True Corporation, the largest mobile phone operator based on subscriptions, views that the next 365 days will be crucial for the company during which it has to put all key jigsaw pieces in place and adjust overall operations, aiming to break-even one year sooner than it originally expected, after completing its merger with Total Access Communication (DTAC) in March 2023.
According to Suphachai Chearavanont, chief executive of Charoen Pokphand (CP) and chairman of True Corporation, the next 12 months will be the most crucial period for the company.
"Looking back over the past few years, it has been proven that our decision was the correct one," Mr Suphachai told the Bangkok Post.
The development of a harmonised telecom and tech company is critical in terms of the vision and roadmap, Mr Suphachai said.
He said the overall picture for the telecom and tech ecosystem is continuously changing, driven by innovation and the platforms of global players and changes in consumers' digital lifestyle.
He added that competitors in the mobile sector even before the merger comprised not only Advanced Info Service, True Corporation and DTAC, but also all other players, especially over-the-top (OTT) operators.
The Charoen Pokphand Group (CP Group) and Telenor of Norway each jointly announced the merger of their telecom businesses, True Corporation and DTAC, in November 2021.
They jointly submitted a report of their proposed amalgamation to the National Broadcasting and Telecommunications Commission (NBTC) on Jan 25, 2022.
The NBTC board voted 3:2 to acknowledge the deal in October 2022 and also issued remedy measures supervising the merger.
True Corporation officially launched its new management structure and announced the formal name of the merged company as True Corporation on March 1, 2023.
Mr Suphachai said the merger deal stands on a real equal partnership as each company will not take full control of the merged entity.
Meanwhile, China Mobile, which held an 18% share in True Corporation before the merger, is still an important strategic partner of True Corporation.
True's chief said the company's management is banking on development over the next 12 months, including cost effectiveness management, new services and innovations together with a sustainability scheme.
The ecosystem is changing quickly with a higher level of competition and operating costs and more complex demands among consumers, but lower margins, Mr Suphachai added.
Mr Suphachai noted that operating costs of mobile service have soared due to higher electricity costs in line with network and tech capability development and the demands of mobile customers.
True's electricity bill is around 10 billion baht annually compared to total operating costs of 48 billion baht last year.
He said True has developed solar cells to ease operating costs through around 8,000 base stations out of a total 30,000 base stations nationwide.
However, the company after the merger has 50,000 base stations that need to gradually adopt the solar cell platform.
"For operation cost reduction, we will monitor our core rivals and compare item by item for basic consideration."
VC FUND WORTH $500 million
Mr Suphachai said Thailand has yet to capture its full digital ecosystem potential, especially through promoting and incubating startups.
He said development of the telecom and tech company has to be done along with the venture capital ecosystem of the group.
Previously, the True-DTAC amalgamation proposal involved a plan to develop the venture capital (VC) fund to promote local startups to compete on the global stage.
Mr Suphachai said True will use its cash flow to establish the VC fund worth US$300 million to invest in the startups.
In addition, it will seek a more strategic partnership, especially matching funds to increase the fund to $500 million, which will make a much greater impact.
The areas of investment will cover the digital economy, quantum computing, robotics, artificial intelligence, electric vehicles and battery storage, green and alternative energy, nuclear microreactors, ageing tech and healthtech with the ability to reduce PM2.5 pollution.
"We might use our startup incubator, True Incube, to act as a mechanism to drive the new VC fund. True Incube has invested up to $100 million in the past 7-8 years."
One way to make Thai startups appealing to foreign investors is a matching fund backed by the government, which will accelerate the growth of these startups and attract more talents, he added.
True Incube is a leading startup incubator and runs an accelerator programme to create a thriving startup ecosystem by screening high potential startups to help them scale and form synergies within the True and CP groups and expand to Southeast Asia and further afield.