Ladies and gentlemen, thank you for standing by. I'm Poppy, your Chorus Call operator. Welcome, and thank you for joining Turkcell's conference call and live webcast to present and discuss the Turkcell first quarter 2022 financial results conference call. All participants will be in a listen only mode, and the conference is being recorded.
The presentation will be followed by a question and answer session. Should anyone need assistance during the conference call, you may signal an operator by pressing star and zero on your telephone. At this time, I would like to turn the conference over to Mr. Ali Serdar Yağcı , Investor Relations and Corporate Finance Director. Mr. Yağcı, you may now proceed.
Thank you, Poppy. Hello, everyone. Welcome to Turkcell's first quarter 2022 results call. We have a brief presentation to be delivered by our CEO, Mr. Murat Erkan, and our CFO, Mr. Osman Yılmaz . After that, we will be taking your questions. Before we kick off, I would like to kindly remind you to review the last page of the presentation for our safe harbor statement. Now I hand over to Mr. Erkan.
Thank you, Serdar. Good morning and good afternoon, everyone. Thanks for joining us today. Year 2022 started off with many uncertainties, including macroeconomic challenges, geopolitical developments, and continuing impact of the pandemic. Most importantly, among all, we are deeply saddened by a humanitarian disaster Ukraine has been suffering and hope that peace will be restored in the country.
Turkcell took a firm step into the year delivering solid result despite unfavorable condition. We generated 37% revenue growth, which was enabled mainly by continued growing subscriber base and price increases in Turkey. The top line was also supported by a strong international and techfin performance. Our EBITDA reached TRY 4.3 billion on a 30% growth with just over 40% EBITDA margin, reflecting inflationary cost pressures as well. Net income came at TRY 803 million, impacted by the depreciating local currency.
On the operation, our strong performance continued, and we made a total net add of 577,000. Turkcell goes on to be the preferred operator for new line establishment, and our broad subscriber base will be a key for monetization in the coming quarters. In line with our plan to increase the overall fiber footprint, we have reached 186,000 new homes, further addressing the demand for high speed and seamless fixed connectivity.
Next slide. Let's take a look at our operational performance in mobile. In the mobile market, we observe continued price increases through the quarter from all operators, inevitably reflecting the inflationary pressures. The price adjustment reached 25%-30% in just one quarter. This has sustained further market re-rationalization, along with continued contraction in the mobile number portability market.
In accordance with our strategy to focus on more value-creating postpaid subscriber, we gained net 423,000, increasing the postpaid share to 56.67%. As expected, prepaid subscriber net addition was slightly impacted by the churn resulting from the boost traffic, tourist visit last summer, yet still achieve a +59,000. In a rising trend, mobile blended ARPU climbed 20% year-on-year, 2 percentage points higher than the previous quarter besides the price increases.
As evident in higher ARPA growth of 26%, our dedicated upsell focus and extended postpaid subscriber base supported ARPU growth. The growth was slightly impacted negatively by the ICTA decision to decrease MTR as of January 1, 2022. Given the ongoing inflationary environment, we expect to review our pricing more frequently than ever and may implement further increases within the year.
The rationalization in the market, along with our customer-driven approach and analytical competency, has resulted in a decline in our monthly mobile churn rate to 1.6%, which marks the record of the past four years. Furthermore, a well-invested network infrastructure, superior customer experience and our value to money strategy ensure extension of the wide gap in Net Promoter Score with the second best operator.
The monthly data usage of a Turkcell user has reached 14.7 GB, driving data usage. Smartphone penetration has reached 86%, up two points year-on-year. Moving to next slide. In the fixed broadband market, the year started with the price increases both in fiber and DSL services in a familiar trend. Demand for the fiber services prevails, yet with some seasonality and competition impact.
Our fiber subscriber continued to grow with 53,000 net addition. With 4,000 net IPTV addition, we are pleased to see continuing interest in our TV+ services. Overall, IPTV penetration in our fiber base has re-exceeded 65%, rising 5 points year-on-year.
The focus on higher speed packages and price increases has supported ARPU growth to up to 21%. Our superior fiber service quality was the key driver of the monthly fiber churn decreased to just 1%.
This also supported the overall fixed churn to improve. Considering the low penetration of pure fiber in Turkey and high demand, which still prevails in the post-pandemic period, we have accelerated our fiber investment over the past couple of years. This quarter, we reached 186,000 new home passes in line with our plan.
Given the accelerated expansion of fiber footprint, our take-up rate was at 43%, which is still well ahead of the competition. Next slide. Now, next two slides, I will be providing an update on our strategic focus areas. Let's start with our digital services and solutions. We increased our price in all of our digital OTT services early in the year in line with our inflationary pricing strategy.
Despite that, strong demand for digital services continued, and standalone paid subscriber base rose to 4.2 million, up 33% year-on-year. Specifically, digital OTT services revenue, which includes core OTT services, rose 46% year-on-year. Among the digital OTT services, OTT's TV subscriber reached 837,000, up 24% year-on-year, mainly driven by TV+ ready subscribers.
lifebox, our cloud storage platform, reached 1.4 million subscribers on a solid rise of 50%. The number of three-month active users of BiP was at 26 million, with one fifth being international. Our digital business services supporting the digital transformation of the enterprises registered a solid growth of 75% year-on-year.
The growth drivers were system integration projects, data center and cloud business. System integration business was boosted by a few mega projects realized within the quarter. Yet even excluding those, annual growth still remains solid at 54%.
We achieved the highest number of project acquisition in a quarter with 1,000 new projects. The backlog from system integration project increased to TRY 1.9 billion, which is set to contribute to the top line in the upcoming quarters. Next slide. Third is our Techfin focus.
Paycell, our innovative payment service platform, registered a remarkable quarter, delivering 67% year-on-year growth. The ongoing shift to digital payments was evident in tripling total transaction volume and a 32% rise in three-month active users, hitting almost 7 million. EBITDA rose 37% in the quarter with a 44% margin.
The margin dilution, which we expect to normalize over the upcoming quarters, reflects the diversified product mix, as well as some one-off expenses realized earlier in the year. Among the revenue lines, the leading product Pay Later continued its strong revenue trend as the mobile payment volume doubled year-on-year.
Revenue contribution from POS solutions also improved. As we ramp up our Android POS device in the market, another strong performing vertical is Paycell Card, where the transaction volume grows eightfold.
Financing customers technological needs, finance sales revenue rose 50% on a larger loan portfolio, higher average interest rate and the contribution of the insurance business revenues. The total loan portfolio rose to TRY 2.3 billion in Q1 2022, up 24% driven by our greater focus on the corporate segments and recovered mobility.
Next slide. Now let's take a closer look to our performance in international market. Turkcell international segment grew 101% year-on-year, and the Ukraine business remained the key driver of the performance as the impact of the war is limited to one month. Excluding the currency impact, the organic growth of the segment was at 21%.
lifecell's top line grew by 21.5% year-over-year in local terms and slightly decreased quarterly due to the one-month impact of the war. As you may recall from our comprehensive call in March, thanks to our proactive operational risk management, we managed to continue providing communication services across the country. We had already established data center backups within and beyond Ukraine to ensure business continuity.
We have reported no damage or outage in our core network, and the radio networks saw partial and temporary downtime due to electricity outage. On the Belarus side, in light of the prevailing geopolitical tension, the EU, U.S. and U.K. have imposed sanctions on Belarus, which may further impact our access to important hardware and software. Moving to next slide. As of today, our expectations are in line with our latest guidance announced in February.
Although the developments have inevitably had a negative impact on the international segment, the strong growth of Turkcell Turkey has so far been compensating for it. Even though the better-than-expected performance of Turkcell Turkey encouraged us to make an upward revision in the guidance, the ongoing uncertainty in Ukraine pushes us to be conservative.
Thus, we keep our full year guidance as is. We will continue to monitor the developments in Ukraine for a potential revision in the guidance. Now I will hand over to Osman, our CFO, for the financials.
Thank you, Murat Bey. Let's take a closer look at our financials. In the first quarter, group revenues grew 37%, corresponding to a TRY 3 billion rise in nominal terms. TRY 2 billion of this increase comes from Turkcell Turkey. The increased focus on pricing and upsell efforts, as well as a larger subscriber base, led Turkcell Turkey to grow 33%. The contribution of our international businesses was 0.7 billion TL.
Together with the positive impact of currency movement, our Ukrainian operations were the main driver of the rise in international revenues, despite the one-month impact of the war. Our Techfin segment contributed TRY 130 million to the top line with the strong performances of both Paycell and Financell, which grew to 67% and 50% respectively. The other segment contribution to the top line remains limited.
The impact of global supply chain issues on equipment sales was compensated for by the growing energy business. Our EBITDA in nominal terms rose TRY 1 billion. Despite the strong top line performance, the slower EBITDA growth resulted mainly from the rise in wages and energy prices. Meanwhile, our net income declined by 77% year-on-year. This was mainly due to higher FX loss. Let's look into details in the next slide.
We started to see the increasing pressure of inflationary impacts in the first quarter. Our EBITDA margin contracted by 2 full points year-on-year to 40.2%. The two main factors behind this were wage hikes and rising energy prices in line with global trends.
We made an inflationary adjustment to wages in January, earlier than its usual period of April, which led to some margin pressure during the quarter. Additionally, energy prices have been rising since the fourth quarter, and this has also become more visible in our financials.
Accordingly, the radio expenses impacted in particular by energy prices led to a 2.2-point margin decline compared to the same quarter of last year. Meanwhile, the lower share of equipment sales in group revenues supported profitability at the EBITDA level. Next slide. Let's take a closer look at our CapEx management.
The current situation requires us to be more disciplined and focused on our investment planning. Accordingly, we allocate more of the budget to businesses with strong demand and growth prospects. As such, the largest portion of our CapEx went to our fixed infrastructure investments, where demand remains strong.
This obviously leads to an increase in the CapEx intensity of the fixed segment. Going forward, this should normalize as we start generating revenue on newly added home passes. I should also note that the lesser effects dependency of fiber investments has a positive impact on overall investments.
On mobile front, our superior infrastructure and the front-loaded investments that we did in the first half of the last year gave us investment flexibility in this year. This is also reflected in the lower CapEx intensity of the mobile business in Turkey.
With the current situation in Ukraine, we will most probably see savings in our international CapEx over the coming periods, which we may consider channeling to our local operations in case of further depreciation of lira. All in all, in terms of CapEx management, we are progressing in line with our plans. Next slide.
Now a few words on our balance sheet. Our gross debt increased by TL 4 billion compared to the previous quarter. This was due mainly to the impact of currency depreciation on FX-denominated debt.
Our consolidated cash position was at TL 18.8 billion. While the currency had a TL 1.4 billion positive impact on our cash holdings during the quarter, this was netted off mainly by frequency usage fee and bonus payments.
We continue to keep the bulk of our cash in hard currency. Excluding FX swaps, 76% of our cash is in US dollars, and the 12% is in euros. Our net leverage increased slightly to 1.2 times due to currency depreciation. Excluding the Techfin business, net leverage was at 1.1 times. As you may recall, each 10% depreciation of lira leads to a 0.1x increase in our net leverage.
I should emphasize that we are still below our net long term target of 1.5 times in terms of leverage. Lastly, in terms of liquidity, I would like to stress that we are in a comfortable position thanks to our strong cash position and available credit line. Next slide. Now I will go into the management of foreign currencies. At the end of Q1, we had around $2.1 billion equivalent FX debt on our balance sheet.
As a natural hedge, we had a $1.2 billion equivalent of FX denominated cash. Additionally, we had a $700 million derivative portfolio. Overall, we ended up with a short FX position of $200 million US dollars. This is broadly in line with our neutral FX range of ±$200 million US dollars.
We aim to remain within this range going forward. Our FX position takes into account ineffective part of our hedging portfolio. The significant Turkish lira depreciation during the fourth quarter had led us to utilize short-term proxy hedging tools, increasing the share of these instruments in our portfolio.
These short-term instruments have higher hedging costs, and they create more bottom line volatility, yet they provide us protection independent of the currency levels. We continue to evaluate market conditions closely. If we see more favorable hedging conditions in the market, we can execute long, longer term transactions or restructure our existing ineffective ones. This concludes my presentation, so we can now start the Q&A session. Thank you very much.
Ladies and gentlemen, at this time, we will begin the question and answer session. Anyone who wishes to ask a question may press star followed by one on their telephone. If you wish to remove yourself from the question queue, then you may press star and two. Please use your handset when asking your question for better quality. Anyone who has a question may press star and one at this time.
One moment for the first question, please. As a reminder, if you would like to ask a question, please press star and one on your telephone. Once again, to register for a question, please press star and one on your telephone. As a final reminder, to register for a question, please press star and one on your telephone. The first question is from the line of Jonathan Kennedy-Good with J.P. Morgan. Please go ahead.
Good evening, and thanks for the opportunity to ask questions. Murat, I think you made a comment that you would be looking to potentially increase pricing at various stages during the year. Can you give us a sense of you know whether you foresee an acceleration in ARPU growth as a result?
How are customers reacting to the price increases? Are we seeing trading down in any meaningful measures yet to you know in reaction to saving cash on the consumer's side? Then secondly, on energy, the impact on margin.
I'm just wondering how we should think about potential impact on margin in the next two to three quarters. Should we expect that to continue to drive narrower margins or is the worst behind us now?
Thank you, Jonathan. First of all, you know, we are in a highly inflationary environment. It is the case in Turkey, and it is the case all over the world as well. In Turkey we are having quite tough situation for the inflation. In an inflationary environment like this, we have increased our focus on pricing to eliminate the impact of the cost pressure on our financial and operational results.
With the increased focus, we have taken required action swiftly. Accordingly, we started adjusting our price back in December, when the sharp Turkish lira depreciation led to a jump in inflation. Additionally, we have made a price adjustment to our tariffs in March as well. These price adjustments were followed by the competition. However, please also bear in mind that 90% of our post-paid subscribers are contracted.
Therefore, price adjustments will have a gradual impact on ARPU. We'll see this impact sooner. Our services are also necessity items rather than discretionary spending for our customers. This is the response for the customer reaction. Additionally, wallet share of the telecom services is less than 3%. Therefore, consumers have larger items to save on.
Additionally, the prices of other spending items are also rising, like electricity, natural gas, and so on, which makes consumers less sensitive to price adjustments. Moreover, despite the current macro environment, digitalization needs of our customers are still rising, supporting the demand for our services. Hence, during the first quarter, we have not observed a down-sell or up-sell. Performance was in line with the previous quarter.
Regarding ARPU, for the remainder of 2022, the current macro environments require us to be more focused. As Turkcell, our aim in 2022 will be to reflect the inflation and pressure to our tariffs in a timely manner. We continuously evaluate competitive environment, consumer sentiment, and try to adjust our price to the greatest possible extent.
As I mentioned, our contract for the postpaid is 12 months. On the fixed line is 24 months. We will see gradual reflection on our ARPU growth throughout the year. Meanwhile, inflation is still following a rising path, trending above expectation. At this point, there is no clarity to foresee when the trend will be reversed.
We believe that once inflation peaks and enters into declining phase, our ARPU growth can catch up with inflation in a couple of quarters. Last but not least, if inflation remains on its current path, as per our increased pricing focus, we will take necessary action swiftly as we did in the last two quarters. Our, you know, I mean, what we did last two quarters, we will continue to do what we need to do.
Thank you very much. Once again, to register for a question, please press star and one on your telephone.
I forgot the energy question. Sorry about that. Let me add this energy impact on our margin. It is around 2%. In the second half of the year with our price increases, it's gonna become more visible. The pressure on the margin should gradually decline due to the energy.
Oh, thank you for that. As a final reminder, to register for a question, please press star and one on your telephone. Ladies and gentlemen, there are no further questions at this time. I would now turn the conference over to Turkcell management for any closing comments. Thank you.
I would like to thank everyone joining our conference call. I hope we're gonna get better result from Ukrainian side and the peace will come on table. Thank you very much for everyone.
Thank you. Hope to see you
This year.
Ladies and gentlemen, the conference is now concluded, and you may disconnect your telephone. Thank you for calling, and have a pleasant evening.