionally, we will grantUS$150,000 to the Association of FootballClubs to support its contribution to Turkishfootball.

Turkcell also continues to be the mainsponsor of the National Basketball Team A.

We Encourage Turkish SportsThrough the support we gave to sports,Turkcell reinforced our faith in Turkishathletes and teams and the values sportrepresents. By supporting sports activitiesover the years, we have supportedpersonal development and contributedto the overall welfare of society. With thegoal of supporting the development ofTurkish sports and carrying success intothe future, we reward success withsponsorship. We not only sponsor teamsbut we also develop projects andcontribute to the development of thesports economy.

Turkcell Continues to SupportTurkish FootballIn addition to sponsoring the nationalfootball team, Turkcell in 2005 signed afive-year agreement to become the mainsponsor of the Turkish professionalfootball league. After a signing ceremonyheld on August 11, 2005, the name ofthe league was changed to the TurkcellSuper League.

Since 2003, we have been successfullysupporting Anatolian football teams andwe are, as of the 2008-2009 season, thesponsor of 14 football clubs. Turkcell isthe main sponsor of Ankaragücü,Ankaraspor, Bursaspor, Denizlispor,Gaziantepspor, Gençlerbirliği,Hacettepespor, Kayserispor, Konyaspor,and Sivasspor, and a sponsor ofAntalyaspor, Eskişehirspor, İstanbulBüyükşehir Belediyespor, andKocaelispor.

WE CONTINUE TO SUPPORT TURKISH SPORTS BY REWARDINGACHIEVEMENT WITH SPONSORSHIPS IN ORDER TO CONTRIBUTE TO THEFUTURE DEVELOPMENT AND SUCCESS OF TURKISH SPORTS.

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Turkcell Volunteers Supportthe Needy in AnatoliaVolunteer groups made up of Turkcellemployees implement various social-responsibility projects in cooperation withnon-governmental organizations. Projectscompleted to date include the restorationof the Diyarbakır 75. Year PrimaryBoarding School, the establishment of acall center for disabled, the renovationof Yakacık Kindergarten, and of programsentitled "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 KeepBatman Warm", "A Sweet Peace of Mind,"and "My First Vacation". In 2007, Turkcellvolunteers were honored with theExcellence in Public Relations-GoldenGlobe Award by the International PublicRelations Association (IPRA).

Turkcell volunteers who established theLife Forest Association in 2008 will playa pioneering role in developing socialresponsibility awareness among ouremployees by supporting the needy allover Anatolia.

Turkcell Social Activity GroupThe Turkcell Social Activity Grouporganizes tours, tournaments in Turkeyand abroad, kids' club activities, trainingsessions, contests, and parties to enrichthe social lives of Turkcell employees.More than 23,000 employees and theirrelatives participated in 365 socialactivities organized in 2008.

We also contribute to the careerdevelopment of sports columnists whowork in Anatolia by organizing inpartnership with the Turkish SportsColumnists' Association (TSYD) the TSYD-Turkcell Sports Press Seminars all overthe country. More than 1,000 sportscolumnists and 2,500 university studentshave participated in these seminars,which have been held in 17 cities overthe last two years.

For the past nine years, Turkcell hassupported the International Istanbul JazzFestival organized by the IstanbulFoundation for Culture and Arts (İKSV),a non-profit organization; and, for thepast six years, we have also supportedİKSV's International Istanbul Film Festival.Since 2005, we have also been thecommunication sponsor of İKSV.

Another example of our projects in thearea of arts and culture is our support,in cooperation with Ericsson Turkey, forthe restoration of the Bodrum AntiqueTheater, which has been hosting a seriesof concerts titled "Starry Bodrum Nights",as well as the restoration of the ancientMyndos Door and the old Ottomanshipyard in the same area.

Turkcell Supports Social,Cultural, and Sports ActivitiesIn addition to the contribution thecompany makes to the national economy,Turkcell adds value to Turkish society bysupporting social projects in a wide rangeof fields, including education, technology,sports, arts and culture. With theseactivities, we aim to contribute to thedevelopment of qualified humanresources.

In June 2007, Turkcell signed a new,15-year sponsorship agreement with theTurkish Football Federation under whichthe Riva facilities were renamed theNational Teams' Turkcell Facilities. Thesefacilities host the Turkish national teamand young Turkish teams, as well asfootball teams from foreign sportsfederations, and provide them withcamping and training opportunities.

Turkcell EncouragesTomorrow's LeadersSince the day Turkcell was established,the company has abided by a principleof investing in people and we continuethis work today under the slogan "PeopleFirst in a Pioneering Turkcell." We carryout various projects in partnership withuniversities to help develop qualifiedworkers for the communication andtechnology sectors. Our GnçtrkcllGraduate Scholarship Program, whichwe initiated in partnership with theTurkish IT Society to develop a well-qualified labor source for the industryand create new opportunities for theyoung generation, provides scholarshipsto 50 graduate students every year. Ourgoal with this scholarship program is todiscover promising young people andsupport their development in this sector.

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As part of our Gnçtrkcll GraduateScholarship Program, we contribute toacademic research projects at universitiesby providing scholarships to graduatestudents in science and social scienceprograms at Anadolu University, AtatürkUniversity, Boğaziçi University, ÇukurovaUniversity, Dokuz Eylül University, EgeUniversity, Gaziantep University,Hacettepe University, Istanbul TechnicalUniversity, Karadeniz Technical University,Kocaeli University, Marmara University,Middle East Technical University, andYıldız Technical University. We plan toexpand the program in the coming yearsto cover additional universities as well.

Human Resources

Our Values and "Turkcell Is Me"In 2008, we continued communicationactivities to promote awareness ofdecisions and actions that highlight ourvalues and corporate culture and we wereexcited to spread the message "TurkcellIs Me" through various platforms. We seeour values as the guiding force behindunique plans of action that will increaseand expand the success of Turkcell Group.The critical and strategic agenda of ourcorporate culture program influences allof our employees.

After defining our corporate values, wedetermined actions that would help usput those values into practice through aprocess that included conductingemployee surveys, face-to-faceinterviews, and focus groups. Our goalis to ensure our values guide the wayour employees do business and that thesevalues are adopted by our entire staff asan indispensable part of our businesslife. Today, employees at all levels of thecompany take part in this process bydeclaring "Turkcell Is Me" and bysupporting the survival of a values-oriented culture through contributingideas that improve and develop thecompany and its business.

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IN 2008, WE CONTINUED COMMUNICATING OUR CORPORATECULTURE AND VALUES, WHICH GUIDE ALL OUR DECISIONS ANDACTIONS.

In 2008, in line with our new projectsand our corporate growth, Turkcellrecruited 535 new employees. Due to theopportunities we offer, 269 employeesrotated into new jobs, assuming newroles and responsibilities that supporttheir career development. The employeeturnover rate at our company in 2008was 4.6%.

Under our strategy of providingemployees with additional benefits thatenhance their professional and personallives, we implemented a "flexible perkprogram" that allows employees to createtheir own benefit packages by selectingtheir preferred options from an array ofjob perks.

Our Employees: Our MostValuable AssetGuided by our philosophy of "People Firstin a Pioneering Turkcell," we keepemployee satisfaction and motivation atthe top of our priorities. We closely follownew technologies that will affect ourcompany, both in Turkey and around theworld, and strive to play a pioneeringrole in developing applications that willset international standards. By creatinga flexible, sensitive, and democraticbusiness environment that supportschange, we invest in adding value to ourorganization in order to motivate ouremployees. We define our workenvironment as a "living environment"and implement all of our projects withthis in mind.

Our Personal Retirement Plan covers allemployees and gives them an opportunityto invest in their futures. We administerthis program by means of the mutual-benefit model.

In addition to regular paid vacation, allemployees receive one additional day offfor their birthdays. We also providekindergarten support for femaleemployees with children between theages of two and five.

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

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

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

IN 2008, WE PROVIDED 1,480,624 HOURS OF TRAINING TO 189,294PEOPLE IN THE TURKCELL GROUP ECOSYSTEM.

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We Develop Our Employees,Our Environment, and OurSociety Through Our TrainingProgramsTurkcell systematically monitors theperformance and potential of its staff,rewarding employees for goodperformance and developing humanresources practices that generate ourworkforce's pride in making a difference.

In 2008, we provided a total of 1,480,624hours of training, reaching 189,294people in the Turkcell Group environment.

We provided our global information andfield personnel with a new vision forcustomer orientation and experience,with the goal of improving customerloyalty and winning new customers byincreasing employee knowledge of andskills in Turkcell customer strategies. Aspart of this effort, we provided 1,255,014hours of training to 146,297 people,including field personnel, members ofsales and marketing teams, and callcenter employees. These training eventsfocused on development and occupationalexpertise in a variety of areas, includingcommon marketing culture, commonservice and sales culture, customerexperience, customer relationshipmanagement, effective salesmanagement, mobile number portability,and product, service, and tariff awareness.

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OUR HUMAN-RESOURCES PRACTICES MAKE A DIFFERENCE ANDMAKE US TURKEY'S "MOST ADMIRED" COMPANY AND "MOSTVALUABLE BRAND".

Our goal is to cultivate future businessleaders who will make a difference, andwe do this under one roof with theTurkcell Group Leadership Academy bygathering a full spectrum of managementand skills-development programs aimedat enhancing corporate culture and valuesand creating a common managementculture.

We reached 5,000 students through thepioneering projects that Turkcell Academyinitiated to promote university-industrycooperation, develop highly qualifiedhuman resources for the sector, andcreate employment in the industry. In2008, as a result of a partnership betweenTurkcell and Harvard University's John F.Kennedy School of Government, weplayed a key role in adding value to boththe communications sector and thecountry as a whole through academicstudies that support the Technology andInnovation in Turkey project.

In 2008, we initiated a professionaldevelopment program to identifysuccessful and promising students at alluniversities in Turkey and to preparethem for business life at Turkcell Groupcompanies and throughout the industry.Fifty-six selected students took part in 70hours of training programs at TurkcellAcademy, and 23 of those whosuccessfully completed the courseworkjoined the Turkcell family.

The Turkcell Academy, the strategicdevelopment center of Turkcell Group,was honored as an Exemplary Project inthe Launching Category for the successfullaunch of a new corporate universityinitiative at the 9th Annual CorporateUniversity Xchange Excellence Awardsfor Excellence and Innovation in CorporateLearning, which received applicationsfrom 150 companies in different sectorsand countries.

We Encourage InnovationAt Turkcell, we use a process called "IHave a Great Idea" that works via theInnovation Office and enables ouremployees to communicate original ideasthat add value to the company to therelevant officials and. To date, we havehonored 453 Turkcell employees for theirinnovative ideas.

Turkcell is the Most AdmiredCompany and Most Valuable Brandin TurkeyOur priority is to work with the best peopleand retain the best employees. With ourhuman-resources programs and policies,we develop loyal employees who achievesuccessful results. Our employeesatisfaction rate was 86% in 2008,significantly above the sector average.

As we strive to continue being a winningteam, we will keep shaping andimplementing our human resourcesstrategies in line with our faith in theimportance of our corporate culture andthe employees and leaders who help thisculture thrive. In 2008, we updated ourbusiness model in line with our valuesand reinforced our leadership modelalong the themes "I am the leader of mybusiness," "I am the leader of my team,"and "I am my own leader."

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“BY REMOVING BARRIERSTO COMMUNICATION, we are nowthe world’s Turkcell too”

BY REMOVING BARRIERS TOCOMMUNICATION, WE ARE NOW THEWORLD'S TURKCELL TOO

Being listed on the NYSE has broughtTurkcell many advantages, including aglobal investor base, internationalpopularity, and global-scale managementstandards.

As the World's Turkcell, we are proud tosee our services receive various awardsin many categories from variousinternational organizations.

The Awards We Received in2008 Reinforced Our Successin the Global Arena

JANUARY1. Capital Magazine - Award for "TheLeaders' Favorite Company".

2. Yıldız Technical University - named"The Most Admired Company" and thecompany with the "Best SocialResponsibility" and received an "HonorsAward".

3. League of American CommunicationsProfessionals (LACP) - Magellan AwardsSilver Medal.

4. Cubic Awards - "Best New CorporateUniversity" (for Turkcell Academy).

FEBRUARY5. Turkish Patent Institute 2007 PatentAwards - "Turkish Golden Patent Award".

6. Hürriyet-Kelebek Kırmızı Awards -received an award for an advertisementrelated to the National Football 7. 9thAnnual Corporate University XchangeContest-"Exemplary Project" in the NewCorporate University, Successful Launchcategory (for Turkcell Academy).

MARCH8. Galatasaray University-"The BestCompany" award for 2007 in the customerrelationship management category.

9. Capital Magazine survey-Turkcell wasselected as "The Leader in SocialResponsibility" for its support for sportsand its social-responsibility projects.

As modern technology continues to breakdown barriers to communication, Turkcellis reaching beyond its boundaries andopening up to new markets andinvestments abroad. Our internationalsubsidiaries have played a significantrole in our recent successes. As theleading communication and technologycompany in Turkey, our goal is to gofurther every year and to turn Turkcellinto the one of the most well-knowncompanies in the world.

The First and Only TurkishCompany Listed on the NYSEOur company's stocks simultaneouslyopened for trading on the Istanbul StockExchange (ISE) and the New York StockExchange (NYSE), on 11 July 2000. Theinitial percentage of publicly tradedshares was 10.5%; over time, as a resultof stock sales by shareholders, this increasedto 33.48%.

Turkcell is the first and only Turkishcompany listed on the NYSE. As a publiclytraded company whose shares are tradedin both the US and Turkish stock markets,the company has developed a corporate-governance model in line with theprovisions set out by the capital marketsof both countries.

JULY14. Superbrands 2008 Award.

SEPTEMBER15. European Call Center Awards - "BestCustomer Services" champion.

NOVEMBER16. Turkish Society for PersonnelManagement - "PerformanceManagement" award.

17. 2008 HP Software Awards -"Excellence in the Europe, Middle East,and Africa (EMEA) Region" award.

18. European Sponsorship Association(ESA) - top award for "SponsorshipProjects that Benefit Society" (for theKardelenler Project).

19. TESİD 2008 Innovation and CreativityAwards - "Creative Idea Award" in the"Big Company" category (for TurkcellTeknoloji Araştırma ve Geliştirme A.Ş.'sInternational Roaming PreventionManager).

DECEMBER20. ContactCenterWorld.com 2008 WorldAwards - Turkcell Global Bilgi won "BestTechnological Innovation" and took thirdplace in the "Best Customer Service"category.

AS THE FIRST AND ONLY TURKISH COMPANY LISTED ON THE NYSE ANDWITH DUAL LISTING, WE ARE A LEADER IN ADOPTING INTERNATIONALSTANDARDS FOR TRANSPARENCY, DISCIPLINE, MANAGEMENT QUALITYAND CORPORATE GOVERNANCE PRACTICES.

APRIL10. Turkcell-Capital-Adecco "Turkey'sMost Admired Companies" awardsceremony - awarded "Turkey's MostAdmired Company" and "The MostAdmired Company in the Telecom Sector".

11. TÜHİD 7th Golden Compass Awards2008 - received an e-communicationsaward for the Turkcell-im Benim ("MyTurkcell") project.

MAY12. 5-E Biko - recognized as the companythat gives the best IT support.

13. GSMA Awards - "Golden Spider BestWeb Site Award" and finalist in threecategories.

A Finalist in Three DifferentCategories at the GSMAAwardsAt the 2008 Global Mobile Awards,organized this year for the 13th time bythe GSM Association (GSMA), Turkcellwas a finalist in three categories. TheGSMA is an organization representingthe global mobile-communications sectorin commercial and strategic activities. Itsmembership comprises 700 mobile-communication operators from 218countries.

Our ad campaign entitled "The Chickenthat Lays Tariffs," which we prepared tobetter communicate our tariff structureand its advantages to potential customers,was a finalist in the "Best TV and RadioCommercial" category, while the"Consumer Loan-SMS Campaign" was afinalist in the "Best Mobile Commercial"category. Our "Turkcell-im Benim" (MyTurkcell) service, launched on 22 May2007, was a finalist in the "Best MobileSocial Sharing Service" category.

The Winner of the IPRA 2008Golden Globe AwardIn 2007, the Turkcell Investor RelationsDepartment initiated a project entitled"Converting Company Performance intoValue" with the goal of carrying outinvestor relations activities that wouldhave a positive impact on stockperformance. This effort won the 2008Golden Globe Award in the financialservices and investor relations categoryfrom the International Public RelationsAssociation (IPRA), the world's leadingPR organization. The IPRA's 2008 GoldenGlobe Award competition drewparticipation from 404 companies from52 countries and Turkcell was selectedfrom among 117 finalists in 28 categories.

In 2007, company value increased by85% based on the Turkish Lira, jumpingfrom TRY15 billion to TRY28 billion, aresult that placed Turkcell as the mostvaluable company in Turkey in terms ofmarket capitalization. The secret of thissuccess lies in our strong management,which supports investor relationsactivities, the capital markets boardregulators in Turkey and the UnitedStates; the performance of the TurkcellInvestor Relations team; and the businessethics and discipline demonstrated by allemployees of our company.

Turkcell's TonlaKazan(Win&Tone) Selected as theWorld's Best MobileAdvertisement ServiceOur TonlaKazan project was chosen asthe "Best Mobile Advertisement Service"at the GSMA Awards Contest, consideredthe Oscars of the mobile communicationworld.

The GSMA Awards, organized by one ofthe most prestigious institutions in thecommunication sector, were distributedfor the 14th time this year. Turkcell wasa finalist in the "Mobile Entertainment"category with its TonlaKazan and Mobiwarproducts and won the top award forTonlaKazan, a first in the world ofadvertising.

Gnçtrkcll Selected as theWorld's Best BrandWith our youth club, gnçtrkcll, we wonthe top award in the "Best Brand"category from the jury of the WorldCommunication Awards (WCA), one ofthe most prestigious organizations in itsfield.

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TURKCELL WAS ONE OF JUST 19 COMMUNICATION AND TECHNOLOGYCOMPANIES FROM EUROPE, THE MIDDLE EAST, AND AFRICA TO MAKETHE BUSINESSWEEK INFOTECH 100 LIST AND THE ONLY ONE FROMTURKEY.

We Surpassed World Giantson the "Infotech 100" ListTurkcell moved up to 25th place on the"BusinessWeek Infotech 100" list, whichranks publicly traded communication andtechnology companies according to thefinancial data provided by Standard &Poor's. In 2008, Turkcell was rankedabove many of the world's leadingtechnology companies, including Intel,Cisco, HP, LG, Samsung, and SAP. On thesame list, Turkcell was ranked 24th interms of the return on investmentprovided to shareholders, which it isincreasing annually by 34%.

This is the fifth time in a row that Turkcellhas appeared on the BusinessWeekInfotech 100, which in 2008 containedonly 19 communication and technologycompanies from Europe, the Middle East,and Africa. Among those companies,Turkcell ranked 25th on the list.

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WE SERVE 62 MILLION SUBSCRIBERS IN 8 COUNTRIES WITH THEWORLD BRAND WE'VE CREATED OVER THE PAST 15 YEARS.

Honored in Three Categoriesat the International BusinessAwardsMore than 1,700 companies from variousindustries apply each year to theInternational Business Awardscompetition, one of the most prestigiousin the business world. In 2008, Turkcellwon three awards-known as "StevieAwards"-in the e-commerce, investorrelations, and press relations categoriesfor our web applications for "The Chickenthat Lays Tariffs" ad campaign, theTurkcell Investor Relations Center, andthe Turkcell Press Room.

Among the world's communication andtechnology companies, Turkcell is one ofthe most effective users of the Web. Oursuccess in this area is demonstrated bythe awards we have won from globallyprestigious organizations such as theInternational Business Awards.

We place high value on the importanceof online communication with regard tocustomer and investor relations andcontinue to develop our applications inthis area.

We Assess InvestmentOpportunities in InternationalMarketsIn addition to our investments in Turkeyin 2008, Turkcell continued to supportits international subsidiaries and utilizenew investment opportunities in line withits strategy of global expansion.

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Of the 220 countries that are membersof the GSMA, 92% are now covered byTurkcell's international network. In termsof the CAMEL international-roamingstandard for pre-paid line owner services,we provide global coverage to ourcustomers via 222 operators in 124countries-making us a world leader inthis regard as well. Similarly, Turkcellalso serves visitors to Turkey using mobilephones with international operators.

...and in Terms of Data CommunicationIn addition to providing the mostwidespread and highest-quality cellularservice in Turkey, Turkcell is also amongthe top global operators in terms of datacommunication, thanks to the generalpacket radio service (GPRS) coverage wehave achieved abroad. We provide thehighest-quality data service to our globalcustomers via 338 operators in 144countries and continue to expand thereach of our international roamingservices via new investments.

Turkcell has also increased its numberof SMS agreements to 743, and madeMMS agreements with 89 operators in58 countries, enabling Turkcellsubscribers to send and receive messagesto and from subscribers to most of theworld's foreign cellular operators.

Turkcell currently operates in eightcountries, including Turkey, serving 62million subscribers and reaching a marketof 160 million people.

Turkcell's infrastructure development andacquisition potential, along with itsmarketing strategies and the value-addedservices it offers its customers, give theCompany an important advantage in itsoperations in international markets.

We Cover 92% of the Worldin Terms of VoiceCommunication...Since July 1994, Turkcell has been signinginternational roaming agreements withglobal operators to enable pre-paid andpost-paid subscribers to use their mobilephones more easily while they areabroad, and our subscribers can nowreadily contact most parts of the world.With regard to our international roamingagreements, Turkcell is among the globalgiants; with the agreements we signedin 2008, our number of agreements withforeign operators reached 609, while thenumber of countries served exceeded200.

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

Moody'sLocal currency rating: Ba2Foreign currency rating: Ba2Outlook: Positive

On February 5, 2008, the international rating company Moody's affirmedTurkcell's foreign and domestic currency ratings of "Ba2" and changedthe company's outlook from stable to positive, a revision that reflectsTurkcell's robust operational and financial performance in 2007, itsprofitability, its sustainable cash-flow-generation capacity, and thepositive momentum of its Ukrainian business interests.

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

FitchRatingsLocal currency rating: BBB-Foreign currency rating: BBOutlook: Stable

International rating agency Standard & Poor's upgraded Turkcell'sforeign currency rating from "BB" to "BB+" and announced its localcurrency rating as "BB+." The rating agency based its upgrade onTurkcell's continued strong performance in the dynamic and increasinglymature Turkish market, its sustainable cash-flow generation and lowfinancial leverage, and its high cash balance, a portion of which isretained as foreign currency.

Standard & Poor'sLocal currency rating: BB+Foreign currency rating: BB+Outlook: Positive

INTERNATIONAL CREDIT RATINGS

THE INTERNATIONAL RATING AGENCY STANDARD & POOR'S UPGRADEDTURKCELL'S FOREIGN CURRENCY RATING FROM 'BB' TO 'BB+' ANDANNOUNCED ITS DOMESTIC CURRENCY RATING AS 'BB+.' TURKCELLNOW HAS THE HIGHEST S&P CREDIT RATING OF ANYCOMPANY IN TURKEY.

THE SUBSIDIARIES THAT MAKE US THEWORLD'S TURKCELL

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TURKCELL

TURKCELLFİNTUR41.45%

FINANCELLB.V.

100%

A-TEL50%

TURKTELLBİLİŞİM100%

KKTCELL100%

GLOBAL BİLGİ100%

TURKTELLULUSLARARASI

100%

KCELL51%

GEOCELL98%

AZERCELL51%

MOLDCELL100%

INTELTEK55%

TELLCOM100%

TURKKULE100%

TURKCELLTEKNOLOJİ

100%

SUPERONLINE100%

EUROASIATELECOM

HOLDING B.V.55%

BELTELTELEKOMÜNİKASYON

HİZMETLERİ A.Ş.

100%

LLC ASTELIT100%

BELARUSSIANTELECOM

80%

Astelit began its operations in a highlycompetitive environment where twostrong operators had equal marketshares. By the end of 2008, the company'smarket share had reached approximately20% and its number of subscribers hadincreased by 27.3% to 11.2 million. Astelitcontinued to post strong operationalfigures. In 2008, its 3 month activesubscriber base increased by 32% andits 3 month active average revenue peruser (ARPU) from this base increased by17.3%.

Due to the negative economic and politicalconditions in Ukraine, the nationalcurrency, the Hryvnia, lost 52% of itsvalue against the US dollar in 2008.Despite the negative impact of thisdevaluation, Astelit posted encouragingfinancial and operational performancein 2008, and supported it with the positiveEBITDA it achieved for the year.

Ukraine: LLC Astelit-life:)By the beginning of February 2005,Turkcell’s 55% indirect subsidiary Astelithad launched its GSM operations inUkraine under the "life:)" brand name.Of the company's shares, 45% belong tothe System Capital Management Group.Astelit covers 93.85% of Ukraine'spopulation and 84.4% of the country'sterritory. In 2008, the company obtainedpositive results, increasing revenues 71%over the previous year to reach US$439million. Astelit also reached a positiveEBITDA during the entire year for the firsttime in 2008.

60

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.

61

Belarus: BeSTAs part of its efforts to capitalize on theemerging investment potential inneighboring countries, Turkcell purchased80% of the shares in BelarusianTelecommunications Network (BeST) for$500 million from the State AssetsCommittee of the Republic of Belarus.The total amount will be paid in threeinstallments: The first payment of $300million was made on 26 August 2008and the remaining two installments of$100 million each will be made on 31December 2009 and 31 December 2010.When BeST announces a net profit forthe entire year for the first time, anadditional payment of $100 million willbe made.

The acquisition of BeST is an importantopportunity for Turkcell to enter a marketwith great growth potential. With itsyoung and well-educated population,and its ever-expanding economy, Belarusis an attractive market in the region whereTurkcell plans to grow. We will use ourexperience working in the Ukrainian andCommonwealth of Independent Statesmarkets to effectively differentiate BeST,currently the third-largest operator inBelarus, in a very short time. With apopulation of 10 million as of the end of2008, Belarus is a very attractive marketcompared with other states with similareducation and employment levels. Witha line penetration level of 84% by theend of 2008, Belarus exhibits reasonablegrowth potential in this sector.

WITH ITS PROMISING FINANCIAL AND OPERATIONAL PERFORMANCEIN 2008, ASTELIT ACHIEVED A POSITIVE EBITDA FOR THE FIRST TIME.

Azerbaijan: AzercellFounded in 1996 as a joint venture ofAzertel and the Ministry ofTelecommunications of Azerbaijan,Azercell is the leader in the Azerbaijantelecommunications market. Fintur ownsapproximately 51% of Azercell throughdirect and indirect holdings. Its superiorservice quality, reasonable rates, pre-paid services, and the absence of a strongfixed-line infrastructure in the countryhave contributed to Azercell's continuedgrowth. As of the end of 2008, thecompany had 3.5 million subscribers.Azercell owns 51% of Azeronline, theleading Internet service provider (ISP) inAzerbaijan.

FinturTurkcell has a 41.45% stake in FinturHoldings BV (Fintur), which currentlyholds its entire interest in GSMinvestments in still-growing markets withrelatively low penetration rates, includingKazakhstan, Moldova, Azerbaijan andGeorgia.

These four operators, operating amidstmacroeconomic challenges and intensecompetition, acquired two millionsubscribers in 2008 and increased theirsubscriber base to 12.8 million. Thanksto its growing subscriber base, Fintur'srevenues increased by 23%, reachingUS$1,823.1 million. Fintur's contributionto Turkcell's net profit in 2008 wasUS$151.1 million. Last year, Finturdistributed dividends for the first time,paying a total of US$83 million to Turkcell.

WITH 12.8 MILLION SUBSCRIBERS IN 2008, FINTUR OPERATES IN MARKETSWITH HIGH GROWTH POTENTIAL.

Georgia: GeocellThe 2001 merger of Georgia's two GSMoperators, Geocell and GT Mobile,enabled Geocell to expand its coveragearea and capacity and launch pre-paidservices. As of 31 December 2008, Finturheld a 97.5% interest in Geocell, whichhad 1.6 million subscribers.

Turkish Republic of NorthernCyprus: KKTCellEstablished in 1999, KKTCell is asubsidiary of Turkcell that operates undera revenue-sharing agreement with thegovernment of the Turkish Republic ofNorthern Cyprus (TRNC) until the end ofJuly 2007. In 2008, KKTCell signed areplacement 18-year license revenue-sharing agreement for the installationand operation of a digital, cellular, ormobile telecommunication system withthe TRNC Ministry of Communicationsand Works. By the end of 2008, KKTCellhad 324,000 subscribers. In an excitingdevelopment last year, KKTCell introduced3G technology to Cyprus and beganoffering 3G services and products to thepeople of Northern Cyprus.

Moldova: MoldCellMoldcell, one of the three GSM operatorsin Moldova, launched operations in 2000.Wholly owned by Fintur, Moldcell had asubscriber base of 0.6 million as ofDecember 31, 2008.

Kazakhstan: K'CellK'Cell is a partnership between Finturand Kazaktelekom, the national telecomoperator of Kazakhstan. K'Cellcommenced providing services in 1999after obtaining a renewable 15-yearlicense for standard GSM networkservices. Fintur owns a 51% interest inK'Cell, one of the largest GSM operatorsin Central Asia and the leader inKazakhstan in terms of subscriber base,growth rate, amount of investments, andrange of services. As of December 31,2008, K'Cell had 7.1 million subscribers.

İnteltek-İddaaİnteltek, under the authority of the TurkishYouth and Sports Directorate and theSpor Toto Organization, provides theinfrastructure for the central bettingsystem used for Spor Toto and İddaagames and is also responsible for riskmanagement. Turktell owns 55% of thecompany; Intralot, 20%; and IntralotIberia, 25%.

Founded on April 6, 2001, İnteltek gainedthe sole legal rights to football betting inTurkey on behalf of Spor Toto with thelaunch of İddaa in April 2004. On August28, 2008, with its best offer of 1.4%, thecompany won the tender that allowedprivate companies to organize constantprobability and paramutuel betting gamesbased on sports competitions that areoriginally organized by Spor Toto. Bysigning a contract with Spor Toto onAugust 29, 2008, it gained the businessrights of İddaa for the next 10 years.

TellcomTellcom Communication Services Corp,a company within the Turkcell Group,was founded in June 2004. Tellcom'sdriving business strategy is to become acomplete solution and service providerfor its corporate and individual customers.Following its establishment, Tellcomobtained the license for long distancetelephone services (LDTS), which allowsit to provide long-distance call originationand termination for individual andcorporate customers as well as wholesalevoice-carrying services. The companyreceived its Internet service providerlicense in February 2005 and was granteda landline data transmission license inJune 2005, and an infrastructureoperating license in March 2006. Tellcomwon a major infrastructure tenderinitiated by the Turkish ElectricityTransmission Corporation (TEIAS) inJanuary 2007 and has been granted the10-year operational rights for a fiber-optic cable between Istanbul and Ankara.In 2007, Tellcom became the firstalternative operator in Turkey to carrydomestic traffic. Tellcom provides itscustomers with affordable packages forfiber Internet, the most advanced Internet-access technology in the world. With itsfiber-optic-infrastructure investmentscompleted in a relatively short time,Tellcom introduced its customers to 100-megabyte Internet connections in 2007.The following year, Tellcom expanded itsintra-city and inter-city fiber-opticnetwork and continued investing in itstransmission network via fiber optic-based access points that it established toreach end-users in residential andindustrial areas. In 2009, Tellcom plansto continue investing in its fiber-opticinfrastructure.

Domestic Investments

Turkcell TeknolojiTurkcell Teknoloji Araştırma ve GeliştirmeA.Ş. began operating in the TUBİTAKMarmara Research Center TechnologicalFree Zone, in Istanbul's Gebze district, in2007. Turkcell Teknoloji offers a widevariety of products and services withinthe categories of network platform,service platform, SIM and terminalsolutions, and next-generationtechnologies. Turkcell Teknolojianticipates transforming new ideas intovalue-added products with thecooperation of R&D companies,universities and research centers, andother affiliated entities.

Global Bilgi Pazarlama Danışma veÇağrı Servisi Hizmetleri A.Ş. (Global)A Turkcell subsidiary that ensures thehighest possible quality of service for thecompany's customers, Global undertakesall customer relations activities exceptfor face-to-face interaction, includingtelephone marketing and salesoperations, sales support, and call-centerservices. In 2002, Global launched itsfamous "Call 7/24" brand to serve theneeds of its corporate customers in thetelecommunications, media, Internet,retail, and technology sectors. In 2006,after the takeover of the face-to-facechannel, Global became the sole customercontact point for Turkcell, employingnumerous diverse channels, includingtelephone, digital TV, Web, WAP, IVR,kiosk, e-mail, and SMS. Thanks to itscutting-edge technology and highlycompetent workforce of approximately5,000 employees in nine locations(including business partners), Globalcreates unrivaled value for its customersthrough providing personalized services.The company aims to be Turkey's topprovider of innovative customer servicesolutions. Global has earned numerousawards for its operations, including the"Best People Practice" award at the 2007European Call Center Awards and the"Best Customer Experience" and "BestTraining Implementation" awards at theIstanbul Contact Center Awards. In 2008,Global added another achievement to itsrecord of success at international contests,taking the top prize in the "BestTechnological Innovation" category andwinning third place in the "Best CustomerService" category at the 2008 WorldAwards finals organized byContactCenterWorld.com, the largestorganization representing the global call-center industry.

TurkKuleTurkcell Kule is a wholly owned subsidiaryfounded in 2006. The company beganoperations in 2007 and became the firstand only tower-service provider to thewireless broadcast and communicationsindustry in Turkey. Its scope includes theconstruction and purchase of new towersand the maintenance and renewal ofexisting ones, security services, and otherrelated activities. Steadfastly holding ontoits vision of spreading communicationseverywhere, the company continued tobuild more towers in 2008. In 2009,TurkKule plans to enlarge its service areaand become one of the leadingtelecommunication players byestablishing a profitable business modelfor the long term.

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

MOBILE COMMUNICATION SECTOROPERATIONAL AND FINANCIAL REVIEW

2008

68

MOBILE COMMUNICATION SECTOR

Turkish MobileCommunication Sector OffersGrowth PotentialWith its sustainable economic growth,young population, and relatively lowpenetration, minutes of usage persubscriber and average revenue per userlevels, the Turkish market continues tooffer opportunities.

Mobile line penetration rate, which is120% in Europe, stands at 92% in Turkeyas at December 31, 2008 in a GSM marketserved by three operators. This figure,along with an expanding younggeneration, indicates that there is stillgrowth potential in the Turkish marketthough this growth has recently slowed.

In recent years, Turkish economic growthhas been higher than the Europeanaverage. In 2008, due to the global crisis,GDP growth rate dropped to 1.1%. Eventhough uncertainties continue in 2009,as the impact of the crisis graduallydiminishes, we expect rising consumerconfidence and spending to increaseusage amounts and in turn increaseaverage revenue per user.

Low Mobile Line Penetration Levels

ARPU Per Capita GDP

1) ARPU data as of April 2009; Source: Merrill Lynch (Global WirelessMatrix 4Q08)2) Per Capita GDP; Source: Merrill Lynch (Global Wireless Matrix 4Q08)

Source: Merrill Lynch (Global Wireless Matrix 4Q08). Penetration rate inTurkey is based on the figures announced by the TelecommunicationAuthority for the end of 4th quarter of 2008.

Per Capita GDP - Average Monthly Revenueper User - ARPU (USD)

Egypt 54%

Turkey 92%

Israel 126%

Hungary 122%

Russia 133%

Germany 131%

Spain 137%

Finland 128%

Portugal 148%

Greece 202%

Italy 153%

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

Egypt

Russia

Italy

Greece

Israel

Turkcell(Turkey)

Germany

Portugal

Hungary

Finland

Spain

40,000

45,000

50,000

5

10

15

20

25

30

35

40

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Turkish Telecommunications SectorThe ownership structure in the sectorchanged with the sale of Telsim toVodafone, the privatization of TurkTelekom, and the sale of Telecom ItaliaMobile's share in Avea to Turk Telekom.This has caused operational profitabilityto rise in importance and companies havestarted to display more rational attitudesto competition.

In the Turkish mobile communicationsector, where Mobile Number Portabilitytook effect on November 9, 2008, therewas intense competition throughout2008. The competition has continued itsactivities with aggressive customeracquisition strategies and campaigns toeffect subscribers' price perceptions. Forits part, Turkcell initiated customer-focused campaigns that increased usageand strengthened customer loyalty whileaddressing customer needs andgenerating benefits in many areas of life,including mobile phone usage.

We Continue to CloselyMonitor Competitive andRegulatory DevelopmentsThe major regulatory developments in2008 were as follows:

Mobile Number Portability (MNP)The long awaited Mobile NumberPortability (MNP) became effective onNovember 9, 2008. We don't expect thebalance in the market to changesignificantly after this development, whichallows the users to port their numbersbetween operators. As of the end of 2008,294,000 people had transferred theirnumbers to Turkcell.

Third Generation (3G) MobileCommunicationOn September 28th 2008, the Informationand Communication TechnologiesAuthority opened a 3G license tender forIMT-2000/UMTS services andinfrastructure with the aim of deliveringfour licenses. As a result of the tender,Turkcell obtained a Type A license, forthe widest frequency band, for a fee ofEuro 358 million (excluding VAT). As acompany that has invested in Turkey'sfuture from start, we will continue tomake the required investments and serveTurkey with the same ambition - to enableTurkish people to conveniently utilize thelatest technologies and to ensure Turkeyis in the mainstream of the informationage.

The high level of tax levied on mobilecommunication services in Turkey is animportant factor affecting the number ofminutes used per month. With taxes onmobile communication services of about60%, Turkey is among the most heavilytaxed countries for these services. Thissuppresses usage rates and makes themmuch lower than those in Europegenerally. We believe that reducing thetaxes levied on these services wouldincrease usage rates and so contributeto the growth of the sector by significantlyincreasing revenue per user.

The decline in the Special CommunicationTax from the current 25% for mobileinternet and 15% for fixed line internetto 5% have triggered further expectationsthat other taxes levied on mobilecommunication sector will be decreasedin the near future.

The importance of data services willincrease in the near future, especiallyafter the implementation of 3Gtechnology, which will increase contentavailability, and hence the use ofentertainment, other content and dataservices as well as voice.

Turkcell's Minute of Usage is Among the Lowest

Source: Merrill Lynch (Global Wireless Matrix 4Q08)

110

Turkey(Turkcell)

102

Poland

96

Germany

121

Portugal

131

Italy

134

Egypt

153

Greece

168

Hungary

157

Spain

244

Finland

246

France

353

Israel

70

The court case is in process. The HighestAdmistrative Court accepted the injunctionrequest of our Company with respect tosetting our on-net prices to be not lowerthan our lowest interconnect rate andrejected the injunction request of ourCompany about Information andCommunication Technologies Authority’sdecision to control retail pricing for mobileoperators, setting a lower ceiling for off-net calling prices for all operators untilthe case is concluded.

Decrease in Interconnection FeesThe ICTA decreased the Reference CallTermination Rates by 33% in 2008 andthis development had a negative effecton our 2008 financial results. Based onthese rates, mobile call termination ratesin Turkey are 57% below the EU average.Thus, we believe that the mobile calltermination rates should not be loweredany further. However, there are noguarantees to that end.

Turkcell is the Market LeaderIn 2008, the Turkish mobilecommunication market continued to growin terms of number of subscribers and,according to official ICTA data, the mobileline penetration rate rose from 88% atthe end of 2007 to 92% at the end of2008. We expect mobile penetration* toremain at the 2008 level of 92% in 2009.

In 2008, in the face of even toughercompetition, we increased the numberof our subscribers by 1.6 million to 37.0million. On one hand, we continued toimprove customer satisfaction throughour products and services and, on theother, by focusing on maintaining abalance in our revenue goals, wemaintained our leadership of the marketwith a share of 56%. In a market wherenumber portability took effect andcompetition is on the rise, we managedto increase our revenue and call trafficshares.

As Turkcell, we want to move Turkey tothe new age in communications thatstarted with 3G and to add value to thecountry by providing Turkey with thetechnology it deserves.

Electronic Communication Law (ECL)The Electronic Communication Lawprepared by the Turkish Ministry ofTransportation to establish a legal systemsimilar to that in the EU and harmonizesEU regulations with those of theInformation and CommunicationTechnologies Authority were accepted byParliament on July 31, 2008 and wasenacted on November 10, 2008.

Information and CommunicationTechnologies Authority (ICTA)’sCurrent Practice on TariffsIn October 2007, the Information andCommunication Technologies Authority(ICTA) announced its decision to regulatemobile regulators’ retail pricing - settinga lower limit for off-net calling prices forall operators and requiring Turkcell toset its on-net prices no lower than itslowest interconnection rate. Due to theICTA's decision, we could only launchcertain commercial offers and activitiesuntil the end of February 2008.

We opened a legal case at Turkey’sHighest Administrative Court for thesuspension and the annulment of theaforementioned decision on the groundsthat the decision violates the LicenseAgreement signed between us and theICTA, the Telecommunication Law andthe Competition Law.

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

71

In 2008, in parallel with our value-oriented approach, we organizedcampaigns and prepared promotionsaimed at subscriber acquisition and atincreasing customer satisfaction so asnot to lose subscribers. As a result ofthese efforts, our churn rate remainedbelow the market average and, despitedecreasing interconnection revenues andthe dilutive impact of pre-paid segmenton total revenues, we managed tomaintain our average revenue per user(ARPU) at 2007 levels.

Throughout the year, we made highlyattractive offers for the largest communityto improve consumers' price perceptionsof Turkcell. With our new communicationtheme, which we started in July, weclearly communicated these advantages.These actions increased customersatisfaction while improving customers'perceptions of Turkcell products andservices. Our brand partnershipscontinued in an increasing manner forour youth and corporate club in 2008.We lead the market by introducingBlackberry Bold and iPhone 3G, whilefurther improving subscribers'perceptions of Turkcell.

By increasing the number ofadvantageous promotions geared towardslarge groups of corporate customers, andby restructuring and adapting projectand office solutions, we have improvedloyalty to our value added services.

WE MAINTAINED OUR LEADERSHIP POSITION WITH THE 56% MARKETSHARE WE OBTAINED IN THE MOBILE COMMUNICATION MARKET BYFOCUSING ON IMPROVING CUSTOMER SATISFACTION WITH OUR PRODUCTAND SERVICE OFFERS WHILE FOCUSING ON OUR REVENUE GOALS IN2008.

The actions we took led to an increase inthe number of post-paid subscribers andhelped us maintain our pre-paidsubscriber acquisition and made theTurkcell brand much more widespread.

In 2009, we plan to maintain our marketleadership and continue our customer-oriented approach by providing high-quality services and well-designed valuepropositions in an increasingly intensecompetitive environment. Our customerorientation and focus on customersegments will continue to strengthen theTurkcell brand. In light of the 3G servicesthat are expected to be launched in themarket during the second half of the year,we plan to improve customer satisfactionby shaping our value-oriented offers tomeet new customer needs and demands.

We will continue maintaining our profitfocus while increasing our revenues bydeveloping new offers aimed at regionswith low mobile-line penetration,focusing on segmented acquisitoncampaigns, new sales incentives,increasing usage rate, advanced dataservices, and advanced value-addedservices, in addition to our effective cost-management and cash-generationabilities.

A Strong Performance in aChallenging Operational EnvironmentThanks to our superior service qualityand strong brand management, we grewour total number of subscriber base to37 million in 2008 while increasing theminutes used, and managed to increaserevenue, despite the challengingeconomic conditions.

The following discussion focusesprincipally on the developments andtrends in our business in 2008. Allfinancial results below for the year endedDecember 31, 2008 are prepared inaccordance with International FinancialReporting Standards ("IFRS") andexpressed in US$.

Turkey was adversely impacted by theglobal financial market turmoil in 2008.The GDP contracted by 6.2% in the fourthquarter of 2008. TRY deteriorated sharplyby 25% against USD in the fourth quarterof the year and by 29.8% against USD in2008 compared to a year ago, impactingour USD financial results for the year end.The consumer confidence index declinedsignificantly in 2008 from 93.89 to 69.90.

In 2009, the GDP growth rate in Turkeyis expected to weaken further in line withthe global economy, which may havesome impact on our operationalperformance.

Even though it is hard to quantify, webelieve that the developments in themacroeconomic environment andconsumer confidence as well asgeopolitical, regulatory and competitivedynamics in Turkey may adversely affectour results of operations, business andfinancial performance in 2009.Consequently, in determining ourbusiness plans we will continue to closelymonitor developments in these areas andtake into consideration the potentialimpact of global volatility on the Turkisheconomy.

OPERATIONAL AND FINANCIAL REVIEW 2008

72

Macro Economic YE 2007 YE 2008 YE 2007 - YE 2008Environment Information Change %TRY / USD RateClosing Rate 1.1647 1.5123 29.8%Average Rate 1.3031 1.2768 (2.0%)

InflationConsumer Price Index 8.4% 10.1% 1.7ppGDP Growth 4.6% 1.1% (3.5pp)

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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 Usageper Subscriber), Blended 76.3 95.9 25.7%

While 1 USD was equal to TRY1.1647 onDecember 31, 2007, 1 USD equaledTRY1.5123 on December 31, 2008. Thusthe Turkish Lira depreciated 29.8%against the US dollar in 2008. However,on a monthly average basis, the TRYappreciated against the USD byapproximately around 2.0%.

During 2008, the Consumer Price Index(CPI) increased by 10.1%. The reason forproviding this information is todemonstrate the impact of exchange ratefluctuations on IFRS financial tables thatTurkcell announced as per NYSErequirements and the key performanceindicators.

74

SubscribersOur subscriber base in Turkey reached37.0 million as of December 31, 2008,increasing 4.5% on annual basis. For thewhole year, net additions stood at 1.6million subscribers in a slower growingmarket.

In 2008, we focused on the post-paidand corporate segment with attractiveacquisition and retention campaigns andpromoted switches from pre-paid to post-paid subscriptions. On the channel front,we made revisions to our existingsubdealer network and the premiumstructure to increase availability ofTurkcell brand and concentrate more onpre-paid subscribers. Of the gross newsubscribers added in 2008, the share ofpost-paid acquisition improved to 15%from 11% a year ago.

YE 2008 - YE 2007Turkcell 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 SubscribersWe had approximately 61.5 million GSMsubscribers as of December 31, 2008.This figure is calculated by taking thenumber of GSM subscribers in Turkcell,its consolidated subsidiaries, andunconsolidated investees.

This figure includes the total number ofGSM subscribers in Astelit, BeST, in ouroperations in the Turkish Republic ofNorthern Cyprus ("Northern Cyprus") andFintur. In the past, when presenting ourtotal group subscribers, we havepresented this figure on a proportionalbasis, adjusted to reflect our ownershipinterest in each subsidiary. We believethat the method of calculation given aboveis a good indicator of our Group's reachand intend to use this new method ofcalculation going forward.

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Churn RateIn 2008, the annual churn rate increasedslightly to 23.8% from 19.9% comparedto a year ago due to our large subscriberbase as well as intensified competitionin the Turkish market throughout the yeardue to MNP. In 2009, we expect a higherchurn rate than in 2008 due to increasingcompetition.

MoUWith the positive effects of the successfultariffs and communication themes, MoUincreased by 25.7% on an annual basisto 95.9 minutes in 2008 compared to76.3 minutes in 2007. In 2009, we believethat usage will increase as our successfulincentives and loyalty programs continue.

ARPUIn 2008, USD based blended ARPUremained almost flat at US$14.5. Post-paid ARPU slightly decreased by 2.1% toUS$36.8 in 2008 compared to a year ago,mainly due to depreciation of TRY againstUSD. In 2008, pre-paid ARPU decreasedslightly by 1.1% to US$9.1 compared toa year ago. This was mainly due to theincrease in usage along with the ongoingSuper Tariff and Bizbize Kampus.

TRY based blended ARPU remained atsimilar levels compared to a year ago atTRY18.4, despite the decreasinginterconnect rates and the dilutive impactof pre-paid subscribers.

Post-paid ARPU in TRY terms decreasedslightly by 4.3% to TRY46.6 in 2008 yearon year mainly due to the increase insubscriptions to minute packages anddata lines.

Pre-paid ARPU slightly decreased by1.7% to TRY11.6 in 2008 compared to ayear ago, mainly due to the effects ofnew tariffs and campaigns.

In 2009, we expect ARPU in TRY termsto remain flat at 2008's levels.

RevenueIn 2008, the increase in our subscriberbase, the partial effect of the increase inusage, upward price adjustments, andthe impact of our consolidatedsubsidiaries contributed positively to ourrevenue compared to a year ago, despitethe sharp decrease in interconnectionrates. For the full year, our revenueincreased by 10.1% to US$6,970.4million. In 2009, we will aim to achieverevenue growth in TRY terms comparedto 2008.

In 2008, an upward price adjustment at a rate of 10.1% was made.

Direct Cost of RevenueIn 2008, direct cost of revenue includingdepreciation and amortization increased9.8% in nominal terms compared to ayear ago. However, as a percentage ofrevenue it remained flat at 48.9%, mainlydue to the decrease in depreciation andamortization expenses as a percentageof revenue, offset by an increase innetwork related expenses, handset costsand wages and salaries.

Selling and Marketing ExpensesIn 2008, selling and marketing expensesincreased by 18.8% in nominal terms toUS$1,351.7 million. As a percentage ofrevenue, selling and marketing expensesincreased by 1.4 percentage points to19.4% in 2008. The primary reasons forthis trend were higher selling expensesstemming from higher acquisitions, andrestructuring in the sales channel, and ahigher pre-paid usage fee payment.

Administrative ExpensesIn 2008, General and administrativeexpense as a percentage of revenueincreased by just 0.4 percentage pointscompared to 2007 to 4.4%, mainly dueto an increase in bad debt expensefollowing the increase in our post-paidsubscriber base.

Profit & Loss Statement YE YE YE 2008-YE 2007(million US$) 2007 2008 % ChangeTotal 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%

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The difference between the total netimpact of A-Tel and the amount nettedoff from selling and marketing expensesamounted to US$48.1 million and isrecorded in the 'share of profit of equityaccounted investees' line of our financialstatements.

Net Finance Income / (Expense)In 2008, we recorded net financial incomeof US$305.3 as opposed to a net financialexpense of US$242.7 million in 2007.The net financial income in 2008 was aresult of absence of high foreign exchangelosses incurred on structured forwardcontracts and translation losses on foreigncurrency long position recognized in 2007as well as our increasing cash balance.

Income Tax ExpenseFor 2008 the total taxation chargeincreased to US$549.8 million fromUS$322.4 million in 2007.

Out of the total tax charge during 2008,US$567.2 million related to current taxcharges and deferred tax income totaledUS$17.4 million.

EBITDAIn 2008, nominal EBITDA decreased by1.8% to US$2,580.3 million while theEBITDA margin decreased from 41.5%in 2007 to 37.0%. The decrease in EBITDAwas due to lower revenue growthcompared to increase in direct cost ofrevenue, resulting from network-relatedexpenses, handset costs offered as partof our loyalty programs, selling andmarketing expenses. In 2009, there arechallenges in our operating environmentnotably we expect the macro environmentto remain volatile and competition toincrease, which may lead to furtherpressure on our margins.

Share of Profit of Equity AccountedInvesteesFor 2008, our share in net income ofunconsolidated investees increased by58.7% to US$103.0 million compared toUS$64.9 million in 2007 mainly due toFintur's successful performance in 2008.

The results of our 50% owned subsidiaryA-Tel impacted two items in our financialstatements. A-Tel's revenue generatedfrom Turkcell, amounting to US$49.1million in 2008, is netted off from theselling and marketing expenses in ourconsolidated financial statements.

Income Tax Expense YE YE YE 2008 - YE 2007(million US$) 2007 2008 % ChangeCurrent 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%

Net IncomeIn 2008, net income increased by 36.0%to US$1,836.8 million compared toUS$1.350.2 million in 2007. This wasmainly due to the positive effect of thedecrease in the translation loss in 2008to US$44.5 million from US$460.8 millionin 2007 and higher interest income ofUS$442.1 million compared to US$308.4in 2007. Net income margin increasedto 26.4% in 2008 from 21.3% comparedto that in 2007.

Total DebtAs of the end of 2008, there was no cashcredit related to Turkcell Group's GSMbusiness in Turkey on our balance sheet.However, at the Group level, there aresome loans obtained from the banks.Currently, our company has no financialinstrument in circulation in the capitalmarkets.

Consolidated debt amounted to US$785.9million as of December 31, 2008.US$541.8 million of this was related toTurkcell's Ukrainian operations. All ofour consolidated debt is at a floating rateand US$655.9 million will mature in lessthan a year.

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For 2008, capital expenditures totaledUS$808.2 million, of which US$155.8million was related to the Ukrainianoperations.

Until the end of the 3rd quarter of 2007,our company benefited from investmentincentives. However, since the investmentincentives were fully utilized, we werenot able to utilize any investmentincentives in 2008.

Turkcell generated free cash flow (cashflow from operating activities minuscapital expenditure) of US$866.2 millionin 2008, a decrease of 37% compared toUS$1,373.1 million in 2007.

Our Company has a relatively high networking capital and a healthy balancesheet. As we aim to take the necessaryprecautions to minimize the impact of

the crisis in the global markets, we planto use financing techniques that spreadthe payables to the vendors related toour infrastructure investments over thelong-term. We also use financial tools totry to manage the exchange rate - interestrisks of the balance sheet by keeping ourforeign-exchange denominated assets atoptimum levels.

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 EquityHolders of the Company 5,793 5,386 (7.0%)

Consolidated Cash Flow YE YE(million US$) 2007 2008EBITDA 2,627.1 2,580.3LESS: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 218.0 349.8Other (244.7) (1,281.1)Net Change in Debt 64.2 111.5Dividend Paid by Turkcell (411.9) (502.3)Cash Generated 1,496.7 164.5Cash Balance 3,095.3 3,259.8

Profitability and Debt Pay-Back Ratios Dec. 31, 2007 Dec. 31, 2008Gross 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%

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

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

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

Resolution of the Board of Directors Related to Obtaining Loans - March 2nd,2009On the Board of Directors meeting dated February 27, 2009 our Board of Directorsdecided to authorize the company management to assure export financing up toUS$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 groupsubsidiaries, if case of need.

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

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

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

Turkcell's CFO Serkan Okandan, assessing the decision regarding submitting a proposalto OTE for Cosmofon and Germanos commented that “We want to further strengthenTurkcell’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 countrieslike Macedonia”.

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

Turkcell's CEO, Süreyya Ciliv stated, "As Turkcell, as today, so in the near future, wewill continue our 3G investments in a manner that enables us to maintain our leadershipin network coverage and quality. In addition to infrastructure works, we work onsolutions that, thanks to the faster mobile internet brought about by 3G, present to ourcustomers 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."

OTHER INFORMATION ABOUT OUROPERATIONS

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

Binding Offer Made to Cosmofon - March 13th, 2009In line with our public disclosure dated February 27, 2009 via its wholly owned subsidiary Beltur B.V, our company made abinding 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 apopulation 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, 2009In 2000 Turkcell filed a lawsuit against Turk Telekom over an additional payment demanded from Turkcell, due to Turk Telekom’sunilateral 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 confiscatedas a result of the unpaid tariff differences on the basis of the lawsuit filed by Turkcell, which was later rejected and an injunctionobtained.

Turkcell stopped Turk Telekom’s this application by temporary injunction and sought a declaration in the Ankara 7th Court offirst 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. Ourcompany will appeal this decision.

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

Board of Directors' Dividend Distribution Offer - March 30th, 2009Information 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, 2009In our disclosure dated March 13th, 2009, we announced that we made a binding offer to OTE, the Greek Operator and mainshareholder 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 beeninformed 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, 2009The media has stated that our company is interested in the sale of HanseNet, an internet service provider in Germany. Ourcompany is not interested in acquiring this company.

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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 theamount of TRY6,360,254.20 in addition to a total of TRY207,171.59 in cash-equivalentdonations made to various schools, societies and organizations.

INVESTOR INFORMATIONCOMPLIANCE WITH CORPORATE

GOVERNANCE PRINCIPLES

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INVESTOR INFORMATION COMPLIANCE WITH CORPORATE GOVERNANCE PRINCIPLES

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 circulationof 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 FinanceHoldings S.A. had signed a share transfer agreement with Nadash International Holdings Inc. (Nadash) that foresees the sale of1,610 Alfa Telecom Turkey Limited (Alfa Telecom Turkey) shares, which corresponds to 32.2% of the total shares, to Nadash; andthat, on the same date, it signed a share transfer agreement with Henri Services Limited (Henri) that foresees the sale of 1,500Alfa Telecom Turkey Limited (Alfa Telecom Turkey) shares, which corresponds to 30% of the total shares, to Henri ServicesLimited (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 CapitalTurkcell Holding A.Ş. 1,122,000,000.238 51.00Çukurova Holding A.Ş. 995,509.429 0.05T. Genel Sigorta A.Ş. 1,558,452.599 0.07Sonera Holding BV 287,632,179.557 13.07MV Holding A.Ş. 51,021,712.590 2.32Müflis Bilka Bilgi Kaynak ve İletişim San. ve Tic. A.Ş. 153,999.575 0.01Publicly Traded* 736,638,146.012 33.48TOTAL 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 ashare that is circulated on the ISE.

Share PerformanceTurkcell shares are listed on the Istanbul Stock Exchange in the form of ordinary shares and on the New York Stock Exchange inthe form of American Depositary Shares (ADS). Currently, two ADSs represent five tradable shares. Turkcell is the only Turkishcompany listed on the NYSE. The nominal value of Turkcell's issued share capital is TRY2,200,000,000 consisting of2,200,000,000 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 6.50New 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

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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 theend of 2008.

Investor RelationsTurkcell 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 sharesales by shareholders.

Turkcell is the first and only Turkish company listed on the NYSE and enjoys all the advantages of being a public company. Sinceits shares are traded on both the US and Turkish stock exchanges, Turkcell has shaped its corporate governance model inaccordance 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 UnitedStates. 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 itsCorporate Governance Principles guide.

In general, these rules apply to transparency, accountability and responsibility in relation to the "good corporate governance" ofcompanies. This issue is of great importance to Turkcell, a company that believes in the value of corporate governance to bringorder 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 andoverseas investors. It also works to translate the company's superior operational performance into market value and to promotethe 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 : investor.relations@turkcell.com.trURL : 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 InternalFraud Management processes were launched at the Corporate Risk Management Department that was established in January2009. These were launched to strengthen the Company's focus on corporate risk management, to make risk managementwidespread for Turkcell and Turkcell Group by developing a methodology, and to centralize operations carried out under variousCompany 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: XNo. 19 reports directly to the Audit Committee, that is made up of the independent members of the Board of Directors, the ChiefExecutive 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 companieshave established an internal control mechanism.

Turkcell Group companies have their own internal control mechanisms that are the responsibility of the management of therespective 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 auditsystem, evaluating and reporting on the effectiveness of the internal control system, evaluating the reliability and accuracy of theinternal 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 verificationprocess 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 teamand 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 ofthe risks or to decrease their possible affects. Here, the goal is to minimize unpleasent surprises, to enable Turkcell to runseamless 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, theCompany prepares detailed action plans for critical risks and applies these plans. These processes are coordinated by RiskManagement 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 00Fax : +90 (212) 317 73 00Web : www.kpmg.com.tr

Board Committees

To date, there are two Board committees: the Corporate Governance Committee and the Audit Committee. These committeesadvise 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 theCorporate Governance Committee, while Mr. Colin J. Williams and Mr. Alexey Khudyakov were elected to the Audit Committee.

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INVESTOR INFORMATION COMPLIANCE WITH CORPORATE GOVERNANCE PRINCIPLES

Corporate Governance CommitteeMembers:Mehmet Bülent Ergin Oleg Malis

The Corporate Governance Committee should assist the Board with the development and implementation of the Company'scorporate 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. TheCommittee should make recommendations to the Boardwhere appropriate, regarding the Company's compensation strategy forBoard members, the Chief Executive Officer, and the Chief Financial Officer. It should also make recommendations to the Boardon 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 investorrelations activities.

Audit CommitteeMembers:Colin J. Williams Alexey Khudyakov

Consistent with the duties imposed on audit committees by the relevant laws and regulations, the main duties of the AuditCommittee 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 performanceand 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 orconsultants 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 uponthe approval of this proposal by the General Assembly. As adopted, Turkcell's general dividend policy is to pay dividends toshareholders with due regard to trends in the Company's operating performance, financial condition, and other factors. TheBoard of Directors intends to distribute cash dividends in an amount of not less than 50% of Turkcell's distributable profits foreach fiscal year, starting with profits for fiscal 2004. However, the payment of dividends will still be subject to the cash flowrequirements of Turkcell, compliance with Turkish law, and the approval of, or amendment by, the Board of Directors and theGeneral 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 providingauthorizations for IMT-2000/UMTS services and infrastructure, our company received a Type A license. As a requirement of thespecifications of the tender, during the Extraordinary Shareholder's Meeting held on January 30th, 2009, our Articles ofAssociation were amended by adding the following phrase to Article 3, entitled "Purpose and Subject of Activity": "To carry outoperations 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 toconvene 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.

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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 andgenerating long-term economic value for the company's shareholders. Toward this end, the company has taken the necessarymeasures 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 necessaryoversight for preparation of this Annual Report which contains the Compliance Report.

SECTION 1SHAREHOLDERS

1.1 Shareholders Relations Unit Representatives of the Turkcell Investor Relations Department, in accordance with present regulations, organize meetings withanalysts 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 thepublic 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 andoperates under the supervision of the Corporate Governance Committee. The Investor Relations Department monitors alldisclosures 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, inaccordance with present regulations, organize meetings with analysts and investors on a regular basis to share developmentsrelated to the Company's strategy and activities, and the market, industry, and the legal environment in which the Companyoperates. 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 publiclyavailable information.

1.2 Use of Right of Gaining Information of the ShareholdersTo increase shareholder accessibility to publicly available information without discrimination, all public announcements aresubmitted in English and Turkish on Turkcell's website, www.turkcell.com.tr, for the use of local and foreign shareholders on anequal 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 andin line with publicly available information.

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

1.3 Information on the General Assembly of ShareholdersThe Ordinary General Assembly of Shareholders was held on April 25, 2008 with a quorum of 69.45%. Also, an ExtraordinaryGeneral Assembly with a meeting quorum of 72.85% was held on January 30, 2009.The participants of the General Assemblyincluded 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 tothe 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 byregistered letter with return receipt, as the law requires. In accordance with the Turkish Commercial Code, applications werereceived 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 mattersadvised by shareholders were duly recorded in the minutes and the minutes of the General Assembly were registered andannounced in the BTTR.

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

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

1.6 Transfer of SharesAlthough 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 writtenapproval by the Telecommunications Authority is required for "actions of gaining or transferring shares which shall result in achange of control."

SECTION 2PUBLIC DISCLOSURE AND TRANSPARENCY

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

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

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

a. Turkish GSM Marketb. Shareholder Structurec. Corporate Governance

i. Board of Directorsii. Corporate Governance Principlesiii. Board of Directors Committeesiv. Dividend Distribution Policyv. Articles of Associationvi. Ethical Rulesvii. Disclosure Policyviii. Corporate Governance Compliance Report

d. Announcementse. Financial and Operational Data

i. Financial Reportsii. Balance Sheet Analysisiii. Income Statement Analysisiv. Cash Flow Analysisv. Key Operational Datavi. Debt Informationvii. Outlookviii. International Operationsix. Investor Kit

f. Financial Calendarg. Share Information

i. Interactive Share Chartsii. Investment Calculatoriii. Ticker Symbolsiv. Analyst Coverage

h. FAQi. 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 CapitalTurkcell Holding A.Ş. 1,122,000,000.238 51.00Çukurova Holding A.Ş. 995,509.429 0.05T. Genel Sigorta A.Ş. 1,558,452.599 0.07Sonera Holding BV 287,632,179.557 13.07MV Holding A.Ş. 51,021,712.590 2.32Müflis Bilka Bilgi Kaynak ve İletişim San. ve Tic. A.Ş. 153,999.575 0.01Publicly Traded* 736,638,146.012 33.48TOTAL 2,200,000,000.000 100.00

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

SECTION 3STAKEHOLDERS

3.1 Informing StakeholdersIn addition to the legislation that is currently in effect, company policies and procedures have been created to inform Companystaff and stakeholders.

3.2 Participation of Stakeholders in ManagementAlthough there is no special provision for the participation of stakeholders in management, relevant information is shared withTurkcell's business partners, staff and other stakeholders through defined and regular meeting (such as staff communicationmeetings, platforms where the staff can communicate their ideas and suggestions, Supplier Day for the supply chain, BusinessPartner 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 highestpriority to recruit and maintain the best personnel. With the aim of realizing this strategy, we implement innovative andpioneering human resources policies.

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

To create a high performance team, as a matter of priority we determine and maintain our skills. To this end, we apply astructured 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 viaalternative development solutions.

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We see our employees as our internal customers and, with the goal of understanding their needs and expectations, we help themgain 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 thecompany in all our operations. In this regard, we conduct annual employee surveys to assess employee satisfaction and loyaltyand take necessary action.

Turkcell reviews its processes and organizational structure on a regular and systematic basis and carries out improvements andrestructuring activities to maintain its competitive and leading stance. Turkcell believes that the most important key todifferentiation and success is to turn individual information into corporate memory and utilize this information accurately andeffectively. 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 believethat it is our priority to provide our employees with a high performance work environment. To his end, we will continue toimplement innovative and pioneering human resources policies.

3.4 Information about Relationships with Customers and SuppliersTurkcell uses an approach in line with global quality standards wherever the company has contact with and/or provides servicesto its customers. The company tests all products and services with the customer's perspective in mind so as to better understandand feel customers' experiences, to determine the inefficiencies in the system, processes, and human resources, and if necessaryto make timely corrective adjustments to systems or processes related to that specific experience. Turkcell also regularlymeasures and analyzes services and its approach throughout business channels to identify areas of improvement and to makeadjustments 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 workingconditions and performance related to suppliers and customers. Additionally, relations with suppliers and customers aregoverned by laws and the Company's "Common values and Ethics" and related regulations.

3.5 Social ResponsibilityIn addition to its contribution to the national economy, Turkcell supports numerous social responsibility projects with the aim ofcontributing to the development of well qualified human resources in our country and adding value to society in a wide range ofareas 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 SupportingModern Life. As part of this project, 10,000 girls who would otherwise be denied educational resources due to a lack of financesare given scholarships. Since 2000, 20,000 students have been given Turkcell scholarships as part of this project. 7,470Snowdrops have graduated from high school, 1,902 have passed the University Entrance Examination, and 363 have graduatedfrom 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 100,000children from 81 Turkish cities to learn more about their country and to grow up as self-confident individuals. The tour thatbegan 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 itsname to Those Running to the Future. In April 2007, we included 38 additional schools in 23 cities in this project, allowing us toprovide 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 the2005-2006 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 thesponsor 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-TurkcellSports Press Seminars all over Anatolia in partnership with the Turkish Sports Columnists' Association. More than a thousandsports 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-profitorganization, for six years. It has also supported the International Jazz Festival for the last nine years and it has been the officialcommunications sponsor of IKSV since 2005. The project to restore Bodrum's antique theatre started in 1998 under theco-sponsorship of Ericsson and Turkcell. After the restoration of the antique Myndos Door and the Ottoman Shipyard werecompleted, the restoration of Bodrum's antique theatre was started in June 2002 as the third leg of the project. The restorationwas completed in one year and the theatre was opened to public. In the field of technology, Turkcell has been aiding thedevelopment of Turkey's IT and telecommunications sectors for 11 years through the support it has given to the CeBIT EurasiaExhibition.

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

Turkcell provides mobile telephone services through a comprehensive network of base stations. For every base station, Turkcelland the company building and equipping the base station perform safety tests. Nevertheless, 107 lawsuits were filed in 2008claiming 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 4BOARD OF DIRECTORS

4.1 Structure and Creation of the Board of Directors and Independent MembersInformation regarding the structure of the Board of Directors can be found in the Investor Relations section of Turkcell's website(www.turkcell.com.tr).

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

Mehmet Emin Karamehmet ChairmanMehmet Bülent Ergin MemberAimo Eloholma MemberTero Erikki Kivisaari MemberOleg Malis MemberAlexey Khudyakov MemberColin J. Williams Member

All the members of the Board of Directors are non-executives. Colin J. Williams, as the independent member of the Board ofDirectors, 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 necessarydischarges and authority in accordance with articles 334 and 335 of the Turkish Commercial Code.

4.2 Qualifications of the Board of DirectorsQualifications for membership on the Board of Directors are described in the Corporate Governance Guidelines. The Guidelinesprovide that the Corporate Governance Committee together with the members of the Board of Directors, annually review theappropriate skills and characteristics required for the Board members in the context of the current structure of the Board. Eachboard member is required to set aside significant time to devote to Board activities, to enhance his/her knowledge of the globaltelecommunications industry and related industries and to annually attend at least 75% of scheduled Board meetings. EachBoard member is encouraged to limit the number of other public company boards on which he or she serves and to be mindful ofhis or her other existing and planned future commitments, so that such other directorships and commitments do not materiallyinterfere with his or her service as an effective and active member of the Company's Board. Additionally, the CorporateGovernance 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 CompanyThe Company's vision and strategic targets are presented in the section entitled "About Turkcell" on the websitewww.turkcell.com.tr as well as in the Annual Report.

4.4 Risk Management and Internal Control MechanismsSince its establishment in 1993, Turkcell İletişim Hizmetleri A.Ş. has been involved in alternative capital markets to fund andsupport 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 onlyaccording to the financial regimes of the area in which the Company is active, but according to the requests and obligations of themarkets 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, asdo all publicly traded companies in the US, as well as with Corporate Governance Principles since it is also listed on the IstanbulStock Exchange. Accordingly, Turkcell has formulated an internal control mechanism for itself and for the consolidated groupcompanies which, in audit scope, are in line with Corporate Governance Principles.

Risk Management, Internal Audit Management, Business Sustainability Management, Information Security Management andInternal Fraud Management processes were introduced at the Corporate Risk Management Department that was established inJanuary 2009.These strengthen the Company's focus on corporate risk management, expand risk management throughoutTurkcell and the Turkcell Group by developing methodology, and they centralize operations carried out under various Companystructures 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: XNo.19 directly reports to the Audit Committee formed by the independent members of the Board of Directors, the Chief ExecutiveOfficer and the Chief Financial Officer.

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

Within the framework of this mechanism, the Internal Audit Department ensures that Turkcell's financial statements as well asGroup companies are reliable and accurate and its activities are in compliance with related laws. The Internal Audit Departmentanalyzes processes to increase the effectiveness and the efficiency of their operations and identifies their existing and potentialrisks 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 andfollowed up as indicated by the findings.

Turkcell formulated its Business Continuity Plans in 2000, involving its Technical operations. In 2004, by broadening its scope, theBusiness Continuity Plan has been positioned as Business Continuity Management in such a way that encompasses all ofTurkcell'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 ourgeographically 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 haveaction plans to back up each other. In cases when a damaged base station cannot be operational within a certain time, a mobilebase station is sent to maintain urgent coverage.

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

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

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

4.7 Prohibition of Carrying Out Transactions with the Company and Prohibition of CompetitionPermission contained in Articles 334 and 335 of the Turkish Commercial Code regarding the prohibition of carrying outtransactions with the Company and competitors has been granted to members of the Board of Directors by the General Assembly.

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4.8 Ethical RulesTurkcell's statement of Common Values and Ethical Rules has been announced and distributed to all Company employees andmanagers. This statement is shared with each new employee during his/her orientation program, and each employee signs aletter 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. Asummary of the Ethical Guidelines are published on the company website, www.turkcell.com.tr, within the Investor Relationssection under Corporate Governance. These rules and guidelines are complementary to other policies currently published or to bepublished 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, whichreports to the Audit Committee. The Committee of Assessment of Turkcell's Common Values and Business Ethics has beenestablished to define, examine, update and develop Turkcell's Common Values and Business Ethics guidelines and to evaluateand resolve potential violations.

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

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

TURKCELL İLETİŞİM HİZMETLERİ A.Ş.AND ITS SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENT AND INDEPENDENT

AUDIT REPORT

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

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

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TURKCELL İLETİŞİM HİZMETLERİ A.Ş. AND ITS SUBSIDIARIESConsolidated Balance Sheet As at 31 December(Amounts expressed in thousands of US Dollars unless otherwise indicated except share amounts)

Note 2008 2007AssetsProperty, 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

EquityShare 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

LiabilitiesLoans 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.

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TURKCELL İLETİŞİM HİZMETLERİ A.Ş. AND ITS SUBSIDIARIESConsolidated 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 10 442,099 308,368 184,015Finance 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.

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TURKCELL İLETİŞİM HİZMETLERİ A.Ş. AND ITS SUBSIDIARIESConsolidated 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.

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TURKCELL İLETİŞİM HİZMETLERİ A.Ş. AND ITS SUBSIDIARIESConsolidated 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 2006Cash 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) 17,053Change 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 activitiesProceeds 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 activitiesPayment 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 1,598,355 808,153Effect 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.

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TURKCELL İLETİŞİM HİZMETLERİ A.Ş. AND ITS SUBSIDIARIESNotes 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 in1994. The address of the Company’s registered office is Turkcell Plaza, Meşrutiyet Caddesi No. 71, 34430 Tepebaşı /Istanbul. It is engaged inestablishing 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 theCompany 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 GSMnetwork and pays the Undersecretariat of Treasury (the “Turkish Treasury”) an ongoing license fee equal to 15% of its gross revenue fromTurkish GSM operations. The Company continues to build and operate its GSM network and is authorized to, among other things, set its owntariffs 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 Authorityregarding the authorization for providing IMT-2000/UMTS services and infrastructure, the Company has been granted the A Type licenseproviding the widest frequency band, at a consideration of EUR 358 million (excluding Value Added Tax (“VAT”) ). Payment will be made in cashfollowing 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 tothe Turkish Ministry as a universal service fund contribution in accordance with Law No: 5369. As a result, starting from 30 June 2005, theCompany 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 andAmerican 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, ownapproximately 37.1% and 13.8%, respectively of the Company’s share capital and are ultimate counterparties to a number of transactions thatare 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 controlover 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 itssubsidiaries (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 financialstatements are prepared as at and for the year ended 31 December 2008.

2. BASIS OF PREPARATION

(a) Statement of complianceThe consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRSs”) as issuedby 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 measurementThe accompanying consolidated financial statements are based on the statutory records, with adjustments and reclassifications for the purposeof fair presentation in accordance with IFRSs as issued by the IASB. They are prepared on the historical cost basis adjusted for the effects ofinflation during the hyperinflationary period lasted by 31 December 2005, except that the following assets and liabilities are stated at their fairvalue: derivative financial instruments and financial instruments classified as available-for-sale. The methods used to measure fair value arefurther discussed in note 4.

(c) Functional and presentation currencyThe consolidated financial statements are presented in US Dollars (“USD”), rounded to the nearest thousand. Moreover, all financial informationexpressed in New Turkish Lira (“TRY”), Euro (“EUR”) and Swedish Krona (“SEK”) have been rounded to the nearest thousand. The functionalcurrency of the Company and its consolidated subsidiaries located in Turkey and Turkish Republic of Northern Cyprus is TRY. The functionalcurrency of Euroasia Telecommunications Holding BV (“Euroasia”) and Financell BV (“Financell”) is USD. The functional currency of East AsianConsortium 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 BelarussianRoubles (“BYR”).

(d) Use of estimates and judgmentsThe preparation of financial statements requires management to make judgments, estimates and assumptions that affect the application ofaccounting 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 inwhich the estimates are revised and in any future periods affected.

107

TURKCELL İLETİŞİM HİZMETLERİ A.Ş. AND ITS SUBSIDIARIESNotes 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 mostsignificant effect on the amounts recognised in the consolidated financial statements are described in notes 4, 7 and 32 and detailed analysiswith respect to accounting estimates and critical judgments of bad debts, useful lives or expected patterns of consumption of the futureeconomic benefits embodied in depreciable assets, income taxes and revenue recognition are provided below:

Key sources of estimation uncertaintyIn 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 policiesCertain critical accounting judgments in applying the Group’s accounting policies are described below:

Allowance for doubtful receivablesThe 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 trendworsen compared to management estimates, allowance for doubtful receivables recognised in consolidated financial statements may not besufficient to cover bad debts.

Useful lives of assetsThe useful economic lives of the Group’s assets are determined by management at the time the asset is acquired and regularly reviewed forappropriateness. The Group defines useful life of its assets in terms of the assets’ expected utility to the Group. This judgment is based on theexperience of the Group with similar assets. In determining the useful life of an asset, the Group also follows technical and/or commercialobsolescence arising on changes or improvements from a change in the market. The useful life of the licenses are based on duration of the soldlicense agreement.

The GSM license that is held by Belarussian Telecom, newly acquired consolidated subsidiary, expires in 2015. According to the Share PurchaseAgreement signed, the State Committee on Property of the Republic of Belarus committed to grant the license from the acquisition date of 26August 2008 for a period of 10 years and such license shall be extended for an additional 10 years for an insignificant consideration. In theconsolidated financial statements, amortization charge is recorded on the assumption that the license will be extended.

Commission feesCommission fees relate to services performed in relation to betting games where the Group acts as an agent in the transaction rather than as aprincipal. In the absence of specific guidance under IFRSs on distinguishing between an agent and a principal, management considered thefollowing 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 recognitionIn 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. Thearrangement consideration is allocated to each deliverable in proportion to the fair value of the individual deliverables.

Income taxesThe calculation of income taxes involves a degree of estimation and judgment in respect of certain items whose tax treatment cannot be finallydetermined 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 thejurisdictions and countries in which they operate. This process involves estimating the actual current tax exposure together with assessingtemporary differences resulting from differing treatment of items, such as deferred revenue and reserves for tax and accounting purposes. TheCompany management assesses the likelihood that the deferred tax assets will be recovered from future taxable income, and to the extent therecovery 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 thetemporary differences can be utilized. Recognition, therefore, involves judgment regarding the future financial performance of the particularlegal 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, andhave been applied consistently by the Group entities.

108

TURKCELL İLETİŞİM HİZMETLERİ A.Ş. AND ITS SUBSIDIARIESNotes 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) SubsidiariesSubsidiaries are entities controlled by the Group. Control exists when the Group has the power to govern the financial and operating policies ofan entity so as to obtain benefits from its activities. In assessing control, potential voting rights that currently are exercisable or convertible aretaken into account. The financial statements of subsidiaries are included in the consolidated financial statements from the date that controlcommences until the date that control ceases. The accounting policies of subsidiaries are changed as necessary to align them with the policiesadopted 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 abinding obligation to fund the losses and is able to make an additional investment to cover the losses. Unless this is the case, the losses areattributed to the Company’s majority interest within the profit for the period. If the subsidiary subsequently reports profits then these profits areallocated 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 areexcluded from the scope of International Financial Reporting Standards No. 3 (“IFRS 3”) “Business Combinations” and are accounted for as ifthe acquisition had occurred at the beginning of the earliest comparative period presented or, if later, at the date that common control wasestablished. The assets and liabilities acquired from entities under common control are recognised at the carrying amounts recognisedpreviously in the Group’s controlling shareholder’s consolidated financial statements. The components of equity of the acquired entities areadded 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. Significantinfluence is presumed to exist when the Group holds between 20 and 50 percent of the voting power of another entity. Joint ventures are thoseentities over whose activities the Group has joint control, established by contractual agreement and requiring unanimous consent for strategicfinancial and operating decisions. Associates and jointly controlled entities (equity accounted investees) are accounted for using the equitymethod and are initially recognised at cost. The Group’s investment includes goodwill identified on acquisition, net of any accumulatedimpairment loss. The consolidated financial statements include the Group’s share of the income and expenses and equity movements of equityaccounted investees, after adjustments to align the accounting policies with those of the Group, from the date that significant influence or jointcontrol commences until the date that significant influence or joint control ceases. When the Group’s share of losses exceeds its interest in anequity accounted investee, the carrying amount of that interest (including any long-term investments) is reduced to nil and recognition offurther losses is discontinued except to the extent that the Group has an obligation or has made payments on behalf of the investee. The Group’sequity 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 consolidationIntragroup balances and transactions, and any unrealised income and expenses arising from intragroup transactions, are eliminated inpreparing the consolidated financial statements. Unrealised gains arising from transactions with equity accounted investees are eliminatedagainst the investment to the extent of the Group’s interest in the investee. Unrealised losses are eliminated in the same way as unrealisedgains, but only to the extent that there is no evidence of impairment.

(v) Minority interestsWhere a put option is granted by the Group to the minority shareholders in existing subsidiaries that provides for settlement in cash or inanother financial asset, the Group recognised a liability for the present value of the estimated exercise price of the option. The interests of theminority shareholders that hold such put options are derecognised when the financial liability is recognised. The corresponding interestsattributable to the holder of the puttable minority interests are presented as attributable to the equity holders of the parent and not asattributable to those minority shareholders. The difference between the put option liability recognised and the amount of minority interestderecognised is recorded under equity. Subsequent changes in the fair value of the put options granted to the minority shareholders in existingsubsidiaries 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 thetransactions. Monetary assets and liabilities denominated in foreign currencies at the reporting date are retranslated to the functional currencyat the exchange rate at that date. Foreign currency differences arising on translation of foreign currency transactions are recognised in theincome statement. The foreign currency gain or loss on monetary items is the difference between amortised cost in the functional currency atthe beginning of the period, adjusted for effective interest and payments during the period, and the amortised cost in foreign currencytranslated 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 functionalcurrency at the exchange rate at the date that the fair value was determined. Foreign currency differences arising on retranslation arerecognised in profit or loss, except for differences arising on the retranslation of available-for-sale equity instruments, which are recogniseddirectly in equity.

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

109

TURKCELL İLETİŞİM HİZMETLERİ A.Ş. AND ITS SUBSIDIARIESNotes 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, theGroup’s date of transition to IFRSs, such differences have been recognized in the foreign currency translation reserve. When a foreign operationis 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 isneither planned nor likely in the foreseeable future, are considered to form part of a net investment in a foreign operation and are recogniseddirectly 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 theentities 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 thepresentation 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 sheetdate. 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 operationsForeign currency differences arising from the translation of the net investment in foreign operations are recognized in foreign currencytranslation reserve. They are transferred to the income statement upon disposal of the foreign operations.

(c) Financial instruments(i) Non-derivative financial instrumentsNon-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, anydirectly 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 partof 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 investmentsIf the Group has the positive intent and ability to hold debt securities to maturity, then they are classified as held-to-maturity. Held-to-maturityinvestments are measured at amortised cost using the effective interest method, less any impairment losses.

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

• Financial assets at fair value through profit or lossAn 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 initialrecognition. Financial instruments are designated at fair value through profit or loss if the Group manages such investments and makespurchase and sale decisions based on their fair value in accordance with the Group’s risk management or investment strategy. Upon initialrecognition, attributable transaction costs are recognised in profit or loss when incurred. Financial instruments at fair value through profit orloss are measured at fair value, and changes therein are recognised in profit or loss.

• Estimated exercise price of put optionsUnder the terms of certain agreements, the Group is committed to acquire the interests owned by minority shareholders in consolidatedsubsidiaries, 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 thebalance sheet for the present value of the estimated option redemption amount. The Group accounted such transactions under the anticipatedacquisition method and the interests of minority shareholders that hold such put option are derecognised when the financial liability isrecognised. The Group accounted the difference between the amount recognised initially for the exercise price of the put option and thecarrying amount of minority in equity.

• OtherOther non-derivative financial instruments are measured at amortised cost using the effective interest method, less any impairment losses.

110

TURKCELL İLETİŞİM HİZMETLERİ A.Ş. AND ITS SUBSIDIARIESNotes 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 instrumentsThe Group holds derivative financial instruments to hedge its foreign currency risk exposures arising from operational, financing and investingactivities. In accordance with its treasury policy, the Group engages in forward and option contracts. However, these derivatives do not qualifyfor 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 hostcontract and the embedded derivative are not closely related, b) a separate instrument with the same terms as the embedded derivative wouldmeet 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 toinitial recognition, derivatives are measured at fair value, and changes therein are recognized in profit or loss.

(d) Property, plant and equipment (i) Recognition and measurementItems of property, plant and equipment are stated at cost adjusted for the effects of inflation during the hyperinflationary period lasted by 31December 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 ofmaterials and direct labor, any other costs directly attributable to bringing the asset to a working condition for its intended use, and the costs ofdismantling and removing the items and restoring the site on which they are located, if any. Borrowing costs related to the acquisition orconstructions 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, plantand equipment.

Gains/losses on disposal of an item of property, plant and equipment are determined by comparing the proceeds from disposal with thecarrying amount of property, plant and equipment and are recognized net within other income or other expenses in profit or loss.

(ii) Subsequent costsThe 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 thefuture economic benefits embodied within the part will flow to the Group and its cost can be measured reliably. The carrying amount of thereplaced item is derecognised. The costs of the day-to-day servicing of property, plant and equipment are recognised in profit or loss asincurred.

(iii) DepreciationDepreciation 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, plantand 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 yearsNetwork infrastructure 3 – 8 yearsEquipment, fixtures and fittings 4 – 5 yearsMotor vehicles 4 – 5 yearsCentral betting terminals 1 – 10 yearsLeasehold improvements 5 years

Depreciation methods, useful lives and residual values are reviewed at least annually unless there is a triggering event.

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

(i) GoodwillGoodwill 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, liabilitiesand 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 isincluded in the carrying amount of the investment.

111

TURKCELL İLETİŞİM HİZMETLERİ A.Ş. AND ITS SUBSIDIARIESNotes 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 expenditureSubsequent expenditure is capitalised only when it increases the future economic benefits embodied in the specific asset (that is purchasedfrom independent third parties) to which it relates. All other expenditure, including expenditure on internally generated goodwill and brands, isrecognised in profit or loss as incurred. Capitalized costs generally relate to the application of development stage; any other costs incurredduring the pre and post-implementation stages, such as repair, maintenance or training, are expensed as incurred. Subsequent expenditures ofthe Company do not relate to research and development activities.

iii) AmortizationAmortization is recognized in the profit or loss on a straight line basis over the estimated useful lives of intangible assets unless such usefullives are indefinite from the date that they are available for use. The estimated useful lives for the current and comparative periods are asfollows:

Computer software 3 – 8 yearsGSM and other telecommunications license 3 – 25 yearsTransmission lines 10 yearsCentral betting system operating right 1 yearCustomer base 2 – 8 yearsBrand name 10 yearsCustoms duty and VAT exemption right 4.4 years

(f) Leased assetsLeases in terms of which the Group assumes substantially all the risks and rewards of ownership are classified as finance leases. Upon initialrecognition, 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) InventoriesInventories are measured at the lower of cost or net realizable value. Net realisable value is the estimated selling price in the ordinary course ofbusiness, less selling expenses. The cost of inventory is determined using the weighted average method and includes expenditure incurred inacquiring the inventories and bringing them to their existing location and condition. As at 31 December 2008, inventories mainly consist ofsimcards, scratch cards and handsets.

(h) Impairment(i) Financial assetsA financial asset is assessed at each reporting date to determine whether there is any objective evidence that it is impaired. A financial asset isconsidered to be impaired if objective evidence indicates that one or more events have had a negative effect on the estimated future cash flowsof that asset.

An impairment loss in respect of a financial asset measured at amortised cost is calculated as the difference between its carrying amount andthe present value of the estimated future cash flows discounted at the original effective interest rate. An impairment loss in respect of anavailable-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 collectivelyin 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 recognisedpreviously 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. Forfinancial assets measured at amortised cost and available-for-sale financial assets that are debt securities, the reversal is recognised in profit orloss. For available-for-sale financial assets that are equity securities, the reversal is recognised directly in equity.

(ii) Non-financial assetsThe carrying amounts of the Group’s non-financial assets, other than inventories, and deferred tax assets are reviewed at each reporting date todetermine 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 assessingvalue in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current marketassessments of the time value of money and the risks specific to the asset. For the purpose of impairment testing, assets are grouped togetherinto the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of otherassets 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 toreduce the carrying amount of any goodwill allocated to the units and then to reduce the carrying amount of the other assets in the unit (groupof units) on a pro rata basis.

112

TURKCELL İLETİŞİM HİZMETLERİ A.Ş. AND ITS SUBSIDIARIESNotes 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 assessedat each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been achange in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carryingamount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss hadbeen recognised.

(i) Employee benefits(i) Retirement pay liabilityIn accordance with existing labor law in Turkey, the Company and its subsidiaries in Turkey are required to make lump-sum payments toemployees who have completed one year of service and whose employment is terminated without cause or who retire, are called up for militaryservice 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 fullUS$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 asat 31 December 2008)) per year of employment at the rate of pay applicable at the date of retirement or termination. Reserve for retirement payis computed and reflected in the consolidated financial statements on a current basis. The reserve has been calculated by estimating the presentvalue of future probable obligation of the Company and its subsidiaries in Turkey arising from the retirement of the employees.

(ii) Defined contribution plansA defined contribution plan is a post-employment benefit plan under which an entity pays fixed contributions into a separate entity and willhave no legal or constructive obligation to pay further amounts. Obligations for contributions to defined contribution plans are recognised as anemployee 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 consolidatedcompanies that initiated defined contribution retirement plan are required to contribute a specified percentage of payroll costs to the retirementbenefit scheme to fund the benefits. The only obligation of the companies with respect to the retirement plan is to make the specifiedcontributions.

(j) ProvisionsA 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 theexpected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, therisks specific to the liability.

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

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

(k) RevenueRevenues 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 revenuesand 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 Groupdoes 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 bundledservices and products involve consideration in the form of fixed fee or a fixed fee coupled with continuing payment stream. Loyalty programs forboth post-paid and pre-paid services may be bundled with other services. Deliverables are accounted separately where a market for eachdeliverable exists and if the recognition criterion is met individually. Costs associated with each deliverable are recognized at the time ofrevenue 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 havebeen transferred to the buyer, collection is probable, the associated costs and possible return of goods can be estimated reliably, there is nocontinuing 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 gamesstarting from 15 March 2007 and 4.3% commission recognized based on the para-mutual and fixed odds betting games operated on CentralBetting System.

113

TURKCELL İLETİŞİM HİZMETLERİ A.Ş. AND ITS SUBSIDIARIESNotes 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 grosstakings. In relation to the new contract signed with Spor Toto Teşkilat Müdürlüğü (“Spor Toto”) on 29 August 2008, commission rate applicablewill decrease to 1.4% effective from March 2009. Commission revenues are recognized at the time all the services related with the games arefully rendered. Under the head agency agreement, Inteltek Internet Teknoloji Yat›r›m ve Dan›şmanl›k A.Ş. (“Inteltek”) is obliged to undertakeany 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 feesare 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 recognizedupfront 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 incentivesreceived 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 outstandingliability. The finance expense is allocated to each period during the lease term so as to produce a constant periodic rate of interest on theremaining balance of the liability.

(m) Finance income and expensesFinance income comprises interest income on funds invested (including available-for-sale financial assets), late payment interest income, gainson 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 onderivative 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 financialassets at fair value through profit or loss and impairment losses recognised on financial assets. Borrowing costs that are recognised in profit orloss 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 extentthat the Group may be prevented from fully pursuing its own interests. For reporting purposes, investee companies and their shareholders, keymanagement personnel, shareholders of the Group and the companies that the shareholders have a relationship with are considered to berelated 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 toitems 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 reportingdate, 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 andliabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for the followingtemporary differences: the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neitheraccounting nor taxable profit, and differences relating to investments in subsidiaries and jointly controlled entities to the extent that theyprobably will not reverse in the foreseeable future. Deferred tax is measured at the tax rates that are expected to be applied to the temporarydifferences when they reverse, based on the laws that have been enacted or substantively enacted by the reporting date. Deferred tax assets andliabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied by thesame 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 basisor 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 differencecan be utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that therelated tax benefit will be realised.

(p) Earnings per shareThe Group presents basic earnings per share (“EPS”) data for its ordinary shares. Basic EPS is calculated by dividing the profit or lossattributable 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.

114

TURKCELL İLETİŞİM HİZMETLERİ A.Ş. AND ITS SUBSIDIARIESNotes 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 reportingA segment is a distinguishable component of the Group that is engaged either in providing related products or services (business segment) or inproviding products or services within a particular economic environment (geographical segment), which is subject to risks and returns that aredifferent from those of other segments. Segment information is presented in respect of the Group’s business and geographical segments. TheGroup’s primary format for segment reporting is based on geographical segment and secondary segment reporting is based on businesssegments.

Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonablebasis. Unallocated items comprise mainly investments and related revenue, loans and borrowings and related expenses and income tax assetsand liabilities.

Segment capital expenditure is the total cost incurred during the period to acquire property, plant and equipment, and intangible assets otherthan goodwill.

(r) New standards and interpretations not yet adoptedA number of new standards, amendments to standards and interpretations are not yet effective at 31 December 2008, and have not beenapplied in preparing these consolidated financial statements:

• IFRS 8 “Operating Segments” introduces the “management approach” to segment reporting. IFRS 8, which becomes mandatory for theGroup’s 2009 consolidated financial statements, will require the disclosure of segment information based on the internal reports regularlyreviewed 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 costsdirectly attributable to the acquisition, construction or production of a qualifying asset as a part of the cost of that asset. The revised IAS 23 willbecome 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 loyaltyprogrammes for their customers. It relates to customer loyalty programmes under which the customer can redeem credits for awards such asfree or discounted goods or services. IFRIC 13, which becomes mandatory for the Group’s 2009 consolidated financial statements, is notexpected 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 asowners. Total comprehensive income may be presented in either a single statement of comprehensive income (effectively combining both theincome statement and all non-owner changes in equity in a single statement), or in an income statement and a separate statement ofcomprehensive income. The revised standard does not change the recognition, measurement or disclosure of transactions and events that arerequired by other IFRS’s. Revised IAS 1, which becomes mandatory for the Group’s 2009 consolidated financial statements, is expected to havea 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 andliabilities 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 thereforethere 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 theGroup in a subsidiary, while maintaining control, to be recognised as an equity transaction. When the Group loses control of a subsidiary, anyinterest retained in the former subsidiary will be measured at fair value with the gain or loss recognised in profit or loss. The amendments toIAS 27, which become mandatory for the Group’s 2010 consolidated financial statements, are not expected to have a significant impact on theconsolidated financial statements.

• Amendment to IFRS 2 “Share-based Payment – Vesting Conditions and Cancellations” clarifies the definition of vesting conditions, introducesthe concept of non-vesting conditions, requires non-vesting conditions to be reflected in grant-date fair value and provides the accountingtreatment for non-vesting conditions and cancellations. The amendments to IFRS 2 will become mandatory for the Group’s 2009 consolidatedfinancial 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 Instrumentsand Obligations Arising on Liquidation requires puttable instruments, and instruments that impose on the entity an obligation to deliver toanother 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. Theamendments, which become mandatory for the Group’s 2009 consolidated financial statements, with retrospective application required, are notexpected to have any impact on the consolidated financial statements.

115

TURKCELL İLETİŞİM HİZMETLERİ A.Ş. AND ITS SUBSIDIARIESNotes 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 NetInvestment in a Foreign Operation”. IFRIC 16 applies to an entity that hedges the foreign currency risk arising from its net investments in foreignoperations and wishes to qualify for hedge accounting in accordance with IAS 39. It does not apply to other types of hedge accounting. Theinterpretation is effective for annual periods beginning on or after 1 October 2008 and is not expected to have any effect on the consolidatedfinancial statements.

• The IFRIC issued on 3 July 2008 an Interpretation, IFRIC 15 “Agreements for the Construction of Real Estate”. The Interpretation willstandardize accounting practice across jurisdictions for the recognition of revenue among real estate developers for sales of units, such asapartments or houses before construction is complete. The Interpretation is effective for annual periods beginning or after 1 January 2009 andis 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 toillustrate 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 July2009 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, andto recognise in profit or loss the difference between the fair value of the assets distributed and their carrying amounts. IFRIC 17 providesguidance on when and how a liability for certain distributions of non-cash assets is recognised and measured, and how to account forsettlement of that liability. Transactions within its scope will need to be measured at fair value. IFRIC 17 is effective for annual periodsbeginning on or after July 2009; earlier application is permitted only if IFRS 3 Business Combinations (2008), IAS 27 Consolidated and SeparateFinancial 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) forentities that receive such contributions from their customers. IFRIC 18 applies prospectively to transfers of assets from customers received on orafter July 2009; earlier application is permitted provided that the necessary valuations and other information were obtained at the time thatthose 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 assetsand liabilities. Fair values have been determined for measurement and/or disclosure purposes based on the following methods. Whenapplicable, 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 equipmentThe fair value of property, plant and equipment recognised as a result of a business combination is based on market values. The market value ofproperty is the estimated amount for which a property could be exchanged on the date of valuation between a willing buyer and a willing sellerin 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 assetsThe 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 brandbeing owned. The fair value of customer base acquired in the Superonline business combination are valued using the multi-period excessearnings method, whereby the subject asset is valued after deducting a fair return on all other assets that are part of creating the related cashflows.

The fair value of custom duty and VAT exemption agreement in the Belarussian Telecom business combination is based on the incremental cashflows 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 valuationanalysis.

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 theassets.

(iii) Investments in equity and debt securitiesThe fair value of financial assets at fair value through profit or loss, held-to-maturity investments and available-for-sale financial assets isdetermined by reference to their quoted bid price or over the counter market price at the reporting date. The fair value of held-to-maturityinvestments 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 atthe market rate of interest at the reporting date.

116

TURKCELL İLETİŞİM HİZMETLERİ A.Ş. AND ITS SUBSIDIARIESNotes 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) DerivativesThe fair value of forward exchange contracts and option contracts are based on their listed market price, if available. If a listed market price isnot available, then fair value is estimated by discounting the difference between the contractual forward price and the current forward price forthe residual maturity of the contract using a risk-free interest rate (based on government bonds) or option pricing models.

(vi) Non-derivative financial liabilitiesFair 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 tosimilar lease agreements.

(vii) Exercise price of financial liability related to minority share put optionThe Group measures the estimated exercise price of the financial liability originating from put options granted to minorities as the present valueof estimated option redemption amount. Present value of the estimated option redemption amount is based on the fair value of estimation forthe 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 thendiscounted 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 formeasuring 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 andcontrols, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes inmarket 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 inTurkey. Consequently, the depreciation of TRY against USD and EUR was 29.8% and 25.2%, respectively as at 31 December 2008 whencompared to the exchange rates as at 31 December 2007. Please refer to note 29 for additional information on the Group’s exposure to thisturmoil.

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 contractualobligations, 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 inrespect of financial assets. Also, the Group may demand letters of guarantee from third parties related to certain projects or contracts. TheGroup 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, maturityand existence of previous financial difficulties. Trade receivables and accrued service income are mainly related to the Group’s subscribers. TheGroup 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 placeto 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 carryingamount of each financial asset in the balance sheet.

117

TURKCELL İLETİŞİM HİZMETLERİ A.Ş. AND ITS SUBSIDIARIESNotes 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 fromsubscribers. This allowance includes the specific loss component that relates to individual subscribers exposures, and adjusted for a generalprovision which is determined based on historical data of payment statistics. Impairment loss as a percentage of revenues represented 0.9% ofrevenues for the year ended 31 December 2008. If impairment loss as a percentage of revenues increased to 1.5% of revenues, the impairmentloss 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 managingliquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal andstressed conditions, without incurring unacceptable losses or risking damage to the Group’s reputation. Typically, the Group ensures that it hassufficient 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’sincome or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market riskexposures within acceptable parameters, while optimising the return on risk.

Currency riskThe Group is exposed to currency risk on certain revenues such as roaming revenues, purchases and certain operating costs such as roamingexpenses and network related costs and resulting receivables and payables, borrowings, deferred payments related to the acquisition ofBelarussian Telecom and financial liability in relation to put option for the acquisition of minority shares of Belarussian Telecom that aredenominated 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. TheGroup 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 withrespect to the currency risk arising from the net assets as those net investments are considered to be long-term in nature.

Interest rate riskThe 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’sinternal 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. Segmentassets 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 thetelecommunications business.

Commission fees are the type of service only included in the betting business.

118

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120

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121

TURKCELL İLETİŞİM HİZMETLERİ A.Ş. AND ITS SUBSIDIARIESNotes 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 TelecomOn 29 July 2008, Beltel Telekomünikasyon Hizmetleri A.Ş. (“Beltel”) signed a Share Purchase Agreement (“SPA”) to acquire 80% stake inBelarussian Telecom, which is specialized in rendering of services using GSM Technologies. On 26 August 2008, the control over BelarussianTelecom 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 on31 December 2009 and 31 December 2010, respectively. An additional payment of US$100,000 will be made to the seller when BelarussianTelecom 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 theaccompanying consolidated financial statements. If the acquisition had occured on 1 January 2008, management estimates that consolidatedrevenue 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 5,956 179,873Intangible assets 13 24,340 182,370 206,710Other assets 4,061 - 4,061Cash and cash equivalents 24 - 24Loans 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 177,322 139,185 316,507Share of the Company on net identifiable assets and liabilities (80%) 253,205Goodwill on acquisition 285,857

Consideration paid, satisfied in cash (300,000)Cash acquired 24Net 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 minorityinterest (note 23).

The difference amounting to US$12,302 between the amount recognised initially for the exercise price of the put option and the carryingamount 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 fairvalues).

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

Acquisition of Superonline and disposal of Bilyoner sharesOn 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 ofBilyoner.

122

TURKCELL İLETİŞİM HİZMETLERİ A.Ş. AND ITS SUBSIDIARIESNotes 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 theaccompanying consolidated financial statements. If the acquisition had occured on 1 January 2008, management estimates that consolidatedrevenue 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) 777Intangible assets 13 117 10,078 10,195Other assets 8,159 - 8,159Cash and cash equivalents 510 - 510Total 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 510Cash 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 2006Communication 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 EXPENSES2008 2007 2006

Wages and salaries (*) 501,327 385,192 262,198Increase in liability for long-service leave 8,083 8,487 5,736Contributions to defined contribution plans 4,182 1,253 1,014

513,592 394,932 268,948

* Wages and salaries include compulsory social security contributions.

123

TURKCELL İLETİŞİM HİZMETLERİ A.Ş. AND ITS SUBSIDIARIESNotes 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 December2008, 2007 and 2006, respectively.

11. INCOME TAX EXPENSE 2008 2007 2006

Current tax expenseCurrent period (567,169) (412,521) (310,665)

(567,169) (412,521) (310,665)

Deferred tax benefitOrigination and reversal of temporary differences 14,893 56,769 14,036Benefit of investment incentive recognized 2,518 31,369 29,959Utilisation of previously unrecognised tax losses - 1,965 6,237Reduction 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 rateThe reported income tax expense for the year ended 31 December 2008, 2007 and 2006 are different than the amounts computed by applyingthe 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 1,319,248 832,918Total income tax expense 549,758 322,418 413,242Profit excluding income tax 2,304,820 1,641,666 1,246,160

124

TURKCELL İLETİŞİM HİZMETLERİ A.Ş. AND ITS SUBSIDIARIESNotes 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 2006Income 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)% 8,954Tax exempt income - 6,178 (1)% 9,724 (1)% 7,703Non deductible expenses 2% (42,206) 2% (25,118) 1% (13,452)Tax incentives - 2,518 (2)% 31,369 (2)% 29,959Change in tax rate - - - - 12% (152,809)Recognition of previously unrecognized tax losses - - - 1,965 (1)% 6,237Unrecognized 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) - 1,627Total 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 relatedtaxable 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 taxableprofit 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 definitiveagreement on tax assessments. Companies file their tax returns at the end of April following the close of the accounting year to which theyrelate. Tax authorities may, however, examine such returns and the underlying accounting records and may revise assessments within fiveyears. 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-deductibleexpenses, 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 profitdistribution via transfer pricing”. The General Communiqué on disguised profit distribution via Transfer Pricing, dated 18 November 2007 setsdetails 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 inaccordance 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.

125

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127

TURKCELL İLETİŞİM HİZMETLERİ A.Ş. AND ITS SUBSIDIARIESNotes 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 assetsThe Group leases equipment under a number of finance lease agreements. At the end of each of the lease period, the Group has the option topurchase 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 constructionConstruction 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 December2007: 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 25years with a carrying amount of US$433,280 as at 31 December 2008 (31 December 2007: US$602,070). The amortization period of the licensewill end in 2023.

Effects of Balance at movements Balance at1 January in exchange 31 December

Cost 2007 Additions Disposals Transfers rates 2007GSM and other telecommunication operating licenses 902,427 29,972 - 16,636 168,520 1,117,555Computer Software 1,565,334 13,391 (3,472) 188,137 309,381 2,072,771Transmission Lines 31,286 1,917 - - 6,471 39,674Central Betting System Operating Right 4,038 55 - - 835 4,928Customer Base 1,255 - - - 260 1,515Other 84 245 - 20 (254) 95Construction in progress 47,565 161,405 - (204,793) - 4,177Total 2,551,989 206,985 (3,472) - 485,213 3,240,715

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

128

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2-

24,6

12(5

2)91

,185

(254

,225

)98

6,44

7Co

mpu

ter

Softw

are

2,07

2,77

11,

958

(585

)15

8,75

2(1

,478

)68

0(4

88,8

34)

1,74

3,26

4Tr

ansm

issi

on L

ines

39,6

7487

7-

--

-(9

,120

)31

,431

Cent

ral B

ettin

g Sy

stem

Ope

ratin

g Ri

ght

4,92

81,

576

(9)

113

--

(1,1

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5,47

6B

rand

nam

e-

--

--

4,65

5-

4,65

5Cu

stom

er B

ase

1,51

5-

--

-5,

204

(349

)6,

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Cust

oms

duty

and

VA

T ex

empt

ion

righ

t-

--

--

51,1

01-

51,1

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oodw

ill-

--

--

244,

642

-24

4,64

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ther

951,

177

(36)

-(6

)21

827

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718

Cons

truc

tion

in p

rogr

ess

4,17

718

0,25

9-

(183

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)-

18,2

183,

329

22,5

06To

tal

3,24

0,71

519

3,21

9(6

30)

-(1

,536

)41

5,90

3(7

50,0

61)

3,09

7,61

0

Accu

mul

ated

Am

ortiz

atio

n

GSM

and

oth

er te

leco

mm

unic

atio

n op

erat

ing

licen

ses

441,

581

57,0

20-

-(3

8)-

(99,

886)

398,

677

Com

pute

r So

ftwar

e1,

390,

791

180,

044

(527

)-

(1,0

36)

-(3

56,3

29)

1,21

2,94

3Tr

ansm

issi

on L

ines

26,7

853,

533

--

--

(6,7

33)

23,5

85Ce

ntra

l Bet

ting

Syst

em O

pera

ting

Righ

t4,

576

361

(3)

--

-(1

,108

)3,

826

Bra

nd n

ame

-13

9-

--

-(2

3)11

6Cu

stom

er B

ase

1,51

519

4-

--

-(3

72)

1,33

7Cu

stom

s du

ty a

nd V

AT

exem

ptio

n ri

ght

-4,

628

--

--

(757

)3,

871

Goo

dwill

--

--

--

--

Oth

er64

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0)-

(2)

-26

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0To

tal

1,86

5,31

224

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5(5

60)

-(1

,076

)-

(464

,946

)1,

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Tota

l int

angi

ble

asse

ts1,

375,

403

(52,

766)

(70)

-(4

60)

415,

903

(285

,115

)1,

452,

895

Am

ortiz

atio

n ex

pens

es fo

r th

e ye

ar e

nded

31

Dec

embe

r 20

08, 2

007

and

2006

are

US$

245,

985,

US$

260,

062

and

US$

231,

480,

res

pect

ivel

y.

129

TURK

CELL

İLET

İŞİM

HİZ

MET

LERİ

A.Ş

. AN

D IT

S SU

BSI

DIA

RIES

Not

es T

o Th

e Co

nsol

idat

ed F

inan

cial

Sta

tem

ents

As

At A

nd F

or T

he Y

ear

Ende

d 31

Dec

embe

r(A

mou

nts

expr

esse

d in

thou

sand

s of

US

Dol

lars

unl

ess

othe

rwis

e in

dica

ted

exce

pt s

hare

am

ount

s)

14. E

QU

ITY

ACCO

UN

TED

INVE

STEE

S

The

Gro

up’s

sha

re o

f pro

fit in

its

equi

ty a

ccou

nted

inve

stee

s fo

r th

e ye

ar e

nded

31

Dec

embe

r 20

08, 2

007

and

2006

are

US$

102,

990,

US$

64,9

06 a

nd U

S$78

,616

, res

pect

ivel

y. S

umm

ary

finan

cial

info

rmat

ion

for

equi

ty a

ccou

nted

inve

stee

s ad

just

ed fo

r th

e ac

coun

ting

polic

y di

ffere

nces

for

the

som

e ev

ents

und

er s

imila

r ci

rcum

stan

ces

and

not a

djus

ted

for

the

perc

enta

ge o

wne

rshi

p he

ldby

the

Gro

up is

as

follo

ws:

Curr

ent

Non

-cur

rent

Tota

lCu

rren

tN

on-c

urre

nt

Tota

lO

wne

rshi

pAs

sets

Asse

tsAs

sets

Liab

ilitie

sLi

abili

ties

Liab

ilitie

s31

Dec

embe

r 20

08Fi

ntur

(ass

ocia

te)

41.4

5%49

2,58

71,

786,

728

2,27

9,31

544

3,80

896

2,82

31,

406,

631

A-T

el (j

oint

ven

ture

)*50

.00%

73,9

2420

7,34

228

1,26

622

,157

44,9

2467

,081

566,

511

1,99

4,07

02,

560,

581

465,

965

1,00

7,74

71,

473,

712

31 D

ecem

ber

2007

Fint

ur (a

ssoc

iate

)41

.45%

418,

485

1,39

0,36

11,

808,

846

235,

264

31,3

5526

6,61

9A

-Tel

(joi

nt v

entu

re)*

50.0

0%85

,473

287,

790

373,

263

15,9

3957

,707

73,6

4650

3,95

81,

678,

151

2,18

2,10

925

1,20

389

,062

340,

265

Dire

ct c

ost

Prof

it fo

r th

eRe

venu

eof

rev

enue

peri

od20

08Fi

ntur

(ass

ocia

te)

1,82

3,09

5(7

39,4

10)

364,

545

A-T

el (j

oint

ven

ture

)*98

,129

(83,

128)

1,88

81,

921,

224

(822

,538

)36

6,43

320

07Fi

ntur

(ass

ocia

te)

1,48

6,39

0(6

09,4

94)

262,

850

A-T

el (j

oint

ven

ture

)*92

,791

(95,

033)

7,05

81,

579,

181

(704

,527

)26

9,90

820

06Fi

ntur

(ass

ocia

te)

1,16

1,43

2(4

63,2

77)

194,

790

A-T

el (j

oint

ven

ture

)**

31,4

72(4

,868

)24

,208

1,19

2,90

4(4

68,1

45)

218,

998

* Fi

gure

s m

entio

ned

in th

e ab

ove

tabl

e in

clud

es fa

ir v

alue

adj

ustm

ents

that

aro

se d

urin

g ac

quis

ition

of A

-Tel

.**

Sin

ce A

-Tel

was

acq

uire

d in

Aug

ust 2

006,

sum

mar

y fin

anci

al in

form

atio

n of

A-T

el is

giv

en fo

r th

e fiv

e m

onth

s en

ded

31 D

ecem

ber

2006

.

130

TURKCELL İLETİŞİM HİZMETLERİ A.Ş. AND ITS SUBSIDIARIESNotes 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 December2007: 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 ofUS$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% ownedconsolidated subsidiary of Fintur, was completed. The minority shareholders in Azercell acquired the 35.7% shares of Republic of Azerbaijanincreasing their effective ownership in Azercell to 49%. One of the minority shareholders was also granted a put option, giving the shareholderthe 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 minorityinterest. The difference between the present value of the estimated option redemption amount and the derecognized minority interestamounting to US$662,534 is accounted under equity, in accordance with the Group’s accounting policy. As a result of this, the Group’s investment 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 accordinglythe 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 31December 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 Carryingincorporation (%) 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 27June 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 from8.23% 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 theseequity 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 1,738Available-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 ofUS$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 2007VAT 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

131

TURKCELL İLETİŞİM HİZMETLERİ A.Ş. AND ITS SUBSIDIARIESNotes 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 minimumconsideration.

17. DEFERRED TAX ASSETS AND LIABILITIES

Unrecognised deferred tax assetsDeferred tax assets have not been recognised in respect of the following items:

2008 2007Deductible temporary differences 4,841 457Tax losses 125,875 48,604Total 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 taxreturns on a consolidated basis. Therefore, deferred tax assets have not been recognised in respect of these items resulting from certainconsolidated subsidiaries because it is not probable that future taxable profit will be available against which the Group can utilise the benefitstherefrom.

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

Year Originated Amount Expiration Date2004 1,097 20092005 1,089 20102006 4,191 20112007 12,667 20122008 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 Amount2004 21,1892005 55,0902006 96,5412007 37,6262008 216,482

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

Assets Liabilities Net2008 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 12,813Trade and other payables 45,242 54,749 (1,003) - 44,239 54,749Other items 4,883 11,436 (9,642) (917) (4,759) 10,519Tax credit carry forwards 6 523 - - 6 523Tax 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)

132

TURK

CELL

İLET

İŞİM

HİZ

MET

LERİ

A.Ş

. AN

D IT

S SU

BSI

DIA

RIES

Not

es T

o Th

e Co

nsol

idat

ed F

inan

cial

Sta

tem

ents

As

At A

nd F

or T

he Y

ear

Ende

d 31

Dec

embe

r(A

mou

nts

expr

esse

d in

thou

sand

s of

US

Dol

lars

unl

ess

othe

rwis

e in

dica

ted

exce

pt s

hare

am

ount

s)

Mov

emen

t in

tem

pora

ry d

iffer

ence

s as

at 3

1 D

ecem

ber

2008

and

200

7 ar

e as

follo

ws:

Acqu

ired

inEf

fect

of

Bala

nce

atBa

lanc

e at

Reco

gnis

edRe

cogn

ised

inbu

sine

ssDi

spos

al o

f m

ovem

ents

in31

Dec

embe

r1

Janu

ary

2007

in p

rofit

or

loss

equi

tyco

mbi

natio

nssu

bsid

iary

ex

chan

ge r

ates

2007

Prop

erty

, pla

nt &

equ

ipm

ent a

nd in

tang

ible

ass

ets

(227

,822

)64

,449

--

-(3

7,35

7)(2

00,7

30)

Inve

stm

ent

(30,

246)

24,9

12-

--

(2,4

82)

(7,8

16)

Prov

isio

ns47

,130

(38,

267)

--

-3,

950

12,8

13Tr

ade

and

othe

r pa

yabl

es-

47,5

45-

--

7,20

454

,749

Oth

er it

ems

12,4

55(3

,461

)(1

,331

)-

-2,

856

10,5

19Ta

x cr

edit

carr

y fo

rwar

ds5,

275

(5,0

74)

--

-32

252

3To

tal

(193

,208

)90

,104

(1,3

31)

--

(25,

507)

(129

,942

)

Acqu

ired

inEf

fect

of

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nce

atBa

lanc

e at

Reco

gnis

edRe

cogn

ised

inbu

sine

ssDi

spos

al o

f m

ovem

ents

in31

Dec

embe

r1

Janu

ary

2008

in p

rofit

or

loss

equi

tyco

mbi

natio

nssu

bsid

iary

ex

chan

ge r

ates

2008

Prop

erty

, pla

nt &

equ

ipm

ent a

nd in

tang

ible

ass

ets

(200

,730

)46

,147

-(5

0,98

9)98

36,8

38(1

68,6

36)

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stm

ent

(7,8

16)

(8,1

33)

343

--

5,33

9(1

0,26

7)Pr

ovis

ions

12,8

1336

7-

-(5

)(3

,105

)10

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Trad

e an

d ot

her

paya

bles

54,7

493,

675

--

-(1

4,18

5)44

,239

Oth

er it

ems

10,5

19(2

3,94

2)1,

025

(476

)-

8,11

5(4

,759

)Ta

x cr

edit

carr

y fo

rwar

ds52

3(7

03)

--

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66

Tota

l(1

29,9

42)

17,4

111,

368

(51,

465)

9333

,188

(129

,347

)

133

TURKCELL İLETİŞİM HİZMETLERİ A.Ş. AND ITS SUBSIDIARIESNotes 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 INCOME2008 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 andUS$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 31December 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 ofsubscribers, there are different billing cycles; accordingly, an accrual is made at each period end to accrue revenues for rendered but not yetbilled.

Receivables from Türk Telekom as at 31 December 2008 and 2007 represent net amounts that are due from Türk Telekom under theInterconnection Agreement. The Interconnection Agreement provides that Türk Telekom will pay to the Company for Türk Telekom’s fixed-linesubscribers’ 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 ASSETS2008 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 minimumconsideration.

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 EQUIVALENTS2008 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, thatare 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.

134

TURK

CELL

İLET

İŞİM

HİZ

MET

LERİ

A.Ş

. AN

D IT

S SU

BSI

DIA

RIES

Not

es T

o Th

e Co

nsol

idat

ed F

inan

cial

Sta

tem

ents

As

At A

nd F

or T

he Y

ear

Ende

d 31

Dec

embe

r(A

mou

nts

expr

esse

d in

thou

sand

s of

US

Dol

lars

unl

ess

othe

rwis

e in

dica

ted

exce

pt s

hare

am

ount

s)

21. C

APIT

AL A

ND

RESE

RVES

Reco

ncili

atio

n of

mov

emen

t in

capi

tal a

nd r

eser

ve

Attr

ibut

able

to e

quity

hol

ders

of t

he C

ompa

nyRe

serv

e fo

r Sh

are

Capi

tal

Shar

eLe

gal

Fair

Val

ueM

inor

ity P

utTr

ansl

atio

nRe

tain

edM

inor

ityTo

tal

Capi

tal

Cont

ribu

tion

Prem

ium

Rese

rves

Rese

rve

Opt

ion

Rese

rve

Earn

ings

Tota

lIn

tere

stEq

uity

Bal

ance

at 1

Janu

ary

2006

1,43

8,96

6-

434

104,

487

800

-(2

0,69

7)2,

102,

537

3,62

6,52

763

,794

3,69

0,32

1In

crea

se in

cap

ital

197,

238

--

--

--

(197

,238

)-

--

Tran

sfer

to le

gal r

eser

ves

--

-43

,786

--

-(4

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6)-

--

Tota

l rec

ogni

zed

inco

me

and

expe

nse

--

--

2,01

5-

(135

,275

)87

5,49

174

2,23

1(4

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3)69

9,65

8D

ivid

ends

to s

hare

hold

ers

--

--

--

-(3

42,1

66)

(342

,166

)-

(342

,166

)A

cqui

sitio

n of

min

ority

sha

res

--

--

--

--

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7,59

1)(1

7,59

1)Ch

ange

in m

inor

ity in

tere

st-

--

--

--

--

87,7

4587

,745

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135

TURKCELL İLETİŞİM HİZMETLERİ A.Ş. AND ITS SUBSIDIARIESNotes 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 capitalAs at 31 December 2008, common stock represented 2,200,000,000 (31 December 2007: 2,200,000,000) authorized, issued and fully paidshares 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 isregistered 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 increasethe 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 ofshare 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 existingordinary 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 mergerwhich 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 TRY1, all shares will have a value of TRY 1. Although the merger process has not been finalized, the practical application is to state each sharehaving a nominal value of TRY 1 which is consented by Capital Markets Board of Turkey (“CMB”). Accordingly, number of shares data isadjusted for the effect of this merger.

Capital contributionThe 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 meetthe definition of a government grant which the government is acting in its capacity as a shareholder.

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

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

Legal reserveUnder the Turkish Commercial Code, Turkish companies are required to set aside first and second level legal reserves out of their profits. Firstlevel 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 reservescorrespond 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 liabilityThe reserve for minority put option liability includes the difference between the put option liability granted to the minority shareholders inexisting subsidiaries recognised and the amount of minority interest derecognized. Subsequent changes in the fair value of the put optionliability are also recognised in this reserve.

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

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

On 27 February 2008, Board of Directors of the Company decided to distribute dividends amounting to TRY 648,714 (equivalent to US$428,959and US$502,334 as at 31 December 2008 and 25 April 2008, respectively), which represented 50% of distributable income. This represents anet cash dividend of full TRY 0.294870 (equivalent to full US$0.228334 in full as at 25 April 2008). Dividend distribution was approved atordinary General Assembly meeting dated 25 April 2008 and dividend distribution was started on 20 May 2008.

136

TURKCELL İLETİŞİM HİZMETLERİ A.Ş. AND ITS SUBSIDIARIESNotes 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 2006TRY USD TRY USD* TRY USD*

Cash dividends 648,714 502,334 567,040 411,913 509,075 342,166Stock 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 andUS$121,419 as at 31 December 2008 and 28 March 2008, respectively). Dividend distribution was approved at ordinary General Assemblymeeting 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 shareholdersfor 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 averagenumber 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 LIABILITIES2008

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 theseller. Total deferred payments amount to US$300,000, of which US$100,000 will be paid on 31 December 2010. The present value of thisliability amounted to US$87,344 as at 31 December 2008. Payment of an additional US$100,000 is contingent on financial performance ofBelarussian Telecom, and based on management’s estimations, expected to be paid during the first quarter of 2015 (note 7). The present valueof 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 fairvalue during a specified period (note 7). The Group accounted for the present value of the estimated option redemption amount as a provisionand 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 atamortized cost. For more information about the Group’s exposure to interest rate, foreign currency and liquidity risk and payment schedule forinterest bearing loans, see note 29.

137

TURKCELL İLETİŞİM HİZMETLERİ A.Ş. AND ITS SUBSIDIARIESNotes 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 liabilitiesUnsecured bank loans 124,405 140,404 Finance lease liabilities 5,615 -

130,020 140,404 Current liabilitiesCurrent 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 itsmaturity 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 valueFuture 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 69Between one and five years 6,086 471 5,615 - - -More than five years - - - - - -

9,905 1,000 8,905 72 3 69

138

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139

TURKCELL İLETİŞİM HİZMETLERİ A.Ş. AND ITS SUBSIDIARIESNotes 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 theenterprise’s obligation under defined benefit plans. The liability for this retirement pay obligation is recorded in the accompanying consolidatedfinancial 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 17,648Provision set during the period 6,734 6,184Payments made during the period (2,235) (3,108)Unwind of discount 1,349 2,303Effect of change in foreign exchange rate (6,360) 4,202Balance 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. TheGroup 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 5,369Effect 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 withBelarussian Telecom’s published environmental policy and applicable legal requirements.

Current provisions:Legal Bonus Total

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

Balance at 1 January 2008 25,894 45,240 71,134Provision made during the period 51,380 45,610 96,990Provisions 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

140

TURKCELL İLETİŞİM HİZMETLERİ A.Ş. AND ITS SUBSIDIARIESNotes 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 onTürk Telekom Transmission Lines Leases”, “Dispute on Special Communication Taxation Regarding Prepaid Card Sales” and “Inquiry ofInformation 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 inMarch 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 andCommunication 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, sitepreparation 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 isclassified 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 theCompany which are not yet invoiced.

Interconnection accrual represents net balance of uninvoiced call termination services received from other operators and interconnectionservices 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 TurkishTreasury 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.

141

TURKCELL İLETİŞİM HİZMETLERİ A.Ş. AND ITS SUBSIDIARIESNotes 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 datewas:

Note 2008 2007Due from related parties-non current 33 45,349 68,871Other non-current assets 16 7,001 7,671Available-for-sale financial assets 15 689 28,218Due from related parties-current 33 64,013 52,482Trade receivables and accrued income 18 587,385 558,563Other current assets 19 25,305 169,378Cash 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 partiesat the reporting date by type of customer is:

2008 2007Receivable from subscribers 473,662 443,705Receivables from distributors and other operators 143,490 137,363Other 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 2007Balance at 1 January 181,746 133,615 Impairment loss recognised 65,678 35,142Impairment loss recognised through acquisition of business combination 2,872 -Write-off (1,674) (16,876)Effect of change in foreign exchange rate (51,985) 29,865Balance 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 tradereceivables.

The allowance accounts in respect of trade receivables is used to record impairment losses unless the Group is satisfied that no recovery of theamount owing is possible; at that point the amount considered irrecoverable and is written off against the trade receivable directly.

142

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143

TURKCELL İLETİŞİM HİZMETLERİ A.Ş. AND ITS SUBSIDIARIESNotes 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 riskThe Group’s exposure to foreign currency risk based on notional amounts is as follows:

2007USD EUR SEK

Foreign currency denominated assetsDue 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 10Other current assets 4,595 949 3Cash and cash equivalents 1,806,527 88,416 5,901

1,946,309 95,410 5,914Foreign currency denominated liabilitiesLoans 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)

2008USD EUR SEK

Foreign currency denominated assetsDue 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 10Other current assets 1,947 933 -Cash and cash equivalents 874,103 408,695 1,392

966,364 420,533 1,402Foreign currency denominated liabilitiesLoans 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 Rate2008 2007 2008 2007

USD 1.2768 1.3031 1.5123 1.1647EUR 1.8816 1.7827 2.1408 1.7102SEK 0.1949 0.1918 0.1945 0.1798

Sensitivity analysisThe basis for the sensitivity analysis to measure foreign exchange risk is an aggregate corporate-level currency exposure. The aggregate foreignexchange exposure is composed of all assets and liabilities denominated in foreign currencies. The analysis excludes net foreign currencyinvestments. 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.

144

TURKCELL İLETİŞİM HİZMETLERİ A.Ş. AND ITS SUBSIDIARIESNotes 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 haveincreased/(decreased) profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular interest rates,remain constant.

Profit or loss2008 2007

USD 32,435 (126,133)EUR (48,542) 6,621SEK 22 2,980

10% weakening of the New Turkish Lira against the following currencies as at 31 December 2008 and 31 December 2007 would haveincreased/(decreased) profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular interest rates,remain constant.

Profit or loss2008 2007

USD (32,435) 126,133EUR 48,542 (6,621)SEK (22) (2,980)

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

2008 2007Effective Effectiveinterest Carrying interest Carrying

Note rate amount rate amountFixed rate instrumentsTime deposits 20

USD 5.7% 932,394 5.7% 1,788,951 EUR 6.2% 595,131 5.8% 132,758TRY 24.7% 1,572,390 19.5% 985,766Other 1.7% 5,518 - 880

Restricted cash 19 - - 4.3% 125,304Finance lease obligations 24 6.9% (8,905) 8.3% (69)

Variable rate instrumentsAvailable-for-sale securities 15

Foreign inv. equity funds - - * 26,480Gov. bonds, treasury bills

USD 5.6% 403 6.5% 1,440EUR 5.1% 286 4.7% 298

Secured bank loans 24EUR floating rate loans - - 4.4% (125,388)

Unsecured bank loans 24USD 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.

145

TURKCELL İLETİŞİM HİZMETLERİ A.Ş. AND ITS SUBSIDIARIESNotes 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 theamounts shown below. This analysis assumes that all other variables, in particular foreign exchange rates, remain constant. The analysis isperformed on the same basis as at 31 December 2008 and 2007.

Profit or loss Equity100 bp 100 bp 100 bp 100 bp

increase decrease increase decrease31 December 2008Variable rate instruments (6,191) 6,191 3 (3)Cash flow sensitivity (net) (6,191) 6,191 3 (3)

31 December 2007Variable 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 2007Carrying Fair Carrying Fair

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

Financial liabilitiesLoans 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 2,442,198Unrecognized 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 foroperating leases were US$263,805, US$206,543 and US$149,734, respectively.

146

TURKCELL İLETİŞİM HİZMETLERİ A.Ş. AND ITS SUBSIDIARIESNotes 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 totalpurchase 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 customsauthorities, 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 AgreementsTurkcell:On 27 April 1998, the Company signed the License Agreement with the Turkish Ministry. In accordance with the License Agreement, theCompany was granted a 25 year GSM license for a license fee of US$500,000. The License Agreement permits the Company to operate as astand-alone GSM operator. Under the License, the Company collects all of the revenue generated from the operations of its GSM network andpays the Turkish Treasury and Turkish Ministry an ongoing license fee and universal service fund, respectively, equal to 15% of its grossrevenues from Turkish GSM operations. The Company is authorized to, among other things, set its own tariffs within certain limits, charge peakand off-peak rates, offer a variety of service and pricing packages, issue invoices directly to subscribers, collect payments and deal directly withsubscribers.

In February 2002, the Company renewed its License with the Information Technologies and Communications Authority (former name of theTelecommunications 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 internationalGSM standards. Failure to meet any requirement in the renewed License, or the occurrence of extraordinary unforeseen circumstances, can alsoresult in revocation of the renewed License, including the surrender of the GSM network without compensation, or limitation of the Company'srights thereunder, or could otherwise adversely affect the Company's regulatory status. Certain conditions of the renewed License Agreementinclude the following:

Coverage: The Company had to attain geographical coverage of 50% and 90% of the population of Turkey with certain exceptions within threeyears 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 technicalassistance for subscribers, free call forwarding to police and other public emergency services, receiver-optional short messages, video textaccess, fax capability, calling and connected number identification and restrictions, call forwarding, call waiting, call hold, multi-party andthird-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 TelecommunicationsStandards Institute and Secretariat of the GSM MoU. Service quality requirements include that call blockage cannot exceed 5% and unsuccessfulcalls cannot exceed 2%.

Tariffs: Information Technologies and Communications Authority sets the initial maximum tariffs in TRY and USD. Thereafter, the revised Licenseprovides that the Information Technologies and Communications Authority will adjust the maximum tariffs at most every six months or, ifnecessary, 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, theLicense Agreement gives the Information Technologies and Communications Authority certain monitoring rights and access to the Company’stechnical 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 andCommunications Authority.

147

TURKCELL İLETİŞİM HİZMETLERİ A.Ş. AND ITS SUBSIDIARIESNotes 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 ifnecessary for the purpose of public security and national defense. During period of suspension, the Information Technologies andCommunications 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 operatingoutside of its allocated frequency ranges, and the penalties for such violations can include fines, loss of frequency rights, revocation of thelicense and confiscation of the network management centre, the gateway exchanges and central subscription system, including related technicalequipment, 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 ofongoing license fee and universal service fund has been changed. According to this new regulation, interest charges for late collections, andindirect taxes such as VAT, and other expenses are excluded from the description of gross revenue. Calculation of gross revenue for ongoinglicense 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 dated29 July 2008 between the State Committee on Property of the Republic of Belarus (“the seller”), Beltel and the Company, the seller granted anextention on the license to render standard GSM services until 26 August 2018. Besides, the license shall be extended for an additional tenyears 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 thedate of the license until 2017. However, Belarussian Telecom’s period of execution in relation to coverage requirements are extended for threeyears 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, DCS1800, D-AMPS and Radiorelay frequency licenses which are regional or national. In addition to the above GSM licenses, Astelit owns fourlicenses 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 bymeans 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 UkrainianTelecommunications Authority at their request. The Ukrainian Telecommunications Authority may suspend the operations of Astelit for a limitedor an unlimited period if necessary because of the expiration of licenses, upon mutual consent, or in case of violation of terms of radiofrequencies use. If such a violation is determined, Ukrainian Telecommunications Authority notifies Astelit of provisions violated and setsdeadline 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 theremaining licenses are valid for 25 years.

Superonline:Superonline acquired Long Distance Traffic Carrying Services License, Data Transmission Overland License, Satellite License and Internet ServiceProvider 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 wellas maintenance and support for the provision of football betting games. The Central Betting System Contract was scheduled to expire on 30March 2008.

148

TURKCELL İLETİŞİM HİZMETLERİ A.Ş. AND ITS SUBSIDIARIESNotes 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 andoperate a risk management center and become head agent for fixed odds betting. The Fixed Odds Betting Contract was scheduled to expire inOctober 2011. However, in relation to the lawsuits related to the operations of Inteltek, GSGM ceased the implementation of the Fixed OddsBetting Contract starting from March 2007. Following this annulment decision, Spor Toto and Inteltek signed a new Fixed Odds Betting Contracton 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 newCentral Betting System Contract with Spor Toto, which took effect on 31 March 2008 as having the same conditions with the current contract butto 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 sportsgames. Inteltek, gave the best offer for the tender. On 29 August 2008, Inteltek signed a contract with Spor Toto, receiving the rights to run thesport 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 TelecommunicationSystem (“Mobile Communication License Agreement”) with the Ministry of Communications and Works of the Turkish Republic of NorthernCyprus which is effective from 1 August 2007, replacing the existing GSM-Mobile Telephony System Agreement dated 25 March 1999. Inaccordance with the Mobile Communication License Agreement, K›br›s Telekom was granted an 18 year GSM 900, GSM 1800 and IMT2000/UMTS license for GSM 900, GSM 1800 frequencies while the usage of IMT 2000/UMTS frequency bands is subject to the fulfilment ofcertain 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 ofMarch 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 anongoing license fee on monthly basis equal to 15% of gross revenues excluding accrued interest charges for the late payments, indirect taxesand accrued revenues for reporting purposes, payments made to third parties for value added services, interconnection revenues, roamingincome from own subscribers after the related payment made to other operators.

Interconnection AgreementsThe Company has entered into interconnection agreements with a number of operators in Turkey and overseas including Türk Telekom, TelsimMobil 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 InterconnectionRegulation (the “Regulation”) became effective when it was issued by the Information Technologies and Communications Authority on 23 May2003.

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

In accordance with the Regulation, the telecommunications providers in Turkey (including Türk Telekom) were obliged to renew theirinterconnection agreements within two months following the issuance of the Regulation. As a result of intervention by the InformationTechnologies 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 interconnectionagreement with Avea (formerly TT&TIM) was last renewed on 20 January 2006. On 24 May 2006, shares of Telsim were transferred to Vodafoneand 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 wherebyMilleni.com may convey calls to the Company’s switch and the Company may convey calls to Milleni.com's switch, in both cases, for onwardtransmission to their destinations.

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

149

TURKCELL İLETİŞİM HİZMETLERİ A.Ş. AND ITS SUBSIDIARIESNotes 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 requiredtelecommunications operators to provide number portability, which means allowing users to keep the same phone numbers even after theyswitch 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 theCompany’s network to enable calls to be transmitted to, and received from, the GSM system operated by each party in accordance with technicalspecifications set out in the interconnection agreement. Typical interconnection agreements also establish understandings between the partiesrelating to a number of key operational areas, including call traffic management, quality and performance standards, interconnection interfacesand 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 orcustomers 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 networkbut switched to the other. These payments vary by contract, and in some cases, may require the Company to pay the counterparty less, the sameamount, or a greater amount per minute, for traffic originating on the Company’s network but switching to the counterparty’s network, than itreceives 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 mayexpose 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 TürkTelekom and GSM operators. In accordance with the recommendation, the fee determined for the Company is full TRY 0.140/minute (equivalentto 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 TRY0.136/minute (equivalent to full US$0.090/minute as at 31 December 2008). These “Standard Interconnection Reference Tariffs” were notnecessarily directly applicable to the Company’s interconnection agreements unless explicitly stated by the Information Technologies andCommunications Authority at the end of the settlement procedure. However, full TRY 0.136/minute (equivalent to full US$0.090/minute as at 31December 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 TürkTelekom and GSM operators. In accordance with the recommendation, the fee determined for the Company is full TRY 0.091/minute (equivalentto full US$0.060/minute as at 31 December 2008) effective from 1 April 2008. These “Standard Interconnection Reference Tariffs” are notnecessarily directly applicable to the Company’s current or future interconnection agreements unless explicitly stated by the InformationTechnologies and Communications Authority at the end of the settlement procedure. The Company has recognized interconnection revenues andcost 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 LeasesEffective from 1 July 2000, Türk Telekom annulled the discount of 60% that it provided to the Company based on its regular ratio, which hadbeen 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 hadbeen 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 didnot charge any interest on late payments at the time of such payments, the Company recorded an accrual amounting to a nominal amount ofTRY 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, TürkTelekom 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 toprevent Türk Telekom from collecting any amounts relating to this interest charge. Also, the Company initiated a lawsuit against Türk Telekomon the legality of such interest. On 25 December 2008, the Court rejected the case. The Company will appeal the decision. As at 31 December2008, based on the management opinion, the Company recorded a provision of TRY 66,497 (equivalent to US$43,971 as at 31 December 2008).

150

TURKCELL İLETİŞİM HİZMETLERİ A.Ş. AND ITS SUBSIDIARIESNotes 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 AgreementDuring the third quarter of 2001, the Company was approached by Is-Tim to negotiate a national roaming agreement. These negotiations didnot result in a mutual agreement. Therefore, the discussions continuing under the supervision of the Information Technologies andCommunications Authority have been subject to several lawsuits. On 26 November 2001, the Company initiated an arbitration suit inInternational Chamber of Commerce (“ICC”) against Turkish Ministry and Information Technologies and Communications Authority. On 25November 2003, ICC rendered a decision stating that the case is not under its jurisdiction. The Company initiated a lawsuit for the annulment ofthis decision. The First Instance Court rejected the case and the Company appealed against said decision. The Supreme Court annulled thedecision of the First Instance Court in favor of the Company. On 13 September 2006, local court decided to execute the Supreme Court’sdecision. 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 roamingto the condition that it be reasonable, economically proportional and technically possible. Nevertheless, the Information Technologies andCommunications Authority declared that the Company is under an obligation to enter a national roaming agreement with Is-Tim within a 30 dayperiod. The Company initiated a lawsuit against Information Technologies and Communications Authority. On 14 March 2006, Dan›ştay decidedto cancel the process dated 14 March 2002 but rejected the Company’s request for cancellation of the regulation on procedures and policieswith respect to national roaming. Information Technologies and Communications Authority appealed the decision. The appeal process is stillpending.

The Information Technologies and Communications Authority decided that the Company has not complied with its responsibility under Turkishregulations to provide national roaming and fined the Company by nominal amount of approximately TRY 21,822 (equivalent to US$14,430 asat 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 December2008). On 13 December 2005, Dan›ştay decided the cancellation of the administrative fine but rejected the Company’s request for cancellation ofthe regulation on procedures and policies with respect to national roaming. Information Technologies and Communications Authority appealedthe 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 theCompany violated competition law since demand of roaming has not been met. Telecom Italia SPA and TIM International N.V. requestedUS$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 TelecomItalia 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 BoardThe Competition Board commenced an investigation of business dealings between the Company and the mobile phone distributors in October1999. The Competition Board decided that the Company disrupted the competitive environment through an abuse of a dominant position in theTurkish mobile market and infringements of certain provisions of the Law on the Protection of Competition. As a result, the Company was fineda nominal amount of approximately TRY 6,973 (equivalent to US$4,611 as at 31 December 2008) and was enjoined to cease theseinfringements. 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 theinvestigation process.

After the cancellation of the Competition Board’s decision, the Competition Board has given the same decision again on 29 December 2005. On10 March 2006, the Company initiated a lawsuit before Dan›ştay for the injunction and cancellation of the Competition Board’s decision dated29 December 2005. Dan›ştay rejected the injunction request of the Company. The Company has objected to this rejection decision. Dan›ştayrejected 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 31December 2008) through the payment order dated 4 August 2006. On 25 September 2006, the Company made the related payment andinitiated 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 thisdecision. The Company ceased to accrue for TRY 6,973 (equivalent to US$4,611 as at 31 December 2008) on its consolidated financialstatements as at and for the period ended 31 December 2008 due to the aforesaid payment on 25 September 2006.

151

TURKCELL İLETİŞİM HİZMETLERİ A.Ş. AND ITS SUBSIDIARIESNotes 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 TrafficIn May 2003, the Company was informed that the Information Technologies and Communications Authority had initiated an investigationagainst the Company claiming that the Company has violated Turkish laws by carrying some of its international voice traffic through an operatorother than Türk Telekom. The Company is disputing whether Türk Telekom should be the sole carrier of international voice traffic. On 5 March2004, 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’sinjunction on 5 November 2004, Information Technologies and Communications Authority paid back the nominal amount. InformationTechnologies and Communications Authority appealed this decision. General Assembly of Administrative Courts of Dan›ştay rejected the appealrequest of Information Technologies and Communications Authority. On 26 December 2006, Dan›ştay decided to accept the Company’s claimand annul the decision of and the penalty given by the Information Technologies and Communications Authority. Information Technologies andCommunications 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 withMilleni.com. Accordingly, Türk Telekom requested the Company to pay nominal amount of TRY 219,149 (equivalent to US$144,911 as at 31December 2008) of principal and nominal amount of TRY 178,364 (equivalent to US$117,942 as at 31 December 2008) of interest, which makea 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 Telekominitiated a lawsuit against the Company with respect to the same issue requesting an amount of TRY 450,931 (equivalent to US$298,176 as at31 December 2008) of which TRY 219,149 (equivalent to US$144,911 as at 31 December 2008) is principal and TRY 231,782 (equivalent toUS$153,265 as at 31 December 2008) is interest charged until 30 June 2005. The Court sent the file to expert examination. According to theexpertise report filed in October 2007, interconnection agreement between the Company and Milleni.com damaged Türk Telekom’s interestamounting 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 December2008). The Company objected to the expertise report. On 6 November 2007, the Court ruled to obtain an additional expertise report. Additionalexpertise report has been sent to the parties and the report is consistent with the previous expertise report. The Company objected to theadditional expertise report. The Company requested another expertise report. On 27 November 2008, the Court ruled to obtain an additionalexpertise report. Management believes that the aforementioned request has no legal basis. Moreover, the Company obtained an independentopinion dated 23 October 2007 which supports the management opinion from an expert who is not designated by the Court. The case is stillpending.

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

Dispute on Special Communication Taxation Regarding Prepaid Card SalesOn 18 September 2003, the Ministry of Finance issued a report stating that by applying discounts for pre-paid card sales for the period betweenJune - December 2002, the Company calculated the special communication tax on post-discounted amounts. Pursuant to this report, the TaxOffice delivered to the Company a notice, asserting deficiencies in special communication tax declarations and requesting a specialcommunication tax payment amounting to nominal amount of TRY 6,992 (equivalent to US$4,623 as at 31 December 2008) and a tax penalty ofnominal amount of TRY 9,875 (equivalent to US$6,530 as at 31 December 2008). The tax court accepted the Company’s request for cancellationof special communication tax declarations. The tax office appealed this decision. Dan›ştay did not accept the Tax Court decision. The Companyapplied for the correction of the decision. On 25 June 2007, Dan›ştay rejected the correction of decision. On 28 September 2007, Local Courtcomplied with Dan›ştay’s decision and rejected the lawsuit for the principle tax amount and accepted the part of the case related to the taxpenalty 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 nominalamount 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 toUS$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 thecancellation of accrued interest amounting to nominal amount of TRY 16,813 (equivalent to US$11,118 as at 31 December 2008) with respect toLocal 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 decidedto 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 aforementionedpayment not to be deemed as a special communication tax and tax penalty. The Court rejected the Company’s cancellation request. TheCompany objected to the decision. As a result of the settlement between the Company and the Tax Office, the Company decided to withdraw itsrequest.

152

TURKCELL İLETİŞİM HİZMETLERİ A.Ş. AND ITS SUBSIDIARIESNotes 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 forthe above mentioned tax payments and requested preliminary injunction. The Court rejected the Company’s cancellation request. The Companyobjected 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 2008following its approval by the Grand National Assembly General Committee. The law provides a new settlement opportunity and easy paymentconditions 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 hasbeen requested, and the settlement meeting has not been held yet or has been held but the period allowed for accepting the final offer has notended, and receivables that have been subject to a litigation and not yet final; shall be subject to a new settlement and the settled amount shallbe divided into installments under convenient conditions. On 26 March 2008, the Company submitted a written application to the Tax Offices forthe 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 Companyamounted 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 December2008). 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 December2008) settled at TRY 7,044 (equivalent to US$4,658 as at 31 December 2008). The Company deducted these settlement gains from its monthlyspecial 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 2003amounted to TRY 47,130 (equivalent to US$31,165 as at 31 December 2008), on the ground that accruals regarding special communication taxduring the sales of prepaid simcards performed by the Company are miscalculated. The Company management believes that the subject amountwill also be settled with Settlement Commission and will not lead to a financial risk. Accordingly, the Company has not recorded any accrualswith 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 theFixed Odds Betting Contract dated 2 October 2003 signed as a result of the said tender between GSGM and İnteltek were challenged by ReklamDepartman› Bas›n Yay›n Prodüksiyon Yap›mc›l›k Dan›şmanl›k ve Ticaret Limited Şirketi (“Reklam Departman›) and Gtech Avrasya Teknik Hizmetve 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 BettingContract dated 2 October 2003 between GSGM and Inteltek was terminated by GSGM based on the said decision of Council of State and the Codenumbered 5583 came into effect which allowed Spor Toto to hold a new tender and sign a new contract which would be valid until 1 March2008. On 15 March 2007, GSGM held a new tender, at which Inteltek became the preferred bidder and reacquired the right to operate until 1March 2008. On the other hand, Inteltek initiated two lawsuits against GSGM on the ground that the termination of the Fixed Odds BettingContract dated 2 October 2003 was unjustified and to determine that the aforementioned contract is valid under law and is in force. The courtdecided to reject Inteltek’s claim on 10 July 2007. Inteltek appealed the court’s decision. Inteltek’s appeal was rejected by the Court on 5February 2008 and Inteltek applied for correction of decision. The Supreme Court rejected the appeal. Inteltek appealed the decision. TheSupreme 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 startunder the new tender which Spor Toto is allowed to hold in accordance with the same law. Inteltek signed a new Fixed Odds Betting contractwith 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 sportsgames. Inteltek, gave the best offer with 1.4% for the tender. On 29 August 2008, Inteltek signed a contract with Spor Toto, receiving the rightsto 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 financialstatements as at and for the period ended 31 December 2008.

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TURKCELL İLETİŞİM HİZMETLERİ A.Ş. AND ITS SUBSIDIARIESNotes 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 IOn 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 reconciliationperiods should be six-month independent periods whereas Inteltek management believes that those periods should be cumulative as stated inthe 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 hasrequested from the Court to determine if Inteltek was responsible for the revenue which was not transferred to the Spor Toto’s accounts in duetime, and collection risk was belonging to Inteltek, Inteltek was responsible for the revenue in the amount of TRY 1,527 (equivalent to US$1,010as at 31 December 2008) which was not paid and not collected until the date of the lawsuit and final accounts should be resolved after everyperiod of six-months for settlement, by accepting the periods of six-months for settlement as periods independent from each other. On 22February 2007, the Court rejected the case and decided that the collection risk is with GSGM and Inteltek is not responsible for the uncollectedamount of TRY 1,527 (equivalent to US$1,010 as at 31 December 2008) and also rejected the demand of GSGM that the reconciliation periodshould be six-month independent periods. GSGM appealed the Court’s decision. Supreme Court rejected the appeal request of GSGM. Followingthe Supreme Court’s decision, GSGM applied for the correction of the decision. GSGM’s correction of decision request was rejected by the Courtand 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 31December 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 December2008) accrued interest which was paid in the 1st and 3rd reconciliation periods. Inteltek has initiated a lawsuit on 21 February 2008 to collectthis amount. On 3 December 2008, the Court ruled to obtain an expertise report. The case is still pending. The Company has not recorded anyincome 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 IIOn 29 January 2007, Spor Toto sent a letter to Inteltek claiming that duplicate payments have been made to Inteltek under the two separateagreements 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 thecontracts between Inteltek and Spor Toto are valid under law. The Supreme Court’s investigation report resulted in favor of Inteltek andwhereon 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) forthe period between 26 December 2006 and 26 March 2007. Therefore, on 29 April 2008 the Court decided that there is no need to render averdict on this case. Such decision has been appealed by Inteltek.

Dispute on call termination feeTelsim has initiated a lawsuit claiming that the Company has not applied the reference interconnection rates determined by the InformationTechnologies and Communications Authority, and has charged interconnection fees exceeding the ceiling rates approved by InformationTechnologies and Communications Authority and requested an injunction to be applicable starting from 1 August 2005, to cease this practiceand 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 11December 2007, Supreme Court approved the local court decision. Telsim applied for the correction of the decision. Supreme Court rejectedTelsim’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 July2006. Avea raised an objection on the invoices the Company had issued during the said period claiming that the Company had not applied thereference interconnection rates determined by the Information Technologies and Communications Authority, and had charged interconnectionfees 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 amountexceeding the ceiling rates approved by Information Technologies and Communications Authority and the Company booked such invoices as areduction of revenue. The Company management believes that the Interconnection Agreement signed between the Company and Avea on 9March 2001 should be binding with respect to tarifing instead of the reference interconnection rates determined by the InformationTechnologies and Communications Authority. A similar case with Telsim, at which Telsim was claiming that the Company should have appliedthe reference interconnection rates determined by the Information Technologies and Communications Authority was rejected on 6 April 2007and approved by Supreme Court on 11 December 2007. Therefore, in November 2007, the Company issued return invoices including taxesamounting to TRY 78,030 (equivalent to US$51,597 as at 31 December 2008) and recognized revenue amounting to TRY 54,566 (equivalent toUS$36,081 as at 31 December 2008) in its consolidated financial statements for the year ended 31 December 2007.

154

TURKCELL İLETİŞİM HİZMETLERİ A.Ş. AND ITS SUBSIDIARIESNotes 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 processThe Company believes the Iranian Ministry has not properly implemented the laws and regulations passed by the Iranian Parliament inconnection with the GSM tender process, which was won by the Consortium. As a result, the Company has brought a claim in Iranian courtsseeking to compel the Ministry to implement the laws and regulations passed by the Iranian Parliament in connection with the GSM tenderprocess. Such injunction order was rejected in April 2006. The Company has initiated an arbitration process against Islamic Republic of Iran fornot 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 feesThe interconnection agreement with Türk Telekom provided for a renegotiation of pricing terms on call termination fees after 31 December2004, and in the event that the parties could not agree on new terms by 28 February 2005, for referral to the Information Technologies andCommunications Authority for resolution. As the parties were unable to agree on new terms, Türk Telekom referred the matter to theInformation Technologies and Communications Authority, which has set temporary call termination fees for calls terminating on each operator’snetwork starting from 10 August 2005.

On 7 October 2005, the Company filed a lawsuit against Information Technologies and Communications Authority for the injunction andcancellation of this decision, which has set temporary call termination fees for calls terminating on each operator’s network starting from 10August 2005 and the Court rejected the Company’s preliminary injunction request. The Company has appealed this decision. The appeal requesthas been rejected. On 4 July 2007, the Court decided that the lawsuit is not under its jurisdiction. Dan›ştay rejected injunction request of theCompany and the Company objected to the decision. On 1 June 2006, Information Technologies and Communications Authority issued referencecall termination fees for the Company and Türk Telekom. In addition, on 26 July 2006, Information Technologies and Communications Authorityissued 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 ofreference 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 31December 2008) for calls terminating on Türk Telekom and the Company’s network through the decisions of Information Technologies andCommunications Authority dated 1 June 2006 and 26 July 2006. On 9 October 2006, the Administrative Court rejected injunction request of theCompany dated 10 July 2006. The Company objected to this decision. On 22 November 2006, Administrative Court has rejected the objectionrequest. The Court decided that the lawsuit is not under its jurisdiction and transferred the file to Dan›ştay. On 21 September 2007, Dan›ştayrejected the injunction request of the Company dated 14 August 2006 and the Company objected to the decision. However, such objection wasalso rejected.

On 12 September 2007, the Company filed another lawsuit on Dan›ştay for the injunction and cancellation of call termination fees between theCompany 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 1January 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 1March 2007. The Court rejected the injunction request of the Company. The Company objected to the decision and the objection was rejected bythe 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 fullUS$0.060/minute as at 31 December 2008) for Türk Telekom, Vodafone and Avea, together with and the decision declared on 26 August 2008that Interconnection fee between the Company and Vodafone is determined TRY 0.091/minute (equivalent to full US$0.060/minute as at 31December 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 fullUS$0.060/minute as at 31 December 2008) for Türk Telekom, Vodafone and Avea, together with and the decision declared on 26 August 2008that Interconnection fee between Company and Avea is determined TRY 0.091/minute (equivalent to full US$0.060/minute as at 31 December2008). 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 areeffective from March 2006, May 2006 and July 2006 for Telsim, Vodafone and Avea, respectively. On 14 August 2006, the Company filed alawsuit with the Ankara Administrative Court for the injunction and cancellation of call termination fees between the Company and Avea whichhave 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’snetwork. On 19 December 2006, the Ankara Administrative Court dismissed the case, deciding that it does not have jurisdiction over the case.

155

TURKCELL İLETİŞİM HİZMETLERİ A.Ş. AND ITS SUBSIDIARIESNotes 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 Companyobjected to this decision. On 26 September 2007, the Company filed a lawsuit on Dan›ştay for the injunction and cancellation of call terminationfees 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 December2008) for calls terminating on the Company’s network. The court rejected the Company’s injunction request and the Company objected to thisdecision. 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 ofcall and SMS termination fees between Turkcell and Vodafone (Telsim for the period between 1 March-24 May 2006) which have been set asfull 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 tofull US$0.0196/unit as at 31 December 2008) for SMS terminating on the Company’s network. The Ankara Administrative Court dismissed thecase 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, theCourt rejected the injunction request of the Company and the Company objected to this decision. The Court rejected this objection of theCompany. 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 oneach 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 itsdamages totaling to nominal amount of TRY 11,970 (equivalent to US$7,915 as at 31 December 2008) including principal, interest and penaltyon 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 terminationtariffs for international calls set by Information Technologies and Communications Authority for the period between November 2005 andOctober 2006 amounting to nominal amount of TRY 23,726 (equivalent to US$15,689 as at 31 December 2008) including principal, interest andpenalty on late payment. The file is currently under expert examination. The Court decided to consolidate this lawsuit and the lawsuit explainedin 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 terminationtariffs for international calls set by Information Technologies and Communications Authority for the period between November 2006 and 1March 2007 amounting to nominal amount of TRY 6,836 (equivalent to US$4,520 as at 31 December 2008) including principal, interest andpenalty 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 andAvea stating that both parties would not charge any SMS interconnection termination fees, the Company has charged SMS interconnection feesfor the messages terminating on its own network and also assumed liabilities for the messages terminating on Avea’s network and madeinterconnection payments to Avea after deducting the net balance of those SMS charges and accruals. Avea requested provisions ofInterconnection Agreement regarding SMS pricing to be applied and requested collection of its losses amounting to nominal amount of TRY12,275 (equivalent to US$8,117 as at 31 December 2008) for the period between February 2005 and December 2005 with its accrued interesttill payment. On 10 October 2006, the Court decided that charging SMS interconnection termination fees violates the agreement between theCompany 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 31December 2008) for the period between February 2005 and December 2005 with its accrued interest till payment. The Company appealed thedecision. The Supreme Court rejected the Company’s request and the Company applied for the correction of the decision. Such request rejectedand 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 inorder 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 collectionof 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 2006and August 2006 with its accrued interest till payment. On 25 November 2008, the Court decided in favor of Avea. The Company has appealedthe 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.

156

TURKCELL İLETİŞİM HİZMETLERİ A.Ş. AND ITS SUBSIDIARIESNotes 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 andAvea, 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 theCompany and Avea. On 7 March 2007, the Information Technologies and Communications Authority determined the SMS termination feesbetween the Company and Avea effective from 23 March 2007.

Dispute on value added taxation with respect to roaming servicesThe Tax Office claimed that the Company should have paid VAT on the invoices issued by foreign GSM operators for the international callsoriginated by the Company’s subscribers and terminating on those foreign GSM operators’ networks during the year 2000. It has been notifiedthat, 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 at31 December 2008) for VAT and penalty fee. Moreover, the Tax Office also claimed that the Company should have paid VAT on the invoicesissued by foreign GSM operators for the international calls originated by the Company’s subscribers and terminating on those foreign GSMoperators’ networks during the years 2001 and 2002 amounting to nominal amount of TRY 15,972 (equivalent to US$10,561 as at 31 December2008) 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 on13 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 thisdecision. 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. On22 November 2007, the Court rejected such lawsuits and the Company appealed these decisions. Dan›ştay rejected the Company’s injunctionrequest 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 andtax penalty amounts. The injunction request of the Company has been rejected. The Company objected to the decision. Administrative Courtrejected the Company’s objection. On 2 April 2008, the Court accepted the injunction request of cancellation of payment notices. Appeal requestof the Tax office to the above mentioned decision was rejected by the Istanbul Administrative Court. Management believes that the Company willprevail in this matter. Accordingly, the Company has not recorded any accruals with respect to this matter in its consolidated financialstatements 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 2008following its approval by the Grand National Assembly General Committee. The law provides a new settlement opportunity and easy paymentconditions 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 hasbeen requested, and the settlement meeting has not been held yet or has been held but the period allowed for accepting the final offer has notended, and receivables that have been subject to a litigation and not yet final; shall be subject to a new settlement and the settled amount shallbe divided into installments under convenient conditions. On 26 March 2008, the Company submitted a written application to the Tax Offices forthe 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 toUS$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 31December 2008), respectively. TRY 17,588 (equivalent to US$11,630 as at 31 December 2008) portion of gain on settlement was deducted inNovember 2008 VAT declaration based on the payment made amounted to TRY 19,588 (equivalent to US$12,952 as at 31 December 2008) inOctober 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 inNovember 2008 VAT declaration and paid in December 2008.

Dispute on ongoing license fee based on the amended license agreementBased on the law enacted on 3 July 2005 with respect to the regulation of privatization, gross revenue description used for the calculation ofongoing license fee has been changed. According to this new regulation, accrued interest charges for the late payments, taxes such as indirecttaxes, and accrued revenues are excluded from the description of gross revenue. Calculation method of gross revenue for ongoing license feestipulated 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 itslicense agreement in compliance with the said Law. In the meanwhile, the Company realized the payments including above-mentioned itemsbetween 21 July 2005 and 10 March 2006, when the amendment in license agreement was effective. On 21 April 2006, following the license

157

TURKCELL İLETİŞİM HİZMETLERİ A.Ş. AND ITS SUBSIDIARIESNotes 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 paymentsthat were realized starting from 21 July 2005 until 10 March 2006 and the amount which will accrue in compliance with the Law totalling TRY111,316 (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 theSupreme Court due to our appeal request. On 13 March 2008, the Supreme Court decided in line with the Local Court decision and the Companyapplied 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 amountingto 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 31December 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 oflicense agreement according to new regulation. However, Information Technologies and Communications Authority did not finalize suchrevision in a timely manner. Therefore, on 5 May 2006, the Company has also initiated a lawsuit against the Information Technologies andCommunications Authority before Administrative Court for the delay of the revision in license agreement preventing the new regulation tobecome effective until 10 March 2006. By this lawsuit, the Company has requested payment totalling TRY 102,649 (equivalent to US$67,876 asat 31 December 2008). On 22 March 2007, the Court decided that the case is not under its jurisdiction. On 12 March 2008, the Companydecided to withdraw from its appeal against the Information Technologies and Communications Authority regarding principal amounting to TRY102,649 (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 theCompany’s withdrawal.

Dispute on Information Technologies and Communications Authority fee payment based on the amended license agreementBased 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 grossrevenue once a year as Information Technologies and Communications Authority Fee. However, in the previous license agreement, the Companywas obliged to pay 0.35% of its yearly gross revenue after deducting ongoing license fee, universal service fund and other indirect taxes fromthe 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’sobjection request.

On 21 June 2006, Information Technologies and Communications Authority notified the Company that the Information Technologies andCommunications Authority Fee for the year 2005 which had been already paid in April 2006 should have been calculated according to the newlicense agreement dated 10 March 2006 instead of the previous license agreement which was effective in the year 2005. Therefore, InformationTechnologies and Communications Authority requested the Company to pay additional TRY 4,011 (equivalent to US$2,652 as at 31 December2008). The Company made the payment and initiated a lawsuit for the injunction and cancellation of the aforesaid decision of InformationTechnologies and Communications Authority. On 30 May 2007, the Court rejected the Company’s injunction request. The Company objected tothe 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 2006which had been already paid in April 2007 should have been calculated according to the previous license agreement which was valid between 1January 2006 and 9 March 2006. The Court rejected the Company’s injunction request. The Company objected to the decision and theAdministrative Court rejected the Company’s objection request.

Dispute on receivables from Avea regarding call termination feesBased on the 21st Article of the Access and Interconnection Regulation, the operators may retrospectively apply the final call termination feesdetermined by Information Technologies and Communications Authority under the reconciliation procedure. Therefore, on 29 August 2006, theCompany has initiated a lawsuit against Avea for the collection of its damages totaling to nominal amount of TRY 32,334 (equivalent toUS$21,381 as at 31 December 2008) including principal, interest and penalty on late payment covering the period from 30 June 2004 until 7July 2006 which is the announcement date of the reference call termination fees issued by Information Technologies and CommunicationsAuthority 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 MeetingOn 21 August 2006, Sonera Hoding BV filed a lawsuit with an injunction request for the purpose of determination of the invalidity of theCompany’s General Assembly Meeting with an ordinary agenda including dividend distribution and appointment of members of the Board ofDirectors, held on 22 May 2006 and the invalidity of all resolutions taken in this meeting.

158

TURKCELL İLETİŞİM HİZMETLERİ A.Ş. AND ITS SUBSIDIARIESNotes 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 TariffsOn 19 January 2007, the Company initiated a lawsuit against Türk Telekom claiming that Türk Telekom charged transmission on erroneoustariffs 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 31December 2008) including interest. The case is still pending.

Dispute on Türk Telekom Interconnect CostsOn 26 April 2007, Türk Telekom initiated a lawsuit against the Company claiming that interconnect costs declared by the InformationTechnologies 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 MemberOn 21 July 2006, Alexey Khudyakov was appointed to the audit committee as an observer member. On 26 January 2007 the CMB informed theCompany that Alexey Khudyakov’s current status, as an observer member on the audit committee does not satisfy the requirements underArticle 25 “Committees Responsible for Auditing” of the CMB. The CMB has stated that steps must be taken urgently in order to comply withArticle 25. In March 2007, the Company commenced a lawsuit to suspend the execution and to annul the decision of the CMB. The courtrejected the Company’s suspension of execution request. The Company objected to the decision. On 15 August 2007, the Local AnkaraAdministrative Court accepted the Company’s objection request and suspended the said decision of CMB. However, on 18 January 2008, Ankara14th Administrative Court rejected the case. The Company appealed the decision. On 9 April 2008, State of Council rejected the injunctionrequest 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 theCompany did not fulfil the decision of CMB dated 26 January 2007 and required the Company to inform its shareholders at the next GeneralAssembly Meeting. The Company commenced a lawsuit before the Council of State seeking to suspend the execution and to annul the decisionof the CMB with respect to the administrative penalty. The Council of State rendered a lack of jurisdiction decision on the ground that theAdministrative Court of Ankara is not designated.

Dispute on Mobile Number PortabilityOn 29 March 2007, the Company initiated a lawsuit against the Information Technologies and Communications Authority claiming stay of orderfor and the annulment of the Regulation on Mobile Number Portability issued by the Information Technologies and Communications Authorityon 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 objectionrequest. 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 CampaignsAccording to the decision of Information Technologies and Communications Authority dated 15 March 2007, a pre-inquiry has been decided tostart regarding the campaigns in which free minutes or counters are given to the new subscribers in the introduction sets in order to determinetheir conformity with telecommunications legislation. Information Technologies and Communications Authority decided to make aninvestigation 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’ financialinterests related to the campaigns in which free minutes or counters are given and requested TRY 32,088 (equivalent to US$21,218 as at 31December 2008). The Company has benefited from the early payment option and deserved a 25% discount and paid TRY 24,066 (equivalent toUS$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 theInformation Technologies and Communications Authority’s decision. The Court rejected the Company’s injunction request. The Companyobjected 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 paidin 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 issuedpayment orders for the above mentioned amount and, on 19 October 2007, the Company initiated a lawsuit for the cancellation of the paymentrequest of SDIF. The Court accepted the injunction request of the Company. SDIF objected the decision. On 6 February 2008, the Court acceptedthe Company’s suspension of execution request. SDIF objected to this decision and such objection request was also rejected by the Court. Thecase is still pending.

159

TURKCELL İLETİŞİM HİZMETLERİ A.Ş. AND ITS SUBSIDIARIESNotes 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 financialstatements 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 todistributors 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 amountingto 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 at31 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. SinceTurkish Treasury and Turkish Ministry have not made any payment, the Company started to deduct these amounts from existing ongoingmonthly payments. As at 31 December 2007, the Company deducted TRY 51,254 (equivalent to US$33,891 as at 31 December 2008) fromexisting 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 fromcurrent year payments. Accordingly, TRY 2,960 (equivalent to US$1,957 as at 31 December 2008) that is deducted from ongoing license feepayment for May 2007 has been requested from the Company. The Company has not made the related payment and continued to deductongoing 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 andInformation Technologies and Communications Authority Fee in accordance with the 8th and 9th Articles of the License, respectively, ondiscounts given to distributors.

Management believes that the Company has the legal right to make deductions with respect to this issue. Accordingly, the Company has notrecorded any provisions with respect to this matter in its consolidated financial statements.

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

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-employmentdefined plan on their behalf. The Group is required to contribute a specified percentage of payroll costs to the retirement benefit scheme to fundthe benefits.

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TURKCELL İLETİŞİM HİZMETLERİ A.Ş. AND ITS SUBSIDIARIESNotes 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, 2007and 2006, respectively.

The Company has agreements or protocols with several of its shareholders, consolidated subsidiaries and affiliates of the shareholders. TheCompany's management believes that all such agreements or protocols are on terms that are at least as advantageous to the Company as wouldbe 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-term2008 2007

Digital Platform İletişim Hizmetleri A.Ş. (“Digital Platform”) 40,690 64,220Other 4,659 4,651

45,349 68,871Due from related parties – short-term

2008 2007Digital Platform 19,356 6,960KVK Teknoloji Ürünleri A.Ş. (“KVK Teknoloji”) 18,394 5,612A-Tel 18,126 27,470Superonline - 7,078Other 8,137 5,362

64,013 52,482Due to related parties – short-term

2008 2007ADD Production Medya A.Ş. (“ADD”) 11,688 7,224Hobim Bilgi İşlem Hizmetleri A.Ş. (“Hobim”) 3,752 5,876KVK Teknoloji 723 -Betting Organization Operation and Promotion Company SA (“Betting SA”) 704 891Kyivstar GSM JSC (“Kyivstar”) 653 499Estore Elektronik Tic. ve Sanal Mağ. Hiz. A.Ş. (“Estore”) 122 2,389Other 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 centerrevenues, 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 theGroup’s receivables from Digital Platform in exchange for sponsorship and the advertisement services that the Company will receive on DigitalPlatform’s infrastructure. Under the agreement, Digital Platform commits to pay amounts due to the Group through 15 July 2011 along with theinterest in cash and advertisement services. US$60,046 represents present value of future cash flows and services discounted using imputedinterest rate. As at 31 December 2008, US$40,690 of the balance is classified as long-term due from related parties in accordance with therevised repayment schedule. Besides, the Company paid US$4,425 to Digital Platform within the scope of the agreement during the year ended31 December 2008.

Due from and Due to KVK Teknoloji, a company whose majority shares are owned by Çukurova Group, mainly resulted from simcard and scratchcard 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 inrelation 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 sponsorshipservices rendered by this company.

161

TURKCELL İLETİŞİM HİZMETLERİ A.Ş. AND ITS SUBSIDIARIESNotes 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 thiscompany.

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

Due to Kyivstar, whose shares are owned by one of the shareholders of the Company, mainly resulted from call termination and internationaltraffic 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 partiesIntragroup transactions that have been eliminated are not recognized as related party transaction in the following table.

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

Related party expenses 2008 2007 2006Charges from ADDAdvertisement and sponsorship services 165,250 167,477 136,171Charges from KVK TeknolojiDealer activation fees and others 103,386 88,564 59,527Charges from KyivstarTelecommunications services 63,799 36,060 13,286Charges from A-Tel (*)Dealer activation fees and others 49,065 45,110 57,716Charges from HobimInvoicing and archieving services 20,865 17,163 13,169Charges from Betting SAConsultancy services 9,842 8,740 13,438Charges from MillenicomTelecommunications 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 toUS$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 affiliatedwith some of the Company's shareholders. In addition to sales of simcards and scratch cards, the Company has entered into several agreements

162

TURKCELL İLETİŞİM HİZMETLERİ A.Ş. AND ITS SUBSIDIARIESNotes 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 mustplace advertisements for the Company’s services in newspapers. The objective of these agreements is to promote and increase handset saleswith the Company's prepaid and postpaid brand simcards, thereby supporting the protection of the Company’s market share in the prevailingmarket conditions. The prices of the contracts were determined according to the cost of advertising for KVK Teknoloji and the total advertisementbenefit received, reflected in the Company’s market share in new subscriber acquisitions. Distributors’ campaign projects and market share alsocontributed 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 andSDIF. A-Tel acts as the only dealer of the Company for Muhabbet Kart (a prepaid card), and receives dealer activation fees and simcard subsidiesfor the sale of Muhabbet Kart. In addition to the sales of simcards and scratch cards through an extensive network of newspaper kiosks locatedthroughout 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 internationaltraffic 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’sprincipal shareholders, Çukurova Group. Digital Platform acquired the broadcasting rights for Turkish Super Football League by the tender heldon 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. On23 December 2005, “Restructuring Framework Agreement” was signed between Digital Platform and the Company. The Company also has anagreement related to the corporate group SMS services that the Company offers to Digital Platform, and an agreement for call center servicesprovided 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 isrendering 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 August2009. The purpose of this agreement is to benefit from the expertise and bargaining power of ADD against third parties, regarding theformation of media purchasing strategies for both postpaid and prepaid brands. Additionally, ADD is a party of the sponsorship andadvertisement 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 Companyhas entered into invoice printing and archiving agreements with Hobim under which Hobim provides the Company with scratch card printingservices, monthly invoice printing services, manages archiving of invoices and subscription documents for an indefinite period of time. Prices ofthe 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 agreementwith Betting SA which was revised on 14 May 2007 to get consultancy services including monitoring operations, providing continuousevaluation of betting, maximizing game revenues of fixed odds betting, operating fixed odds betting games in the most efficient manner, withintegrity and securely.

163

TURKCELL İLETİŞİM HİZMETLERİ A.Ş. AND ITS SUBSIDIARIESNotes 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 InterestName Country of incorporation Business 2008 (%) 2007 (%)K›br›s Telekom Turkish Republic of Northern Cyprus Telecommunications 100 100Global Turkey Customer relations management 100 100

Information technology, value added Turktell Turkey GSM services investments 100 100Tellcom Turkey Telecommunications 100 100Turktell Uluslararas› Yat›r›m Holding A.Ş. Turkey Telecommunications investments 100 100Turkcell Kurumsal Sat›ş ve Dağ›t›m Hizmetleri A.Ş. Turkey Telecommunications 100 100Eastasia Netherlands Telecommunications investments 100 100Turkcell Teknoloji Araşt›rma ve Geliştirme A.Ş. Turkey Research and Development 100 100Kule Hizmet ve İşletmecilik A.Ş. Turkey Telecommunications infrastructure business 100 100Sans Oyunlar› Yat›r›m Holding A.Ş. Turkey Betting business investments 100 100Financell Netherlands Financing business 100 100Rehberlik 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 99Belarussian Telecom Republic of Belarus Telecommunications 80 -Inteltek Turkey Betting business 55 55Euroasia Netherlands Telecommunications 55 55Astelit Ukraine Telecommunications 55 55Bilyoner 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 thephrase “New” which is executed on 1 January 2009 in accordance with the first item of Law No: 5083.

DEMATERIALIZATION OF THE SHARE CERTIFICATES OF THE COMPANIES THAT ARE TRADED ON THESTOCK 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 commencethe 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 ofDematerialized Capital Market Instruments”, it is set forth that all of the share certificates of the companies that are traded in ISE shall becollectively 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 ourCompany (“Issuer”) or an authorized broker for their registration with “Central Registry Agency” that is under supervision and control of theBoard 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 notdematerialized until the end of 31 December 2007, shall be monitored in a dematerialized manner at the Central Registry Agency from that dayon and in case the share certificates are dematerialized, their financial rights shall be transferred to the accounts of the rightful owners. Anyfinancial rights related to management for the share certificates that are not dematerialized after 31 December 2007 shall be exercised byCentral Registry Agency until the dematerialization process of existing shares completed. Implementation principles for the aforementionedarticle 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 theCentral Registry Agency.

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TURKCELL İLETİŞİM HİZMETLERİ A.Ş. AND ITS SUBSIDIARIES

164

ACCOMMODATION OF THE SHARE CAPITAL OF THE COMPANY AND NOMINAL VALUES OF THE SHARECERTIFICATES 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 ofTurkish Republic Government and the Code numbered 5274 Regarding the Amendment of Turkish Commercial Code, the share capital of theCompany has been made compatible with the New Turkish Lira and such resolution was approved at the Ordinary General Assembly Meeting on29 April 2005.

Provisions regarding making nominal values of the share certificates of the Company compatible with the New Turkish Lira are regulated in thetemporary article of the Company’s Articles of Association and such article was approved at the Ordinary General Assembly Meeting on 29 April2005. 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 sharesto 1.- (One) New Turkish Liras, 1,000 (One thousand) units of shares, each having a nominal value of 1,000.- (One thousand) Turkish Liras shallbe merged and 1.- (One) unit of share having a nominal value of 1.- (One) New Turkish Liras shall be issued to represent such shares. Fractionreceipt shall be issued for the shares that could not be complemented up to TRY 1. In relation to such change, the shareholders’ rights arisingout of their shares are reserved. Concerning such transaction, the 1st, 2nd, 3rd and 4th series of share certificates, which represent the existingshare capital, shall be merged in the 5th series. In connection with the transactions of share change and merger of series, the shareholdersrights 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 thedematerialization of Capital Markets instruments is put into practice and within the framework of related regulations.”

165

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 andInterim Dividends To Be Followed by the Publicly Held Joint Stock Corporations Subject to Capital Market Law”, through considering theminimum ratio of the dividend distribution, determined by 2008/6 numbered weekly bulletin of CMB, and the dividend distribution policy thatwas 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 beevaluated 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 BoardCommuniqué Serial: XI numbered 29, named “Communiqué Regarding the Financial Reporting in Capital Markets” is TRY 3,016,415,970- andthe 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 dividenddistribution in accordance with the decree which was published on 12 January 2009 regarding “Announcement Regarding Dividend DistributionOf Profits Related To 2008 Accounting Period” which had been decided during the meeting of the Capital Markets Board (CMB) dated 09January 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 thepaid 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- asof 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 legalreserve 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/issuedcapital of the Company and TRY 323,585,664- which is the first legal reserve amount set aside in the commercial records as of 31 December2008.,

4- TRY 2,196,386,452- is the distributable dividend of the Company, pertaining to year 2008, which is the difference between TRY2,312,800,788-, the basis for dividend distribution as stated in the consolidated financial reports of the Company and TRY 116,414,336- , whichis the first legal reserve amount, as mentioned hereinabove and TRY 2,202,953,878- calculated by adding TRY 6,567,426- which is theaggregate 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 forthe year 2008, of the first dividend basis, amounting to TRY 2,202,953,878- shall be distributed as the first cash dividend and the secondaryreserve 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 theinvestment incentive utilized within the scope of the investments made during the period prior to April 24, 2003 and investment allowancewithholding 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 anominal 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 extraordinaryreserves, 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 HeadOffice, Çiftehavuzlar, İzmir and Ankara branches of Finans Yat›r›m Menkul Değerler A.Ş. and also in Central Registry Agency located at SüzerPlaza Askerocağ› Cad. No: 15 K: 2 34367 Elmadağ - Şişli, İstanbul and shall be made in exchange of the dividend share denominations for year2008, provided that the physical shares held by the shareholders are registered by the Central Registry Agency and brokerage house authorizedfor keeping the shares.

THE BOARD

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ABSTRACT OF AUDITOR'S REPORT TOGENERAL ASSEMBLY OF TURKCELL İLETİŞİM HİZMETLERİ A.Ş.

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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 ERATALARterm of duty of auditors : 1 (One) Yearwhether they are company shareholderand/or employees : Neither is a company shareholder or employee

Number of Board of Directors Meetings : Hamit Sedat Eratalar attended 11 ordinary Board of DirectorsAttended, Board of Directors Meetings meetings in addition to the extraordinary Board of DirectorsHeld 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 statutoryaccounts, 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 inThe Turkish Commercial Code and the results thereof coherence.

Dates of examinations performed pursuant to Article 353 : The monthly examinations revealed that securitiesParagraph 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 regardsproceedings 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 TurkishCommercial Code, the Company's Articles of Association and other legislation and in accordance with the generally accepted Accountingprinciples 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, andthat 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

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