Advanced Info Service (AIS), the country's mobile market leader in terms of subscriber base, has expressed opposition to the planned merger of its rivals True Corporation and Total Access Communication (DTAC), saying the deal would diminish the price war and free competition in the segment.
The firm also pointed to a new challenge to the deal, saying the merger would breach a spectrum cap rule imposed by the regulator on carriers during the past spectrum auctions as the newly merged firm would own a combined spectrum bandwidth per operator exceeding the regulator's cap.
AIS's viewpoints were spelled out at a hearing forum organised by the National Broadcasting and Telecommunications Commission (NBTC) yesterday to gather opinions from those operating in related industries.
It is the first time such a hearing on the merger had been conducted under the new NBTC board. The regulator's next hearing will be to gauge the opinions of academics, while another will seek the opinions of consumer advocates.
Speaking at the hearing, Saran Phaloprakarn, head of AIS's business development department, said the company has a clear stance to support free and fair competition under relevant laws, but the merger would bring down the number of major players from three to two and reduce the alternatives in terms of promotions and after-sales services.
This does not only affect consumers, but also hampers related businesses, such as distributors, subcontractors for network expansion and handset retail shops.
"The merger will lead to the end of the price war and real competition ecosystem," Mr Saran said.
The merger will push the Herfindahl-Hirschman Index (HHI), which gauges market concentration conditions, to a very dangerous level, he noted.
As of September 2021, the HHI in the country's mobile market stood at 3,575, above the standard market concentration level of 2,500 laid out by the NBTC.
This means the market concentration of the country's mobile segment is already high despite the merger having yet to take place.
The merger is expected to drive the HHI to 4,706, which is a very dangerous level in terms of market concentration, he said.
If the merger goes ahead, True and DTAC will hold a combined spectrum bandwidth which exceeds the limit for each range imposed during the frequency auction, Mr Saran said.
The spectrum cap rule was meant to prevent any company and its affiliates from holding too much spectrum bandwidth in each range, which could create unfair competition, he said.
The spectrum cap rule forced AIS to seek other spectrum ranges or business partnerships to increase its spectrum portfolio, which subsequently increased its costs, he said.
If the NBTC gives the greenlight to the deal, it should usher in remedy measures for AIS too, Mr Saran said.
The NBTC regulation allows spectrum holders to transfer spectrum it holds to others but a 1% fee based on the winning spectrum bid prices needs to be paid to the NBTC office.
"If the merger takes place, such a fee payment for spectrum transfers must be made to the NBTC for public benefit too," Mr Saran said.
Speaking at the forum, Pathom Indarodom, executive director of the Thailand e-Business Centre, stressed the merger would help strengthen digital infrastructure, support the supply chain and drive startups in the country.
Nonthawat Saramarn, president of the Cyber Innovation Promotion Association of Technology, said the merger would help strengthen telecom providers in the digital economy which incur intensive costs for digital transformation.
"In the merger and acquisition era, the big guys would help the smaller guys and the new firm would be able to efficiently support startups," he said.
Jesada Sivaraks, head of government and industry relations at Ericsson (Thailand), said the regulator must carefully handle the merger deal as its work has an impact on the economic ecosystem too.
Regarding concerns over a monopoly, careful consideration must be carried out in all dimensions, including the profit margins of each operator, he said.