Thailand appears set to become a duopoly telecom market after the industry regulator declined to block a proposed merger between True Corp and Telenor-backed DTAC.

After a marathon 11-hour meeting Thursday, the National Broadcasting and Telecommunication Commission (NBTC), approved the merger by a 3-2 vote.

It set conditions including price controls, separate rates for voice, data, messaging and the independent verification of costs and service pricing, Reuters reported. The merged company is also required to roll out a 5G network to 75% of the population within three years.

The decision puts almost the entire mobile market into the hands of two operators – the True-DTAC entity, estimated to be worth $7.3 billion, will have a combined 55% of the market, and current market leader AIS will have a 44% share.

Figure 1: In neighboring Malaysia, Telenor is also close to completing a merger that will create the largest mobile player in the market.
(Source: Jorgen Udvang/Alamy Stock Photo)

The merger, first announced nearly a year ago, has attracted wide opposition, with consumer groups and unions staging a rally outside the NTBC while it made its decision Thursday.

The Thailand Consumer Council has filed a complaint to the Administrative Court seeking to have the decision overturned, but precedent suggests its success is unlikely. A previous filing to the Thailand Competition Commission was rejected on grounds that it had no jurisdiction in the telecom market.

M&A fever in Asian telecoms

True Corp, with a market cap of 171.9 billion Thai baht (US$4.49 billion), is 49%-owned by the CP Group, controlled by Thailand's richest family, with China Mobile owning 18%. DTAC, a publicly-listed entity with THB110.7 billion ($2.9 billion) market cap, is 47%-owned by Telenor.

Post-merger the CP Group will own 29% of the enlarged company, Telenor 19.6% and China Mobile 10.4%.

The transaction is one of a series of M&As in Asian telecoms this year, most driven by the financial demands of 5G.

In neighboring Malaysia, Telenor is close to completing a merger that will also create the largest mobile player in the market. Its local unit Digi is awaiting approval of its proposed $15 billion merger with Axiata's Celcom.

Want to know more? Sign up to get our dedicated newsletters direct to your inbox.

In January, Indosat Ooredoo and Hutchison 3 agreed to a $6 billion merger to create the second largest player in the still-growing Indonesia market, while Taiwan is consolidating through dual mergers between two of the biggest players and the two smallest operators.

In Friday trading on the Thai stock exchange, True Corp's stock fell 1.96% and AIS was off 1.06%. DTAC was unchanged.

Related posts:

— Robert Clark, contributing editor, special to Light Reading