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Telenor tries True Thai tie-upTelenor tries True Thai tie-up

Telenor has struck a so-called merger of equals in Thailand between its DTAC arm and rival mobile operator TrueMove.

Nick Wood

November 22, 2021

3 Min Read
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Telenor has struck a so-called merger of equals in Thailand between its DTAC arm and rival mobile operator TrueMove.

The deal is structured as a share-swap with a ratio of 10.22 True shares for every DTAC share. Once the dust settles, Telenor and True will each hold an equal stake in the combined company.

The agreement may be structured as a merger of equals, but operationally it’s anything but. True is the country’s second-largest operator, with 32 million mobile customers at the end of Q3, while DTAC occupies a distant third spot with 19.3 million. Bringing them together would create a new market leader, relegating AIS and its mobile customer base of 43.7 million to second spot. Propping up the market by a very wide margin is National Telecom (NT), the state-owned operator that formed earlier this year by the merger of CAT and TOT. According to Bangkok-based analyst firm Yozzo, NT had just under 3.4 million customers at the end of 2020.

It’s also not a merger of equals because it’s also probably not going to happen. And even if it does happen, there is a high likelihood that there would be some stringent conditions attached by the regulator.

The reason being, realistically Thailand is a three-player market. Yes, as mentioned, there is a token fourth, but its paltry customer base proves it’s not much of a competitor. Reducing that number to two by combining the second and third-largest operators in the market would have significant implications for competition.

The Bangkok Postreports that Thailand’s telco regulator, the National Broadcasting and Telecommunications Commission (NBTC), has already invited Telenor and True to a meeting to explain what they’re up to. An unnamed source said competition – or the potential lack thereof – would be one of the key points of discussion.

The counterpoint typically proffered by the merging telcos is that the combined company will have the scale and financial clout to invest in new technology and maintain low prices.

Telenor and True’s parent CP Group are no exception. As a merged ‘telecom-tech’ company, as they are calling it, they have also pledged to form a venture capital group that will raise up to $200 million to invest in promising start-ups.

“The telecom and technology sectors are key to enabling Thailand to move up the development curve and to create broad-based prosperity,” said Suphachai Chearavanont, CEO of CP Group and True chairman, in a statement. “As a telecom-tech company, we can help unleash the enormous potential of Thai businesses and digital entrepreneurs as well as attract more of the best and the brightest from around the world to do business in our country.”

These sentiments were echoed by Telenor CEO Sigve Brekke.

“We have experienced an accelerated digitalisation of Asian societies, and as we move forward, both consumers and businesses expect more advanced services and high-quality connectivity,” he said “We believe that the new company can take advantage of this digital shift to support Thailand’s digital leadership role, by taking global technology advancements into attractive services and high-quality products.”

This is all well and good, but in this case, the NBTC’s opinion on the merger will be the one that matters most.

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