NBTC finally gives True-Dtac merger ‘conditional’ approval after 9 months
At a meeting that lasted for more than 11 hours, the Thai telecoms watchdog voted 3:2 to “conditionally acknowledge” a proposed merger between True Corporation and Total Access Communications (Dtac).
The decision was made on Thursday night, many months after True and Dtac – the country’s second and third-largest mobile network operators, respectively – filed their business merger report with the National Broadcasting and Telecommunications Commission (NBTC) in January.
However, this decision was a huge disappointment for consumer protection and civic society groups that have been against the merger, saying it would lead to market control and unfair competition.
Meanwhile, the opposition Move Forward Party has threatened to take legal action against NBTC for alleged dereliction of duty.
Deputy party leader Sirikanya Tansakul said on Friday that the agency failed to perform its constitutional duty to protect the interest of consumers.
In its resolution, the NBTC appeared to avoid using the term “approve”, though the minority commissioners maintained the regulator is empowered to decide whether to give the green light to such a business merger.
In a statement released on Thursday night, the NBTC admitted that the True-Dtac merger “is a sensitive matter that has impacts on the public”.
Prof Pirongrong Ramasoota, one of the two commissioners who voted against, dubbed the lengthy discussion between the five NBTC members as “the longest meeting in my life”.
In her Facebook post, Pirongrong apologised to reporters waiting outside the meeting room for declining an interview. “I was totally exhausted. My battery was depleted,” she wrote.
Pirongrong and her fellow minority commissioner, Assoc Prof Suphat Suphachalasai, reserved their rights not to permit a business merger between True and Dtac.
In her written statement, Pirongrong said she viewed such a merger as ownership of the same business type, which could severely affect the mobile network market and the national economic development.
She said the telecoms law and NBTC rules empower the regulator to prevent monopoly or unfair competition.
In her seven-point arguments, Pirongrong cited constitutional clauses that prohibit business domination and competition restriction. She also mentioned the findings of a study by the NBTC’s independent foreign advisers SCF Associates Ltd that pointed to the negative impacts of the merger on consumers.
"The merger may lead to monopolistic market conditions that undermine competition, which would breach Sections 40, 60, 61, and 75 of the Constitution, as well as the Telecommunications Master Plan No 2 to increase competition in the telecommunications business." said Pirongrong.
In his written statement, Suphat said the True-Dtac merger would have severe consequences on the country’s economy and society, with reduced service quality and obstruction to new players in the market. There is a high likelihood of market collusion that would discourage new competitors, he said
Before reaching their final decision, the five NBTC commissioners were evenly split. Suphat and Pirongrong viewed that the NBTC should not allow the merger as it would lead to a duopoly of the telecom business and unfair competition. But NBTC president Dr Sarana Boonbaichaiyapruck and Torpong Selanont disagreed, saying the regulator should acknowledge the merger with conditions.
The fifth commissioner, Air Marshal Thanapant Raicharoen, abstained explaining that there were some legal issues that need to be further considered.
The NBTC president cast the deciding vote, making it 3:2 in favour of the proposed merger, which was in line with the NBTC rules.
The conditions set for the merged entity include service fee controls and ceilings, independent verification of cost structures and service pricing by experts to be hired by the operators at their expense, for at least five years after the merger, space to be provided for the operation of mobile virtual network operators (MVNO) and separate rates to be charged for voice, data and messaging services.
Under the NBTC’s conditions, True and Dtac will use their existing brand names, True Move H Universal Communications (TUC) and Dtac TriNet (DTN), for three years after the merger, before they can adopt a new brand name.
They are also required to install a 5G network to cover 75 per cent of the Thai population within three years of the merger and 90 per cent coverage within five years.
