Telco merger up in air

Telco merger up in air

The National Broadcasting and Telecommunications Commission (NBTC) is expected to make a decision on the controversial merger of True Corporation and Total Access Communication (DTAC) on Oct 12.

It is unclear how the telecommunication regulator's decision will be made because NBTC claims it lacks the authority to approve or reject the merger.

Trairat Viriyasirikul, acting secretary-general of the NBTC, said the Council of State, the government's advisory body, had provided a legal interpretation that the authority can only prescribe measures to govern the deal.

The NBTC's authority to approve or reject the merger under the 2010 NBTC Announcement was nullified by the 2018 announcement, he said.

The 2018 announcement allows a merger procedure to take place after it is notified to the NBTC, which can issue measures to regulate it.

The NBTC has since proposed 14 measures to control the merger. Some key measures include prohibiting their mobile business subsidiaries from merging within three years and banning mobile network sharing during the period.

Another key point is the parties must have equal management of the new firm's board, in line with their announcement of an equal partnership for the merged firm.

Consumer groups spearheaded by the Thailand Consumers Council are not convinced these measures are sufficient to protect consumers from any trade monopoly that may arise. They said the NBTC failed to set measures to control prices and service fees.

The council plans to file a lawsuit with the Administrative Court against the NBTC for negligence of duty.

In fact, the concerns of consumer groups merely scratch the surface of the issues raised by this much questioned amalgamation.

In a leaked document on the Council of State's interpretation, the agency said it could not interpret the questions asked by the NBTC because most concern the body's own discretion.

The Council of State also mentioned the NBTC's authority under Article 8 of the 2006 NBTC Announcement on preventing monopolies or unfair competition, which remains intact. The article bans the acquisition of more than 10% of the same type of business, unless it gets approval from the NBTC.

In layman's terms, it says the NBTC indeed has authority to approve or reject a merger which raises monopoly or market dominance concerns under Article 8.

It's true the merger would benefit the operators' customers as they could enjoy a better experience in mobile internet access through the combined frequencies and cellular towers, and enjoy broader privilege programmes.

However, the deal will stamp out market competition as the amalgamation will leave only two major players in the field. The Thailand Development Research Institute (TDRI) said mobile market concentration would rise to a "dangerous" level following the merger.

With less market competition, consumers could be at risk of increases in service charges or be forced to take bundled packages they do not want.

Hopefully the NBTC will take into account consumer benefits instead of looking solely at the legality. The agency cannot forget that the deal can affect trade competition and consumers. It should strive for balance between market factors and protecting consumers.


Bangkok Post editorial column

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