Equity Analysis /

Thailand: ICT - Greenlight for TRUE-DTAC amalgamation deal

  • NBTC’s greenlight for TRUE-DTAC merger aligned with expectation

  • The MergeCo formation expected in 1Q23

  • Reduced competition and consolidation to lead to ARPU uplift

Bualuang Securities
31 October 2022

We expect the NBTC’s acknowledgement of TRUE-DTAC merger deal with special conditions to pave the way for the amalgamation to proceed with the formation of MergeCo in 1Q23. We are bullish on longer-term telco prospects due to the reduced competition.

NBTC’s greenlight for TRUE-DTAC merger aligned with expectation

The NBTC’s acknowledgement of the TRUE-DTAC amalgamation deal with the special conditions attached was to be expected, given that the “TRUE-DTAC amalgamation” did not fit the definition of “same business” consolidation under Section 8 of the NBTC’s 2006 anti-monopoly regulation and Section 12 of NBTC’s 2018 regulations which require business consolidations to be conducted only by reporting to the NBTC for acknowledgement with special conditions. Overall, we don’t see any difficulties for TUC, DTN and the merged entity to follow the NBTC’s five attached conditions and opine that the negative impact from those five conditions will be immaterial. In particular, we think that the requirement of reducing the mobile price ceiling, (but not the actual price), by 12% within 90 days isn’t likely to impact the current actual mobile service tariff because both voice and data service tariffs are now significantly below their ceilings.