The country’s telecommunications regulator has cleared the way for the country’s second and third largest mobile operators — True Corp and Total Access Communication (DTAC) — to merge, but with conditions.
The conditions include a price ceiling and price controls, the National Broadcasting and Telecommunication Commission (NBTC) said in a statement on Thursday.
The long-awaited decision comes nearly a year after the deal was first announced amid concerns about reduced market competition.
The merger would leave the country with only two operators: the merged entity and the current market leader, Advanced Info Service (AIS)
Other conditions reportedly include requiring independent verification of the operators’ cost structure and service fees for at least five years. Service rates such as voice, data and messaging must be shown separately and based on average-cost pricing, the NBTC said.
The combined entity will overtake AIS as the market leader. True and DTAC currently have 34% and 21% of the country’s mobile subscribers, respectively. AIS controls 44% of the market.
True, DTAC and AIS did not immediately respond to requests for comment
DTAC is backed by the Norwegian firm Telenor. The Thai agri-industrial conglomerate Charoen Pokphand Group holds a 49% stake in True Corp with China Mobile holding 18%.
Telenor and CP Group are slated to hold a third of the shares each in the new merged entity, China Mobile would have 10% and the remaining shares would be listed on the stock exchange.
The independent regulatory body had agonised for months over whether it had the legal authority to approve or reject a merger of two telecom operators, and the possible legal liability it could face depending on how it proceeded.
After a meeting that lasted more than 10 hours on Thursday, its five-member board simply “acknowledged”, reportedly by a vote of 3-2, the intention of True and DTAC to merge, while stipulating conditions in the name of “consumer protection”.
The office of the NBTC has reportedly proposed 14 remedy measures to the board for consideration, including prohibiting the merger of True Move H Universal Communication (TUC), a mobile business arm of True, and dtac TriNet (DTN), a mobile service unit of DTAC, for three years.
TUC and DTAC would also face a ban on frequency sharing for three years.
In addition, TUC and DTN could be forced to allot 20% of their mobile network capacities for rental to mobile virtual network operators.
However, full details on all conditions agreed on by the board were not immediately available.
