True Corporation and Total Access Communication (DTAC) have hit back and denied allegations of disrespecting the regulators' authority levelled by the head of their main rival, Advanced Info Service (AIS).
Earlier this week, Somchai Lertsutiwong, chief executive of AIS, insisted that the National Broadcasting and Telecommunications Commission (NBTC) has the legal power to approve or reject the True-DTAC merger.
True and DTAC yesterday clarified that mergers in the Thai telecommunications industry have been consistently and continuously carried out.
They cited at least nine merger cases which the NBTC had considered according to the 2018 NBTC Notification by issuing resolutions to acknowledge the notification of those mergers.
"Since then, it has never resolved to 'approve' or 'disapprove' the mergers and adopt the 2006 NBTC Notification in considering the merger cases. We believe the NBTC will uphold its principles fairly and apply the same standards as with previous merger cases without discrimination in considering the amalgamation of True and DTAC," said the statement from True and DTAC.
APPLES AND ORANGES
Mr Somchai compared the NBTC to the central bank in terms of its authority and argued that when banks expressed an interest in merging, they must get approval from the central bank first. Likewise for energy firms.
The AIS chief also accused True and DTAC of not submitting any letters asking for NBTC's permission and claimed that, meanwhile, the chiefs of True and DTAC kept pushing the narrative that the NBTC has no legal authority.
However, True and DTAC stated that it is inaccurate and misleading to refer to laws and regulations applicable to other industries to mergers in the telecom sector. It is because each regulated industry has a specific regulatory body and regulations to oversee mergers.
"For the telecommunications sector, the NBTC has the power to impose specific measures in accordance with the 2018 NBTC Notification which is a specific regulation applying to mergers in the telecommunications sector. True and DTAC have fully complied with all procedures required in connection with the proposed amalgamation both as governed by the NBTC and the Public Limited Companies Act 1992," the two firms stated.
SUBJECT TO DIFFERENT RULES
As for the question posed by the AIS chief, inquiring why those behind the True-DTAC deal think they do not need approval from the NBTC. When AIS said it would acquire Triple T Broadband (TTTBB) and Jasmine Broadband Internet Infrastructure Fund (JASIF), AIS submitted its request for the NBTC to approve, he said.
True and DTAC responded that their mergers and the acquisition of 3BB by AIS are not comparable because each of them is subject to different NBTC notifications.
They said the acquisition of 3BB by AIS is covered by the 2006 NBTC Notification as it refers to the acquisition of shares or assets of another licensee, which requires prior approval from the NBTC.
However, the True-DTAC amalgamation has to be considered in accordance with the 2018 NBTC Notification which specifically regulates the amalgamation of telecommunication licensees or their controlling persons.
"The 2018 NBTC Notification repealed the 2010 NBTC Notification. Therefore, referring to the 2010 NBTC Notification as the regulation applying to mergers creates confusion because the 2010 NBTC Notification is no longer in effect," the statement said.
ABIDE BY THE LAWS
Article 8 of the 2006 NBTC regulation states that NBTC may ban business holdings or impose specific measures to prevent or suspend business operations, acts or behaviours that monopolise or reduce or limit competition in telecommunications services.
A 2010 regulation created by the National Telecommunications Commission (NTC) required merger deals to be approved by the regulator. The NTC was the telecom regulatory body prior to the establishment of the NBTC.
This authority was abrogated by an NBTC regulation in 2018 that allows those wishing to merge to only notify the regulator, not seek its approval.
True and DTAC assured that both firms and their major shareholders have undertaken their businesses in strict adherence to corporate governance principles and ethical business practice, including treating business partners and competitors with respect, adhering to the pillars of fair competition, and complying with relevant laws and regulations in all jurisdictions in which they invest and operate.
"We are confident that the new tech company arising from this amalgamation will deliver greater benefits and values to consumers, businesses, society, and support the country's sustainable development.
"The new tech company will enable Thailand to take advantage of new technologies such as artificial intelligence, 5G and Internet of Things, and deliver new products and services through partnerships with global platform companies," the statement concluded.