FORM 6-K

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Report of Foreign Issuer
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934

For the month of May 2007

Commission File Number 001-15092

TURKCELL ILETISIM HIZMETLERI A.S.

(Translation of registrant’s name into English)

Turkcell Plaza
Mesrutiyet Caddesi No. 153
34430 Tepebasi
Istanbul, Turkey

(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F

Form 20-F: ý Form 40-F: o

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):

Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders.

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):

Note: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submitted to furnish a report or other document that the registrant foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant’s “home country”), or under the rules of the home country exchange on which the registrant’s securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant’s security holders, and, if discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR.

Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes: o No: ý

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b) 82 —

EXHIBIT 1

TURKCELL ILETISIM HIZMETLERI A.S. REPORTS RESULTS

FOR THE FIRST QUARTER 2007

Strong Financial Performance Continues

Istanbul, Turkey, May 9, 2007 – Turkcell (NYSE:TKC, ISE:TCELL), (www.turkcell.com.tr), the leading provider of mobile communications services in Turkey, today announced results for the first quarter ended March 31, 2007. All financial results in this press release are unaudited, prepared in accordance with International Financial Reporting Standards (“IFRS”) and expressed in US$.¹

Beginning this quarter, we will provide a year on year comparison of our key indicators because we believe it provides a more complete picture of our performance for the reader. We are making this change mainly on the basis of more stable macro economic environment in Turkey and to eliminate the effects of seasonality in quarter on quarter analysis. In this press release figures in parentheses following the operational and financial results for the first quarter 2007 refer to the same item in the first quarter of 2006. For further details, please refer to our consolidated financial statements and notes for the quarter ended March 31, 2007 which can be accessed via our web site in the investor relations section (www.turkcell.com.tr).

Highlights of the Quarter

•	Revenue increased by 14% on an annual basis to US$1.3 billion (US$1.1 billion) in the first quarter of 2007

•	Turkcell recorded an EBITDA* margin of 40% in the first quarter of 2007

•	Net income increased 45% on an annual basis to US$272.1 million (US$187.2 million) due to a continued strong operational performance

•	Turkcell’s subscriber base grew by 12% on an annual basis to 32.2 million (28.7 million) as of March 31, 2007

•	Minutes of usage per subscriber (“MoU”) in the first quarter of 2007 increased on an annual basis by 9% to 63 minutes (58 minutes)

•	Turkcell recorded average revenue per user (“ARPU”) of US$12.1 (US$12.2) in the first quarter of 2007 despite depreciation of TRY against USD of 6% during the period

•	Astelit, Turkcell’s Ukrainian subsidiary, recorded encouraging results with 150% increase in revenue on an annual basis

*EBITDA is a non-GAAP financial measure. See page 10 for the reconciliation of EBITDA to net cash used for operating activities.

_________________________

¹ Please note that all financial data is consolidated and comprises of Turkcell Iletisim Hizmetleri A.S., (the “Company”, “Turkcell”) and its subsidiaries and its associates (together referred to as the “Group”). All non-financial data is unconsolidated and comprise of Turkcell only. The terms "we", "us", and "our" in this press release refer only to the Company, except in discussions of financial data, and where such terms refer to the Group, and where context otherwise requires.

Comments from the CEO, Sureyya Ciliv

“I am very pleased that we delivered a quarter of strong growth where revenue increased 14% and net income increased 45% over the same period last year. Our customers responded well to our best value offers and to our marketing campaigns.

The number of new subscriptions was a new record for any first quarter. Despite a slow start in January due to the introduction of a new dealer incentive program, we have built strong momentum in customer acquisitions through the quarter.

I am also pleased about the business performance of our international operations and especially the progress made in our subsidiary in Ukraine.

I thank all of the Turkcell employees and business partners for their hard work, dedication and focus on customer satisfaction. I congratulate them all for a successful quarter. “

OVERVIEW OF THE QUARTER

During the first quarter of 2007, the stability in the Turkish macro economic environment continued. However, there have been important developments in the political sphere in Turkey recently, due to the upcoming elections. These developments may result in potential political and economical uncertainties during the forthcoming months which we will monitor closely.

The growth in the Turkish GSM market continued in first quarter of 2007, to an extent driven by some aggressive acquisition campaigns introduced by our competitors. We maintained our leading position in the market while maintaining our value focus and sustaining a balance with our revenue goals despite an increasing competitive environment.

In line with our vision “to ease and enrich the lives of our subscribers”, we communicated our value propositions to our customers, sales network and dealers. We promoted the quality and reliability of our network, the range of our different value offers, the variety and convenience of our services and the additional benefits of being a Turkcell customer.

During this period, we continued to focus on customer satisfaction and loyalty, mainly targeting youth, premium and corporate segments, as well as encouraging higher usage through introducing voice, SMS and data packages, and continuing with our customized offers and campaigns. We also continued to design attractive campaigns providing additional co-branded benefits to emphasize our value propositions to our youth club and professionals club members. Furthermore, during this period, we introduced several actions to attract postpaid subscriptions as a result, expanding our postpaid subscriber base and usage amongst these subscribers.

Overall in our market, we can conclude that we have seen continued trends from our competitors towards a more rational competitive environment through upward price adjustments and more chargeable minute campaigns despite more aggressive acquisition offers.

With regard to developments in the regulatory environment, the Telecommunications Authority recently announced the tender conditions for granting of the 3G Licenses in Turkey; to be held on May 25, 2007.

Financial and Operational Review of First Quarter 2007

The following discussion focuses principally on the developments and trends in our business in the first quarter of 2007. Selected financial information for the first quarter of 2006, fourth quarter of 2006, full year 2006 and first quarter of 2007 are also included at the end of this press release.

Macro environment Information

	Q1 2006	Q4 2006	Q1 2007	Q1 2007-Q1 2006 % Chg	Q1 2007- Q4 2006 % Chg

TRY / US$ rate
Closing Rate	1.3427	1.4056	1.3801	2.8%	(1.8%)
Average Rate	1.3252	1.4538	1.4024	5.8%	(3.5%)
INFLATION
CPI	1.3%	2.8%	2.4%	-	-
PPI	2.5%	0.1%	1.9%	-	-

The Turkish economy has been enjoying solid and stable growth in the last few years. However, there have been recent developments in the political environment that may result in potential political and economical uncertainties in the forthcoming quarters. Turkcell maintains its cautious stance primarily due to high uncertainty in local politics and concerns in the economy. We closely monitor the financial and political agenda in this volatile environment. We pay significant attention to liquidity and currency risks in line with our treasury management policies.

Financial Review

Profit & Loss Statement (million US$)	Q1 2006	Q4 2006	Q1 2007	Q1 2007-Q1 2006 % Chg	Q1 2007-Q4 2006 % Chg

Total revenues	1,132.2	1,203.3	1,294.8	14.4%	7.6%
Direct cost of revenues	(667.4)	(662.0)	(686.0)	2.8%	3.6%
Depreciation and amortization	196.8	164.9	188.7	(4.1%)	14.4%
Administrative expenses	(41.3)	(29.2)	(52.4)	26.9%	79.5%
Selling and marketing expenses	(206.1)	(211.8)	(231.7)	12.4%	9.4%

EBITDA	414.3	465.2	513.3	23.9%	10.3%
EBITDA Margin	37%	39%	40%	-	-

Financial expense	(20.2)	(42.0)	(51.1)	153.0%	21.7%
Financial income	53.6	63.0	76.7	43.1%	21.7%
Net finance income	33.4	21.0	25.6	(23.4%)	21.9%
Share of profit of associates	15.8	16.3	17.7	12.0%	8.6%
Income tax expense	(87.4)	(52.0)	(100.6)	15.1%	93.5%
Net income	187.2	289.6	272.1	45.4%	(6.0%)

Revenue: Our revenues increased by 14% to US$1,294.8 million compared to the same quarter of 2006 on the back of an increasing subscriber base and usage, increase in tariffs as well as the contribution of our consolidated subsidiaries despite the depreciation of TRY against US$.

Direct cost of revenue: Direct cost of revenues, including depreciation and amortization, remained almost stable at US$686.0 million. Direct cost of revenues did not increase parallel to revenues mainly due to the change in the gross revenue definition as of March 10, 2006 that resulted in a decrease in treasury share fee expenses.

Depreciation and amortization decreased to US$188.7 million in the first quarter of 2007 compared to US$196.8 million in the first quarter of 2006 mainly due to the fully depreciated assets and depreciation of TRY against US$.

Interconnection costs also decreased year on year by 8% to US$83.0 million due to the revision of call termination rates and the depreciation of TRY against US$.

Selling and marketing expenses: Selling and marketing expenses in the first quarter of 2007 increased by 12% on an annual basis to US$231.7 million through higher marketing campaign costs and investments in channel in line with trends in the competitive environment. The proportion of selling and marketing expenses to revenue remained stable at 18%.

Administrative expenses: The year on year increase in administrative expenses was mainly due to consultancy expenses related to the investment opportunities and administrative expenses as a proportion of revenue remained stable at 4%.

Compared to the fourth quarter of 2006, the increase was due to a one time reversal recorded in the fourth quarter of 2006 regarding the income accrual of approximately US$15.5 million recognized for the success fee previously paid to BNP Paribas for Irancell.

Share of profit of equity accounted investees: In the first quarter of 2007, our equity in net income of unconsolidated investees increased to US$17.7 million compared to US$15.8 million the first quarter of 2006 mainly due to solid operational growth in our Fintur operations.

Net finance income: As a result of an increasing cash balance and interest rates, financial income increased to US$76.7 million. On the other hand, our finance expense increased to US$51.1 million mainly due to the foreign exchange loss on foreign currency assets and transactions.

Overall, our net financing income decreased by 23% to US$25.6 million compared to the same quarter of 2006.

Income tax expense: The total taxation charge in the first quarter of 2007 increased by 15.1% year on year to US$100.6 million mainly due to increase in profit before tax and decrease in deferred tax benefit recognized from investment incentive allowance as a result of the decrease in corporate tax rate from 30% to 20%.

Out of the total tax charge, US$114.3 million was related to current tax charges in the first quarter of 2007 and deferred tax income of US$13.7 million was realized during the quarter.

Income tax expense (million US$)	Q1 2006	Q4 2006	Q1 2007	Q1 2007-Q1 2006 % Chg	Q1 2007-Q4 2006 % Chg

Current Tax expense	(69.5)	(64.2)	(114.3)	64.5%	78.0%
Deferred Tax expense	(17.9)	12.2	13.7	176.5%	12.3%
Income Tax expense	(87.4)	(52.0)	(100.6)	15.1%	93.5%

EBITDA: EBITDA in the first quarter of 2007 increased by 24% year on year to US$513.3 million due to increase in revenues and decrease in Treasury Share fee expenses and interconnection costs. Consequently, EBITDA margin increased to 40% for the first quarter of 2007.

Net income: We recorded 45% annual growth in net income to US$272.1 million in the first quarter of 2007 mainly due to the improved EBITDA.

Total Debt: Our consolidated debt amounted to US$579.2 million as of March 31, 2007. Of this total amount, US$462.7 million was related to our Ukraine operations.

Consolidated Cash Flow (million US$)	Q1 2006	Q4 2006	Q1 2007

Net cash provided by operating activities	98.1	729.5	343.5
Net cash used for investing activities	(113.4)	(135.1)	(17.6)
Net cash provided by/(used for) financing activities	196.5	(41.7)	(56.6)
Cash Balance	1,000.3	1,598.6	1,862.7

Cash Flow Analysis: Our net cash flow from operating activities increased to US$343.5 million in the first quarter of 2007 mainly resulting from the increase in net income in the first quarter due to strong operational performance.

In the first quarter of 2007, net cash used for investing activities decreased to US$17.6 million mainly resulting from interest and dividends received.

Capital expenditures in the first quarter of 2007 amounted to US$130.0 million of which US$50.0 million was related to our Ukrainian operations.

Consequently, our cash position at the end of the first quarter of 2007 reached US$1,862.7 million.

Operational Review

Summary of Operational Data	Q1 2006	Q4 2006	Q1 2007	Q1 2007- Q1 2006 % Chg	Q1 2007- Q4 2006 % Chg

Number of total subscribers (million)	28.7	31.8	32.2	12.2%	1.3%
Number of post-paid subscribers (million)	5.5	5.8	5.9	7.3%	1.7%
Number of pre-paid subscribers (million)	23.2	26.0	26.3	13.4%	1.2%

ARPU (Average Monthly Revenue per User), blended (US$)	12.2	11.8	12.1	(0.8%)	2.5%
ARPU, postpaid (US$)	30.5	31.1	32.2	5.6%	3.5%
ARPU, prepaid (US$)	7.9	7.5	7.6	(3.8%)	1.3%

Churn (%)	3.5	4.4	5.1	-	-

MOU (Average Monthly Minutes of usage per subscriber), blended	57.9	74.1	62.8	8.5%	(15.2%)

Subscribers: Our subscriber base grew by 12% on an annual basis and reached 32.2 million as of March 31, 2007. We added approximately 484,000 net new subscribers in the first quarter of 2007. New gross subscribers acquired in the first quarter of 2007 consisted of 87% prepaid subscribers and 13% postpaid subscribers ensuring an increase in terms of the percentage of postpaid subscriber acquisitions overall.

Churn Rate: Churn refers to disconnected subscribers, whether disconnected voluntarily or involuntarily. In the first quarter of 2007, we recorded a churn rate of 5.1% mainly due to prepaid involuntary churn triggered by high acquisition campaigns in the market in the third quarter of 2006.

MoU: Our blended minutes of usage per subscriber (“MoU”) in the first quarter of 2007 increased on an annual basis by 9% to 63 minutes mainly due to our segment based offers.

ARPU: Our blended average revenue per user (“ARPU”) remained at almost stable levels of US$12.1 compared to the same quarter in 2006. This stability was mainly due to price adjustments and increased usage despite a 6% depreciation of TRY against US$ and dilutive impact of growing prepaid subscriber base during this period.

International Operations

Fintur

We hold a 41.45% stake in Fintur and through Fintur we hold interests in GSM operations in Kazakhstan, Azerbaijan, Moldova, and Georgia.

FINTUR as of March 31, 2007	Subscriber (mio)	Revenue (US$ mio)

Kazakhstan	3.9	163.1
Azerbaijan	2.5	88.3
Moldova	0.5	11.4
Georgia	1.1	34.9
TOTAL	8.0	297.7

Fintur’s operations recorded growth in revenues on annual basis during the first quarter of 2007 and consolidated revenues of Fintur reached US$297.7 million as of March 31, 2007. Fintur added approximately 0.7 million net new subscribers in the first quarter of 2007.

We account for our investment in Fintur using the equity method. Fintur’s contribution to income was US$22.1 million (US$15.8 million) in the first quarter of 2007.

Ukraine

Astelit, in which we hold a 55% stake through Euroasia, has operated in Ukraine since February 2005 under the brand “life:)”.

During the first quarter of 2007;

•

Astelit continued to achieve encouraging results through growing its revenue by 150% on annual basis.

•

Astelit’s operational indicators have remained very strong with subscribers at 5.8 million

•

3 months active subscriber base has reached 60% levels

•

3 month active ARPU increased by 55% on annual basis.

Summary Data for Astelit	Q1 2006	Q4 2006	Q1 2007

Number of subscribers (million)
Total	3.3	5.6	5.8
Active (3 months)^[1]	2.2	3.1	3.5

Average Revenue per User (ARPU) in US$
Total	2.0	2.0	2.5
Active (3 months)	2.7	4.1	4.2

Revenue	17.1	30.5	42.8
EBITDA^[1]	(17.7)	(26.5)	(16.5)
Net Loss	(55.9)	(29.9)	(44.9)

Capex	55.7	83.3	50.0

In December 2005, a long term financing package was obtained by Astelit amounting to US$540 million that consisted of a syndicated senior loan (US$390 million) and a junior loan (US$150 million). As of March 31, 2007, approximately US$369 million of the senior syndicated facility was utilized. In 2006, Astelit started discussions with the lenders of the senior syndicated facility and proposed it’s restructuring and notified that Turkcell shall purchase the loans and commitments held by lenders that do not consent to the restructuring proposal. As of today, it is likely that we will take over the majority of the syndicated senior loan amounting to US$369 million and the restructuring is expected to be finalized in the third quarter of 2007. Astelit intends to refinance this debt to Turkcell within the next 18 months, depending on the market conditions and its performance.

_________________________

² Active subscribers are those who in the past three months made a transaction which brought revenue to the Company.

³ EBITDA is a non GAAP financial measure. See page 11 for the reconciliation of Astelit EBITDA to net cash used for operating activities

Reconciliation of Non-GAAP Financial Measures

We believe that EBITDA is a measure commonly used by companies, analysts and investors in the telecommunications industry, which enhances the understanding of our operating results and assists in the evaluation of our capacity to meet our financial obligations. We also use EBITDA as an internal measurement tool and, accordingly, we believe that the presentation of EBITDA provides useful and relevant information to analysts and investors.

Beginning from the 2006 fiscal year, we have revised the definition of EBITDA which we use and we report EBITDA using this new definition starting from the first quarter of 2006 results announcement to provide a new measure to reflect solely cash flow from operations.

The EBITDA definition used in our previous press releases and announcements had included Revenues, Direct Cost of Revenues excluding depreciation and amortization, Selling and Marketing expenses, Administrative expenses, translation gain/(loss), financial income, income on unconsolidated subsidiaries, gain on sale of investments, income/(loss) from related parties, minority interest and other income/(expense). Our new EBITDA definition includes Revenues, Direct Cost of Revenues excluding depreciation and amortization, Selling and Marketing expenses and Administrative expenses, but excludes translation gain/(loss), financial income, income on unconsolidated subsidiaries, gain on sale of investments, income/(loss) from related parties, minority interest and other income/(expense).

EBITDA is not a measure of financial performance under IFRS and should not be construed as a substitute for net earnings (loss) as a measure of performance or cash flow from operations as a measure of liquidity.

The following table provides a reconciliation of EBITDA, which is a non-GAAP financial measure, to net cash provided by operating activities, which we believe is the most directly comparable financial measure calculated and presented in accordance with IFRS.

TURKCELL US$ million	Q1 2006	Q4 2006	Q1 2007	Q1 2007-Q1 2006 % Chg	Q1 2007-Q4 2006 % Chg

EBITDA	414.3	465.2	513.3	23.9%	10.3%
Other operating income/(expense)	(2.0)	(0.4)	1.0	(150.0%)	(350.0%)
Financial income	53.6	63.0	76.7	43.1%	21.7%
Financial expense	(20.2)	(42.0)	(51.1)	153.0%	21.7%
Net increase (decrease) in assets and liabilities	(347.6)	243.7	(196.4)	(43.5%)	(180.6%)
Net cash provided by operating activities	98.1	729.5	343.5	250.2%	(52.9%)

EUROASIA US$ million	Q1 2006	Q4 2006	Q1 2007	Q1 2007-Q1 2006 % Chg	Q1 2007-Q4 2006 % Chg

EBITDA	(17.7)	(26.5)	(16.5)	(6.8%)	(37.7%)
Other operating income/(expense)	(1.3)	(0.3)	-	-	-
Financial income	0.1	0.2	0.3	200.0%	50.0%
Financial expense	(15.1)	(2.8)	(9.8)	(35.1%)	250.0%
Net increase (decrease) in assets and liabilities	22.2	46.9	22.8	2.7%	(51.4%)
Net cash provided by operating activities	(11.8)	17.5	(3.2)	(72.9%)	(118.3%)

Turkcell Group Subscribers

We have approximately 40.2 million proportionate GSM subscribers as of March 31, 2007. This is calculated by taking the number of GSM subscribers in Turkcell and each of our subsidiaries and multiplying the number of unconsolidated investees by our percentage ownership interest in each subsidiary. This figure includes the proportionate rather than total number of Fintur’s GSM subscribers however, includes the total number of GSM subscribers in Ukraine and in our operations in Turkish Republic of Northern Cyprus (“Northern Cyprus”) because the financial statements of our subsidiaries in Ukraine and Northern Cyprus are consolidated with Turkcell’s financial statements.

Turkcell Group Subscribers (million)	Q1 2006	Q4 2006	Q1 2007	Q1 2007- Q1 2006 % Chg	Q1 2007- Q4 2006 % Chg

Turkcell	28.7	31.8	32.2	12.2%	1.3%
Ukraine	3.3	5.6	5.8	75.8%	3.6%
Fintur (pro rata)	1.5	1.8	1.9	26.7%	5.6%
Northern Cyprus	0.2	0.2	0.3	50.0%	50.0%
TURKCELL GROUP	33.7	39.4	40.2	19.3%	2.0%

Forward-Looking Statements

This release may include forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 and the Safe Harbor provisions of the US Private Securities Litigation Reform Act of 1995. All statements other than statements of historical facts included in this press release, including, without limitation, certain statements regarding our operations, financial position and business strategy may constitute forward-looking statements. In addition, forward-looking statements generally can be identified by the use of forward-looking terminology such as, among others, “may,” “will,” “expect,” “intend,” “plan,” “estimate,” “anticipate,” “believe” or “continue.”

Although Turkcell believes that the expectations reflected in such forward-looking statements are reasonable at this time, it can give no assurance that such expectations will prove to be correct. Given these uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. All subsequent written and oral forward-looking statements attributable to us are expressly qualified in their entirety by reference to these cautionary statements.

www.turkcell.com.tr

ABOUT TURKCELL

Turkcell is the leading GSM operator in Turkey with 32.2 million postpaid and prepaid customers as of March 31, 2007 operating in a three player market with a market share of approximately 60% as of December 31, 2006 (Source: The Telecommunications Authority). In addition to high-quality wireless telephone services, Turkcell currently offers General Packet Radio Service (“GPRS”) countrywide and Enhanced Data Rates for GSM Evolution (“EDGE”) in dense areas, which provide for both improved data and voice services. Turkcell provides roaming with 548 operators in 193 countries as of May 4, 2007. Serving a large subscriber base in Turkey with its high-quality wireless telephone network, Turkcell reported US$1,295 million net revenues as of March 31, 2007 and US$4,700 million net revenues as of December 31, 2006 as per IFRS financial statements. Turkcell has interests in international GSM operations in Azerbaijan, Georgia, Kazakhstan, Moldova, Northern Cyprus and Ukraine. Turkcell has been listed on the NYSE (“New York Stock Exchange”) and the ISE (“Istanbul Stock Exchange”) since July 2000 and is the only NYSE listed company in Turkey. 51.00% of Turkcell’s share capital is held by Turkcell Holding, 7.46% by Cukurova Group, 13.07% by Sonera Holding, 5.07% by M.V. Group and 0.01% by others while the remaining 23.39% is free float.

For further information please contact:

Contact:

Turkcell:

Investors:

Koray Ozturkler, Investor Relations

Tel: +90-212-313-1500

Email: koray.ozturkler@turkcell.com.tr

Ferda Atabek, Investor Relations

Tel: + 90-212-313-1275

Email: ferda.atabek@turkcell.com.tr

investor.relations@turkcell.com.tr

Media:

Doruk Arbay, Corporate Communications

Tel: + 90-212-313-2319

Email: doruk.arbay@turkcell.com.tr

TURKCELL ILETISIM HIZMETLERI A.S.
SELECTED FINANCIALS

	Quarter Ended March 31, 2006		Quarter Ended December 31, 2006		Year Ended December 31, 2006		Quarter Ended March 31, 2007


Consolidated Statement of Operations Data
Revenues
Communication fees	1,047.6		1,128.9		4,406.7		1,193.3
Commission fees on betting business	60.0		38.9		172.4		58.2
Monthly fixed fees	13.9		15.8		57.6		12.6
SIM card sales	5.8		6.0		21.0		6.9
Call center revenues and other revenues	4.9		13.7		42.6		23.8
Total revenues	1,132.2		1,203.3		4,700.3		1,294.8
Direct cost of revenues	(667.4	)	(662.0	)	(2,627.9	)	(686.0	)

Gross profit	464.8		541.3		2,072.4		608.8
Administrative expenses	(41.3	)	(29.2	)	(154.9	)	(52.4	)
Selling & marketing expenses	(206.1	)	(211.8	)	(827.5	)	(231.7	)
Other operating income / (expense)	(2.0	)	(0.4	)	1.6		1.0

Operating profit before financing costs	215.4		299.9		1,091.6		325.7
Financial expense	(20.2	)	(42.0	)	(108.0	)	(51.1	)
Financial income	53.6		63.0		184.0		76.7
Share of profit of associates	15.8		16.3		78.6		17.7

Income before taxes and minority interest	264.6		337.2		1,246.2		369.0
Income tax expense	(87.4	)	(52.0	)	(413.2	)	(100.6	)

Income before minority interest	177.2		285.2		833.0		268.4
Minority interest	10.0		4.4		42.5		3.7

Net income	187.2		289.6		875.5		272.1

Net income per share	0.085084		0.131651		0.397951		0.123699
Other Financial Data

Gross margin	41	%	45	%	44	%	47	%
EBITDA(*)	414.3		465.2		1,820.0		513.3
Capital expenditures	137.7		210.7		604.8		130.0

Consolidated Balance Sheet Data (at period end)
Cash and cash equivalents	1,000.3		1,598.6		1,598.6		1,862.7
Total assets	5,576.7		6,089.7		6,089.7		6,488.1
Long term debt	16.2		113.5		113.5		116.0
Total debt	830.6		639.6		639.6		579.2
Total liabilities	1,696.2		1,971.8		1,971.8		2,434.7
Total shareholders’ equity / Net Assets	3,880.6		4,118.0		4,118.0		4,053.3

Consolidated Cash Flow Information
Net cash provided by operating activities	98.1		729.5		1,854.9		343.5
Net cash used in investing activities	(113.4	)	(135.1	)	(632.5	)	(17.6	)
Net cash used in financing activities	196.5		(41.7	)	(395.8	)	(56.6	)

* Please refer to the notes on reconciliation of Non-GAAP Financial measures on page 10.

EXHIBIT 2

TURKCELL ILETISIM HIZMETLERI AS AND ITS SUBSIDIARIES

CONSOLIDATED INTERIM BALANCE SHEET

As at 31 March 2007

(Amounts expressed in thousands of US Dollars unless otherwise indicated except share amounts)

		Note	31 March	31 December
		Note	2007	2006
Assets
	Property, plant and equipment	11	1,943,321	1,916,991
	Intangible assets	12	1,195,399	1,234,668
	Investments in equity accounted investees	13	532,545	523,840
	Other investments, including derivatives	14	37,649	35,095
	Due from related parties	31	71,513	72,506
	Other non-current assets	15	125,893	121,465
	Deferred tax assets	16	2,178	3,052
Total non-current assets			3,908,498	3,907,617

	Inventories		7,966	11,018
	Other investments, including derivatives	14	46,051	61,733
	Due from related parties	31	56,218	66,101
	Trade receivables and accrued income	17	349,123	318,973
	Other current assets	18	257,528	125,653
	Cash and cash equivalents	19	1,862,697	1,598,640
Total current assets			2,579,583	2,182,118

Total assets			6,488,081	6,089,735


Equity
	Share capital	20	1,636,204	1,636,204
	Share premium	20	434	434
	Reserves	20	180,940	(4,884)
	Retained earnings	20	2,146,543	2,394,838
Total equity attributable to equity holders of the Company			3,964,121	4,026,592

Minority interest		20	89,221	91,375

Total equity			4,053,342	4,117,967

Liabilities
	Loans and borrowings	22	115,989	113,503
	Employee benefits	23	21,322	17,648
	Other non-current liabilities		-	8,683
	Deferred tax liabilities	16	186,122	196,260
Total non-current liabilities			323,433	336,094

	Bank overdraft	19	-	285
	Loans and borrowings	22	463,200	526,083
	Income taxes payable	10	425,498	309,470
	Trade and other payables	26	571,320	579,421
	Due to related parties	31	456,343	6,844
	Deferred income	24	179,075	184,337
	Provisions	25	15,870	29,234
Total current liabilities			2,111,306	1,635,674

Total liabilities			2,434,739	1,971,768

Total equity and liabilities			6,488,081	6,089,735

The notes on page 6 to 74 are an integral part of these consolidated financial statements

TURKCELL ILETISIM HIZMETLERI AS AND ITS SUBSIDIARIES

CONSOLIDATED INTERIM INCOME STATEMENT

For the three months ended 31 March 2007

(Amounts expressed in thousands of US Dollars unless otherwise indicated except share amounts)

		Three months ended 31 March
	Note	2007	2006

Revenue	7	1,294,761	1,132,201
Direct cost of revenue		(685,995)	(667,354)
Gross profit		608,766	464,847

Other income		3,110	1,492
Selling and marketing expenses		(231,695)	(206,090)
Administrative expenses		(52,432)	(41,273)
Other expenses		(2,016)	(3,628)
Results from operating activities		325,733	215,348


Finance income	9	76,770	53,603
Finance expense	9	(51,140)	(20,152)
Net finance income		25,630	33,451

Share of profit of equity accounted investees	13	17,679	15,848
Profit before income taxes		369,042	264,647

Income tax expense	10	(100,612)	(87,447)
Profit for the period		268,430	177,200

Attributable to:
Equity holders of the Company		272,138	187,185
Minority interest		(3,708)	(9,985)
Profit for the period		268,430	177,200

Basic and diluted earnings per share	21	0.123699	0.085084
(in full USD)

The notes on page 6 to 74 are an integral part of these consolidated financial statements

TURKCELL ILETISIM HIZMETLERI AS AND ITS SUBSIDIARIES

CONSOLIDATED INTERIM STATEMENT OF RECOGNIZED INCOME AND EXPENSE

For the three months ended 31 March 2007

(Amounts expressed in thousands of US Dollars unless otherwise indicated except share amounts)

	Three months ended 31 March
	2007	2006

Foreign exchange translation differences	76,955	2,066
Change in fair value of available-for-sale securities, net of deferred taxes	349	390
Income recognized directly in equity	77,304	2,456

Profit for the period	268,430	177,200

Total recognized income for the period	345,734	179,656

Attributable to:
Equity holders of the Company	349,442	189,641
Minority interest	(3,708)	(9,985)
Total recognized income for the period	345,734	179,656

The notes on page 6 to 74 are an integral part of these consolidated financial statements

TURKCELL ILETISIM HIZMETLERI AS AND ITS SUBSIDIARIES

CONSOLIDATED INTERIM STATEMENT OF CASH FLOWS

For the three months ended 31 March 2007

(Amounts expressed in thousands of US Dollars unless otherwise indicated except share amounts)

	Three months ended
	2007	2006
Cash flows from operating activities
Profit for the period	268,430	177,200
Adjustments for:
Depreciation	126,217	138,157
Amortization of intangibles	62,443	58,639
Foreign exchange gain, net	37,631	(7,858)
Net finance costs	(58,410)	(23,891)
Income tax expense	100,612	87,447
Share of profit of equity accounted investees	(26,971)	(15,848)
Gain on sale of property, plant and equipment	(1,557)	-
Translation reserve	3,759	7,943
Net gain/(loss) on remeasurement of investments	(632)	-
Amortisation of transaction costs of borrowings	2,176	-
	513,698	421,789
Change in trade receivables	(24,632)	3,208
Change in due from related parties	11,720	3,362
Change in inventories	3,255	(400)
Change in other current assets	(129,564)	(119,152)
Change in trading securities	-	(96,780)
Change in other investments, including derivatives	(6,391)	-
Change in other non-current investments, including derivatives	(1,906)	-
Change in other non-current assets	(4,133)	526
Change in due to related parties	38,556	(347)
Change in trade and other payables	(20,108)	(58,501)
Change in other non-current liabilities	(8,713)	1,163
Change in employee benefits	3,348	1,737
Change in deferred income	(5,262)	(12,639)
Change in provisions	(13,710)	(13,532)
	356,158	130,434
Interest paid	(17,894)	(18,651)
Income taxes paid	(6,106)	(13,705)
Dividend received	11,306	-
Net cash from operating activities	343,464	98,078

Cash flows from investing activities
Acquisition of property, plant and equipment	(126,802)	(133,449)
Acquisition of intangibles	(3,195)	(4,215)
Proceeds from sale of property plant and equipment	1,556	-
Acquisition of equity accounted investees and other investments	-	(1,927)
Acquisition of minority interest	(93)	(16,661)
Proceeds from currency option contracts	1,372	-
Acquisition of available-for-sale financial assets	(119)	-
Proceeds from sale of available-for-sale financial assets	16,729	-
Proceeds from settlement of held-to-maturity investments	7,246	-
Interest received	69,923	42,892
Dividends received	15,828	-
Net cash used in investing activities	(17,555)	(113,360)

Cash flows from financing activities
Payment of transaction costs	(203)	(49,062)
Proceeds from issuance of loans and borrowings	-	664,049
Repayment of borrowings and finance lease liabilities	(58,000)	(445,768)
Change in minority interest	1,647	27,252
Net cash used in financing activities	(56,556)	196,471
Effects of foreign exchange rate fluctuations on balance sheet items	32,335	-

Net increase in cash and cash equivalents	301,688	181,189
Cash and cash equivalents at 1 January	1,598,640	808,153
Effect of exchange rate fluctuations on cash and cash equivalents	(37,631)	7,858
Cash and cash equivalents at 31 March	1,862,697	997,200

The notes on page 6 to 74 are an integral part of these consolidated financial statements

TURKCELL ILETISIM HIZMETLERI AS AND ITS SUBSIDIARIES

NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS

As at and for the three months ended 31 March 2007

(Amounts expressed in thousands of US Dollars unless otherwise indicated except share amounts)

Notes to the Consolidated Financial Statements

	Page
1. Reporting entity		6
2. Basis of preparation		7
3. Significant accounting policies		8
4. Determination of fair values		18
5. Segment reporting		20
6. Acquisitions of joint ventures and minority interests		24
7. Revenue		25
8. Personnel expenses		25
9. Finance income and expense		25
10. Income tax expense in the income statement		26
11. Property, plant and equipment		28
12. Intangible assets		30
13. Equity accounted investees		32
14. Other investments		33
15. Other non-current assets		34
16. Deferred tax assets and liabilities		34
17. Trade receivables and accrued income		36
18. Other current assets		36
19. Cash and cash equivalents		37
20. Capital and reserves		38
21. Earnings per share		40
22. Loans and borrowings		41
23. Employee benefits		44
24. Deferred income		44
25. Provisions		44
26. Trade and other payables		45
27. Financial instruments		46
28. Operating leases		50
29. Capital commitments		51
30. Contingencies		51
31. Related parties		68
32. Group entities		73
33. Subsequent events		74

TURKCELL ILETISIM HIZMETLERI AS AND ITS SUBSIDIARIES

NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS

As at and for the three months ended 31 March 2007

(Amounts expressed in thousands of US Dollars unless otherwise indicated except share amounts)

1.	Reporting entity

Turkcell Iletisim Hizmetleri Anonim Sirketi (the “Company”) was incorporated in Turkey on 5 October 1993 and commenced its operations in 1994. It is engaged in establishing and operating a Global System for Mobile Communications (“GSM”) network in Turkey and regional states.

In April 1998, the Company signed a license agreement (the “License”) with the Ministry of Transportation and Communications of Turkey (the “Turkish Ministry”), under which it was granted a 25 year GSM license in exchange for a license fee of $500,000. The License permits the Company to operate as a stand-alone GSM operator and releases it from some of the operating constraints in the Revenue Sharing Agreement, which was in effect prior to the License. Under the License, the Company collects all of the revenue generated from the operations of its GSM network and pays the Undersecretariat of Treasury (the “Turkish Treasury”) an ongoing license fee equal to 15% of its gross revenue from Turkish GSM operations. The Company continues to build and operate its GSM network and is authorized to, among other things, set its own tariffs within certain limits, charge peak and off-peak rates, offer a variety of service and pricing packages, issue invoices directly to subscribers, collect payments and deal directly with subscribers.

On 25 June 2005, the Turkish government declared that GSM operators are required to pay 10% of their existing monthly ongoing license fee to the Turkish Ministry as a universal service fund contribution in accordance with Law No 5369. As a result, starting from 30 June 2005, the Company pays 90% of the ongoing license fee to the Turkish Treasury and 10% to the Turkish Ministry as universal service fund.

In July 2000, the Company completed an initial public offering with the listing of its ordinary shares on the Istanbul Stock Exchange and American Depositary Shares, or ADSs, on the New York Stock Exchange.

In November 2006, Cukurova Group sold 5.88% of the total shares through secondary offering. The Company did not receive any proceeds from this offering.

As at 31 March 2007, two significant founding shareholders, Sonera Holding BV and Cukurova Group own approximately 37.1% and 21.2%, respectively, of the Company’s share capital, and are ultimate counterparties to a number of transactions that are discussed in the related party footnote. On 28 November 2005, upon completion of a series of transactions, Alfa Group acquired 13.2% indirect ownership in the Company through its Altimo subsidiary, one of Russia’s leading private telecommunications investors.

The consolidated interim financial statements of the Company as at and for the three months ended 31 March 2007 comprise the Company and its seventeen subsidiaries (together referred to as the “Group”) and the Group’s interest in one associate and one joint venture. The Company’s and each of its subsidiaries’, associate’s and joint ventures’ interim financial statements are prepared as at and for the three months ended 31 March 2007.

TURKCELL ILETISIM HIZMETLERI AS AND ITS SUBSIDIARIES

NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS

As at and for the three months ended 31 March 2007

(Amounts expressed in thousands of US Dollars unless otherwise indicated except share amounts)

2.	Basis of preparation

(a)

Statement of compliance

The consolidated interim financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRSs”) and its interpretations adopted by the International Accounting Standards Board (“IASB”).

The Group’s consolidated interim financial statements were approved by the Board of Directors on 8 May 2007.

(b)

Basis of measurement

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

(c)

Functional and presentation currency

The consolidated interim financial statements are presented in US Dollars, rounded to the nearest thousand. Moreover, all financial information expressed in new Turkish Lira (“TRY”), Euros (“EUR”) and Swedish Krona (“SEK”) have been rounded to the nearest thousand. The functional currency of the Company and its consolidated subsidiaries located in Turkey and Northern Cyprus is TRY. The functional currency of Euroasia Telecommunications Holding BV (“Euroasia”), LLC Astelit (“Astelit”) East Asian Consortium BV (“Eastasia”) is US Dollars, Ukrainian Hryvnia and EUR, respectively.

(d)

Use of estimates and judgments

The preparation of interim financial statements requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expenses and disclosure of contingent assets and liabilities. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making judgments about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods.

Management discussed with the Audit Committee the development, selection and disclosure of the Company’s critical accounting policies and estimates and the application of these policies and estimates. Information about estimates, uncertainty and critical judgements about the contingencies are described in note 30 and detailed analysis with respect to accounting estimates and judgements of bad debts, useful life or expected pattern of consumption of the future economic benefits embodied in depreciable assets is provided below:

TURKCELL ILETISIM HIZMETLERI AS AND ITS SUBSIDIARIES

NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS

As at and for the three months ended 31 March 2007

(Amounts expressed in thousands of US Dollars unless otherwise indicated except share amounts)

2.	Basis of preparation (continued)

(d)

Use of estimates and judgments (continued)

Key sources of estimation uncertainty

In note 27, detailed analysis is provided for the foreign exchange exposure of the Company and risks in relation to foreign exchange movements.

Critical accounting judgements in applying the Company’s accounting policies

Certain critical accounting judgements in applying the Company’s accounting policies are described below.

Trade receivables and accrued income

The impairment losses in trade and other receivables are based on management’s evaluation of the volume of the receivables outstanding, past experience and general economic conditions.

Useful life of assets

The useful economic lives of the Group’s assets are determined by management at the time the asset is acquired and regularly reviewed for appropriateness. The Group defines useful life of its assets in terms of the assets’ expected utility to the Group. This judgment is based on the experience of the Group with similar assets. In determining the useful life of an asset, the Group also follows technical and/or commercial obsolescence arising on changes or improvements from a change in the market. The useful life of the License is based on duration of the license agreement.

Commission fees

Commission fees relate to services performed in relation to betting games where the Group acts as an agent in the transaction rather than as the principal. In the absence of specific guidance in IFRSs on distinguishing between an agent and a principal, management considered the following factors:

•

The Group does not take the responsibility for fulfillment of the games.

•

The Group does not collect the revenue from the final customer and it does not bear the credit risk.

•

The Group earns a stated percentage of the total turnover.

3.	Significant accounting policies

The accounting policies set out below have been applied consistently to all periods presented in these consolidated interim financial statements.

(a)

Basis of consolidation

(i)

Subsidiaries

Subsidiaries are entities controlled by the Company. Control exists when the Company has the power, directly or indirectly, to govern the financial and operating policies of an entity so as to obtain benefits from its activities. In assessing control, potential voting rights that presently are exercisable or convertible are taken into account. The interim financial statements of subsidiaries are included in the consolidated interim financial statements from the date that control commences until the date that control ceases.

TURKCELL ILETISIM HIZMETLERI AS AND ITS SUBSIDIARIES

TURKCELL ILETISIM HIZMETLERI AS AND ITS SUBSIDIARIES

NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS

As at and for the three months ended 31 March 2007

(Amounts expressed in thousands of US Dollars unless otherwise indicated except share amounts)

3.	Significant accounting policies (continued)

(a)

Basis of consolidation (continued)

(ii) Associates and joint ventures (equity accounted investees)

Associates are those entities in which the Company has significant influence, but not control, over the financial and operating policies. Joint ventures are those entities over whose activities the Company has joint control, established by contractual agreement and requiring unanimous consent for strategic financial and operating decisions. Associates and joint ventures are accounted for using the equity method (equity accounted investees). The consolidated interim financial statements include the Company’s share of the income and expenses of equity accounted investees, after adjustments to align the accounting policies with those of the Company, from the date that significant influence or joint control commences until the date that significant influence or joint control ceases. When the Company’s share of losses exceeds its interest in an equity accounted investee, carrying amount of that interest is reduced to nil and recognition of further losses is discontinued except to the extent that the Company has incurred legal or constructive obligations or made payments on behalf of an associate. The Company’s equity accounted investees as at 31 March 2007 are Fintur Holdings B.V. (“Fintur”) and A-Tel Pazarlama ve Servis Hizmetleri AS (“A-Tel”).

(iii) Transactions eliminated on consolidation

Intragroup balances, and any unrealised gains and losses or income and expenses arising from intragroup transactions, are eliminated in preparing the consolidated interim financial statements. Unrealised gains arising from transactions with equity accounted investees are eliminated to the extent of the Group’s interest in the entity. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment.

(iv) Acquisition from entities under common control

Business combinations arising from transfers of interests in entities that are under the control of the shareholder that controls the Group are excluded from the scope of IFRS 3 Business Combinations (“IFRS 3”). The assets and liabilities acquired from entities under common control are recognised at the carrying amounts recognised previously in the Company’s controlling shareholder’s consolidated financial statements. The components of equity of the acquired entities are added to the same components within the Company equity except that any share capital of the acquired entities is recognised as part of share premium.

(b)

Foreign currency

(i)

Foreign currency transactions

Transactions in foreign currencies are translated to the respective functional currencies of the Group entities at exchange rate ruling at the date of the transactions. Monetary assets and liabilities denominated in foreign currencies at the reporting date are retranslated to the functional currency at the exchange rate ruling at that date. Foreign exchange differences arising on translation of foreign currency transactions are recognised in the income statement. Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are retranslated to the functional currency at exchange rate at the date that the fair value was determined. Foreign currency differences arising on retranslation are recognised in profit or loss, except for differences arising on the retranslation of available-for-sale equity instruments or a financial liability designated as a hedge of the net investment in a foreign operation.

TURKCELL ILETISIM HIZMETLERI AS AND ITS SUBSIDIARIES

NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS

As at and for the three months ended 31 March 2007

(Amounts expressed in thousands of US Dollars unless otherwise indicated except share amounts)

3.	Significant accounting policies (continued)

(b)

Foreign currency (continued)

(ii) Foreign operations

The assets and liabilities of foreign operations, including fair value adjustments arising on acquisition, are translated to US Dollars at foreign exchange rates ruling at the reporting date. The income and expenses of foreign operations are translated to US Dollars at rates approximating to the exchange rates ruling at the dates of the transactions. Since 1 January 2005, the Group’s date of transition to IFRS, such differences have been recognized in the foreign currency translation reserve. When a foreign operation is disposed of, in part or in full, the relevant amount in the translation reserve is transferred to profit or loss. Foreign exchange differences arising on retranslation are recognized directly in a separate component of equity.

(iii) Translation from functional to presentation currency

Items included in the financial statements of each company are measured using the currency of the primary economic environment in which the entities operate, normally under their local currencies.

The consolidated interim financial statements are presented in US Dollars, which is the presentation currency of the Group. The Group uses US Dollars as the presentation currency for the convenience of investor and analyst community.

Assets and liabilities for each balance sheet presented (including comparatives) are translated to US Dollars at exchange rates at the balance sheet date. Income and expenses for each income statement (including comparatives) in non-hyperinflationary economies are translated to US Dollars at rates approximating to exchange rates at the dates of the transactions.

Foreign exchange differences arising on retranslation are recognised directly in a separate component of equity.

(iv) Net investment in foreign operations

Foreign exchange differences arising from the translation of the net investment in foreign operations are recognized in translation reserve. They are transferred to the income statement upon disposal.

(c)

Financial instruments

(i)

Non-derivative financial instruments

Non-derivative financial instruments comprise investments in equity and debt securities, trade and other receivables, cash and cash equivalents, loans and borrowings, and trade and other payables.

Non-derivative financial instruments are recognised initially at fair value plus, for instruments not at fair value through profit or loss, any directly attributable transaction costs, except as described below. Subsequent to initial recognition, non-derivative financial instruments are measured as described below.

A financial instrument is recognised if the Group becomes a party to the contractual provisions of the instrument. Financial assets are derecognised if the Group’s contractual rights to the cash flows from the financial assets expire or if the Group transfers the financial asset to another party without retaining control or substantially all risks and rewards of the asset. Regular way purchases and sales of financial assets are accounted for at trade date, i.e., the date that the Group commits itself to purchase or sell the asset. Financial liabilities are derecognised if the Group’s obligations specified in the contract expire or are discharged or cancelled.

Cash and cash equivalents comprise cash balances and call deposits. Bank overdrafts that are repayable on demand and form an integral part of the Group’s cash management are included as a component of cash and cash equivalents for the purpose of the statement of cash flows.

TURKCELL ILETISIM HIZMETLERI AS AND ITS SUBSIDIARIES

NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS

As at and for the three months ended 31 March 2007

(Amounts expressed in thousands of US Dollars unless otherwise indicated except share amounts)

3.	Significant accounting policies (continued)

(c) Financial instruments (continued)

(i)

Non-derivative financial instruments (continued)

Accounting for finance income and expense is discussed in note 3(m).

Held-to-maturity investments

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

Available-for-sale financial assets

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

Investments at fair value through profit or loss

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

Other

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

(ii) Derivative financial instruments

The Group holds derivative financial instruments to hedge its foreign currency risk exposures arising from operational, financing and investing activities. In accordance with its treasury policy, the Group engages in forward and option contracts. However, these derivatives do not qualify for hedge accounting and are accounted for as trading instruments.

Embedded derivatives are separated from the host contract and accounted for separately if the economic characteristics and risks of the host contract and the embedded derivative are not closely related, a separate instrument with the same terms as the embedded derivative would meet the definition of a derivative, and the combined instrument is not measured at fair value through profit or loss.

Derivatives are recognised initially at fair value; attributable transaction costs are recognised in profit or loss when incurred. Subsequent to initial recognition, derivatives are measured at fair value, and changes therein are recognized in income statement.

TURKCELL ILETISIM HIZMETLERI AS AND ITS SUBSIDIARIES

NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS

As at and for the three months ended 31 March 2007

(Amounts expressed in thousands of US Dollars unless otherwise indicated except share amounts)

3.	Significant accounting policies (continued)

(c) Financial instruments (continued)

(iii) Share capital

Ordinary shares

Incremental costs directly attributable to issue of ordinary shares and share options are recognised as a deduction from equity.

Repurchase of share capital

When share capital recognised as equity is repurchased, the amount of the consideration paid, including directly attributable costs, is recognised as a deduction from equity. Repurchased shares are classified as treasury shares and are presented as a deduction from total equity.

(d) Property, plant and equipment

(i) Recognition and measurement

Items of property, plant and equipment are stated at cost adjusted for the effects of inflation during the hyperinflationary period lasted by 31 December 2005 less accumulated depreciation (see below) and impairment losses (see note 3(h)).

Cost includes expenditures that are directly attributable to the acquisition of the asset. The cost of self-constructed assets includes the cost of materials and direct labor, any other costs directly attributable to bringing the asset to a working condition for its intended use, and the costs of dismantling and removing the items and restoring the site on which they are located. Purchased software that is integral to the functionality of the related equipment is capitalised as part of that equipment.

Where parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items of property, plant and equipment.

(ii) Subsequent costs

The cost of replacing part of an item of property, plant and equipment is recognized in the carrying amount of the item if it is probable that the future economic benefits embodied within the item will flow to the Group and the cost of the item can be measured reliably. All other costs are recognised in the income statement as expense as incurred.

(iii) Depreciation

Depreciation is recognized in the income statement on a straight-line basis over the estimated useful lives of each part of an item of property, plant and equipment. Leased assets are depreciated over the shorter of the lease term and their useful lives. Land is not depreciated. The estimated useful lives for current and comparative periods are as follows:

Buildings	25 – 50 years
Network infrastructure	5– 10 years
Equipment, fixtures and fittings	4 – 5 years
Motor vehicles	4 – 5 years
Leasehold improvements		5 years

Depreciation methods, useful lives and residual values are reassessed at the reporting date.

TURKCELL ILETISIM HIZMETLERI AS AND ITS SUBSIDIARIES

NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS

As at and for the three months ended 31 March 2007

(Amounts expressed in thousands of US Dollars unless otherwise indicated except share amounts)

3.	Significant accounting policies (continued)

(e) Intangible assets

Intangible assets acquired by the Group are stated at cost adjusted for the effects of inflation during the hyperinflationary period lasted by 31 December 2005 less accumulated amortisation (see below) and impairment losses (see note 3(h)).

Expenditure on internally generated goodwill and brands is recognised in the income statement as an expense as incurred.

(i) Subsequent expenditure

Subsequent expenditure on capitalised intangible assets is capitalised only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure including expenditure on internally generated goodwill and brands, is expensed as incurred.

(ii) Amortization

Amortisation is recognized in the income statement on a straight line basis over the estimated useful lives of intangible assets unless such lives are indefinite from the date that they are available for use. Goodwill and intangible assets with an indefinite useful life are systematically tested for impairment at each balance sheet date. The estimated useful lives for the current and comparative periods are as follows:

Computer software	3 – 8	years
GSM and other telecommunications license	3 – 25	years
Transmission lines	10	years
Central betting system operating right	4 – 5	years
Customer base	2	years

(f) Leased assets

Leases in terms of which the Group assumes substantially all the risks and rewards of ownership are classified as finance leases. Upon initial recognition, the leased asset is measured at an amount equal to the lower of its fair value and 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.

The Group adopted International Financial Reporting Interpretation Committee (“IFRIC”) 4, Determining whether an Arrangement Contains a Lease, which is mandatory for annual periods beginning on or after 1 January 2006, in its consolidated interim financial statements as at 31 March 2007.

(g) Inventories

Inventories are stated at the lower of cost and net realisable value. Net realisable value is the estimated selling price in the ordinary course of business, less selling expenses. The cost of inventory is determined using the weighted average method and includes expenditure incurred in acquiring the inventories and bringing them to their existing location and condition. At 31 March 2007, inventories mainly consist of simcards and scratch cards.

TURKCELL ILETISIM HIZMETLERI AS AND ITS SUBSIDIARIES

NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS

As at and for the three months ended 31 March 2007

(Amounts expressed in thousands of US Dollars unless otherwise indicated except share amounts)

3.	Significant accounting policies (continued)

(h)

Impairment

(i)

Financial assets

A financial asset is considered to be impaired if objective evidence indicates that one or more events have had a negative effect on the estimated future cash flows of that asset.

An impairment loss in respect of a financial asset measured at amortised cost is calculated as the difference between its carrying amount, and the present value of the estimated future cash flows discounted at the original effective interest rate. An impairment loss in respect of an available-for-sale financial asset is calculated by reference to its current fair value.

Individually significant financial assets are tested for impairment on an individual basis. The remaining financial assets are assessed collectively in groups that share similar credit risk characteristics.

All impairment losses are recognised in profit or loss. Any cumulative loss in respect of an available-for-sale financial asset recognised previously in equity is transferred to profit or loss.

An impairment loss is reversed if the reversal can be related objectively to an event occurring after the impairment loss was recognised. For financial assets measured at amortised cost and available-for-sale financial assets that are debt securities, the reversal is recognised in profit or loss. For available-for-sale financial assets that are equity securities, the reversal is recognised directly in equity.

(ii)

Non-financial assets

The carrying amounts of the Group’s non-financial assets, inventories and deferred tax assets are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists then the asset’s recoverable amount is estimated. For goodwill and intangible assets that have indefinite lives or that are not yet available for use, recoverable amount is estimated at each reporting date.

An impairment loss is recognised if the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount. A cash-generating unit is the smallest identifiable asset group that generates cash flows that largely are independent from other assets and groups. Impairment losses are recognised in profit or loss. Impairment losses recognised in respect of cash-generating units are allocated first to reduce the carrying amount of any goodwill allocated to the units and then to reduce the carrying amount of the other assets in the unit (group of units) on a pro rata basis.

The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.

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

TURKCELL ILETISIM HIZMETLERI AS AND ITS SUBSIDIARIES

NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS

As at and for the three months ended 31 March 2007

(Amounts expressed in thousands of US Dollars unless otherwise indicated except share amounts)

3.	Significant accounting policies (continued)

(i)

Employee benefits

(i)

Retirement pay liability

In accordance with existing labor law in Turkey, the Company and its subsidiaries in Turkey are required to make lump-sum payments to employees who have completed one year of service and whose employment is terminated without cause, or who retire, are called up for military service or die. Such payments are calculated on the basis of 30 days’ pay maximum full TRY 1,961 as at 31 March 2007 (equivalent to full $1,421 as at 31 March 2007) (31 December 2006: full TRY 1,857 (equivalent to full $1,346 as at 31 March 2007)) per year of employment at the rate of pay applicable at the date of retirement or termination. Reserve for retirement pay is computed and reflected in the consolidated interim financial statements on a current basis. The reserve has been calculated by estimating the present value of future probable obligation of the Group arising from the retirement of the employees. The calculation was based upon the retirement pay ceiling announced by the government.

(ii)

Defined contribution plans

Obligations for contributions to defined contribution plans are recognised as an expense in the income statement as incurred. Turkcell initiated a defined contribution retirement plan for all eligible employees during 2005. Besides, Inteltek Internet Teknoloji Yatirim ve Danismanlik Ticaret AS (“Inteltek”) and Bilyoner Interaktif Hizmetler AS (“Bilyoner”), other consolidated subsidiaries, initiated a defined contribution retirement plan for all eligible employees during 2006. The assets of the plan are held separately from the consolidated interim financial statements of the Group. The Company, Inteltek and Bilyoner are required to contribute a specified percentage of payroll costs to the retirement benefit scheme to fund the benefits. The only obligation of the Company, Inteltek and Bilyoner with respect to the retirement plan is to make the specified contributions.

(j)

Provisions

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

Onerous contracts

A provision for onerous contracts is recognized when the expected benefits to be derived by the Group from a contract are lower than the unavoidable cost of meeting its obligations under the contract. The provision is measured at the present value of the lower of the expected cost of terminating the contract and the expected net cost of continuing with the contract. Before a provision is established, the Group recognizes any impairment loss on the assets associated with that contract.

TURKCELL ILETISIM HIZMETLERI AS AND ITS SUBSIDIARIES

NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS

As at and for the three months ended 31 March 2007

(Amounts expressed in thousands of US Dollars unless otherwise indicated except share amounts)

3.	Significant accounting policies (continued)

(k) Revenue

Communication fees include all types of postpaid revenues from incoming and outgoing calls, additional services and prepaid revenues. Communication fees are recognized at the time the services are rendered.

With respect to prepaid revenues, the Group generally collects cash in advance by selling scratch cards to distributors. In such cases, the Group does not recognize revenue until the subscribers use the telecommunications services. Instead, deferred revenue is recorded under current liabilities.

Both postpaid and prepaid services may be bundled with handset or other services and these bundled services and products involve consideration in the form of fixed fee or a fixed fee coupled with continuing payment stream. Deliverables are accounted separately where a market for each deliverable exists and if the recognition criterion is met individually. Costs associated with each deliverable are recognized at the time of revenue recognized. The arrangement consideration is allocated to each deliverable in proportion to the fair value of the individual deliverables.

Commission fees mainly comprised of net takings earned to a maximum of 7% of gross takings, as a head agent of fixed odds betting games starting from 15 March 2007 and 4.3% commission recognized based on the para-mutual and fixed odds betting games operated on Central Betting System. Prior to 15 March 2007, under the former head agency agreement, head agency commission fees were earned to a maximum of 12% of gross takings. Commission revenues are recognized at the time all the services related with the games are fully rendered. Under the head agency agreement, Inteltek is obliged to undertake any excess payout, which is presented on net basis with the commission fees.

Monthly fixed fees represent a fixed amount charged to postpaid subscribers on a monthly basis without regard to the level of usage. Fixed fees are recognized on a monthly basis when billed.

Simcard sales are recognized net of returns, discounts and rebates upon initial entry of a new subscriber into the GSM system only to the extent of direct costs. Excess simcard and prepaid simcard sales, if any, are deferred and amortized over the estimated effective subscriber life.

Call center revenues are recognized at the time the services are rendered.

(l) Lease payments

Payments made under operating leases are recognized in profit or loss on a straight-line basis over the term of the lease. Lease incentives received are recognized in the income statement as an integral part of the total lease expense, over the term of the lease.

Minimum lease payments made under finance leases are apportioned between the finance expense and the reduction of the outstanding liability. The finance expense is allocated to each period during the lease term so as to produce a constant periodic rate of interest on the remaining balance of the liability. Contingent lease payments are accounted for by revising the minimum lease payments over the remaining term of the lease when the lease adjustment is confirmed.

TURKCELL ILETISIM HIZMETLERI AS AND ITS SUBSIDIARIES

NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS

As at and for the three months ended 31 March 2007

(Amounts expressed in thousands of US Dollars unless otherwise indicated except share amounts)

3.	Significant accounting policies (continued)

(m) Finance income and expenses

Finance income comprises interest income on funds invested, gains on the disposal of available-for-sale financial assets, changes in the fair value of financial assets at fair value through profit or loss, net foreign currency gains, and gains on hedging 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, net foreign currency losses, changes in the fair value of financial assets at fair value through profit or loss, impairment losses recognised on financial assets, and losses on hedging instruments that are recognised in profit or loss. All borrowing costs are recognised in profit or loss using the effective interest method.

(n) Transactions with related parties

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

(o) Income tax expense

Income tax expense comprises current and deferred tax. Income tax expense is recognised in profit or loss except to the extent that it relates to items recognised directly in equity, in which case it is recognised in equity.

Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years.

Deferred tax is recognised using the balance sheet method, providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for the following temporary differences: the initial recognition of goodwill, the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit, and differences relating to investments in subsidiaries and jointly controlled entities to the extent that they probably will not reverse in the foreseeable future. Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the reporting date.

A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available against which temporary difference can be utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised.

Additional income taxes that arise from the distribution of dividends are recognised at the same time as the liability to pay the related dividend is recognised.

Information as to the calculation of income tax expense in the income statement for the interim periods presented is included in note 10.

TURKCELL ILETISIM HIZMETLERI AS AND ITS SUBSIDIARIES

NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS

As at and for the three months ended 31 March 2007

(Amounts expressed in thousands of US Dollars unless otherwise indicated except share amounts)

3.	Significant accounting policies (continued)

(p)

Earnings per share

The Group presents basic earnings per share (“EPS”) data for its ordinary shares. Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the period. Diluted EPS is equal to basic EPS because the Group does not have any convertible notes or share options granted to employees.

(q)

Segment reporting

A segment is a distinguishable component of the Group that is engaged either in providing related products or services (business segment), or in providing products or services within a particular economic environment (geographical segment), which is subject to risks and rewards that are different from those of other segments. The Group’s primary segment reporting is based on geographical segment and secondary segment reporting is based on business segments.

(r) New standards and interpretations not yet adopted

A number of new standards, amendments to standards and interpretations are not yet effective for the period ended 31 March 2007, and have not been applied in preparing these consolidated interim financial statements:

•

IFRS 8 Operating Segments requires that an entity should disclose information to enable users of its financial statements to evaluate the nature and financial effects of the types of business activities in which it engages and the economic environments in which it operates. IFRS 8 requires operating segments to be identified on the basis of internal reports about components of the entity that are regularly reviewed by the chief operating decision maker in order to allocate resources to the segment and to assess its performance. IFRS 8 is effective for annual financial statements for periods beginning on or after 1 January 2009 and will require additional disclosures for the Group. Earlier adoption is permitted.

•

IFRIC 12, Service Concession Arrangements provides guidance to private sector entities on certain recognition and measurement issues that arise in accounting for public to private service concession agreements. IFRIC 12 becomes effective for annual periods beginning on or after 1 January 2008 and is not expected to have any impact on the consolidated interim financial statements.

4.	Determination of fair values

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

(i)

Property, plant and equipment

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

TURKCELL ILETISIM HIZMETLERI AS AND ITS SUBSIDIARIES

NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS

As at and for the three months ended 31 March 2007

(Amounts expressed in thousands of US Dollars unless otherwise indicated except share amounts)

4.	Determination of fair values (continued)

(ii) Intangible assets

The fair value of intangible assets is based on the discounted cash flows expected to be derived from the use and eventual sale of the assets.

(iii) Inventory

The fair value of inventory acquired in a business combination is determined based on its estimated selling price in the ordinary course of business less the estimated costs of sale, and a reasonable profit margin based on the effort required to complete and sell the inventory.

(iv) Investments in equity and debt securities

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

(v)

Trade and other receivables

The fair value of trade and other receivables is estimated as the present value of future cash flows, discounted at the market rate of interest at the reporting date.

(vi)

Derivatives

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

(vii) Non-derivative financial liabilities

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

TURKCELL ILETISIM HIZMETLERI AS AND ITS SUBSIDIARIES

NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS

As at and for the three months ended 31 March 2007

(Amounts expressed in thousands of US Dollars unless otherwise indicated except share amounts)

5.	Segment reporting

Primary reporting format – geographical segments

Segment information is presented in respect of the Group’s geographical and business segments. The primary format, geographical segments, is based on the dominant source and nature of the Group’s risk and returns as well as the Group’s internal reporting structure.

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

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

Geographical segments:

A geographical segment is a distinguishable component of an enterprise that is engaged in providing products or services within a particular economic environment and that is subject to risks and returns that are different from those of components operating in other economic environments.

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, Turkish Republic of Northern Cyprus.

Business segments:

In presenting information on the basis of business segments, segment revenue is based on the operational activity of the entities. Segment assets are based on the intended use of the assets.

The Group comprises the following main business segments: Telecommunications and betting businesses

TURKCELL ILETISIM HIZMETLERI AS AND ITS SUBSIDIARIES

NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS

As at and for the three months ended 31 March 2007

(Amounts expressed in thousands of US Dollars unless otherwise indicated except share amounts)

5.	Segment reporting (continued)

	Three months ended 31 March
	Turkey		Ukraine		Turkish Republic of Northern Cyprus		Other		Eliminations		Consolidated
	2007	2006	2007	2006	2007	2006	2007	2006	2007	2006	2007	2006
Total external revenues	1,233,030	1,099,539	42,778	17,067	18,953	15,595	-	-	-	-	1,294,761	1,132,201
Intersegment revenue	720	347	-	-	1,117	943	-	-	(1,837)	(1,290)	-	-
Total segment revenue	1,233,750	1,099,886	42,778	17,067	20,070	16,538	-	-	(1,837)	(1,290)	1,294,761	1,132,201

Segment result	357,956	255,235	(35,097)	(39,300)	1,674	1,176	-	-	106	373	324,639	217,484
Unallocated expenses	-	-	-	-	-	-	-	-	-	-	1,094	(2,136)
Results from operating activities	-	-	-	-	-	-	-	-	-	-	325,733	215,348
Net finance income	-	-	-	-	-	-	-	-	-	-	25,630	33,451
Share of profit of equity accounted investees	(4,441)	-	-	-	-	-	22,120	15,848	-	-	17,679	15,848
Income tax expense	-	-	-	-	-	-	-	-	-	-	(100,612)	(87,447)
Profit for the period	-	-	-	-	-	-	-	-	-	-	268,430	177,200

TURKCELL ILETISIM HIZMETLERI AS AND ITS SUBSIDIARIES

NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS

As at and for the three months ended 31 March 2007

(Amounts expressed in thousands of US Dollars unless otherwise indicated except share amounts)

5.	Segment reporting (continued)

	Turkey		Ukraine			Turkish Republic of Northern Cyprus				Other							Eliminations						Consolidated
	2007	2006	2007		2006	2007		2006		2007				2006			2007			2006			2007			2006
Segment assets	3,268,646	3,154,146	598,373		572,474	35,303		35,529		-				-			(2,191)			(563)			3,900,131			3,761,586
Investment in equity accounted investees	128,035	147,568	-		-	-		-		404,510				376,272			-			-			532,545			523,840
Unallocated assets	1,882,466	1,670,790	42,549		8,307	16,656		13,871		113,734				111,341			-			-			2,055,405			1,804,309
Total assets	5,279,147	4,972,504	640,922		580,781	51,959		49,400		518,244				487,613			(2,191)			(563)			6,488,081			6,089,735

Segment liabilities	1,148,154	736,753	84,310		76,753	12,926		12,993		-				119			(1,460)			(451)			1,243,930			826,167
Unallocated liabilities	726,147	678,600	462,655		465,371	2,007		1,630		-				-			-			-			1,190,809			1,145,601
Total liabilities	1,874,301	1,415,353	546,965		542,124	14,933		14,623		-				119			(1,460)			(451)			2,434,739			1,971,768


	Three months ended 31 March
	Turkey		Ukraine				Turkish Republic of Northern Cyprus				Other				Eliminations						Consolidated
	2007	2006	2007	2006			2007		2006		2007		2006		2007			2006			2007			2006
Capital expenditure	78,793	79,526	49,971		55,670	1,233			2,468			-	-			-			-			129,997			137,664
Depreciation	115,007	120,983	9,560		15,706	1,650			1,468			-	-			-			-			126,217			138,157
Amortisation of intangible assets	53,099	52,589	9,054		5,844	290			206			-	-			-			-			62,443			58,639

TURKCELL ILETISIM HIZMETLERI AS AND ITS SUBSIDIARIES

NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS

As at and for the three months ended 31 March 2007

(Amounts expressed in thousands of US Dollars unless otherwise indicated except share amounts)

5.	Segment reporting (continued)

Business segments

	Three months ended 31 March
	Telecommunications		Betting		Other operations		Consolidated
	2007	2006	2007	2006	2007	2006	2007	2006
Total external revenues	1,232,842	1,068,861	58,156	59,998	3,763	3,342	1,294,761	1,132,201
Capital expenditures	128,874	136,622	637	236	486	806	129,997	137,664

	Telecommunications		Betting		Other operations		Consolidated
	2007	2006	2007	2006	2007	2006	2007	2006
Segment assets	3,849,693	3,712,408	24,298	23,418	26,140	25,760	3,900,131	3,761,586

TURKCELL ILETISIM HIZMETLERI AS AND ITS SUBSIDIARIES

NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS

As at and for the three months ended 31 March 2007

(Amounts expressed in thousands of US Dollars unless otherwise indicated except share amounts)

6.	Acquisitions of joint ventures and minority interests

Business combination

During August 2006, the Company acquired 50% shares of A-Tel for a consideration of TRY 218,715 (equivalent to $158,478 and $150,000 at 31 March 2007 and 9 August 2006, respectively). At 31 March 2007, management has not yet completed the evaluation of the fair value of identifiable assets and liabilities of A-Tel and its allocation of the purchase price. The Company has a period up to one year to complete purchase price allocation effective from August 2006, which is the date of acquisition. Therefore, final purchase accounting adjustments may differ from the Company’s initial estimates and the allocation of purchase price is subject to refinement. A-Tel is accounted for under equity method and results of the operations for the three months ended 31 March 2007 are included in the accompanying consolidated interim financial statements using ownership rate of 50% as at and for the three months ended 31 March 2007. Besides, during February 2007 and September 2006, A-Tel’s General Assembly decided to distribute dividends and accordingly the Company reduced the carrying value of its investment in A-Tel by the dividends declared of TRY 37,448 (equivalent to $27,134 at 31 March 2007) and TRY 30,300 (equivalent to $21,955 at 31 March 2007) as at 31 March 2007 and 31 December 2006, respectively. On 9 March 2007 and 16 October 2006, such dividends are collected by the Company.

A-Tel is involved in the marketing, selling and distributing the Company’s prepaid systems. A-Tel acts as the only dealer of the Company for Muhabbet Kart (a prepaid card), and receives dealer activation fees and simcard subsidies for the sale of Muhabbet Kart. In addition to the sales of simcards and scratch cards through an extensive network of newspaper kiosks located throughout Turkey, the Company has entered into several agreements with A-Tel for sale of campaigns and for subscriber activations. Since 1999, the business cooperation between the Company and A-Tel has provided important support to the Company’s sales and marketing activities. With the brand name Muhabbet Kart, A-Tel has proved success in a competitive environment through well structured campaigns. With the acquisition of 50% stake in A-Tel, management believes that the Company will be better positioned in the changing competitive environment and achieve increased benefits by optimizing sales and marketing efforts. A-Tel is a joint venture and its remaining 50% shares are held by Turkey’s Savings and Deposit Insurance Fund (the “SDIF”).

Acquisition of minority interests

In January 2007 and March 2007, the Company has made contribution to capital increase of Euroasia for $27,500 each. As Eurocorp did not participate in these capital increases, ownership of the Company increased from 54.8% to 54.9%. The Group recognised a decrease in minority interests of $93.

TURKCELL ILETISIM HIZMETLERI AS AND ITS SUBSIDIARIES

NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS

As at and for the three months ended 31 March 2007

(Amounts expressed in thousands of US Dollars unless otherwise indicated except share amounts)

7.	Revenue

	Three months ended 31 March
	2007	2006
Communication fees	1,193,339	1,047,587
Commission fees on betting business	58,156	59,998
Monthly fixed fees	12,595	13,898
Simcard sales	6,873	5,781
Call center revenues	3,050	2,393
Other revenues	20,748	2,544
	1,294,761	1,132,201

8.	Personnel Expenses

	Three months ended 31 March
	2007	2006
Wages and salaries (*)	76,215	67,319
Increase in liability for long-service leave	3,950	2,613
Contributions to defined contribution plans	260	252
	80,425	70,184

* Wages and salaries include compulsory social security contributions.

9.	Finance income and expense

	Three months ended 31 March
	2007	2006
Interest income	64,546	29,945
Late payment interest income	7,174	8,924
Premium income on option contracts	1,692	2,134
Gain on financial assets	1,685	2,981
Other interest income	1,673	1,761
Net foreign exchange gain	-	7,858
Finance income	76,770	53,603

Discount interest expense on financial liabilities measured at amortised cost	(11,411)	(19,479)
Net foreign exchange loss	(37,631)	-
Other	(2,098)	(673)
Finance expense	(51,140)	(20,152)
Net finance income and expense	25,630	33,451

Interest expense on borrowings capitalized on fixed assets amounts to $1,947 for the three months ended 31 March 2007 (31 March 2006: nil).

TURKCELL ILETISIM HIZMETLERI AS AND ITS SUBSIDIARIES

NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS

As at and for the three months ended 31 March 2007

(Amounts expressed in thousands of US Dollars unless otherwise indicated except share amounts)

10.

Income tax expense in the income statement

	Three months ended 31 March
	2007	2006

Current tax expense	(114,266)	(69,506)
Current period	(114,266)	(69,506)

Deferred tax benefit/(expense)
Origination and reversal of temporary differences	13,431	(31,030)
Benefit of investment incentive recognized	223	13,089
	13,654	(17,941)
Total income tax expense	(100,612)	(87,447)

Income tax recognized directly in equity is amounting to $223 and $490 for the three months ended 31 March 2007 and 2006, respectively.

Reconciliation of effective tax rate

The reported income tax expense for three months ended 31 March 2007 and 2006 are different than the amounts computed by applying the statutory tax rate to profit before tax, attributable to equity holders of the Company, as shown in the following reconciliation:

		Three months ended 31 March
		2007		2006
Profit for the period		369,042		264,647

Income tax using the Company’s domestic tax rate	20%	(73,808)	30%	(79,394)
Effect of tax rates in foreign jurisdictions	(1)%	1,994	(1)%	1,582
Non-deductible items	-	(853)	4%	(11,321)
Investment tax credit and tax exemptions	-	223	(5)%	13,089
Effect of gradual tax rate	5%	(18,736)	-	-
Unrecognized deferred tax assets	3%	(10,762)	5%	(12,453)
Other	-	1,330	-	1,050
Total income tax expense		(100,612)		(87,447)

The income taxes payable of $425,498 at 31 March 2007 represents the amount of current income taxes payable in respect of related taxable profit for the three months ended 31 March 2007 including income taxes payable for the year ended 31 December 2006. The income taxes payable of $309,470 at 31 December 2006 represents the amount of current income taxes payable for the year ended 31 December 2006.

TURKCELL ILETISIM HIZMETLERI AS AND ITS SUBSIDIARIES

NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS

As at and for the three months ended 31 March 2007

(Amounts expressed in thousands of US Dollars unless otherwise indicated except share amounts)

10.

Income tax expense in the income statement (continued)

According to the article 32 of New Corporate Tax Law No. 5520, the corporate tax rate was reduced from 30% to 20%. In this respect, corporate income of the companies are subject to corporate tax at the rate of 20%, effective from 1 January 2006 onwards. However, applicable corporate tax rate for the three months ended 31 March 2006 was 30% at the time of the issuance of the financial statements. It has been also stated that the advance corporate tax that was calculated and collected on the rate of 30% for the advance corporate tax periods after 1 January 2006 that is in excess of the amount calculated by the new rate for the same periods will be offset against the advance corporate tax for the following advance tax periods.

According to the Income Tax Law which was published in Official Gazette on 8 April 2006, the investment allowance application has been abolished effective from 1 January 2006. Accordingly, tax payers have been granted an option to use the tax benefits of investment incentive certificates given that they file tax returns at 30% corporate tax rate; or file tax returns at 20% corporate tax rate (which is the new comparable tax rate effective from 1 January 2006) without using the tax benefits of investment incentive certificates. The Company used the tax benefit of investment incentive certificates which provides 0.2% net benefit on corporate taxes. However, the respective law allows the taxpayers to utilize their investment allowance rights obtained under the scope of the previous provisions only from their income generated in the years 2006, 2007 and 2008.

TURKCELL ILETISIM HIZMETLERI AS AND ITS SUBSIDIARIES

NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS

As at and for the three months ended 31 March 2007

(Amounts expressed in thousands of US Dollars unless otherwise indicated except share amounts)

11.

Property, plant and equipment

Cost or deemed cost	Balance at 1 January 2006	Additions	Disposals	Transfers*	Effect of movements in exchange rates
Cost or deemed cost	Balance at 1 January 2006	Additions	Disposals	Transfers*	Effect of movements in exchange rates	Balance at 31 December 2006
Network infrastructure (All Operational)	4,220,485	14,453	(1,897)	424,458	(180,707)	4,476,792
Land and buildings	250,517	3,972	(386)	10,874	(11,269)	253,708
Equipment, fixtures and fittings	292,428	6,634	(1,597)	7,675	(12,657)	292,483
Motor vehicles	18,982	589	(915)	15	(853)	17,818
Leasehold improvements	137,196	544	(17)	-	(5,893)	131,830
Construction in progress	385,367	464,588	-	(563,425)	(19,343)	267,187
Total	5,304,975	490,780	(4,812)	(120,403)	(230,722)	5,439,818

Accumulated Depreciation
Network infrastructure (All Operational)	2,675,018	465,549	(1,261)	-	(113,520)	3,025,786
Land and buildings	59,342	10,615	-	-	(2,514)	67,443
Equipment, fixtures and fittings	287,901	16,649	(1,228)	-	(12,694)	290,628
Motor vehicles	14,991	1,895	(632)	-	(653)	15,601
Leasehold improvements	125,013	3,825	(15)	-	(5,454)	123,369
Total	3,162,265	498,533	(3,136)	-	(134,835)	3,522,827

Total property, plant and equipment	2,142,710	(7,753)	(1,676)	(120,403)	(95,887)	1,916,991

*The remaining portion of transfer amounting to $120,403 comprises intangible assets.

TURKCELL ILETISIM HIZMETLERI AS AND ITS SUBSIDIARIES

NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS

As at and for the three months ended 31 March 2007

(Amounts expressed in thousands of US Dollars unless otherwise indicated except share amounts)

11.

Property, plant and equipment

Cost or deemed cost	Balance at 1 January 2007	Additions	Disposals	Transfers*	Effect of movements in exchange rates
Cost or deemed cost	Balance at 1 January 2007	Additions	Disposals	Transfers*	Effect of movements in exchange rates	Balance at 31 March 2007
Network infrastructure (All Operational)	4,476,792	3,047	(2,512)	62,794	77,086	4,617,207
Land and buildings	253,708	56	-	(938)	4,374	257,200
Equipment, fixtures and fittings	292,483	680	(5,154)	6,506	4,994	299,509
Motor vehicles	17,818	68	(3,987)	-	303	14,202
Leasehold improvements	131,830	360	(35)	(5,109)	2,300	129,346
Construction in progress	267,187	122,591	-	(63,290)	3,073	329,561
Total	5,439,818	126,802	(11,688)	(37)	92,130	5,647,025

Accumulated Depreciation
Network infrastructure (All Operational)	3,025,786	116,936	(2,078)	-	58,422	3,199,066
Land and buildings	67,443	3,170	-	-	1,252	71,865
Equipment, fixtures and fittings	290,628	4,796	(5,054)	-	5,318	295,688
Motor vehicles	15,601	359	(3,927)	-	293	12,326
Leasehold improvements	123,369	956	-	-	434	124,759
Total	3,522,827	126,217