There are signs that common sense might actually prevail in Thailand, as the review into DTAC’s proposed merger with rival True Corp took a late twist.

The five-member board of the country’s telco watchdog, the National Broadcasting and Telecommunications Commission (NBTC), has called for a more detailed analysis of the deal’s impact on competition, consumers and industry.

Eyebrows were raised last November when Telenor’s DTAC unit announced its merger of equals with CP Group-owned True. It is as clear and obvious today as it was back then that the tie-up will create – concessions not withstanding – a duopoly in Thailand’s retail mobile market, one comprised of DTAC-True and current market leader Advanced Info Services (AIS). While there would still be a third player in state-owned National Telecom (NT), its already tiny market share would severely constrain its ability to compete effectively. Despite these warning signs, local press reported in April that the merger was expected to sail through the regulatory process.

As of now though, the success of DTAC’s and True’s merger plan doesn’t seem quite so assured.

Acting NBTC secretary general Trirat Viriyasirikul said in a statement last week that the board has already reviewed reports by its subcommittee and three focus groups. It has also considered the NBTC’s own analysis of the merger’s economic impact, as well as a study carried out by Chulalongkorn University. It has also solicited the opinion of independent advisor Finansa Securities.

“The five NBTC board members agreed that the information presented was not complete and well-rounded enough,” the NBTC said last week, which is a somewhat damning indictment given the apparent breadth and depth of research that has been carried out to this point. “There is also a lack of important information on many issues to determine the impacts in various fields, and measures to take to prevent monopoly acts or cause unfair competition in telecommunications.”

The board has ordered the regulator to conduct no fewer than six more analyses. They include the structure of the merger, including operating licences held by the combined entity and its subsidiaries. It also wants to know how the merger will potentially affect the operation of those subsidiaries, which includes DTAC’s low-cost sub-brand FinnMobile, for instance. The NBTC also wants to know how the scale benefits of the merger will be passed onto consumers, and whether the combined company’s total spectrum holdings will give it an advantage over rivals.

The final two analyses consider potential remedies that would aim to reduce prices, maintain service quality, promote the launch of MVNOs and revise regulations to ensure those MVNOs stand a fighting chance in the market.

“Such information is deemed necessary for the design of measures to prevent monopolies in the telecommunications market or unfair competition,” the NBTC said.

The watchdog has not set a deadline by which it wants this new body of work completed, and until then it will withhold its decision on the proposed merger.

The development will doubtless be welcomed by consumer advocacy groups, which have been warning about this deal’s impact on end users ever since it was announced. As reported by the Thai Enquirer, the Thai Consumers Council last week delivered the NBTC’s office a petition signed by 10,000 people opposed to DTAC and True’s tie-up. In addition, a poll of 1,331 people carried out by Super Poll in January found that 83.9% were against the merger on grounds that it would create a telecoms monopoly resulting in higher prices and less choice.

Indeed, according to Thailand-based research firm Yozzo, which based its figures on subscriber numbers at the end of 2021, the combined market share of AIS and DTAC-True would be 96.5%, with DTAC-True alone accounting for 52.1% of the market.

In various press reports last week, DTAC and True naturally insisted that the merger will benefit customers.

“Thailand needs two strong market players, not one strong and two to three weak players, which does not promote effective competition,” they said in a joint statement reported by the Bangkok Post.

And yet, given that – according to Yozzo – mobile penetration in Thailand stood at 150% at the end of 2021, and that AIS, True and DTAC respectively had market shares of 44.38%, 32.44% and 19.68%, it appears on the surface at least that Thailand’s mobile market is functioning pretty well in its current form.

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