True denies reported interest in buying DTAC

True denies reported interest in buying DTAC

DTAC customers at a service centre in Bangkok. (Bangkok Post file photo)
DTAC customers at a service centre in Bangkok. (Bangkok Post file photo)

A highly placed source at SET-listed True Corporation has rejected a media report suggesting it will acquire Total Access Communication (DTAC), the country's third largest mobile operator, from Norway-based telecom giant Telenor, insisting the story is baseless.

"That's not true," the source told the Bangkok Post without further elaboration. The source requested anonymity.

The report emerged via online media Thai Enquirer on Thursday, citing an earlier report published by London-based business intelligence service TMT Finance. Access to TMT Finance's report requires a subscription.

According to the report, sources said True is understood to be holding discussions with Telenor regarding the potential acquisition of DTAC.

The report indicated Telenor, which owns 65% of DTAC, is looking to exit the Thai market at a valuation of S$2 billion for its stake.

DTAC shares surged 11.7% to close at 35.75 baht on Thursday following the report. Its shares jumped 5% to 37.75 baht on Friday.

The suggestion Telenor plans to depart the Thai market any time soon was quickly countered by DTAC, which sent a statement to the Stock Exchange of Thailand on Thursday evening stating Telenor remains committed to the Thai market.

"Telenor Group does not comment on rumours or speculation in the market. We are committed to Thailand and our Asia strategy remains," Jessica Chandrangam, head of investor relations at DTAC, said in the statement.

On July 20, Telenor Group president and chief executive Sigve Brekke also indicated its revenues in Thailand and Malaysia are stabilising, buoyed by its targeted marketing initiatives and the government's stimulus packages.

He said despite the pandemic, Telenor knows historically Asian economies are quick to bounce back.

"We also have a business model that enabled us to quickly adapt to lockdowns, but also to reopenings," said Mr Brekke.

Telenor did exit Myanmar on July 8 as the firm entered into an agreement to sell 100% of its business unit in the country to the M1 Group, a Lebanon-based investment firm.

"We had some very, very difficult dilemmas between ensuring the safety of our employees versus complying with regulatory orders from the military authorities. These challenged our premise of how we can do business," Mr Brekke said.

Pisut Ngamvijitvong, senior equity analyst at Kasikorn Securities (KS), said KS believes Telenor has only a 25% chance of exiting its cash cow operation in Thailand.

He said Telenor's decision to exit Myanmar has nothing to do with business or financial issues and is driven by business ethics.

Mr Pisut said Telenor is unlikely to be desperate to secure more spectrum ranges in Thailand over the next four years as the 3.5-gigahertz band is expected to be auctioned off either late next year or early in 2023, followed by the 2.3GHz range in 2025.

There is a 50% chance Telenor may explore the possibility of strengthening its market presence through a merger as it did in Malaysia, he said. Such a move could enhance its business value and scale, said Mr Pisut. There is a 75% chance it would lease its telecom towers out to others, which could enhance its asset value, he said.

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