A proposed merger between True Corp and dtac took a step forward after the boards of both companies approved the deal to create the largest mobile player in Thailand by connections.
Telenor-owned dtac and True Corp, part of Charoen Pokphand (CP) Group, have now signed an agreement to create a new telecom-tech company which would leave the country with only two major operators.
Dtac’s Norwegian parent appeared confident the merger will be completed in 2022, although a number of hurdles remain.
The tie-up still requires shareholder and regulatory approval, for example, although it has been suggested the deal will receive speedy approval by Thai authorities.
Telenor stated True and dtac have filed a merger notification with the National Broadcasting and Telecommunication Commission (NBTC), informing it of “their readiness to provide further information or clarification as needed”.
There have been concerns over the impact the consolidation will have on market competition, given the merged entity would control more than half of the total market at about 95.3 million subscribers with current market leader AIS maintaining a share of about 46 per cent. National Telecom (NT), formed in January 2021 through a merger of TOT and CAT Telecom, is in theory the third player, but had less than 1 million mobile subscribers at end-September 2021.
Despite the telecom-tech label, Telenor emphasised the telecommunication business “will remain core to the merged company, ensuring that consumers throughout the country benefit from continual improvements in 4G and 5G coverage”.
Jorgen Arentz Rostrup, EVP and head of Telenor Asia, stated the merged entity “will have scale to both invest in network quality and make technology advancements that meet the changing needs of Thai consumers and support Thailand’s digital growth”.
It was also indicated the new company, together with partners, intends to raise $100 million to $200 million in venture capital, “supporting promising digital start-ups focusing on new products and services that benefit Thai consumers”.