Thailand to merge state-owned operators TOT and CAT in November

The Thai government plans to merge state-owned operators TOT and CAT Telecom into a single entity called National Telecom (NT). The planned merger would take place in November. National Telecom is expected to begin operations by year-end, Bangkok Post reports, citing the country’s minister of Digital Economy and Society. The merger has already been approved by the State Enterprise Policy Commission (Sepo).

According to Pichet Durongkaveroj, minister of Digital Economy and Society, the merger of TOT and CAT Telecom would boost business efficiency, reduce redundancy of operations and add value to the existing assets of TOT and CAT. "Sepo urged us to put the issue of the merger process to the cabinet for approval, but it will have to wait for a new cabinet", the minister said. 

Durongkaveroj said the merger will not affect existing employees of the two companies, and no layoffs are expected from the move. TOT has about 13,000 employees, and CAT employs around 6,000 people. TOT and CAT Telecom will need to combine their existing management structures, which could lead to some chain-of-command complications.

The minister said there would be a new business unit under NT's management structure to capitalise on digital and innovative development, as well as rearrange current management positions. "After the establishment of NT Co, the new entity will not be under TOT or CAT, but be 100 percent held by the Finance Ministry", he said.

The DE Ministry has also sent a letter to the National Broadcasting and Telecommunications Commission (NBTC) to clarify whether TOT and CAT can each use their existing spectrum until 2025. The NBTC is expected to take a decision by November.

CAT Telecom’s board has approved the merger with TOT, and the creation of a "national telecom company" in July 2018. The merger was proposed in April last year, after the DE Ministry suspended the spinoff of TOT and CAT Telecom into two subsidiaries. The DE Ministry has shifted its timeline for splitting the state enterprises into two new companies from last year. Under the initial plan, TOT would have split into a new company called National Broadband Network (NBN), with CAT becoming the Neutral Gateway & Data Centre company (NGDC). However, CAT and TOT labour unions filed a suit in the Central Administrative Court against the procedure, claiming it would damage state assets in the future. Thus the DE Ministry suspended the transfer process of TOT and CAT to NGN and NGDC.