True-dtac merger could set telecom industry back by 17 years: TDRI chief
The TDRI’s boss is clearly not happy with the National Broadcasting and Telecommunications Commission’s (NBTC) stance in the expected merger of two telecom giants True Corporation and Total Access Communication (dtac).
Thailand Development Research Institute (TDRI) president Somkiat Tangkitvanich blamed the NBTC for “failing to do its job” when it did not oppose the planned merger.
On Monday the parent companies of both Charoen Pokphand (CP) Group and Telenor Group announced they had agreed to explore the creation of a new telecom-tech company comprising True and dtac.
“The new company will be a merger of equals, and bring out the best of the two local companies, with the support of its key sponsoring shareholders,” said the joint statement issued by CP and Telenor.
The rumour that CP and Telenor are in talks have been around for nearly a month.
“All three telecom operators in Thailand are benefiting from this news,” Somkiat said.
“In the past five days the price of dtac’s shares has jumped 17 per cent, while True shares went up 15 per cent. AIS, their sole competitor, also enjoyed a 7.7 per cent hike in share price,” the TDRI chief said.
“Investors have noticed that now that there will likely be two players in the market, there is no need for price cuts or inventing new services,” Somkiat pointed out.
“The deal could set Thailand’s telecom industry back by 17 years, as in 2004 there were also two operators in the mobile phone market – AIS and dtac,” he bemoaned.
“Back then operators used user-unfriendly strategies to secure more customers. They locked the IMEI [International Mobile Equipment Identity] number of phones, which practically forced consumers to buy phones only from the operators,” he said.
Somkiat said the merger would lead to a downgrading of service quality and the forced sale of bundle services that users plainly do not need.
“Consumers will also be affected by fewer choices and a variety of services, while startup companies which rely on support from mobile operators will gain fewer sponsors,” he said.
“The country’s digital economy could also be affected by this merger, as the development of digital infrastructure requires a competitive market where operators constantly push out innovations to stay ahead of one another,” Somkiat said.
“The NBTC should have immediately issued a regulation prohibiting the sale of any telecom business to an existing operator to prevent market domination, instead of letting the merger go ahead and wait to fix problems later,” he added.
