Conditions for telecoms merger thwart True-Dtac business plans: expert
Consumer-focused conditions set for the True-Dtac merger may pose a challenge to Thailand’s second and third largest mobile network operators, a Bangkok University (BU) academic said on Saturday.
Assistant Prof Suchart Tripopsakul, from BU’s School of Entrepreneurship and Management, said conditions laid out by the National Broadcasting and Telecommunications Commission (NBTC) on Thursday prioritise consumer benefits and may disrupt True Corp and Dtac’s future strategy.
The regulator on Thursday voted 3:2 in favour of the proposed merger.
The conditions set for the merged entity include service fee controls and ceilings, independent verification of cost structures and service pricing for at least five years after the merger, market space for the operation of mobile virtual network operators (MVNO), and separate rates charged for voice, data and messaging services.
Most importantly, True and Dtac must use their existing brand names – True Move H Universal Communications (TUC) and Dtac TriNet (DTN) – for three years before they can adopt a new brand name and share their respective frequencies.
Suchart said the three-year embargo will affect True and Dtac’s plan to combine their strengths to attract more users, the core purpose of the merger.
“Their planned post-merger business strategy may be delayed for three years, allowing competitors to use new marketing campaigns to poach their existing customers while the new brand is blocked from forming,” he said.
This condition alone will cost True and Dtac the opportunity to become the market leader immediately after the merger, said Suchart.
He added that NBTC’s ban on the merged entity refusing services to MVNO ensures that mobile services for consumers will not by disrupted by the merger. The ban will be a burden for True and Dtac, forcing them to continue providing space for MVNO instead of focusing on streamlining their organisations after the merger to reduce operational costs.
“True and Dtac have a tough challenge ahead of them. They will need to overhaul their business strategy and marketing plans in the next three years to comply with the NBTC’s conditions,” he added.
