Telenor Asia expects gains worth up to US$2.5 billion from synergy over the next three years from the mergers of True Corporation and Total Access Communication (DTAC) in Thailand and Celcom and Digi in Malaysia.
Telenor Asia celebrated the telecom merger with a $20.7 billion enterprise valuation in Thailand, Jørgen C Arentz Rostrup, executive vice-president and head of Telenor Asia, told the Bangkok Post. He is also vice-chairman of True Corporation, the name of the newly merged firm.
“Thailand is a tech-savvy market and one of the most valuable for Telenor. We’ll continue our investment in the region,” he said.
Telenor Asia said it completed the amalgamation of True and DTAC in Thailand on March 1. The transaction is the largest telecom merger in Southeast Asia by combined enterprise value.
Telenor Asia signed merger agreements in 2021 in Thailand and Malaysia, the two largest in Southeast Asia. When the two mergers are completed, Telenor Asia’s portfolio will comprise leading telecom players in three large Asian markets, with more than 200 million customers and $10 billion in revenue.
“We expect by using merger strategies it can lead to a synergy effect for our investment of $2.5 billion over the next three years,” said Mr Rostrup.
Telenor Asia’s operating companies are market leaders in Bangladesh and Malaysia. The firm aims to deliver $1.2 billion in cashflow from Asia over the next three years.
The merger three months ago of Celcom and Digi was the largest in Malaysia, with a combined value of $14 billion, he said.
Mr Rostrup said mergers are about opportunities and challenges. There is great potential and many opportunities in bringing the two firms together, he said.
“The merger of True and DTAC is really bringing strong capabilities and capacities, with some of them overlapping and complementary in customer segments, technology and product portfolios,” said Mr Rostrup.
“We’re trying to bring the best from both and become even better together in culture, performance, being quicker to market and becoming the best place to work for employees.”
The new company True will support the government’s digital agenda for consumers, businesses and the government, increasing the performance and financial deliverables of the company, he said. True will serve an estimated 60 million customers across mobile, broadband and TV services.
Telenor and Charoen Pokphand Group are equal owners in terms of representation on the firm’s board of directors.
True and DTAC were working on the merger deal for three years and are now determining a business plan for the next 3-5 years.
The new firm will have economy of scale to both invest in network quality and make technology advancements that meet the changing needs of consumers and support Thailand’s digital growth, said Mr Rostrup. This ensures telecom services that are attractive, affordable, and which enable innovation and partnerships for a wide range of new products, he said.
True aims to support the government’s digital transformation push as part of the Thailand 4.0 policy, bringing in new partnerships and global technology advancements to the country, said Mr Rostrup.
To stimulate growth in the digital ecosystem, the new firm and partners intend to raise venture capital funds worth $200 million to support early-stage digital startups focusing on new products and services that benefit Thai consumers.
He said the DTAC brand would remain in the market for three years.