SE Asian telcos turn to consolidation for 5G investment
South-east Asian telcos have announced several deals worth a combined $30bn as 5G investment in the region continues.
Consolidation has been a key theme across the telco industry in 2021 and several deals have been curated to “enlarge market clout and improve profitability” according to a Financial Times report.
This has been the case for several companies in South-east Asia as it continues to grow 5G services in the region and becomes one of the fastest-growing sectors for 5G worldwide.
Several M&A deals have been announced in the last few months in different countries. In September, the two largest operators in Indonesia Ooredoo and CK Hutchinson announced inked a $6 billion deal for their telecoms businesses.
Similarly, Thailand’s second-biggest telco True announced that it would be merging with Dtac which would create an $8.6 billion company with around 51 million users to become the biggest telco in the country.
In Malaysia, Axiata and Telenor had signed an agreement to merge their mobile operations in the area in June.
The two main shareholders said their initial estimates showed potential value accretion through cost and capex synergies of around 8 billion ringgit ($1.9 billion) on a net present value basis.
As several firms in the region have announced merging deals, investment into 5G and full-fibre networks is set to continue.
According to the latest edition of the Ericsson Mobility Report, 5G subscriptions in South East Asia and Oceania are expected to touch 15 million by the end of 2021.
Mobile subscriptions in the region have already exceeded 1.1 billion and 5G is expected to grow significantly in the region over the next few years with 560 million projected by 2027.
The announcement of further deals will only increase South-east Asia's 5G potential as it becomes the dominant technology worldwide within the next five years.