Thailand’s Telecom Regulator Approves True Corp, DTAC Merger

Thailand’s telecom regulator has approved the merger of True Corp and Total Access Communication (DTAC), the country’s 2nd and 3rd largest mobile operators.

The criteria include a price ceiling and price controls, according to a statement issued by the National Broadcasting and Telecommunications Commission (NBTC) on Thursday.

The long-awaited decision comes nearly a year after the agreement was first negotiated amid fears of decreased market competition.

The merger would leave Thailand with only two operators: the merged business and Advanced Info Service, the current market leader (AIS)

Other requirements, according to reports, include mandating independent verification of the operators’ cost structure and service costs for at least five years.

According to the NBTC, service rates such as phone, data, and messaging must be displayed separately and based on average-cost pricing.

The combined company will surpass AIS as the market leader. True and DTAC presently have 34% and 21% of all mobile subscribers in the country, respectively. AIS has a 44% market share.

True, DTAC and AIS did not reply quickly to calls for comment.

Telenor, a Norwegian company, has invested in DTAC. Charoen Pokphand Group, a Thai Agri-industrial conglomerate, owns 49% of True Corp, while China Mobile owns 18%.

Telenor and CP Group are expected to own one-third of the new amalgamated business, while China Mobile will own 10%, and the rest shares will be listed on the stock exchange.

For months, the NBTC debated whether it had the legal jurisdiction to accept or reject a merger of two telecom companies, as well as the potential legal liabilities it could face depending on how it proceeded.

Following a more than 10-hour meeting on Thursday, its five-member board simply “acknowledged,” purportedly by a vote of 3-2, True and DTAC’s decision to merge while prescribing stipulations in the name of “consumer protection.”

The NBTC office reportedly offered 14 corrective measures to the board for consideration, including a three-year ban on the merger of True Move H Universal Communication (TUC), True’s mobile business arm, and DTAC TriNet (DTN), DTAC’s mobile service unit.

TUC and DTAC would also face a three-year restriction on frequency sharing.

Furthermore, TUC and DTN may be obliged to rent out 20% of their mobile network capacity to mobile virtual network operators.

However, full details on all of the board’s agreed-upon restrictions were not immediately accessible.

Source: Bangkok Post