Investors Approve Thailand Telecoms Mega-Merger Despite Market Competition Worries

Two women sitting on a bench look at their mobile phones in Chiang Mai on October 31, 2020. (Photo by Mladen ANTONOV / AFP) (Photo by MLADEN ANTONOV/AFP via Getty Images)

The planned merger of True Corporation and Total Access Communication (DTAC), two of Thailand’s top telecom operators, has officially been approved by shareholders on Monday.

The proposed agreement won the support from some 99.37 percent of True’s shareholders and 89 percent of DTAC’s shareholders at the companies’ annual general meeting held on Monday, Bangkok Post reported.

True and DTAC estimated the new company’s registered and paid-up capital would be 138.2 billion baht ($41.2 million) and 34.5 billion ordinary shares with a par value of 4 baht ($0.12 cent) per share.

Sharad Mehrotra, DTAC’s chief executive, said the merger is expected to be completed in the second half of this year. He added that the new tech firm will be able to adapt to rapid changes in the global market and meet customers’ expectations using advanced technology.

“The strength of True and DTAC will be drawn into the new firm with the support of major shareholders of both companies,” Mehrotra said at the shareholder meeting.

The planned merger was announced in November last year, but consumer protection groups and academics raised concern that it would result in market dominance and potential financial implications for consumers.

Advanced Info Service (AIS), another of Thailand’s top mobile operators, lodged a complaint to the National Broadcasting and Telecommunications Commission (NBTC) on March 25 over its rivals’ planned merger, saying that it would affect market competition.

AIS urged the NBTC board to exercise its legal authority and conduct a thorough review of the merger deal, which it believes could impact consumer interest and market competitiveness, Bangkok Post reported on April 1.

Saree Ongsomwang, Thailand Consumer Council’s secretary-general, claimed that consumers may face a 20 percent increase in expenses as a result of the merger, which will reduce the number of mobile operators in Thailand from three to two, the Nation Thailand reported.

Saree said that the merger would leave AIS, which holds 46 percent of the market, and the new company as the only two competitors. True Corp holds 32 percent of the market while DTAC controls 22 percent.

“Hence, the council has urged the watchdog–the National Broadcasting and Telecommunications Commission (NBTC)–and related agencies to act on this deal carefully,” Saree said.

Thailand Development Research Institute (TDRI) president Somkiat Tangkitvanich also urged to revoke the True-DTAC merger as it would adversely affect startups and innovators who will suffer the increase in production costs.

“During the transition to the digital economy, Thailand will face market domination both domestic and overseas, resulting in difficulties in competition,” Somkiat said.