Regulator paves way for telecom mega-merger
BANGKOK – The national telecoms regulator has cleared the way for the country’s second and third-biggest mobile operators – True Corp and Total Access Communication (DTAC) – to merge, albeit with conditions.
Progressive Movement leader Thanathorn Juangroongruangkit joins consumer advocates who have gathered to demand that the NBTC reject the True Corp-DTAC merger deal Thursday (October 20) at the telecoms regulator’s headquarters. Photo: Apichart Jinakul/Bangkok Post
Conditions include a price cap and price controls, the National Broadcasting and Telecommunication Commission (NBTC) said in a statement on Thursday (October 20). Bangkok Post.
The long-awaited decision comes almost a year after the deal was first announced due to concerns about less competition in the market.
The merger would leave the country with just two operators: the merged entity and the current market leader, Advanced Info Service (AIS).
Other conditions reportedly include a requirement for an independent review of operators’ cost structure and service fees for at least five years. Service tariffs such as voice, data and messages must be accounted for separately and are based on average prices, the NBTC said.
The merged company will overtake AIS as the market leader. True and DTAC currently have 34% and 21% of the country’s mobile subscribers, respectively. AIS controls 44% of the market.
True, DTAC and AIS did not immediately respond to requests for comment.
DTAC is supported by the Norwegian company Telenor. Thai agribusiness conglomerate Charoen Pokphand Group owns a 49% stake in True Corp, while China Mobile owns 18%.
Telenor and CP Group are said to each own a third of the shares in the newly merged entity, China Mobile 10% and the remaining shares listed on the stock exchange.
The NBTC had debated for months whether it had the legal authority to approve or disapprove a merger between two telecom operators and what possible legal liability it might face depending on its actions.
After a meeting that lasted more than 10 hours Thursday, the five-member board merely “acknowledged” True’s and DTAC’s intention to merge, reportedly by a vote of 3-2, and imposed conditions in the name of “consumer protection”.
The office of NBTC has reportedly proposed 14 remedies for the board to consider, including a three-year ban on the merger of True Move H Universal Communication (TUC), a wireless business of True, and dtac TriNet (DTN), a wireless services unit of DTAC .
TUC and DTAC are also threatened with a three-year ban on frequency sharing.
In addition, TUC and DTN could be forced to lease 20% of their mobile network capacity to mobile virtual network operators.
However, full details of all the terms agreed by the board were not immediately available.