Telenor's control of Singapore-listed Total Access Communication (TAC) will put the country's second biggest mobile firm in a stronger position to compete for third-generation (3G) mobile licences next year. Telecommunications firms world-wide hope 3G, which offers higher speed transmission of data and Internet access, will enable them to tap new revenue streams by beefing up voice services with music, video and pictures.
On Thursday, a 49-percent owned affiliate of Telenor paid 9.2 billion baht ($225 million) for a 40 percent stake in Thailand's United Communication Industry (UCOM), which owns 42 percent of TAC.
The deal, which gives Telenor and its Thai Telco Holdings affiliate a combined 65 percent stake in UCOM, also requires them to make a mandatory tender offer to buy UCOM shares from minority shareholders. It raises Telenor's direct and indirect holdings in TAC to 48.5 percent from 30 percent.
Thailand has about 29 million mobile users, or a 45 percent penetration rate. Analysts expect the Thai market to reach 49 percent at the end of 2005 and over 70 percent by 2010.
Most Thai operators plan to upgrade their existing networks to offer higher-speed 3G services next year, when the telecoms industry will be fully liberalised under World Trade Organisation rules.