Thailand’s ICT minister has insisted that there will not be a merger between the two state-owned operators TOT and CAT even as the companies are under pressure to consolidate their operations.
Minister Uttama Savanaya has ruled out a merger on the grounds that the organizational structures of the two companies are incompatible.
But he said the two companies will partly consolidate some of their similar core businesses to help avoid duplication of investment spending.
Thailand’s State Enterprise Policy Commission has ordered both TOT and CAT to restructure to survive, terminating their unprofitable businesses and focusing on their core operations.
Both are under pressure now that the nation has moved from a concession model – whereby private operators paid a share of their revenue to the state operators in exchange for use of spectrum assets – to the conventional licensing model.
The commission has approved in-principal proposals involving consolidating the operators’ transmission, fiber, subsea cable network and internet data center operations.
But Uttama said that other core areas of the two operators, including fixed broadband, mobility and network rental services, will remain separate.
He noted that TOT and CAT will need to quickly adjust their organizational and business structures to ensure their survival. TOT has revealed it expects to face an operating loss of 1 billion baht in 2016.