Telenor teams up with Thailand’s CP

Norwegian telecoms operator Telenor said Monday that it has agreed to merge its Thai mobile unit with a local rival in a bid to create a major new player on the market.

Telenor and Thai conglomerate Charoen Pokphand (CP) said they plan to combine their respective mobile units, Dtac and True, in a so-called “merger of equals” that will create a new company with 55 million subscribers and combined sales of nearly seven billion dollars.

Telenor and CP will each own 33.3 percent of the merged company, and the rest will be listed on the Thai stock exchange.

The tie-up is still subject to approval from the boards and shareholders, as well as regulatory authorities.

“The parties acknowledge that there is no certainty as to the completion of the transaction,” Telenor said in a statement.

DNB Markets economist, Ole-Andreas Krohn, said there were “still obstacles in the road” before the deal can see the light of day.

Telenor, which owns 65 percent of Dtac, will have to convince minority shareholders of the interest of such a merger. Competition authorities may also object to the plan, as the tie-up would “in practice” leave only two operators on the Thai mobile phone market, he said. The new group would focus on new technologies, CP said in a separate statement.

“The new venture will focus on the development of tech-based businesses, creating a digital ecosystem and establishing a start-up investment fund,” it said.

“Telecom business will still form the core of the company’s structure while greater emphasis is needed to develop our capabilities in new technologies: artificial intelligence, cloud technology, IoT, smart devices, smart cities, and digital media solutions,” chief executive Suphachai Chearavanont said.

Present in Northern Europe and Southeastern Asia, Telenor is already in the process of merging its subsidiary in Malaysia, DiGi, with Celcom, controlled by Malaysian group Axiata, to create a 10-billion-euro company.

The group has also decided to sell its subsidiary in Myanmar following a coup there, to Lebanese financial group M1 Group.

The transaction has yet to be finalised and according to several media outlets, the junta is opposed to the sale.a