Turkey's Competition Authority (RK) launched an investigation into Türk Telekom Inc. on Monday based on preliminary findings that the company violated the country's competition laws.
The RK announced the probe into the company in a statement on its website.
The statement said a preliminary investigation found that Türk Telekom had abused its dominant position in the wholesale fixed broadband internet services market and made it unreasonably and unfairly difficult for competitor companies to render services and gain subscribers in retail services.
The competition board found the information, documents and findings of the preliminary probe sufficient to launch a wider investigation into the company and its practices, the statement said.
Türk Telekom was established in 1995 after telecommunications operations were separated from Turkish Post (PTT), and privatized in 2005 when Oger Telecom won a $6.55 billion bid for 55 percent stake in the company. Saudi Oger acquired 35 percent of Oger Telecommunications in 2008 for $2.56 billion.
Oger Telecom is owned by Lebanon's Hariri family and has had close links with Saudi authorities since it was established in 1978 by Saad Hariri's father Rafic, a former Lebanese premier.
Oger received loans from 29 Turkish and international lenders to buy the stake in Türk Telekom through its Turkish venture Ojer Telekom (OTAŞ).
Turkish broadcaster NTV previously reported that OTAŞ owes $1.7 billion to Akbank, $1 billion to Garanti, and $500 million to Iş Bank. French lender BNP Paribas and Deutsche Bank also extended loans to the company, it said. Garanti Bank, Iş Bank, and Akbank reclassified Oger Telecom's debt as "closely watched" at the end of 2017.
In December, Türk Telekom shares previously held by OTAŞ were moved to a special purpose vehicle, setting the company up for new owners after the majority shareholder missed several payments.
The creditor banks had previously said in July that they had decided to set up the SPV, Levent Yapılandırma Yönetimi A.Ş (Levent Restructuring Management – LYY), as part of the debt restructuring talks after an extended period of negotiations.
Akbank, a subsidiary of Turkey's second largest conglomerate Sabancı Holding, holds 35.56 percent of the shares in the LYY. Garanti, owned by the Spanish banking giant BBVA, controls 22.13 percent and Iş Bank, Turkey's largest private bank, controls 11.60 percent.
The main goal in the process is to transfer the Türk Telekom shares to a "competent" investor, Iş Bank, Garanti Bank and Akbank said in a joint statement.
In a separate statement, Türk Telekom said four board members representing OTAŞ, namely Mohammed Hariri, Cenk Serdar, Faisal Mohammed I Aldughaither and Al-Hakam Marwan Moh'd Kanafani, had resigned and three people nominated by the SPV, Hakan Aran of Iş Bank, Cüneyt Sezgin of Garanti and Eyüp Engin of Akbank, joined the board.
In addition to operating land-based infrastructure, Türk Telekom is the largest landline operator and internet service provider in the country. It is also the third-largest cellphone operator in Turkey, reaching 45 million customers in total. It also offers television and digital platform services.