TTTBB purchase by AIS in spotlight
Brokerage suggests deal is imminent
The prospect of the acquisition of fixed broadband provider Triple T Broadband (TTTBB) by Advanced Info Service (AIS) has come under the spotlight with market analysts believing the leading mobile operator is now exploring such an opportunity to level up its broadband business as its rivals True Corporation and Total Access Communication (DTAC) are on the path towards a merger.
Bualuang Securities said the purchase deal is expected to be concluded soon.
The brokerage firm said in its analysis report that the purchase of TTTBB, which provides services under the brand 3BB, would make AIS the second biggest broadband operator in Thailand with a combined subscriber base of 4.3 million, as opposed to the current market leader True which has 4.7 million subscribers.
AIS now has 1.9 million broadband subscribers while TTTBB has 2.4 million.
The deal would enable AIS to have access to 1.7 million core kilometres of optical fibre owned by Jasmine Broadband Internet Infrastructure Fund (JASIF), which is 19% owned by Jasmine International Plc, the parent of TTTBB.
The move could allow AIS to expand its broadband business in rural areas through the fibre network of JASIF, it said.
Such an acquisition would reduce the number of players in the broadband market, easing the competition in the segment and increasing the average monthly revenue of the home internet providers in the long run, said Bualuang Securities.
A telecom analyst who requested anonymity said the deal between AIS and TTTBB has been talked about from time to time, particularly among those in the stock market but it became more discussed in recent weeks.
"It makes business sense that AIS aims to become the leader in fixed broadband service in the country," the source said.
The source said the deal was mentioned in two scenarios.
The first is that AIS could buy the entire stake of TTTBB, wholly owned by Jasmine International. The second is that AIS would acquire the entire stake of TTTBB as well as a portion of the stake of JASIF.
The deal's value could range between 30-40 billion baht, the source said.
The source said the parties involved in the deal may wait to see the prospect of the planned merger of DTAC and True before making the move.
A telecom veteran who requested anonymity said TTTBB has three core assets, covering last mile internet connections, core networks -- half of which are capitalised on by Jasmine International -- as well as its subscriber base.
The source said the deal is likely to have been pushed by Gulf Energy Development Plc, the biggest shareholder of InTouch Holdings, the parent firm of AIS.
Gulf has strength in its strategic management, particularly in its merger and acquisition scheme, powered by the company's chief of asset management, Smith Banomyong, who was once an executive at Siam Commercial Bank, the source said.
"The fixed internet broadband market is likely to see the end of fierce competition if AIS succeeds in acquiring TTTBB," the source said. Competition in the segment has been escalating every year.
Before 2015, the cheapest fixed broadband internet package was 599 per month, but that has declined to 299 baht per month now, partly due to the emergence of AIS Fibre in 2015.
AIS chief executive Somchai Lertsutiwong declined to comment about the deal.