The Mobile Changemaker

In December 2000, Telenor announced that it had entered into an agreement to purchase a significant part of Thailand’s Total Access Communication or tac as it was known.

After more than 20 years of growth, the organisation, now known as dtac, is on the cusp of another transformative partnership. The Bencharongkul family had been in the communication business for two generations and built tac into the second-largest mobile operator in Thailand during the 1990s. However, the country had been hit hard by the Asian financial crisis and the family was looking for an international partner who was ready to invest in new growth opportunities for the company.

The timing could not have been better for Telenor as the Norwegian telecom company had recently entered Bangladesh and Malaysia as part of an Asian expansion. These moves were based on a belief that mobile technology would become a mass-market product beyond Europe. “European 3G licences were getting expensive around this time. They were too costly for Telenor to compete for. A new growth strategy emerged, and in 1999 Telenor decided to establish a regional office in Singapore with a mandate to explore opportunities to invest in new markets in Asia,” Telenor Group CEO, Mr Sigve Brekke, said. “One year after the office had opened, Telenor entered into partnerships and acquired significant ownership stakes in Malaysia’s Digi and what was then known as tac in Thailand.”

When Telenor joined tac, the company was a traditional Thai business with complex formal and informal structures. One of Telenor’s first tasks was to build a culture based on a Nordic leadership philosophy where the staff was empowered with greater responsibilities. That meant internal barriers preventing effective interaction had to be identified and removed. Finding a balance between two different cultures was a priority for tac, and the company was managed by a pair of CEOs, one Thai and one Norwegian, for three years.

Another major challenge was company’s less than stellar reputation in the market at the time. The quality and coverage of its mobile network had gradually deteriorated and there was a need to rebuild customer trust. A campaign was developed where Mr Brekke and Khun Vichai Bencharongkul, the organisation’s two CEOs, fronted advertisements and took personal responsibility for improving tac’s mobile network coverage and quality. It was the first time Thai people saw the CEOs of a big company in a TV commercial. The results were positive and led to more ambitious campaigns.

“Creative marketing and a unique ability to understand customer needs were central to our growing popularity in Thailand. We even organised or own street campaigns. All 5,000 employees, from secretaries to technicians and engineers to accountants, were dispatched to join the mob marketing activities,” Mr Brekke recalled. As technology advanced and the analogue network was replaced by a digital one, tac was no longer a fitting identity. The company added a ‘d’ and became dtac, the name everyone is familiar with today.

Of course, fun marketing activities and a new name mean very little without substance. In order to support its goal to be one of the country’s most popular and well-liked companies, dtac launched customer-friendly services and simple products that strengthened the firm’s down-to-earth, humble and fun brand image. The foundation of the new brand, and what made dtac stand out from its competitors was a profound belief in humility and in going beyond what was required or expected.

“dtac led the market with fresh products and services. A key initiative was unlocking SIM cards so consumers could use handsets from any vendor. We also introduced one nationwide calling rate and were the first to launch user friendly prepaid price plans,” Mr Brekke stated. “To remove bottlenecks in distribution that kept SIM cards and refills from reaching the market, we cut through the traditional Thai wholesaling system and started selling directly to shops.”

Thailand matured faster than most Asian markets, and customers quickly switched from speech to data as the public could afford more advanced phones and better services. It became common to see people on the streets of Bangkok using their mobile phone. Its pervasiveness was evident when Telenor celebrated its 10-year anniversary in the Kingdom and announced the company’s customer base had passed the 20 million mark.

Continued growth required a bigger space and dtac eventually moved into new surroundings at Chamchuri Square next to Chulalongkorn University in Bangkok. The modern hub was inspired by Telenor’s headquarter in Norway with open landscapes removing barriers; meeting rooms stimulating collaboration and creativity; and state-of-the-art connectivity allowing employees to work from anywhere in the building. Its offices and culture gained notoriety far beyond Thailand, and the company was ranked among the world’s 10 best places to work. But this wasn’t the company’s only move.

Continued growth and new competition

Telenor moved its regional office from Singapore to Bangkok in 2006 as it sought to be located in a country where a local operation was present. In 2008, after six years as co-CEO and then CEO of dtac, Mr Brekke was appointed Executive Vice President and Head of Asia at Telenor Group. The introduction of 3G, and later 4G networks, across the region, saw demand for access to mobile services increase rapidly each year with Asia becoming an increasingly important territory for Telenor. The organisation’s skill in creating and operating mobile networks combined with deep market understanding and a highly efficient team became a notable growth machine for Telenor. When Mr Jon Fredrik Baksaas resigned as Group President and CEO, Mr Brekke, who had been central in building the organisation’s regional presence, was appointed as his successor.

This was during a time when the mobile market experienced its first sign of saturation. Customers’ data consumption continued to double every year, but mobile operators were not able to capitalise on investments in licenses, new technology and services. “In an increasingly digital world, the firms that captured growth were digital over-the-top (OTT) players who enjoyed global reach with minimal local investments. To be prepared for fierce competition from both existing and new brands, we initiated several programs to digitise and automate operations; become more efficient, and streamline the entire organisation. Dtac was one of the first telco’s to introduce a multi-vendor virtualised network and development of a mobile app for retailers. These measures were demanding but necessary to secure long-term, sustainable operations in Thailand,” Mr Brekke detailed.

A new telecom-tech company

For more than 20 years, the mobile industry had been on a journey connecting people. From voice to message and data services, the mobile phone has been the most transformative technological innovation, according to Mr Brekke. He added that it has reduced inequalities by providing access to information, created markets for new business and provided an improved platform for efficient government services. However, this is only the start. “Today, the mobile industry is at the beginning of a digital shift, where new technologies, like high-speed networks (5G), artificial intelligence (AI), Internet of Things (IoT) and global data centres, come together in a perfect storm,” Mr Brekke said. “In the coming years, the traditional telecom industry will experience more changes than in its entire history combined. To be successful and capture new growth in this increasingly complex business environment, traditional mobile companies need to transform into telecom-tech companies.”

Telenor’s success over the years has been driven in part by its ability to identify new opportunities early on. To be a leading force in a world that is moving beyond connectivity, the company began exploring partnerships that would help it build innovative products and services capable of enriching the lives of customers. In November 2021, CP Group and Telenor announced they wanted to combine their mobile companies, True and dtac, to create a telecom-tech company and a leading provider of telecom services in Thailand. Following a successful due-diligence, True and dtac approved the merger in February 2022. The merger is currently awaiting regulatory and shareholder consent. The current operations of True and dtac will continue to operate independently until the transaction is completed, which is expected to be within 2022.

“A new telecom-tech company will continue to invest in digital infrastructure, drive service innovations, modernise society and contribute to the development of a thriving digital ecosystem in Thailand,” Mr Brekke explained. “dtac has played a significant role in supporting Thailand with connectivity for over 20 years, and Telenor remains committed t.o realise new digital opportunities for Thailand and Thai people as we enter the next leg of our journey in the country.”

Facts

• The Telenor Group is currently represented in 9 markets worldwide with Bangladesh, Malaysia, Myanmar, Pakistan and Thailand being located in Asia.
• Telenor Group had 182 million subscribers in 2020 of which 19 million were subscribers of dtac in Thailand.
• The Group’s revenue in 2020 was NOK 123 billion, of which NOK 24 billion were generated in Thailand.
• dtac was established in 1989 and Telenor became a shareholder in 2001.
• In 2021, CP Group and Telenor announced that they wanted to combine their mobile operations in Thailand.

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