Broadband merger set to sail through NBTC
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Broadband merger set to sail through NBTC

Deal is less impactful than True-Dtac tie-up

A worker installs internet connection lines along Sarasin Road in Bangkok. (Bangkok Post file photo)
A worker installs internet connection lines along Sarasin Road in Bangkok. (Bangkok Post file photo)

The ongoing takeover of fixed broadband service 3BB by Advanced Info Service (AIS) is expected to pass through scrutiny by a telecom regulator's subcommittees as the deal might bring lesser economic impact to the market and consumers than the completed merger between True Corporation and Total Access Communication (Dtac).

The National Broadcasting and Telecommunications Commission (NBTC) might only have to iron out measures to govern this takeover, said Prawit Leesathapornwongsa, head of the NBTC subcommittee tasked with studying the consumer protection impact of the AIS-3BB deal.

The deal is being scrutinised by the NBTC under the merger rules that require licensees involved with the deals to submit relevant reports to the regulator 90 days before the deal execution. The NBTC's board has set up four subcommittees to scrutinise the deal, comprising those responsible for economic effects, technical effects, legal, and consumer benefit.

Mr Prawit said the AIS takeover of 3BB is significantly different from the merger of True and Dtac.

"Personally, I strongly believe that the deal will be given a nod by the NBTC board and it will issue remedy measures governing the deal like the True-Dtac merger deal."

Mr Prawit, who is a former NBTC commissioner, said the penetration of the fixed broadband market is only 50% of all Thai households, compared to mobile services that have penetration coverage of more than 95% across the country.

In addition, the subcommittee for consumer benefit has asked for opinions and studies related to the deal, such as that of the Thailand Development Research Institute (TDRI) and economic lecturers which show that the economic effects caused by the AIS-3BB deal would be lower than the True-Dtac merger deal.

More importantly, there are several fixed broadband service providers in the market, compared to the number of mobile phone operators. Even if the AIS-3BB takeover deal is completed, there will be at least three major fixed broadband operators, comprising AIS Fibre, True Corp and National Telecom.

The fixed broadband market also has several smaller operators providing services to specific segments, such as for corporates.

Mr Prawit also referred to recent discussions with fixed broadband operators, held by the subcommittee for consumer benefit, which showed True's representatives did not oppose the AIS-3BB deal, but small broadband operators were concerned about the impact on their market.

The representatives of the consumer protection groups are concerned about attractive promotional packages being cancelled after the takeover deal.

The subcommittee for consumer benefit has already completed its study and discussions with AIS and 3BB. It will hold a public hearing on the deal on July 25, and will submit the study results to NBTC's board by Aug 15.

The other three subcommittees have yet to set a timeline for their study conclusion and public hearing dates. Mr Prawit said the three subcommittees may ask for an extension of their study time.

All the subcommittees can ask the NBTC's board to approve the extension of the study. They have 30 days during the first phase to conclude the study. If they cannot conclude it on time, they can extend the deadline by another 30 days and then another 90 days.

According to a study of the subcommittee responsible for the economic effects of the True-Dtac merger deal which began last year, that amalgamation may reduce future GDP growth by 0.05%-1.99%, or between 8.2-322.8 billion baht, depending on the level of cooperative marketing among major mobile operators.

The True-Dtac merger may result in inflation increasing between 0.05% and 2.07%, depending on the level of competition, and the price range of mobile services in the market is likely to rise between 2.03% and 19.5%, even with no post-merger collusion.

However, on Oct 20 last year the NBTC board voted 3-2 that it had no authority to approve or disapprove the True-Dtac deal, and then acknowledged the deal and issued remedy measures. True and Dtac officially completed the merger on March 1 to become True Corporation.

The NBTC board recently approved in principle the guidelines for the AIS purchase of 3BB and its investment in Jasmine Broadband Internet Infrastructure Fund (JASIF). The owner of 3BB is Triple T Broadband (TTTBB). The guidelines were proposed by the NBTC management.

AIS is committed to acquiring a 100% stake in 3BB and buying a 19% holding in JASIF, even though JASIF shareholders rejected AIS's proposed amendments to optical fibre cable rental agreements between TTTBB and JASIF.

AIS is considering alternatives such as the establishment of an infrastructure fund to utilise its assets to support long-term business growth to deal with the leasing contract for JASIF network infrastructure after it expires in January 2032.

According to Tee Seeumpornroj, AIS chief financial officer, his company sees the long-term benefits for business operations to be supported by synergies between both companies. 3BB is a long-established provider of home internet, while AIS is a leader in mobile telecoms and digital services.

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