Telenor's sale of its shares in True Corporation may be based on the calculation that it is more difficult to achieve strong profit margins in the Thai telecom sector after 2026, says an analyst.
Pisut Ngamvijitvong, an analyst at Kasikorn Securities, questioned the timing of the exit following several consecutive quarters of strong financial performance by True.
He said one reason might be achieving profit margins in Thailand after 2026 may be more difficult than in the past.
True reported net profit after tax of 1.6 billion baht for the third quarter of 2025, marking its third consecutive quarter of profitability.
In addition, Mr Pisut said structural political issues in Thailand may affect the economy, which could have influenced Norway-based Telenor's decision on the share sale.
He said he had a negative view of the share sale.
"Telenor's agreed selling price of 11.70 baht may imply it is satisfied with the risk and reward payoff, while Telenor's departure may diminish the checks-and-balances role it has played, in our view," said Mr Pisut.
On Thursday, True notified the Stock Exchange of Thailand that Telenor entered into an agreement with Arise Digital Technology Co Ltd, an entity owned by Suphachai Chearavanont, to sell a 24.95% stake in True (from a pre-transaction holding of 30.3%).
The parties also agreed to a mutual put/call option for the sale of Telenor's remaining 5.35% stake, exercised two years after the transaction.
True's share price on Thursday tumbled by 14.5% after the announcement of Telenor's planned divestment.
According to a Telenor statement on Jan 22, chief executive Benedicte Schilbred Fasmer said the company expects the sale to contribute to its goal to increase the return on capital employed. The transaction also underpins its goal to evolve into a more Nordic-centric provider of secure connectivity over time.
True group chief executive Sigve Brekke held a conference call with analysts to discuss Telenor's divestment. He said the transaction will not affect True's operations or strategies, and he will remain chief executive. The deal is not changing True's governance or company direction, said Mr Brekke.
According to Mr Pisut, the transaction is likely to be completed in 1-2 months and will not trigger a mandatory tender offer.
Arise plans to nominate two members to the board, leaving Telenor with one board seat. True's financial guidance for 2027, capital allocation and financial discipline remain intact.
Mr Pisut said Telenor's remaining 5.35% stake in True is likely to be locked up and sold in the market after two years.
On Thursday, Arise revealed Mr Suphachai stepped down as Charoen Pokphand (CP) group chief executive.
A business sector source who requested anonymity said a partial reason for Mr Suphachai's pivot to a tech innovation business may be a potential restructuring of business groups within CP Group.
Arise Ventures Group is the parent of Arise Digital Technology Co Ltd.
Mr Suphachai has led the development of True Group since Thai telecom companies operated under the state-owned concession regime decades ago.
No price war
Maybank Securities (Thailand) expects no fundamental impact at True from the Telenor exit.
Wasu Mattanapotchanart, telecom analyst at Maybank, said some investors are concerned CP Group would push True towards more aggressive competition, potentially triggering a price war after Telenor (perceived as the rational owner) divests.
CP Group, run by the Chearavanont family, holds a 30.3% stake in True.
Maybank believes a price war is "highly unlikely" because both True and its arch-rival Advanced Info Service have sizeable market shares. Both can have strong profitability if they manage their costs well.
Mr Brekke said repeatedly last year True would not initiate a price war because Thailand is in a unique position, with easing competition that allows the industry's mobile revenue growth to outperform GDP growth.
In Maybank's view, True's strategic direction and financial discipline will remain intact so long as Mr Brekke stays with the company.
True recruited Mr Brekke, former chief executive of Telenor Group, in early 2025 shortly after he left Telenor.
