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Unraveling Telenor’s $760M Impairment amid True Corp Investment

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As telecom enthusiasts may already be aware, Norway’s leading telco group, Telenor, has recently revealed plans for an impairment of 8.04 billion Norwegian kroner, or $760.3 million, in Q4 2023. This impairment is due to be booked against the company’s investment in True Corp.

A substantial decrease in shares triggered this decision. The company’s shares plummeted notably in 2023, from 8.15 Thai Baht, equivalent to $0.23, initially, down to 5.05 Baht or $0.14 by the close of the year. This significant reduction resulted in an approximate one-third decrease in share price, validating the requirement to recognise the impairment.

Nonetheless, Telenor remains optimistic about its investment in True Corp. The company maintains the stance that this mark-to-market alignment is only a book entry and is not indicative of any prominent changes in the company’s outlook and ownership regarding True Corp. A statement from Telenor clarified, “The Dtac—True Corporation transaction remains positive for Telenor and True Corporation continues to be a valuable asset.”

Currently, Telenor holds a substantial 30.2% stake in True Corp, a Thai mobile operator that emerged from the merger between Telenor’s Dtac and Charoen Pokphand Group’s True Corp in the previous year. This merger, estimated at $7 billion, was in development since 2021 before finally seeing completion in early 2023.

The journey towards this merger was not a smooth sail. It witnessed immense delays and controversies, with opponents arguing that a reduction in the number of players in the Thai mobile market would stifle competition and inflate consumer prices.

Following the merger completion, the consolidated True Corp has borne extensive costs for integrating Dtac’s network and continuing its 5G network rollout. In addition, the company is engaged in a legal altercation with rival operator National Telecom (NT) over interconnection charges. In October, a tribunal ruled that True should pay almost $200 million to NT, a decision that True is currently appealing.

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