They will merge their transmission and fibre-optics networks to become the National Broadband Network Co, their Internet gateway and submarine cable networks will become the Neutral Gateway Network Co, and their Internet data centres will become IDC Co.

The policy commission on Monday approved in principle this merger plan proposed to it by the Information and Communications Technology Ministry.

The other flagship services of TOT and CAT, including fixed broadband, mobile phone service, telecom towers and other assets, will remain with the two agencies, which will act as holding companies.

Their employees will be asked to move to the three merged companies on a volunteer basis and the rest will remain at the holding companies. Currently TOT has 15,367 employees, while CAT has 5,995.

The labour unions of TOT and CAT have opposed the merger plan.

The State Enterprise Policy Commission has asked the two state agencies to complete the merger process within a year, according to CAT acting president Surapant Meknavin.

He said both state agencies had to hire consultants separately for the merger plans within one to three months, set up the merged companies within six months, and transfer all assets to them within a year.

Each of the three new entities will also work out plans to list on the Stock Exchange of Thailand. Initially TOT and CAT will hold major stakes in each of them, which will later seek business partners and list on the SET.

Surapant said CAT would meet with its employees to explain the move to them.

He expects that CAT’s and TOT’s fixed-broadband businesses will also soon seek private partnerships.