Thai officials greenlight True/DTAC merger

A consumer advocacy group and the opposition political party want to stop the merger in its tracks

Thailand’s National Broadcasting and Telecommunications Commission (NBTC) on Thursday voted to approve the merger of True Corp and DTAC. Despite the NBTC’s ruling, it looks like the True/DTAC merger isn’t going to happen without a fight, as a Thai consumer group and the country’s opposition political party have filed legal proceedings against it, even accusing the commission itself of corruption in the process.

The long-simmering merger, first announced in 2021, would consolidate Thai telecom down to two major players: AIS, the current market leader, and the merged True/DTAC entity once consolidated. AIS currently calls about 44% of Thailand’s mobile subscriber base its customers. True has 34% market share, and DTAC brings up the rear with another 21%. True is backed by Thailand’s largest private company, Charoen Pokphand, as well China Mobile. The company is estimated to be worth about $4.49 billion at current exchange rates. DTAC is almost half-owned by Telenor, the state-controlled telco of Norway. DTAC’s market cap is around $2.9 billion. Combined, the $7+ billion company will have 55% of the nation’s mobile subscribers. 

The merger has been on the books since November 2021. While its consummation has never really been in doubt, there’s been strong resistance to the merger from consumer groups and others who claim the combination will be uncompetitive and lead to higher prices for Thailand’s mobile users. Within hours of the NBTC announcing its decision, consumer advocacy group Thailand Consumers Council (TCC) announced that it would ask courts to stop the merger. The TCC said it will file an administrative court injunction to stop the merger and wants to begin an inquiry to see if there was any malfeasance by the NBTC, according to the Bangkok Post. The merger news has also earned the ire of the Move Forward Party, the country’s opposition political party.

As Asian markets move to embrace 5G, merger and acquisition news continues across the region. GSMA forecasts that 5G connections will represent 14% of total mobile connections in the Asia Pacific (APAC) region by 2025, reaching 430 million subscribers. According to the ‘Mobile Economy Asia Pacific 2022’ report, published in July, 5G services are commercially available in 14 markets. The figure will be much higher (67% on average) in “developed” Asia Pacific, which comprises Australia, Japan, Singapore and South Korea. Since then, India has also begun lighting up 5G service.

Earlier this month, Telenor announced the creation of an independent Asia business unit to further its endeavors in the area. Telenor described the new business group as “a more independent regional entity” based in Singapore, created to oversee the company’s efforts to expand its market in Bangladesh, Malaysia, Pakistan and Thailand. Telenor already holds a commanding presence in its Asian markets. Asia accounted for almost half of the company’s revenue in 2021, where it provides services to more than 162 million subscribers. The restructuring provides dedicated investment management teams for each market, the company said.

For its part, the NBTC says that the merger is tied to several conditions. The companies must agree to price controls, data transparency and separation of services, it said. The NBTC ruled in favor of the merger by 3-2.

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