The board of the NBTC is scheduled to examine the documents at a meeting today. The board is however not expected to make any decisions today, as it is awaiting a legal interpretation by the Council of State, as to whether it actually has the authority to approve or reject telecom mergers.

The documents from the four NBTC subcommittees, contains a summary of public and focus group hearings, analysis of business and market aspects, as well as proposed remedy measures to govern the proposed mega merger between True Corporation and Total Access Communication (DTAC).

Despite being in charge of communication in Thailand, the regulator (NBTC), is not very good at communication itself.  By way of example, the reports, comments and submissions from the public hearings has not been shared with the public.

NBTC did post what they called “Five facts” to the public regarding merger case stories in other countries, as well as the market situation in Thailand in order to avoid fake news and false facts. However the communique was retracted within hours of being published and after a complaint from the merging parties, by the Chair of the NBTC board, who said he had to sign and approve what was facts. Not unusual in Thailand, as the NBTC is also very proactive when it comes to censoring media in the country.

Leaked TRUE DTAC proposed remedy measures

With the total lack of transparency from the regulator, local news and analysts have to rely on anonymous sources at the NBTC in order to inform and educate the public. One such source, has shared with Bangkok Post that the conclusion contains 10+ proposed remedy measures to govern the merger, including:

• TRUE and DTAC’s mobile subsidiaries; True Move H Universal Communication (TUC) and DTAC’s TriNet (DTN) are prohibited from merging within three years after the deal is completed.
• TUC and DTN must not pursue spectrum sharing during the three-year period.
• The merged firm must reserve 20% of its network capacity for mobile virtual network operators (MVNOs).
• The two parties must have equal management of the new firm’s board, in line with their announcement of an equal partnership for the new merged firm.

Now, we don’t have the details (if there are any), of the mentioned measures – but if that is it, they are weak and flawed and contains no weight at all.

By way of example, regarding TUC and TriNet DTN prohibited from merging within 3 years. The two parties already announced in their respective Information Memorandum that the merger NewCo will operate in the businesses of: “The sale and distribution of mobile devices and mobile service via subsidiaries dtac TriNet and TrueMove H”

TUC/DTN Spectrum sharing. Question is how would that affect the roaming agreements in place between the parties today. Secondly, TRUE has a contract with CAT Telecom on 850MHz and DTAC has one with TOT on 2300MHz – those two (CAT/TOT) was merged into one (National Telecom) in 2021.

But the real paper tiger is in the 20% capacity to MVNOs. As it is today (pre-merger), AIS, TRUE, DTAC and NT must share a minimum of 10% capacity of their individual spectrum with MVNOs. In each of their spectrum licenses, it says that the licensee has to reserve minimum 10 percent to MVNOs.

It has been as such, since 2013. Yet no MVNO has been able to launch operation on AIS, TRUE, DTAC. It is only the state enterprise National Telecom), who has/is providing network access to MVNOs. The reason the three others don’t have is that they are avoiding MVNOs by providing such with a wholesale offer that they have to refuse.

Even if NBTC said 99% would have to e reserved to MVNOs, it would not make a difference as the issues is rooted barriers to MVNO entry build by the Big 3. This is not new to the NBTC, it has been pointed out several times over the years, as well as in official submissions from undersigned to the public hearing and focus group hearings.

The big joke is of course that 1+1=2 – or in this case 10+10=20% anyway.

Again, we don’t know all the details yet, but it would make more sense to setup the remedy, that the parties would not be allowed to merge their mobile subsidiaries, until having signed agreements with 5-10 MVNO (or a MVNA with MVNO clients) and at least 3 of them having launched commercially into the market with a favorable wholesale agreement to the MVNOs or MVNA for minimum 5 years.

X amount of the merger spectrum should be made available to acquire under favorable terms of X years for MVNO in case they want to go from MVNO to MNO – or to new entries.

The merging parties must put up for sale or retire their own pseudo MVNOs (sub-brands) such as DTAC’s FinnMobile and TRUE’s RealMove.

In other words, what he have seen and learned from mergers in other markets.

Where are the proposed remedy measures from TRUE and DTAC

Speaking of other markets and standard practice, another big question is: Why on earth haven’t the NBTC asked TRUE and DTAC to come up with remedy suggestions themselves to mitigate the issues?

Not only do we know such practice from real regulators in other countries but given what we have seen so far from the NBTC, remedy suggestions from TRUE and DTAC themselves could only be better.

But having heard what the NBTC has on the table now, TRUE and DTAC are probably to busy rolling on the deck laughing, in their sailboat towards a smooth merger.

1. Spectrum holding

Office of the NBTC 1st proposal:

• It should be stipulated that TRUE and DTAC cannot use their spectrum together to provide services and the parties must strictly comply with the NBTC rules related to the use of frequencies.

Office of the NBTC proposal after processing the opinions received from the sub-committees:

• The Office of the NBTC is of the opinion that it is only advisable for applicants to merge businesses to comply with the rules that are already in force.
• Without the sharing of frequencies together the NBTC may, however, consider in the future the allocation of spectrum to new operators, through auctions and mechanisms such as set-aside spectrum or a spectrum holding ceiling.

2. Maintaining consumer choice

Office of the NBTC 1st proposal:

• Assigning no business merger to TRUE and DTAC and maintain separate service brands for a period of time, such as 3 years.

Office of the NBTC proposal after processing the opinions received from the sub-committees:

• No comments received

3. Support for MVNO

Office of the NBTC 1st proposal:

• Prescribing TRUE and DTAC to sell capacity for mobile phone service to MVNO, which may be set at 20% of the capacity of their own network (more than the normal condition at 10%).

Office of the NBTC proposal after processing the opinions received from the sub-committees:

• From the various opinions received — in addition to promoting MVNOs to enter the market by stipulating measures to sell capacity of mobile phone services to MVNOs as proposed — additional measures may be considered, including:
• Increasing or maintaining the number of MVNOs in the market, for example requiring that before or after a business merger, a contract must be made with at least 1-2 non-affiliated MVNO operators, which could create more market players.
• However, the pressure of such measures may cause an MVNO, that is not really ready to provide services, to enter the market anyway due to the measure ending up being unable to compete and leave the market.
• Determining that the wholesale of mobile phone services to MVNOs must be paid according to the actual amount (Pay as you go) to reduce the burden and risk of providing services.
• According to the opinion of the subcommittee of Consumer Protection and Civil Rights, if an MVNO can purchase a quantity of services that is in line with its ability to provide its own services, this will reduce costs and be one of the factors that help MVNOs being competitive and stay in the market.

4. Determination of service rates

Office of the NBTC 1st proposal:

• It should be determined that TRUE and DTAC must strictly comply with the rules relating to the supervision of the NBTC’s service fee rates – increased from the one that is currently in use, to make the governance more suitable for the changing market structure with conditions that are suitable and flexible to the current situation.
• It should be similar to the approach proposed by Chulalongkorn University consultants regarding pricing in the form of Price Cap, which takes into account the current market condition and the efficiency of the telecommunication industry, etc.

Office of the NBTC proposal after processing the opinions received from the sub-committees:

• The Office of the NBTC has reviewed that the most appropriate approach is that TRUE and DTAC must strictly comply with the rules relating to the supervision of the NBTC’s service fee rates. At present, the supervision of service fees is in accordance with the NBTC’s Notification on Determination and Supervision of the Domestic Mobile Phone Service Rate Structure and the NBTC’s Announcement on Determination and Supervision of Rates of Mobile Phone Service Charges.
• Domestic mobile phone service in excess of the usage of the main promotion – and to consider additional measures related to the service rate – must increase from the one that is currently in use to make the governance more appropriate for the changing market structure from mergers and acquisitions.

5. Quality of Service (QoS)

Office of the NBTC 1st proposal:

• Signal (QoS): TRUE and DTAC must not reduce the number of cell sites from the original, in order to maintain the quality and standard of services that the people receive, not lower than before.
• TRUE and DTAC must strictly maintain QoS in accordance with the NBTC’s announcement regarding the standard of telecommunication service quality.
• QoS in customer service: Determine that the two companies are ready to support the number of customers that will increase from the business combination in order to ensure the quality of service to the service users is not lower than before, such as the number of staff that are sufficient to support the service in both the service center and call center staff, as well as the size of the customer service center area that can support the calls of service users.

Office of the NBTC proposal after processing the opinions received from the sub-committees:

• The proposed measure by the Office of the NBTC is in the same direction as the specific measures proposed by other agencies.

6. Service contract

Office of the NBTC 1st proposal:

• It is appropriate to specify that TRUE and DTAC terms of the contract and the agreement between the Company and the user shall be maintained, including the benefits received under the contract or agreement for the period specified in the contract. Unless it is a change in the terms of the contract that is beneficial to the user and with the consent of the user.

Office of the NBTC proposal after processing the opinions received from the sub-committees:

• It is of the view that the Office of the NBTC has set a contract to protect consumers. But there may be additional consideration as to the appropriate length of time the business merger should maintain the contract and how to notify the user of the termination of the contract and the change of the contract in order for users to get the most benefit. Both Finansa Securities and the Subcommittee on Consumer Protection and Civil Rights have proposed a period of approximately 3 years, which is a period that may be considered applicable.

7. Network coverage

Office of the NBTC 1st proposal:

• Set additional measures to telecommunication network coverage requirements with 5G technology, for example to achieve 5G network coverage of more than 80% of the population within 5 years.

Office of the NBTC proposal after processing the opinions received from the sub-committees:

• It is the opinion, that measures should be imposed on the requirements for expanding the coverage of telecommunication networks with 5G technology, not less than the proposal of the business merger which is consistent with the opinion of the subcommittee on Consumer Protection and Civil Rights and the Independent Consultant (85% within 3 years)

8. Infrastructure sharing

Office of the NBTC 1st proposal:

• Should stipulate that TRUE and DTAC must allow other licensees to lease their own telecommunication networks. and must strictly comply with the rules relating to the use of telecommunication networks of the NBTC

Office of the NBTC proposal after processing the opinions received from the sub-committees:

• The measures proposed by the Office of the NBTC are in the same direction as the opinions received.

9. Public relations of service for the confidence of users after business combination

Office of the NBTC 1st proposal:

• Public relations and publicity to maintain quality service and fair prices for service users

Office of the NBTC proposal after processing the opinions received from the sub-committees:

• The NBTC’s proposals for measures are consistent with the opinions received. However, in the details, the Office of the NBTC has not yet determined the details of procedures, time frames, and public relations methods. While the subcommittee on Consumer Protection and Civil Rights are clearly defined and concrete.
• Therefore, it may be considered further in the implementation to make public relations to be more clear, according to the measures of the Office of the NBTC

10. Follow-up on operations and changes that may occur after a merger

Office of the NBTC 1st proposal:

• Reporting on business results subject to the implementation of the periods and conditions received from the NBTC on a quarterly basis – or in accordance with the period prescribed by the NBTC, in accordance with the form prescribed by the NBTC, for at least a period of time: 3 years

Office of the NBTC proposal after processing the opinions received from the sub-committees:

• The Office of the NBTC’s measure proposal has not specified the details of what information the applicant must report to the NBTC, while Chulalongkorn University has proposed details of what should be done and reported, It also proposed to have measures to monitor the results of the operation by having other agencies to join in the inspection. Therefore, it may be considered for further adaptation in conjunction with the licensee to report the results of the existing operations.

11. Promotion of competition – increase MNO service providers

Office of the NBTC 1st proposal:

• Specify the return of spectrum from the same operators who requested a business merger and arrange spectrum auctions to be allocated specifically to new MNO operators
• Require distribution of property holdings such as spectrum, telecommunication towers or necessary infrastructure and details of the distribution of property holdings, should be completed prior to the business combination, to prepare spectrum allocation plans for new service providers and conducting spectrum auctions at the latest within 6 months after the business merger
• Require new MNO operators to enter into roaming contracts with existing applicants or service providers until they have sufficient infrastructure of their own.

Office of the NBTC proposal after processing the opinions received from the sub-committees:

• Both Chulalongkorn University and the Sub-Committee on Consumer Protection and Civil Rights propose a way to create a new service provider that has a network using the spectrum that has been returned from the business merger, as well as selling some networks to new service providers and the introduction of the network, in the form of roaming.
• These methods emphasize on new venture operators having access to the infrastructure needed to provide services – both from the allocation of resources and the use of the necessary infrastructure of the same operators in the market until they can provide services on their own – may need to be considered in conjunction with the measures of spectrum holding and determined accordingly.

12. Prevention of business takeover to reduce the likelihood that either TRUE Corp or DTAC can control the NewCo solely

Office of the NBTC 1st proposal:

• Conditions relating to the Board of NewCo may prescribe a condition for shareholders of TRUE Corp and DTAC to either be unable to nominate – no more than half of the names of directors in NewCo during the first 3 years after the merger.
• Conditions relating to the appointment of executives and the Board of Directors of NewCo’s subsidiaries
• The appointment of NewCo’s directors must be approved by NewCo’s Nomination and Remuneration Committee. NewCo’s sub-committees must be appointed in accordance with NewCo’s board designation characteristics.

Office of the NBTC proposal after processing the opinions received from the sub-committees:

• Finansa Securities offered measures related to the prevention of new company domination by any one company, by offering measures to the NBTC to determine the shareholding and appointment of executives and sub-committees of the new company in a way, such an approach could be a defense against a company domination by a particular company.
• But there are concerns whether it will interfere with the business management of the business merger or not. Therefore, the proposed measures and objectives for their appropriate implementation should be considered.

13. Investment to develop new services and develop new technology

Office of the NBTC 1st proposal:

• NBTC should determine the investment ratio of entrepreneurs in technology development and innovation according to revenues.
• Require the development of technology and infrastructure to benefit consumers and increase pressure on other operators to develop tech and infrastructure. It is more difficult to enter the market as new entrees must find comparable technology
• NBTC should play a key role with relevant sectors in overseeing and formulating policies on digital technology development to support the expansion of the digital economy. Due to advances in technology this group is largely associated with telecommunication technology.
• The NBTC should determine its own investment plan in technology development and innovation by considering the worthiness of investment and sharing of resources with the private sector to support government operations

Office of the NBTC proposal after processing the opinions received from the sub-committees:

• These measures should be those that promote the overall growth and development of technology for the further development of the industry, rather than the specifics of individual entrepreneurs

14. Receiving issues and problem solving mechanisms for service users

Office of the NBTC 1st proposal:

• Require the applicant for the business merger to establish a mechanism for accepting matters and solving problems for service users after the business merger;
• Requiring all service providers to provide channels for receiving complaints and disseminating statistics and complaints problems in accordance with the rules prescribed by the NBTC.

Office of the NBTC proposal after processing the opinions received from the sub-committees:

• At present, the NBTC has announced the process for receiving and considering complaints related to the telecommunication business act B.E. 2559, which specifies processes such as the complaint submission process.
• The process of considering and reviewing the resolution of complaints and the duty of the licensee to manage complaints including receiving and solving complaints, applies to all licensees. Therefore, if there are any additional details In terms of such matters it would be more appropriate to apply as a whole.