Thailand’s TOT and CAT won’t be merged

1 min readUpdated May 15, 2025Jul 22, 20165:14 AM

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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.

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What this means

The ICT minister's insistence against a full merger of TOT and CAT, citing structural incompatibilities, represents a cautious approach to state enterprise reform. While partial consolidation of infrastructure like fiber and data centres aims to reduce investment duplication, it avoids the bolder, single-entity strategy seen elsewhere. This move maintains internal competition in areas like fixed broadband and mobility, potentially diluting the overall strength needed to thrive under the new licensing model. It pressures both entities to rapidly overhaul their individual operational inefficiencies. A key indicator of success will be the financial performance of TOT and CAT in the next 12-18 months, particularly how they offset the anticipated 1 billion baht operating loss like TOT's 2016 figure.

Maria Santos

Questions & Answers

Why has the ICT minister ruled out a full merger between TOT and CAT?

The ICT minister, Uttama Savanaya, has stated that the organisational structures of TOT and CAT are incompatible. This is the primary reason given for not proceeding with a full merger between the two state-owned operators.

What specific business areas will TOT and CAT consolidate?

The companies will partly consolidate operations including transmission, fiber, subsea cable networks, and internet data centers. These in-principal proposals have been approved by the State Enterprise Policy Commission to avoid duplicated investment.

What is driving the pressure for TOT and CAT to restructure their businesses?

The nation's shift from a concession model to a conventional licensing model is pressuring the companies. This change means they no longer receive revenue shares from private operators using spectrum assets, necessitating restructuring to survive.

What financial challenge is TOT specifically facing?

TOT expects to incur an operating loss of 1 billion baht in 2016. This financial forecast highlights the urgency for the company to adjust its organisational and business structures for survival.

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