Thailand’s telecom regulator, the National Broadcasting and Telecommunications Commission (NBTC), has voiced concern that the merger of two telecom companies, True and Dtac, may lead to price collusion over service fees and spectrum auction bidding in the future.
NBTC Commissioner Prawit Leesathapornwongsa who expressed concern after a meeting with representatives from Dtac about the potential merger yesterday, admitted that the regulator has no power to stop the merger, but could issue certain regulations.
He said the NBTC will hold discussions with the Securities and Exchange Commission (SEC), the market regulator, and the Trade Competition Commission (TCC) over how to deal with the concerns and any new entity which may emerge as a result of the merger.
Charoen Pokphand Group, which owns True, and Norway-based Telenor, which majority owns Dtac, announced the joint venture plan for their telecom units in Thailand yesterday, in what they called an “equal partnership for Thailand’s digital transformation”.
According to analysts, the merger will create a new telecom and tech entity, which is yet to be named and which would be the new market leader in Thailand, overtaking Advanced Info Service (AIS), which now controls a 44% market share.
Under the proposed US$8.6 billion deal, Telenor and CP Group would each own a third of the combined company, with stock market investors holding the rest.
Dr. Prawit said he was told by Dtac representatives that talks on a possible merger are still in their initial stages adding, however, that he is concerned that, if it does take place, it may have negative impacts on the telecom sector in Thailand and on consumers, regarding future service fees and spectrum auctions.
He also said that a working committee will be set up to monitor the potential merger.
Meanwhile, Secretary-General of Thailand’s Consumer Council Saree Aongsomwang said that the council’s telecom committee will meet to discuss the possible merger, adding that it is concerned, citing the recent takeover of Tesco Lotus retailing business in Thailand and Malaysia by the CP Group.
She also urged the NBTC to make clear how it will protect customers of True and Dtac regarding service fees.
