- Kultida Samaputti
- BBC Thai correspondent
After years of rumors, the issue of “True buy dtac” returned to the spotlight when foreign news agencies reported that Norwegian company Telenor, a major shareholder of Total. Access Communication Co., Ltd. (DTAC) has admitted that negotiations are underway with Charoen Pokphand Group. Major shareholder of True Corporation Company Limited regarding the actual merger
The movements of True and dtac, the 2nd and 3rd largest telecom companies in the country, are highly eye-catching. because if the acquisition actually happens Internet and mobile phone service providers in Thailand, which were originally 3 operators, AIS, True and DTAC, will be reduced to only 2 operators. that consumer
A Telenor statement released by Reuters on Nov. 19 said: “Negotiations are not finalized. And there is no certainty that this negotiation will lead to any final agreement.”
Telenor, who has been in the news for some time about withdrawing its investment from Thailand, said the company would not make any further comment on this level.
that same day dtac and True both sent a letter to the Stock Exchange of Thailand to “clarified the news in the media” with similar content that it does not accept or reject news or predictions reported by the press. and said only that if there was any information that the company had to inform to the stock exchange in accordance with the regulations I will inform you later.
What do we know about True-DTAC and “Deal of the Year”?
Reuters reported that if True and DTAC merge, it will become the largest telecom company in Thailand. It surpassed Advanced Info Service Co., Ltd. (AIS), which now holds the highest market share among three Thai telecommunication companies.
If approved by the regulatory authority The merged company of True and DTAC will have a market share of about 52 per cent, more than AIS, which has around 44 per cent, Reuters quoted analysts at Danske Bank in Denmark.
While many economic media outlets reported that At present, True has more than 32 million users, while dtac has 19.3 million users. In terms of operating results, during the first 9 months of 2021, True had revenue of 103,177 million baht. 59,855 million baht
If merged, True-DTAC has a total of 51.3 million users, which is more than the market leader like AIS, which has 43.7 million users and will have a combined income of more than 163,032 million baht
Reuters also reported that the deal between True and DTAC If true, it will mark Telenor’s merger with a regional mobile company for the second time in a year, after Telenor merged with Malaysian telecom company Axiata in June. last, and immediately became a leader in Malaysia’s telecommunication business.
Business and telecom analysts have been struggling to clarify the matter. man investment website The business and investment media analyzed that the messages in the letters sent by True and dtac executives to the stock exchange were suspiciously similar. It is also delivered on the same day.
The message in dtac’s letter reads: “The Stock Exchange of Thailand will be clarified by the Company. according to the regulations of the Stock Exchange of Thailand,” said True. “If there is any clarification that the company has a duty to inform to the Stock Exchange of Thailand, the company will continue to inform the information to the SET”
Investment website man analyzes that. If True successfully purchases dtac, it will be counted as True’s largest shareholder CP Group will be the dominant market for goods and services in Thailand covering food, retail and telecommunications.
1 in How is the NBTC?
Dr. Prawit Leesathaphonwongsa, a member of the Broadcasting Committee television business And the National Telecommunications Commission (NBTC) told the BBC Thai that until now the NBTC has not been contacted by the two companies about the merger. Only received from the media that the company will hold a press conference on November 22, which the NBTC will follow up on information to determine how to proceed. including calling related companies to provide additional information
“If it’s a different service, there’s no problem. But if the service is the same, that is, a mobile operator (mobile phone service provider) is the same, they will buy shares. If more than 10 percent must seek approval from the NBTC,” said Dr. Prawit.
What will happen if True combines with dtac?
Sarinee Achavanuntakul, an independent economics scholar Follow the news about Telenor plans to withdraw investment from Thailand. Including the acquisition of True and dtac since 2020, which she said is understandable in the business that Telenor wants to leave the market.
“Because this business requires scale, the larger the scale, the more competitive advantages.”
BBC Thai asked her to analyze if the merger between True and DTAC really happened. What is there to keep an eye on and what is expected to happen? especially the impact on consumers and telecommunication businesses in Thailand.
- The market has changed hands – consumers have fewer options.
From the number of service users and market share of AIS, True and DTAC that appear to the public It is clear that if True buys dtac The merger will become the new market leader and the No. 1 largest market, surpassing AIS. And the market for mobile and internet service providers will be left with only 2 operators, which are AIS and True-DTAC. which clearly reduced the competition in the market
“In the past we might have expected the three of you to compete for a promotion. But when there are two left, there are fewer competitors. when the competition is less Individual companies may not be motivated to improve service quality. Consumers have fewer choices. and had to surrender to this situation,” Sarinee commented.
Sarinee views that Thailand has a small number of mobile phone and internet service providers. reflects the management problems of government agencies that have been accumulated for a long time since the concession era until the licensing and auction
“Our regulatory system has been in trouble since the concession era… If we ask about the government’s efforts to persuade people to bid, it’s not. But scholars have noted that the conditions of the auction do not motivate new people to join. And many times the state has the opportunity to induce more people to compete. But he didn’t take that opportunity as he should. So it comes to the current situation where we only have 3 of them.”
- NBTC will be rightwatch
from the announcement of the National Telecommunications Commission on measures to prevent any monopoly or unfair competition in the telecommunication business that stated that the acquisition of shares of more than 10 percent of telecommunications operators in the same type of service business Must request permission from the NBTC. Sarinee therefore sees that society should keep an eye on whether the NBTC, as the agency that regulates telecommunications. How to do this?
Sarinee stated that in the case of DTAC-True Should be in the scope of asking for permission because if it is an acquisition, there will definitely be an acquisition of more than 10 percent of the shares.
“The question is, how will the NBTC set the criteria for its consideration? For example, the NBTC will approve it only if the company complies with these conditions. which must be in a way that protects the interests of consumers Because there will be only two service providers left, so the NBTC must ensure how to protect the interests of consumers,” said Sarinee.
- The existing problem has not been resolved. New problems will be added.
Sarine is concerned that the competition in the mobile phone and internet business is declining. This will further exacerbate the problem of the previously weak protection of consumer rights. Both from the delay in the enforcement of personal data protection laws that require these companies to act, and from “net neutrality”, which the Thai authorities have never paid attention to.
She explained that internet equality Refers to the principle that operators, including governments, must deal with information on the Internet equally without discrimination. If there is no net equality ISPs will be able to control the speed. and the quality of the content that we consume over the Internet to give their own platform an advantage over competitors, etc.
- CP will be more influential than ever.
If True succeeds in acquiring dtac, CP, which is a major shareholder of True It will inevitably become stronger in the telecommunication business. independent scholar CP Business Operations Study
“True is a big business in CP…Now CP has a clear business structure. Anything related to telecommunication is under True. So it’s a general problem that we let a group of businesses dominate. It has a very high market share in almost every business that goes into it.”
What’s the problem with reducing from 3 to 2?
Dr. Phavida Pananon, Professor of International Business Administration Faculty of Commerce and Accountancy Thammasat University commented on this matter that The merger of 2 big players in the market. It’s a reasonable business matter. can share resources Invest the money in massive capital intensive activities such as the 5G infrastructure in the telecom industry.
But she sees the downside to consumers and related businesses is that there are only two key players left, one in two companies that are seen as dominating businesses in many businesses.
“2 or 3 are not very different, but this 1 in 2 occupies almost every market. Having only 2 players left will block the other players. Business partners have less choice,” Prof. Dr. Pavida told BBC Thai.
In addition, while the world is divided into two camps on communication technology. Between the Chinese camp and the US, international business educators see The fact that the major shareholder in the market leader is a Chinese company will make Thailand look like it has chosen to stand next to China. Meanwhile, Telenor has a question that must be answered by its own shareholders. to do business handshake with Thai companies whose image is not very admirable among a number of Thai people while CP is drawing a line connecting various points. from being a leader in the Thai market This will lead to expansion in the region to fight with regional giants such as Singtel or Viettel.
“In terms of the Thai government, if this deal is allowed to happen The Thai government is sending a signal to foreign investors to understand that Investing in Thailand is not easy because the rules do not encourage equal competition. And it can be difficult. if not cooperating with the original market owner”