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Telenor and CP Group Explore Telecom Units Merge

The Charoen Pokphand Group (CP Group) and Telenor of Norway are reportedly in talks to merge their telecom units in Thailand, expecting to create a new leader in the domestic mobile market.

If completed, the deal would merge the telecommunications operations of Total Access Communication (DTAC) and CP Group’s True Corp (True), both SET-listed, Telenor said in a statement.

It would be the Oslo-based firm’s second tie-up in Southeast Asia this year. In June, Telenor reached an agreement with Axiata Group Bhd to merge mobile operations and create a new market leader in Malaysia through a $15-billion transaction.

Telenor serves a total of 172 million customers, with about half of its revenue generated in Asia. Based on their customer base, DTAC ranks third in the Thai market, below True Move and Advanced Info Service (AIS).

A deal approved by regulators would give the combined entity a share of the Thai market of around 54%, positioning it above AIS, which has a total mobile subscriber base of 43.7 million. True has 32 million, while DTAC has 19.3 million.

However, “there are open issues outstanding and there is no certainty that the discussions will result in a final agreement. Telenor will not provide any further comments at this stage of the process,” Telenor said.

Responding to the media’s request for comment, True did not deny the report. Its chief financial officer Yupa Leewongcharoen told the Stock Exchange of Thailand (SET) that the company would report any clarification to the regulator if necessary.

DTAC declined to comment and said there would be an official announcement about it.

Mads Rosendal, a credit analyst at Danske Bank, said the transaction would be in line with Telenor’s strategy of reducing risk and unlocking more value from its Asian business units. Also, it would give True greater pricing power and positive capital investment synergies, benefiting DTAC, which performed weakly due to the pandemic.

According to a Thai telecom specialist who requested anonymity, bankers have acknowledged talks between the two parties for years, adding that it is possible for True and DTAC to form a joint venture under a share exchange model.