Telenor allays concerns over governance
Chief pledges 'no compromise' in terms of the firm's value and ethics post-merger
published : 5 Jul 2022 at 06:44
newspaper section: Business
writer: Janine Phakdeetham
Telenor Group, the major shareholder of Total Access Communication Plc (DTAC), has reaffirmed its plan to maintain good governance and high business standards when it merges with True Corporation to create a telecom-tech company.
When asked at a recent press conference in Bangkok if the management style and direction of DTAC would be affected because some observers believe True has the opposite standards when it comes to "good governance", Sigve Brekke, president and chief executive of Telenor Group, swiftly defended his firm's stance and independence.
"We are not going to compromise on our ethics and our values. We have spent a lot of time with CP Group on how the new company should be run and what standards this new company should have," Mr Brekke said.
"So we'll continue to have a very strong focus on our boundaries when it comes to compliance, governance and how we do business the right way. These are a very important part of the agreement that we have."
Jorgen C Arentz Rostrup, executive vice-president and head of Telenor Asia, echoed Mr Brekke's statement and highlighted global standards.
"That conversation becomes easier because of the global perspective, framework and standards on this are quite clear. It's been a very good conversation. We have put in place those mechanisms to ensure that," he said.
DTAC and True announced that their new firm would be based on an "equal partnership" with goals to pursue telecom-tech businesses, create a digital ecosystem and set up a fund to support startups.
"An equal partnership means that we're glad to have equal shareholding -- that's a formal part of it, but it's more based on that we're very comfortable for both parties that we have the same perspective and the same ambition for the company and the plans how to go about things in the future," Mr Rostrup said.
Telenor revealed it had spent a considerable amount of time with the leaders of CP Group before announcing the planned merger publicly in November 2021.
Elaborating on balancing the force of two giants, Mr Brekke said: "It's an equal shareholding, but also equal influence. This is not DTAC merging into True, and not True merging into DTAC. It's a new company where we have agreed on what that influence means."
True and DTAC both got the green light from their shareholders in April to proceed with the merger.
The closely watched consolidation of the two telecom giants means they will have the most subscribers in the Thai market, surpassing Advanced Info Services (AIS) -- a move which watchdogs say would reduce market competition and put consumers at a disadvantage.
The merger is pending approval by the National Broadcasting and Telecommunications Commission (NBTC).
Still, Mr Brekke revealed that the regulator should give its final decision by the end of this month, adding that he has a meeting set with the NBTC to iron out any wrinkles and clarify DTAC's position.
Recently, Telenor received a green light to complete a major merger in Malaysia when the country's regulator approved a deal to combine Telenor's Digi with Malaysia's oldest mobile telecommunication provider Celcom Axiata Berhad.
- Next up -
When the merger is finalised, what is in store includes the expansion into new tech frontiers using cutting-edge technologies such as artificial intelligence, the cloud and the Internet of Things.
This new growth is labelled Growth 2.0. It differs from the 1.0 version because it no longer focuses on the number of subscribers or giving people access to cell phones.
Furthermore, the new firm aims to support Thailand's digital leadership role by raising venture capital. The move will focus on local and foreign startups as well as having a plan to study space technology to incorporate into its business.
"We want to be good for startups. We will support investment in them and create an environment for that to happen -- stronger and quicker than what it does today. We'll set up a venture capital fund initiated by us and supported by others. It will target Thai and foreign startups based in Thailand. Working together, hand in hand, will benefit all," Mr Rostrup said.
The planned merger will advance the company's strategy to strengthen its presence in Asia while creating value and supporting long-term market development in the region.