SE Asian telcos turn to consolidation for 5G investment

As the area continues to invest in 5G, Southeast Asian carriers have announced multiple transactions totaling a total of US$30 billion.

According to a Financial Times analysis, consolidation has been a significant topic in the telco business in 2021, with multiple mergers crafted to “enlarge market clout and improve profitability.”

This has been the case for a number of enterprises in Southeast Asia as the region continues to expand 5G services and becomes one of the fastest-growing sectors for 5G globally.

Several mergers and acquisitions have been announced in recent months in various nations. Ooredoo and CK Hutchinson, Indonesia’s two largest operators, reached a US$6 billion agreement for their telecoms companies in September.

Similarly, True, Thailand’s second-largest telecom, announced that it would merge with Dtac to form a US$8.6 billion firm with about 51 million customers, making it the country’s largest telco.

In June, Axiata and Telenor in Malaysia agreed to consolidate their mobile businesses in the country.

On a net present value basis, the two major shareholders said their first estimations suggested potential value accretion of about 8 billion ringgit ($1.9 billion) through cost and capex efficiencies.