CAT, TOT plan to merge core businesses into two
CAT Telecom and TOT will jointly propose to the State Enterprise Policy Commission early next month their plans to merge their three core businesses into two companies, instead of three as earlier planned.
CAT has hired Deloitte as the consultant to study its plan to merge its Internet gateway and data centre businesses with the same two businesses of TOT.
TOT, meanwhile, has hired PricewaterhouseCoopers Thailand as its consultant for the planned merger of its broadband Internet business with CAT’s.
According to the first phase of Deloitte’s study, CAT and TOT should consolidate their international Internet gateฌway and data centre businesses into a single company, instead of merging them and creating two separate companies as planned earlier, CAT president Colonel Sanpachai Huvanandana said.
He added that CAT would name the merged entity Neutral Gateway Network & Data Centre Co (NGDC).
CAT originally planned to set up two joint ventures with TOT by merging their Internet gateway businesses to form Neutral Gateway Network Co (NGN Co), and merge their Internet data centre businesses to form Internet Data Centre Co (IDC Co).
TOT has maintained its plan to merge its broadband Internet unit with the same business of CAT and name the merged entity National Broadband Network Co (NBN Co).
Sanpachai said Deloitte had recommended that the interฌnational Internet gateway and Internet data centre busiฌnesses of CAT and TOT should not be separated as two entiฌties, as they were closely related businesses.
The merger proposals comply with the State Enterprise Policy Commission’s order that the two state telecommuniฌcation agencies combine their three core businesses to elimฌinate redundancy, cut costs and improve competitiveness. The commission recently ordered them to complete the mergers next year.
Sanpachai said that in the second phase of its study, Deloitte would focus on the due diligence of the merger, the organisation structure of the joint venture, and manpower. This study is expected to be completed within seven months.
The State Enterprise Policy Commission has suggested that the two state agencies turn themselves into TOT Holdings and CAT Holdings. Each entity should also turn its broadband Internet service business into a company and they would compete against each other, the commission said.
Currently TOT has 11,000 staff, while CAT has 5,709.
According to the commission’s original recommendation, TOT Holdings should have 4,000 staff, and CAT Holdings 2,650.
The new entity, NBN Co, should have 4,500 employees from TOT and 1,000 from CAT, while NGN Co should have 350 staff from CAT and 200 from TOT.
The commission recommended that IDC Co have 300 staff, of whom 200 would be supplied by CAT and 100 by TOT.
