Thailand’s True Seeks Foreign Partner for Southeast Asia Expansion

By Manunphattr Dhanananphorn & Khettiya Jittapong 7 March 2014

BANGKOK — Thai telecommunications group True Corp PCL wants to take on a foreign partner in the second half of this year to help it expand in Southeast Asia, its chief executive said on Thursday.

True Corp, controlled by Thailand’s richest man Dhanin Chearavanont, plans to offer any potential partner new shares equivalent to about quarter of its existing equity, Chief Executive Suphachai Chearavanont told reporters.

“We prefer to raise funds via an equity issue to open way for a foreign partner to take a stake in True,” Suphachai said. He declined to give further details.

True, which operates Thailand’s third biggest mobile network by subscribers, is currently the only major Thai telecom operator without a foreign partner. Market leader Advanced Info Service Pcl is 23 percent owned by Singapore Telecommunications and Total Access Communication is majority owned by Norway’s Telenor.

Facing stiff competition at home, True Corp has set its sights on the rapidly growing economies of Southeast Asia. Suphachai said True Corp aimed to sign on 100 million subscribers in the region over the next five years, which would be almost five times as much as its current subscriber base in Thailand.

The company expects to conclude its first Southeast Asian deal—a joint partnership with Burma’s Yatanarpon Teleport—within the next two months, Suphachai said.

The deal, if successful, would pit True against Telenor and Qatar’s Ooredoo which are building new mobile networks in Burma, a country where less than a tenth of the 60 million population has a mobile phone.

Debt Burden

True is the only Thai telecom operator offering a full range of services from mobile and fixed-line phones to broadband Internet and cable television.

An aggressive expansion of its mobile network has left True with a net debt of US$2.3 billion at the end of 2013, the third largest among telecom operator in Southeast Asia, Reuters calculations show.

Chief Financial Officer Noppadol Dej-Udom said True was considering selling more telecoms networks to an infrastructure fund it had listed in December to pay down more debt. The fund’s listing raised $1.8 billion in December, which helped cut the debt down to 75 billion baht ($2.32 billion), he added.

True also planned to cut the par value of its stock, an accounting method to help a company reduce accumulated losses and enable it to pay dividends, Noppadol said.

Concerns about True’s debt burden prompted ratings agency Moody’s to downgrade the company, and its mobile unit, and assign them with a negative outlook.

True Corp expects to make a profit this year after a net loss of 9 billion baht ($278.55 million) last year, mainly due to gains from a listing of the fund.

It also plans to invest 26.5 billion baht ($820 million) this year, primarily to expand its mobile and high-speed broadband Internet businesses as it targets revenue growth of 7 to 9 percent.