Welcome to the live webcast to present and discuss the Turkcell Q3 2021 financial results conference call. At this time, I would like to turn the conference over to Mr. Ali Serdar Yagci, Investor Relations and Corporate Finance Director. Mr. Yagci, you may now proceed.
Thank you, Constantinos. Hello, everyone. Welcome to Turkcell's Q3 financial and operational results call. Today's speakers are our CEO, Mr. Murat Erkan, and our CFO, Mr. Osman Yilmaz. They'll be delivering a brief presentation, and afterwards, we'll be taking your questions. Before we start, I'd like to kindly remind you to review the last page of this presentation for our safe harbor statement. Now, I hand over to Mr. Erkan.
Thank you, Serdar. Good morning and good afternoon to all. Welcome to our presentation, and thank you for joining us. In the Q3, we recorded 22.3% revenue growth, and our EBITDA reached TL 4 billion for the first time, implying an EBITDA margin of 43.1%. Growing 18% year-on-year, we recorded a net income of TL 1.4 billion, an all-time high quarterly figure. Net income settled above TL 1 billion run rate per quarter. Our customer-centric strategy, diversified business model, and focus on mobile and fixed network quality are the key factors of the sustainable performance, which was further supported by increased mobility in this quarter. This strategy has enabled us continue outstanding growth in total subscriber by 1.2 million, which marks the record of the past 14 years.
In the 1st nine months of the year, we gained a total of 2.5 million subscriber, further strengthening the subscriber base for the upcoming terms. The ARPU trend remained robust at 12% for mobile and 10% for residential fiber. Lastly, this quarter, the revenue share of digital channels in consumer sales rose to 17%, increasing five percentage points year-on-year. We have also distributed the last installment of the 2021 dividend on October 27th. In consideration of these solid results, we further increased our full year guidance, which I will elaborate on my last slide. Next slide. Here we see the operational performance of the Q3. In all three fronts, mobile, fixed, broadband, and IPTV, we delivered a strong net add performance.
On the mobile front, we gained a net 464,000 postpaid and 643,000 prepaid subscribers. This outstanding performance was achieved through our customer focus offer, innovative service portfolio, and also supported by increased mobility thanks to vaccination. High net add performance in prepaid subscriber is due to the visit of Turks living abroad after lifting of restriction in international travel. The average monthly mobile churn rate was at 1.9%, well below that of the last year, and we believe around 2% monthly churn is a healthy level in this market. Blended mobile ARPU rose to TL 58 on 12% increase, thanks to higher postpaid subscriber base, upsell to higher tariffs, price adjustments, and increased data and digital service usage.
Our AI-based analytical capabilities, we observe strong upsell levels and the incremental that an upsell postpaid customer pays 2x that of same quarter last year. In the fixed broadband segment, amid the prevailing demand for high speed connections with a back to school period, we gained net 60,000 fiber subscriber with our high speed fiber internet offers. Our rollout plans are on track as we exceeded 400,000 new home passes in the 1st nine months. This quarter, we also welcome our 25th city in our fiber network. We are pleased to register a further 51,000 net addition to our IPTV subscriber, exceeding 1 million customer this quarter. IPTV's penetration within the residential fiber subscriber reached 63% accordingly. Residential fiber ARPU rose to TL 79 on 10% growth.
13% annual fiber subscriber growth should be taken into consideration, where we aim to manage a delicate balance between ARPU growth and net addition. Next, an update on the data usage and 4.5G subscription trends. Average mobile data usage rose 12% year-on-year to 13.7 GB per user. The rise in data consumption was due mainly to higher content consumption boosted by seasonality and lifted restrictions. Out of the 34 million subscribers sign up for 4.5G services, around 70% have 4.5G compatible smartphones, still indicating growth potential for the upcoming quarters and implying further room for growth in data consumption. Overall, smartphone penetration is at 84%, with 92% of these units being 4.5G compatible. Moving on to page six.
We reaped the benefit of our careful planning efforts to provide best-in-class services, which is evident by the outstanding net add figures in this quarter. Our well-invested high-quality network and strong infrastructure is once again confirmed in the GSA report. With its rich spectrum assets and well-planned modern infrastructure, Turkcell is able to provide speed of up to 1.6 Gbps, which even exceeded the 5G speeds provided by certain operators with this capability. Turkcell ranks among the world's top three operators and its fastest foreign network infrastructure in Europe. Our longtime invested customer-centric approach, which enables Turkcell to provide service addressing customer exact needs, has made us a winner at the European Customer Centricity Awards. At Turkcell team, we have realized over 100 projects that touch the hearts of our customers.
Additionally, our key strength, including data-driven personalized offer and extensive distribution channel, both physical and digital, stand out as core factors influencing customer decision making. With all of above, customer have continued to recommend Turkcell over the competition this quarter, even extended the wide gap with the 2nd best. Next. Now our strategic focus areas. Let's zoom into digital services and solution. The standalone revenue from digital services and solution continued its strong growth at 31% year-on-year, reaching TL 435 million. The paid user base reached 3.6 million, up 0.9 million from last year. We are delighted to have reached another remarkable milestone for our digital services as the IPTV user base exceeded 1 million in September.
TV+ has continued to increase its share in the TV market, reaching just above 13% in Q2, and it is the only TV platform have steadily increased its share for the past Q12 . Content and product quality enable us to increase prices, whereby the product enjoys rising retention levels. With its robust infrastructure, BiP, our instant messaging platform, provides seamless communication and has reached 27 million three-month active user this quarter, tripled from the same quarter last year. A quarter of the active user base is abroad, where the leading countries are highly populated countries like Nigeria, Indonesia, and Bangladesh. Our constant effort in our digital services are improving the user experience of the application, and we achieve this by responding to our customer needs.
For instance, new feature in BIP this quarter include the status posting and video group call with up to 15 people. On fizy, our digital music services, we have added over 120 podcast series. Next slide. Next is the Digital Business Services. We continue to lead end-to-end digital journey of corporate in Turkey. This has resulted in a revenue of TL 499 million from Digital Business Services this quarter. Of the total revenues, 75% are service revenue, which rose by 28% year-on-year. From the service revenues, we have seen continuous strong demand, particularly in Data Center and Cloud Services, cybersecurity services and IoT. We signed 575 new contracts with a total contract value of TL 221 million.
Overall, backlogs from the system integration project signed to date is at TL 832 million, which will be contributing to the top line in the upcoming quarters. This quarter, we continued our product launch in cybersecurity and cloud services. WatchGuard is an economic and flexible fiber solution that works in physical and virtual system. As a 1st in the country, object storage is a cloud-based solution to further support the vision of keeping corporate data in Turkey. Next slide. Last but not least, in our Techfin focus. Techfin services revenue rose to TL 281 million on 37% year-on-year growth. Paycell saw another remarkable quarter, topping 6 million active users on a 30% rise year-on-year. The revenue saw 53% year-on-year growth, mainly with traction in the Pay Later product.
We started to monetize POS solution, which includes virtual and physical Android POS services. We have installed 1,700 devices at local SMEs. We also launch our virtual POS solution with 900 e-commerce merchants, including Turkcell sales channel. This quarter, Financell's revenue rose 28% year-on-year due to higher interest rate and support from emerging insurance business. Financell continues to finance technological needs of a broad range of customers, including individual residential, SME, and corporates. To date, we have served 11 million customers, and we have 24% market share in consumer loans below TL 5,000 . One of Financell key strength is assigning the right limit to the right customer based on Turkcell vast data. We have recently launched a new credit model based on machine learning.
Initial results indicate higher approval rates and higher limits without negatively impacting the historically low cost of risk levels. Next slide. Let's look at our performance in the international segment, which now generates 10% of group revenues. In this quarter, international revenue grew by 39% year-on-year, thanks to the expanding subscriber base in all three regions. Higher mobile data consumption and the positive impact of currency movement. Organic growth excluding the currency impact was at 18%. Our Ukraine business has continued its strong operational performance in this quarter by reaching 8.9 million mobile subscribers on a 14% rise year-on-year. Revenue growth in local currency terms was 24% yearly, exceeding 20% for the last four quarters. This business has seen a 4.6 percentage point EBITDA margin improvement year-on-year on the back of limited interconnection costs and well-controlled operational expenses.
In local currency terms, Belarus revenue declined 2% due mainly to lower handset sales, which on the other hand, affected the EBITDA margin positively. In Belarus, we focus on digital subscription. In the Q3, one out of five new customer opted for Life through digital channels. Our subsidiary in Turkish Republic of Northern Cyprus recorded strong 24% growth with rising voice revenues and data usage due to increased mobility after the recovery of education services and tourism in the island. I would like to end my presentation by sharing our new guidance for the full year. Taking into consideration our outstanding nine-month performance and expectation for the remainder of the year, we once again revise our guidance upwards. Accordingly, we raise our revenue growth guidance to around 20%.
Generating real revenue growth in a high inflationary environment, we revise our nominal EBITDA expectation to around TL 14.5 billion, and expect to register an operational CapEx over sales ratio at around 21%. Lastly, as you remember, we held our last Capital Markets Day back in November 2019. Since then, COVID-19 pandemic has significantly impacted our industry and the way we do business. This necessitates us to revisit our plan and target in relation to the core business and strategic focus area. We plan to organize a Capital Markets Day after the announcement of full year 2021 results, where we aim to reveal our revised three-year business plan and targets. We will make necessary announcements regarding the details of the event in time. I will now leave the floor to our CFO, Osman, for the financial discussion.
Thank you, Murat Bey. Now let's take a closer look into our Q3 financials. In Q3, we recorded a TL 9.4 billion top line and 22% year-on-year growth, thanks to subscriber base expansion, higher data and digital service revenues, coupled with contributions from international operations, Techfin and equipment sales. The 1sst nine-month growth exceeded 21%. Our EBITDA reached TL 4 billion level on a 19% increase. Net income was solid at TL 1.4 billion, marking 18% yearly growth, mainly driven by solid top line growth. The bottom line has settled consistently above TL 1 billion with the contribution of disciplined financial risk management. We are pleased with our solid performance, which exceeded our expectations. Next slide. Now some details on revenue and EBITDA developments. This quarter, with contribution of all segments, we generated TL 1.7 billion incremental revenue.
TL 1 billion derives from Turkcell Turkey. This was possible with a larger subscriber base, ARPU growth, and upsell efforts with price adjustments. TL 258 million from international subsidiaries supported the top line, mainly due to robust subscriber and ARPU performance of Ukrainian operations, as well as the positive impact of currency movements. Our Techfin segment had a TL 76 million positive impact. Paycell and Financell has supported this with an annual growth of 53% and 28% respectively. The other segment contribution of TL 334 million was mainly driven by increased equipment sales. This quarter, our EBITDA margin was at 43%. The main factors behind the 1.3 percentage points margin contraction year-on-year were as follows.
1st, - 0.6 percentage points from gross margin impacted by our energy businesses increased cost of goods sold and rising radio costs due to higher energy prices. Secondly, - 0.7 percentage points from S&M expenses, mainly due to increased selling expenses on the back of record high net adds during the quarter. Next slide. Now a few words on our balance sheet and leverage. Our total debt increased by TL 700 million in this quarter mainly due to the currency movements. A cash position of around $1.4 billion dollar equivalent, which is mainly in FX, covers our debt service until 2025. We maintained our leverage below 1x in this quarter, despite the second installment of the last year's dividend amounting to TL 862 million .
Excluding the financing business, this was at 0.8x , the same level as the previous quarter. We generated just over TL 1 billion of free cash flow, thanks to strong operational performance as well as relatively lower CapEx in this quarter. Next slide. Now I will go into the management of foreign currency risk. We continue to hold the bulk of our cash in hard currencies as a natural hedging tool. With hedging instruments in place, the share of FX debt declined from 83%- 51% as of the end of this quarter. Our hedge contracts are cash flow hedge and covering the full maturity of related FX liabilities. We were in a long net FX position of $122 million as at the end of Q3, and we continue to target a neutral to long FX position going forward. Next slide.
Now let's take a closer look at our fintech company's performance and start with our financing business, Financell. As we communicated before, in line with our expectations, the negative trend in Financell's portfolio ended in Q2, and the growth has gradually restarted. Revenues rose by 28% year-on-year on the back of higher average interest rate on the portfolio versus last year and growing insurance revenue. We expect to sustain the loan portfolio at around TL 2 billion by the year-end. EBITDA rose by 24% to around TL 120 million with a margin of 73%. The 2.3 percentage points margin contraction is due to the base effect as we sold some of our receivables in Q3 2020.
As a result of strong collection performance and improvements in the customer portfolio, cost of risk has been declining since the start of this year. Cost of risk has remained nearly unchanged at 0.3% for this quarter. Next slide. Lastly, our payments business, Paycell. In line with the global trends, Paycell users continue their payment habits in the post-pandemic period, which is reflected in Paycell's solid operational and financial performance. Paycell continued to see increased recognition with the contribution of rising active customers and merchant numbers in Q3. In fact, Paycell's three-month active users reached 6 million, and the number of merchants hit 14,000. The most popular product on our platform, Pay Later, delivered another strong performance in Q3. Pay Later volume rose by 84% to TL 455 million year-on-year.
Transaction volume of Paycell card has increased to sixfold of the same period last year and reached TL 657 million. As you may remember, at the beginning of the year, we launched Android POS for our corporate customers. Focusing on virtual POS as well, we shifted Turkcell payment channels to Paycell's virtual POS, providing a revenue channel for Paycell and saving for Turkcell. Thanks to our increased focus on this business, POS transaction volume reached TL 475 million in this quarter. Overall, in Q3, Paycell revenues increased by 53% to TL 119 million, 55% of which are non-group revenues. EBITDA margin was at 46%, impacted by increased human capital investments and S&M expenditures. With its unique product range and disruptive nature, Paycell has already taken its place among regional fintech leaders.
As disclosed earlier, we are seeking growth capital to scale this business further in Turkey and then globally. This concludes our presentation. We are now ready to take your questions. Thank you very much.
The 1st 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. My 1st question on Paycell, could you give us a sense of what the total payment value across the platform is at the moment and the growth rate there? Just wanted to understand why bill payments have declined during the quarter. That's 1st question. 2nd question, wanted to understand how your pricing strategy is evolving at the moment given inflation rates and whether you can push mobile ARPU growth at higher rates than what you've seen at the moment, or whether that's hoping for too much into the new year.
Okay. Jonathan, thank you very much. For the first question regarding total payment value is around TL 500 million. It's ups and downs around TL 500 million.
The bill payment, you know, is because it moves from physical channel to the digital channel. That's why, as you might see the decline, but we see growth. When it moves to the digital channel, we can get it. For the pricing strategy, obviously, you know, to be able to grow the business, there are two options in your hands. One of them is growing subscriber base, and the other one is growing the ARPU. We would like to push both of them. This is our strategy since two years to two and a half years back. We would like to push ARPU. On the other hand, the inflation was increasing more than expected by the market. Our initial plan was, in terms of inflation, it's not gonna grow that much.
We're adapting ourselves based on pricing. As you know, we have a contract with the customer for 12 months, so it will take some time to catch up the real inflation. We're gonna push to reach on inflationary pricing. As I mentioned, it was quite fast in terms of our expectation, but we'll catch it up. On the other hand, I would like to emphasize our customer growth, because if you wanna pick one, I would prefer on the customer growth side, because at the end of the day, we can create more value from one customer, especially we have other businesses like Paycell and Financell and digital services and so on. If we catch customer, we can easily increase their ARPU level in near term.
That's why we would like to continue on this. Regarding growth rate, it is around 85% for payment in Paycell. 84% range. Yeah. Sorry, I
Thank you so much.
Came back to 1st question. Yeah.
The next question is from the line of Ivan Kim with VTB Capital. Please go ahead.
Yes. Hi. Three questions from my side, actually, if I may. Firstly, on 5G auction. When do you expect the 5G auction and what spectrum do you expect to be sold? Is it C-band and 700MHz ? That's one. Two, on capital intensity in 2022. How do we think about it compared to 2021? Do you think capital intensity will increase in 2022 compared to 2021, given where Lira is? Thirdly, on Paycell's take rate, it's pretty high, 3% in 2020 and like 3.5% if you look at the Q3 of 2021. Where do you expect the take rate to evolve when the business scales? Thank you.
Yeah. Thank you very much, Ivan Kim. 1st of all, regarding 5G roadmap and auction. Obviously there is no official timeline for 5G announced by the regulator. There are number of explanations or announcements coming from miniser, but obviously we have to wait for official announcement. 5G is vital technology. We would like to facilitate the digitalization of industry and contribute to the economic development of our country. However, we believe there are some issues that need to be addressed for the healthy launch. 1st is the fiber connection of base station. Currently similar to the low household penetration, fiber connectivity of base station is not enough for the full-fledged transition to 5G. Secondly, we believe we have not reached a desired localization rate in the development of 5G network equipment.
We think localization rate can only be reached around 20% in 2023. This could be even lower for the core network and base station level. Therefore, we believe there are some risk for the full-fledged transition to the local 5G network. Regarding the license cost or CapEx side, 1st of all, auction structure is not clear yet, and we don't have an official timeline, which limits us in making any estimate regarding a possible CapEx or frequency payment. The difference between 4.5G and 5G is that 4.5G was a great leap over 3G in terms of speed, particularly for the individual user. Therefore, we need some time to see how it's gonna end up for the probably end of this year.
For the CapEx plan, 2022 and allocation, we have not finalized our budget planning for the next year. We will give 2022 guidance when we announce our full year result. I don't expect major increase on the CapEx side, even little bit decrease, because we spent CapEx earlier than expected this year, and we get positive result due to the effects, fluctuation. Next year, probably we're gonna spend a little more CapEx on the fixed line, on the fiber side, a little less on the mobile. More or less, we would like to keep similar levels on the CapEx side. Sorry for the third question. Could you repeat the third question? It was regarding Paycell, but I couldn't catch the 3rd question.
Yes, of course. On Paycell, just a quick question on its take rate. Basically, if you take Paycell's revenue and divide it by total payment volume. It's pretty high by international standards, 3% in 2020. If you look at the Q3 2021, it's 3.5%. I was just wondering, where do you expect that to settle when the business scales? Thank you.
Okay. Let me give the word to Osman. He'll answer your question.
Yes. Actually, Paycell started its business with as a business unit within the group, and then it became a stand-alone company, and now we are expanding Paycell revenues outside of the group, and now more than half of the revenues are coming out of the group. Actually, the intensity of revenues over total turnover is partly on the back of the two factors. 1st factor is group revenues. The 2nd , but more important factor is our lending business, Pay Later business. Many of the payment companies do not have this Pay Later business, which is relatively more profitable part of the fintech business. You can see some international examples. There are companies, fintech companies, payment service companies, which are only processing payments and doing remittances.
On the other hand, there are pay later businesses, which have higher profitability and higher growth scale. We are a combination of both. We either have a high volume turnover, high turnover. On the other hand, we have a higher profitability, thanks to our strong penetration in Paycell network. What we are aiming going forward is to first to penetrate in overall Turkish market. We are expanding our footprint outside of Turkcell Group. We are aiming to double our customer base in a couple of years. Then we want to expand regionally and then later on globally. That is why we are seeking growth capital for this business. But we will not be doing that in at the expense of negative EBITDA and negative profitabilities. We will keep the healthy balance sheet while doing this growth.
That's great. That's very helpful. Thank you.
The next question is from the line of Ondrej Cabejsek with UBS. Please go ahead.
Hello, and thank you for the presentation. I have one follow-up and three questions, if I may. The follow-up pertains to the fiber connectivity on towers that you mentioned as a kind of prerequisite to running the 5G auction properly. Can you expand on that? Does that mean perhaps that you are kind of or you would be kind of pushing for some kind of large scale of regulated fiber access needed you know across the market to connect base stations you know across the operators for 5G to really be successful? Is this what you mean? Then the three questions. I believe you mentioned 400,000 homes passed in terms of fiber year to date.
Can you give us an idea in terms of the take-up on that footprint so far and where this take-up is coming from, whether these are, you know, greenfield customers or whether you're perhaps taking market share in some areas? 2nd question, if I may understand in terms of your CapEx guidance, you are now guiding for the low end. I know it's not a huge difference, but with the lira having depreciated again in the Q4, what has changed in your plans? 3rd question, a quick one on Ukraine, please. You know, some or one of your peers is looking at doing something with their towers in Ukraine. Is this also an area? I know you're doing that in Turkey, but is it also something that you're, you know, looking at in Ukraine? Thank you.
Thank you very much. For the fiber connectivity in Turkey overall, I'm talking about all operator, the reaching to the base station with the fiber is around less than 40%. And even incumbent operator has less than 50%. In this case, without fiber reaching to the base station, it is difficult to give proper 5G services. On the other hand, for existing base station numbers like around 100,000 per whole operator, probably when we go to the 5G, it's gonna be maybe 10x higher, the base station. The fiber connectivity and fiber reaching fiber with the proper connection, this is mandatory, I believe. Regarding 400K home pass year to date. It is, yeah.
We're gonna see the increased demand on the fiber. Our take-up rate for this segment is around more than 20% for the 1st year, but to reach the real take-up rate is around 45%. We are faster than our business case. There are, you know, existing greenfield customer as well as the customer from the competition. In terms of market share, I believe we have more than 50% in the area where we reach. For the guidance of lower CapEx, you know, there are two things about CapEx. We did two important action for this year. 1st of all, we did advanced payment to the supplier by lowering the cost of equipment. which help us our CapEx management.
The 2nd one is we decided to invest earlier than expected, which means first half of this year, which is front-loaded investment. This is gonna help us to address the CapEx guidance level. For the CapEx guidance, even though we see dramatic increase on the FX side, we don't wanna change our guidance. For Ukraine, actually, I have no idea what the peers are doing on the tower side. I don't wanna comment on things that I have no clue about it.
Thank you very much. If I may just a quick follow-up in terms of the connectivity. You mentioned, you know, sub-50% of towers, even for the incumbent, for the market, about 40%. What is your proposal then? What do you think needs to be sorted for the 5G auction to make sense at this stage?
Obviously, we publicly announce our proposal. Turkey needs common infrastructure company, common investment portfolio, because if everybody invests on expensive fiber side, it doesn't help country's economy, it doesn't help for you know, services side of it. If we invest CapEx underground, we will probably run out of money to give services to the customer, high digital services, I mean. That's the you know, this one proposal on the table. Let's have common investment on fiber. Let's compete on the services side, not the infrastructure side, because infrastructure competition is old world, old world competition.
Understood. If I may, sorry, one final one. What do you think needs to happen for you know a common infrastructure company to be a reality in Turkey? What do you think needs to happen? Thank you.
I think the wise way and intelligent way to establish this thing, I think, is the minister has the vision to implement such a common infrastructure company. There are, you know, the intention to do so. We'll see what's gonna happen. I think the vision is there. The vision of the prime minister, sorry, president is there. The vision of minister of Transport and Infrastructure is there. I think this is the wise way.
Thank you.
Türk Telekom concession is has uncertainty. Recently, Minister of Communication also told that this uncertainty sometimes blocks some of the things. I think, you know, reasonable people understand that Turkey needs common fiber infrastructure.
That's clear. Thank you very much.
The next question is from the line of Nora Nagy with Erste Group. Please go ahead.
Hi. Good evening, guys. Thank you for the presentation. I only have one question from my side, please. Do you plan to take the fixed asset revaluation allowed by a new legislation, so that to use that as a deferred tax income release, as we have seen in case of Türk Telekom? Thank you.
Okay. Let's have Osman take this question.
Actually, we disclosed same application in our Q2 financials. There are further opportunities on our balance sheet, which we are evaluating further. We will decide on this issue in our year-end financials.
I see. Thank you.
The next question is a follow-up question from the line of Ondrej Cabejsek with UBS. Please go ahead.
Thank you. Just one follow-up, please, in terms of the other headlines that we saw today with you know, looking to monetize the Techfin business. Is it still the case that you prefer a strategic partner who would help you develop this business from a minority perspective? Or are you know, are you in a different place compared to the past couple of quarters, where you were kind of suggesting this would be the preferred option? Thank you.
Okay, thank you. 1st of all, regarding the monetization or strategic partnership things, it was a secret. It was, you know, we were talking about Turkcell Superonline, we were talking about our tower business, we were talking about Paycell on FinTech side. I think this is a good opportunity, but and we are planning to offer minority stake, and the partner we're looking for should ideally be able to contribute to Paycell's growth story, not only provide growth capital. We should be able to share know-how, make expansion plans and make sure that the business further evolves and potentially get ready for an IPO in the next couple of years.
Thank you.
The next question is from the line of Kayahan Demirak with AK Investment. Please go ahead.
Hi, thank you very much for the presentation. On the Paycell side, do you have some kind of a valuation range for the stake sale? The 2nd question, related to the first remark about the inflationary pricing and the current inflationary environment. If I understand right, you expect the blended ARPU growth at least to converge to somewhere close to the inflation. The 3rd question is about the Ukrainian operations. I think for the past couple of quarters the operations are performing quite well. I mean, could you give us some color on that? I think particularly subscriber additions are strong. Is it because of market share or market is growing? Thank you.
Thank you very much. 1st of all, regarding Paycell, obviously Paycell is one of our most important and valuable asset. Not just Paycell, also we have other assets as well. We disclose the company's financial and operational metric every quarter in our presentation, and we were quite open to the market as well, you know. We all know that fintechs and payment companies around the world enjoy quite high multiples, and thanks to their disruptive nature and unique growth profiles. These companies are mostly having negative EBITDA, which makes their valuation to be based on their revenues. Our Paycell has a positive EBITDA margin with strong growth profile. Thanks to its diversified business model involving group and non-group revenue, as well as individual user and merchants.
Both in terms of revenue growth and EBITDA margin, Paycell is a unique business. Everybody can do the math for the valuation by using the global revenue and EBITDA multiples. That's the valuation of Paycell per global average. Regarding about inflationary pricing, ARPU growth, I tried to explain that we would like to keep our ARPU in line with the inflation increase. As I said, our initial plan was not expected that much increase on the inflation side. To be able to adapt inflation increase, sometimes we need time. I believe that we're gonna catch the inflation. I hope inflation is not gonna go same speed as we see today. We can catch this in a while.
We shouldn't forget that we are gaining 2.5 million customers from the beginning of the year. This customer, when we get the customer, we put them into the system and provide upsell opportunities for this customer, and sell other products like Paycell, digital services, TV, and so on. It will take some time to get acceptable ARPU level for the customer who come recently. We have quite important system in terms of using AI and other technology, customer centricity, and so on. We're gonna get to the acceptable levels. Regarding Ukraine operation, we actually, this is not the result of last quarter. We have focused on Ukraine last couple of years.
We invested in the area where we have weak network and captured the customer. We probably gonna continue on the customer side in a similar level. I would like to remind that our subscriber growth is 14% year-over-year. Our ARPU growth is 9%. It's above the inflation of Ukraine. Plus, we are doing better than the competition, and we are gaining market share in terms of revenue, in terms of customer as well. We're growing almost double percentage point versus the competition. We gonna keep grabbing market share, and our expectation is there as well.
Thank you. As a follow-up on the subscribers additions gains guide, do you think we can keep the current pace of additions you are hoping to have 1 million year-over-year, or is that a more realistic number for the next year?
To be honest, we are in telephone business, we are in technology business, we are in services business, and we are in Techfin business, and so on. To be able to successful in this area, you need to get more customer. Our gaining customers strategy will continue. We hope to see another million next year. As I mentioned, this year is our spending year, and having such a customer is very important for next year revenues as well. Because you gain this year, you spend subscriber acquisition costs this year, but you get the real revenue for next year. I think the strategy is in line. We are executing well on the operation side and we hope to continue this level.
Okay. Thank you, and congratulations on the good results as well.
Thank you very much. I appreciate it.
Ladies and gentlemen, there are no further questions at this time. I will now turn the conference over to Turkcell management for any closing comments. Thank you.
1st of all, I would like to thank everyone for joining our conference call. You know, hope to see you in our Capital Markets Days at the beginning of next year. Thank you very much. Have a good day.
This concludes our call. Thank you for joining. Have a nice day or evening. Thank you.