Top Thai mobile operator buys internet company to broaden network

(Bloomberg) — Advanced Info Service Pcl, Thailand’s largest mobile phone operator, plans to expand its network through Triple T Broadband Pcl and acquire an infrastructure fund totaling 32.4 billion baht ($908 million).

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The Bangkok-based company will buy internet provider Triple T from Jasmine International Pcl for 19.5 billion baht, Chief Financial Officer Tee Seeumpornroj said in an exchange filing. It will also acquire 1.52 billion units, or a 19% stake, in the Jasmine Broadband Internet Infrastructure Fund for 12.9 billion baht. At 8.5 baht per unit, that’s a 7.6% discount off the fund’s last unit price of 9.2 baht.

“This acquisition will improve consumer access to a wider and better quality of service by enhancing broadband inclusion in new areas targeting upland and non-urban areas,” said Tee. “This aligns with our business direction to grow the broadband business and effectively develop the country’s fiber infrastructure.”

Shares of Advanced Info rose a staggering 2.8% on Monday, the largest gain since June 24. Jasmine International, a tech company expanding into Bitcoin mining, fell a whopping 7.2%, while Jasmine Broadband fell 7.4% before dropping to 3.2%.

“Advanced Info benefits the most from this deal as acquisition costs are much lower than we previously expected,” said Wasu Mattanapotchanart, an analyst at Maybank Securities (Thailand) Pcl. “The cheap price and additional subscribers will significantly improve Advanced Info’s business and prospects. In contrast, Jasmine has a negative outlook on this deal as it sells almost all of its business at a cheap price.”

Advanced Info, whose major shareholders are Temasek Holdings Pte, said it will finance the acquisitions with loans given “sufficient debt space”. The company pledged to maintain a dividend payment of at least 70% of its net income.

The company launched broadband in 2015 to respond to the rising demand for high-speed internet in Thailand. The number of subscribers to broadband services rose to 1.87 million as of March 31, from 1.77 million at the end of 2021, the company said in May, while its mobile phone business had 44.6 million customers.

The move comes as Telenor ASA makes an offer to merge its Thai telecommunications unit with True Corp. and potentially topple Advanced Info as the nation’s largest mobile operator. Advanced Info’s backers include Thai billionaire Sarath Ratanavadi, while True is backed by billionaire Dhanin Chearavanont’s Charoen Pokphand Group and China Mobile Ltd.

Advanced Info will seek regulatory approvals before entering into a formal contract and expects to complete the acquisitions in the first quarter of 2023, it said in a separate statement.

(Adds chart and background on the company’s broadband business in seventh paragraph, updates stock prices.)

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