True-DTAC Merger To Shake-Up Thai Telecoms Market

Key View

• Thailand’s second and third-largest telecoms companies, True and DTAC, are considering a merger of their mobile operations. The resulting entity would become the country’s largest operator.
• DTAC would be the main winner, benefiting from a dramatically improved market share and spectrum portfolio. AIS would be particularly vulnerable to downward pressure on ARPUs given that it would no longer benefit from superior economies of scale.
• We note that the outlook will remain uncertain over the near-term given that there is some opposition to the deal over the market dominance the new entity would achieve.

In a major development to the Thai telecommunications market, the owners of the country’s second and third-largest mobile network operators, True and DTAC, are exploring a merger in the form of a joint venture, Citrine Global Company. Norway-based Telenor Group (parent of DTAC) and Thailand’s largest conglomerate Chareon Pokphand Group (CP Group), parent of True, have both indicated they would take an equal share in the venture reportedly worth USD7.5bn. The merger would require the approval of the regulator, however.