The Anatolia National Telekom Privatization Simulation
From my perspective, during negotiation, each team from the “selling” and “buying” sides tried to achieve its own interest by all means possible. For instance, our team represented the government side, and it was sometimes clear that we could not find any compromises with teams representing the interests of the bank and potential buyers. The main challenge to the privatization of Anatolia National Telekom was the potential threat to national security. The government wanted to protect telecommunications as one of the most strategic resources that could not be transferred to private parties. At the same time, another side wanted to persuade teams that the sale of the Anatolia National Telekom would be helpful in informing the public about the opportunities they have. From this point of view, teams are suggested to gain benefits from the sale: to create equity-based popular capitalism in the state. Thus, the conflict of interest was the main feature of the launched negotiations.
Therefore, these negotiations represented a means for each side to achieve its goals, to make their ideas adopted by others. However, the negotiation period was complex because the interests of all the sides sometimes were conflicting, and everyone’s ideas were right from their point of view. Another interesting point that one can define when discussing the past negotiations is that we, as the government representatives, faced strong opposition from teams who wanted to sell the Anatolia National Telekom. They promoted their own ideas without any concerns regarding the potential threat to national safety, but this issue was also meant to be scary to them. Thus, an intense competition was happening among teams during the negotiation, and each side wanted to turn the discussion into a favorable flow.
Knowledge Gained from the Privatization Negotiation and Valuation
From the negotiations that were held over the privatization of the Anatolia National Telekom company, it became clear that other sides will not fully adopt the one’s side truth because they also have their own interests. Moreover, it became evident that one cannot be a leader in the global management industry without investigating the preferences and aims of other sides with whom he/she is working. Negotiations overall and those held over buying-selling issues especially are complicated and intense processes that should be handled with responsibility. Firstly, one needs to define the interests of his/her competitors’, then it is necessary to decide whether those interests can be mutually existing with his/her. From the gained experience, one can state that preparation for negotiations is one of the most crucial points. In reality, all the sides were deliberately studying each other: foreign investors tried to analyze and make some conclusions based on their information on the eve of privatization. The same was happening in the simulation: students tried to analyze each other better to define some weak sides, which can help achieve the preferred outcome.
Finally, the valuation process provided me with a clear perception of where the values of enterprises come from. For instance, it became clear that the value of privatizing companies is driven by institutional contingencies, which, in their turn, are tied with the country and industry. We have considered some ways to value an enterprise, including adjusted book value, comparables, and discounted cash flows. These methods of company valuation helped students to create arguments, protecting their interests.