MP seeks probe into Thursday’s NBTC decision not to block the $7.5 billion DTAC True merger

October 22, 2022 at 1:04 pm
by Joseph O' Connor
in Economy, Foreigners, Living, More News from Thailand, Thailand
Tweet Share Share

The decision on Thursday by the National Broadcasting and Telecommunications Commission (NBTC) not to block the huge merger between two key players in the Thai telecommunications market has sparked the ire of activists, the public and opposition MPs. Calls are being made for the general public to join a legal action being planned, including an application for an injunction before the Administrative Court in Bangkok, to oppose the move. People can do so by producing their receipts to show standing. A report by independent international consultants on the merger concluded the likely outcome of the move would be more negative than positive for Thai consumers and the economy going forward based on global economic models.

There has been outrage from consumer rights activists and opposition MPs in the House of Representatives after a split decision by the National Broadcasting and Telecommunications Commission (NBTC) on Thursday not to block a proposed merger announced last November between True Corporation Plc and Total Access Communication Plc (DTAC) which promises to become the country’s leading telecommunication service provider and one which will be very much linked Thailand’s largest conglomerate the Charoen Pokphand Group, Thailand’s largest private firm with a turnover of $82 billion and which employs 450,000 people. On Friday, Move Forward Party list MP, Sirikunya Tansakun, told reporters that she would report Thursday’s decision to the National Anti-Corruption Commission (NACC) as a possible breach of Section 157 of Thailand’s Criminal code based on dereliction of duty.

MP-seeks-probe-into-NBTC-merger-decision — Move Forward Party MP Sirikunya Tansakun on Friday threatened to report Thursday’s decision by the National Broadcasting and Telecommunications Commission (NBTC) to acknowledge the merger between Total Access Communication Plc (DTAC) and True Corporation Plc to the National Anti-Corruption Commission (NACC). The decision came after members of the commission formed a view that it did not have the legal power to block the move but only to apply conditions to the deal.

Deputy leader of the Move Forward Party Sirikunya Tansakun MP has come out fighting and promised to lead a campaign after the NBTC board on Thursday voted 3 to 2 to acknowledge a proposed merger of the business interests of Total Access Communication Plc (DTAC) and True Corporation through the creation of a new entity which will control 49.4% of the telecommunication market in Thailand and 56% of the mobile telecommunications market.

Both firms hold various licences from the government to operate telecommunications services on both the mobile spectrum and the provision of broadband services to both businesses and the general public.

Campaigners brand the deal a recipe for a ‘duopoly’ in Thailand as it will lead to only two players in the critical mobile telecommunications market

Campaigners against the move, since it was announced late last year, have branded the proposed deal as the creation of a ‘duopoly’ which may have repercussions for Thai consumers.

The deal would leave only two key players in the mobile telecommunications sector with over 77.8% of the Thai public now using smartphones which is the main means through which the population obtains a connection to the internet.

If the proposed deal proceeds the only competitor left will be Advanced Info Service (AIS) which is already gearing up its own merger with 3BB, a smaller competitor in the home and business broadband market, in response to this move.

Chairman’s vote swings the commission’s decision to back the deal after two members formed the view that there was no legal basis to block the merger

At the meeting, on Thursday, there was a split decision on the proposed deal with two of the board members of the National Broadcasting and Telecommunications Commission (NBTC) voting that the state body had jurisdiction and the power to block the proposed merger while two others felt that it had not and could only apply strict conditions.

The Chairman’s casting vote swung the decision in favour of the proposed deal.

The latter position was arrived at due to a contention that the two firms are not both involved in the same business sector despite overlaps and that the question of seeking permission for such a merger does not arise because of the structure of the new entity.

The current telecommunications laws particularly specify that mergers between firms, each holding licences in the same sector, are prohibited under the country’s strict licensing laws set down over the last decade to encourage competition within the sector which is seen as an economic imperative for a country such as Thailand seeking to make a breakthrough and become an international digital economy.

Commission member explains why Thursday’s green light for a merger is bad news for Thailand’s economy

One of the members of the National Broadcasting and Telecommunications Commission (NBTC), on Thursday, who voted against the deal, Dr Pirongrong Ramasoota, said he had still reserved his position on whether the proposed deal was a merger of two firms prohibited by law or not, as argued by legal representatives of the two firms.

However, Dr Pirongrong noted that the deal would have a wide impact on the market particularly on the mobile telecommunications sector and the fact, which was obvious, that the single trading entity being created would help subdue competition and benefit the larger concern.

He also cited evidence from Mexico and the Philippines where saturated mobile phone markets have seen such deals which subsequently have resulted in higher prices and costs for end users.

Such mergers, across the world, have been shown to have a significant impact on economic development

The NBTC board member also said he was not satisfied with the empirical data supplied to the commission and felt that the state agency had a duty to look very closely at how state concessions including the exclusive use of valuable broadcast spectrums were being used.

He cited a range of reasons for his decision to oppose the merger including the fact that such deals have been shown across the world to have a significant impact on economic development prospects, the advice of an independent international consultant, SCF Associates Ltd, which concluded that the net effect of the deal was negative, particularly in a country where the public relies heavily on mobile telecommunications.

The consultant firm said that the possible outcome for consumers was more negative than positive based on economic models and norms worldwide.

Consumers told to bring receipts in a campaign against a merger of Thailand’s best-known firms into an entity led by the Charoen Pokphand Group

On Friday, the Move Forward Party list MP was joined by Ms Saree Aongsomwang, the Secretary-general of the Thailand Consumers Council (TCC) which had already voiced its strong concerns about the proposed deal announced by the two firms in November 2021.

Total Access Communication Plc (DTAC) is owned by the Norwegian communications giant Telenor while True Corporation Plc is owned by the Thai conglomerate, the Charoen Pokphand Group, the largest private firm in the kingdom.

The Charoen Pokphand Group is owned by the Chearavanont family, which, among other interests, owns Thailand’s vast 7/11 chain as well as being involved in a spread of business interests from the agricultural sector to retailing and telecommunications.

The firm employs 450,000 people in Thailand and across the world with interests, particularly in China and East Asia.

Its turnover in 2020 was $82 billion.

It is understood that following the merger the Thai-owned firm will play a larger role in the new business entity going forward.

Merger partners this week promised a new technology firm which would invest ฿200 billion in Thai digital and internet startups if go-ahead was given

In a statement, earlier this week, the two firms emphasised that the proposed $7.5 million mega-merger between the two firms to create a new communications behemoth, would see the new entity support local startups in the digital and telecommunications sector with investment capital of ฿200 billion being provided.

Ms Saree pointed out, on Friday, that already both the Council of State and the Administrative Court had ruled that the National Broadcasting and Telecommunications Commission (NBTC) had the legal authority to block the merger between the two firms despite the decision by the state agency’s board on Thursday.

She said that she would seek to join forces with other consumer rights groups and invite the public to participate, pointing out that all anyone had to do to show they had an interest or standing was to produce a receipt from either of the two telecommunication concerns.

This was in relation to a proposed legal case being taken before Thailand’s Administrative Court seeking an injunction against the proposed deal going ahead.

Thailand Consumers Council (TCC) boss says it has already been confirmed that the NBTC had the legal authority and power to block the proposed merger

‘Apart from the TCC and the Move Forward Party, other damaged parties, including customers of True and Dtac, can join petitions if they have receipts,’ she declared.

The Move Forward Party MP, Ms Sirikunya, slammed last Thursday’s decision by the state agency claiming that they had failed to act in the interests of consumers to prevent a move towards more monopolistic power.

She said the controversial decision also pointed towards the need to strengthen and overhaul the country’s legal framework governing such licences so that they are weighted more in the public interest and consumers.

The MP said that the parties involved may face a criminal probe under Section 157 of the Thai Criminal Code for dereliction of duty because of the decision.

In this respect, she would file a complaint with the National Anti-Corruption Commission (NACC) to adjudicate on the matter first of all.

MP raises the possibility of Section 157 charges under the Criminal Code for dereliction of duty because of the decision not to act by the commission

‘I will continue to file an objection to this matter. Because the NBTC has not exercised its powers as the Constitution and the law dictate. I will file a lawsuit under Section 157 as a whole to the National Anti-Corruption Commission (NACC) saying that the NBTC has acted wrongly, if it is true, this judgement may be void,’ she explained to reporters.

Ms Sirikunya also told reporters that she would be canvassing the opinion and position of each member of the commission before asking the National Anti-Corruption Commission to conduct an enquiry.

After the meeting on Thursday, sources within the National Broadcasting and Telecommunications Commission (NBTC) underlined the conclusion arrived at by members of the body that they simply did not have the power to vote down the proposed deal under the current laws on the basis that it was not a straightforward merger of two identical market players.

Legal advisors and executives with True Corporation Plc and Total Access Communication Plc (DTAC) made the position clear to the members of the commission board who are appointed by the government and the Senate.

They argued that the NBTC only had the power to set conditions and prescribe measures to be attached to the deal as it was not structured as a merger.

Join the Thai News forum, follow Thai Examiner on Facebook here

Receive all our stories as they come out on Telegram here

Follow Thai Examiner here

About the Author

Joseph O' Connor

Joseph Anthony is an expat from Ireland who has lived in Thailand for the last decade. He has worked extensively in the media including editorial positions in Ireland and Thailand. He is focused on economic and business stories in Thailand as well as the expat lifestyle.

All posts by Joseph O' Connor