A board member of the National Broadcasting and Telecommunications Commission (NBTC), Professor Dr. Pirongrong Ramasoota, has explained why she disagrees with the planned merger between True Corporation and Total Access Communications (DTAC) at the board’s 11-hour meeting yesterday (Thursday), which she described as the “longest meeting of her life.”
Dr. Pirongrong is one of the two board members who voted against the merger plan. Two other members, including the chairman, “acknowledged” the plan while the fifth abstained, citing unclear legal interpretations. This paved the way for the chairman to cast a deciding vote to end the impasse.
In her Facebook post today, Dr. Pirongrong said that she disagrees with planned merger because it constitutes a takeover of a similar business, which may have widespread negative consequences in the mobile phone market, restrict competition and affect consumers, as well as the economic and social development of the country.
She explained that the merger between True Move H Universal Communications (TUC) and DTAC TriNet (DTN), subsidiaries of True Corp and DTAC respectively, will create a new single economic entity, which will have a combined market share of 49.40%, with the rest being held by Advanced Info Services (AIS), leading to a market duopoly.
Dr. Pirongrong cited a study of the economic model of the merger, conducted by SCF Associates Ltd, an independent foreign-based consultant, which shows that the merger would have more negative impacts on consumers than benefits and that not all the measures intended to reduce the impacts will be realised.
Moreover, the merger will not support the creation of new players, such as mobile virtual network operators (MVNO). Nor will it promotes competition in the wholesale market, roaming services or spectrum transfers, she said.
The conditions attached to the merger plan are not likely to improve market competition and the NBTC may have to resort to litigation to ensure compliance.
Empirical data about public benefits from the merger are unclear, said Dr. Pirongrong, adding that the merger may lead to a duopoly and obstruction of competition, which may constitute a violation of the Constitution and contravene the Second Master Plan for Telecommunications Businesses, which emphasises competition.
Since the mobile phone service business in Thailand has reached saturation point, there is only a slim chance for new players to enter the market, she said, citing the cases of Mexico and the Philippines.
Without naming names, she also pointed out that one of the two mobile phone operators is closely linked with a business conglomerate which has control over wholesaling and retailing businesses in Thailand.
