True and dtac’s boards clear merger proposal

True and dtac’s boards clear merger proposal

The respective boards of True Corp and dtac have approved a proposed merger of the companies’ Thai mobile operators, leaving the market with just two major players.

The entity created from a merger of Telenor’s dtac and Charoen Pokphand (CP) Group’s True Corp would be Thailand’s largest mobile operator by subscriber numbers. The parent firms have signed an agreement for the merger, although shareholder and regulatory approvals are still required.

A merger that creates a duopoly would typically be viewed by antitrust authorities as a retrograde step, and indeed the merged entity would have a market share of over 50% with around 95 million subscribers. The market is currently led by AIS, which has a share of around 46%. There would be a third player in the form of National Telecom (NT), itself formed from a merger of state units CAT Telecom and TOT in January 2021, but as of end-September 2021 it had fewer than 1 million connections.

Despite the duopoly concerns, Telenor is reportedly optimistic that the merger will receive the required approvals and close before the end of 2022. This is likely due to the market clout held by CP Group, which is Thailand’s largest private company.

The firms have informed the National Broadcasting and Telecommunication Commission (NBTC) of their “readiness to provide further information or clarification as needed” relating to the merger.

Telenor Asia chief Jorgen Arentz Rostrup said that the merged unit would “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.”

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