The TRUE telco merger in Thailand has a plan for the provisions of MVNOs

The merger of the two Thai telecom operators (DTAC/TRUE), have a plan for the provisioning of MVNOs in accordance with the merger remedies from the regulator.

TRUE says it has already implemented the Ex Ante merger remedies required by the regulator NBTC, including the plan for the provisions of MVNOs.

TRUE and DTAC have jointly considered and implemented all specific merger conditions and measures that was required by the Thai telecom regulator (NBTC), before the merger (Ex Ante) of TRUE and DTAC on the 1st of March 2023.

According to Nakul Sehgal, Co-chief finance officer, “These measures included the preparation of an implementation and development plan for the provisioning of MVNOs and an accounting system management separation plan from mobile service network and mobile service. All of this has been done before the date of merger.”

Further, TRUE Corp has also implemented specific conditions or measures which have already been set forth by the NBTC with immediate effect as those related to maintaining the quality of service. So we are already complying with that. And for other specific conditions which are already set forth by the NBTC, they are going to be implemented or put in force in accordance with the time limit that has been specified and will be implemented exactly, according to the specifications and complying with the related laws. So all in all, before the merger, we have applied and after the merger, whatever was supposed to be done, on quality of service has been done as well, and going forward, we’ll continue to comply with the NBTC remedies that have already been forced on us,” said Nakul Sehgal.

You can see the NBTC remedies below – or with some comments here

There has been no news or updates on the matter from the regulator itself, which unfortunately, is in line with the lack of information sharing from the regulator (NBTC), since the implementation of its new board. A timeline and status report on the actual implementation of each measurement is missing from the regulator.

It is also questionable, if TRUE really has followed or implemented as they say because at the last board meeting, at the regulator (March 15, 2023), the NBTC itself still hadn’t found all the members for the committee who has to track and check the rates of the merger.

TRUE does not say how far they are with the “plans”. A quick check on the “Reference Access Offer” (RAO) at DTAC, shows it is still the old version that hasn’t yielded any MVNOs access. The same quick peek at TRUE’s old RAO shows the text: Reference Access Offer (RAO) – but the link is missing. Likewise, a quick search on TRUE’s business website shows no results for MVNO.

Below: A search for “MVNO” on TRUE’s business website brings zero result.

TRUE has a plan for the provisions of MVNOs but there are no result for MVNO on TRUE's business website

On the other side of the mobile operator duopoly in Thailand, the former leading – but now second largest mobile operator in Thailand – AIS, has also suddenly showed a little action when it comes to MVNO. At the previous NBTC board meeting, AIS had a question regarding updating its Request for Access and information to MVNOs and adding it to its website.

Below: NBTC’s Minutes of Meeting 15 March, 2023: AWN (AIS) asking permission regarding disclosing information to MVNOs  

AIS AWN question about MVNO from NBTC's Minutes of Meeting March 15, 2023

Now, before we all get to much excited and ready to port-out our mobile numbers so we can move to MVNOs quickly, we have to remember, AIS, TRUE and DTAC giving access to MVNOs has been mandated in Thailand since 2013 – but with zero MVNOs ever launching on their network. Instead those few – about a dozen out of the 65+ companies who have received a MVNO license – have launched on TOT and CAT Telecom (Now NT).

Even if, TRUE (and AIS) decides to live up to the regulation and open for MVNOs, question is how much value it will have, if they are still not invested/interested in a real partnership with MVNOs, because if not, it will be a nightmare to have them as a host operator for the MVNOs. In fact, that question will be hanging as a heavy grey cloud over the two, whereas NT is proactively interested in MVNOs as their own survival depend on it.


NBTC’s Merger Remedies and Measures for TRUE

1. Mitigation measures for concerns regarding Service Rates and Service Contracts
1) Price ceiling and determination of Average Service Fee

a. Average Service Fee, to be reduced 12 percent using the new Price Average method by weighting according to the number of users in each promotion (WEIGHTED AVERAGE) within 90 days after the merger)

b. Provide a choice and separate prices for each service, as an alternative.

c. Submit cost information and necessary information to an inspection agency.

d. The business merger must notify the user on the above for acknowledgment, in order to have an audit. Penalties in case of not doing so, include a fine based on the percentage of revenue or tiers  – or the revocation of license.

2) Determination of Service fees using the Average Economic Price (Average Cost Pricing)

a. Submit the information in accordance with the NBTC Notification Re: Criteria and Procedures for Preparation of the Telecommunications Ledger Report – and submit such to the Office of the NBTC every 3 months – or upon request of the NBTC, for cost structure examination of the Service Fee structure and to calculate if the average total cost of the prices (Average Cost Pricing) and the Marginal Cost (MC) are current and accurate.

b. Provide an experienced consultant expert, to verify the Cost Structure Data Service Rate or data on various rates of the telecommunication industry abroad for not less than 5 years to the NBTC. The applicant for the business merger is to be responsible for all expenses incurred from the procurement and employment of such consultants. The Consultants must not be associated with, linked to, or have conflicts of interest, directly or indirectly, with the business merger applicant. In accordance with (a) the merger applicant and consultant must verify the Cost Structure, Service Rate Structure and calculate the correct Average Cost (AC) and Marginal Cost (MC), for each service such as voice, data, SMS, etc., within 1 month from when the business integration is completed.

c. Provide experienced consultants expertise as in (b) to verify the accuracy of the information under (a) to verify the Cost Structure, Service Rate Structure and to calculate the correct and up-to-date Average Cost (AC) and Marginal Cost (MC) of each service such as voice, data, SMS etc., 4 times a year (quarterly). Consultation for a period of not less than 10 years or throughout the license period.  Expires in the event that the license is less than 10 years, which the NBTC will determine and the applicant for business merger will be responsible for the cost and all expenses incurred in the recruitment and sourcing of consultants. The consultants must not be directly or indirectly associated with, linked or having conflicting interests with the applicant of the business merger.

d. There must be a fixed and displayed mobile phone service rate separately for each service (Unbundle), such as voice service, data service, SMS service, etc., or promotion. Selling separate service (Unbundle Package) to users, the users must be informed and confirm first. The service fee is set according to the Average Cost Per Service (Average Cost Pricing) based on the actual usage price. There must not be a minimum purchase of services. However, the Average Cost Pricing will be applied to the case of excess service charges arising from the use of a separate service promotion. (Unbundle Package) and promotion of bundles as well.

e. Must provide convenient, fast, easy access, comprehensive and easy to purchase, change (increase, decrease) the use of mobile phone service according to the needs of end users. without limitation. The details of the service must be displayed. Service rates classified according to each service. or promotional service rates as well as methods and conditions for choosing to receive services expressly and current.

3) Maintaining Consumer Choice

True Move H Universal Communication (TUC) the mobile service of TRUE and Dtac TriNet (DTN) the mobile service of DTAC must maintain separate brands of services for a period of 3 years.

4) Service Contract

TUC and DTN shall maintain the terms of the contracts and agreements between the Company and the User. Including the benefits received under the contracts or agreements for the period specified in the contract. Unless there is a change in the terms of the contract that is beneficial to the user and has been agreed by the user.

5) Public relations of service for the confidence of service users.

After the business merger, TUC and DTN are required to publicize and disseminate information, in order to make users aware of the parties maintaining the quality of service and fair service fees and the parties must establish guidelines for maintaining the quality of goods and services after the business integration, including conditions for public relations for TUC Company and DTN Company to continue.

2. Mitigation measures regarding concerns on: Barriers to market entry, Lack of competitiveness and Supporting small entrepreneurs  
1) Prerequisite (Ex Ante)

a. The applicants for the business merger must prepare a plan for the establishment of mobile virtual network operator (MVNO), which must contain the following details:

(1) Establish a business unit to provide network services to MVNO service providers by separating the management system and accounting system from the main business unit arising from this business merger.

(2) Provide a network service system that is ready to support network service access for MVNO service providers immediately after business integration.

In addition, the actions under (1) and (2) must be ready for immediate operation when the business merger occurs.

b. Business merger licensees as well as companies under control must set up a separate management plan and accounting system for mobile network service and mobile phone service by submitting the said plan to the NBTC before the business merger.

2) Specific measures after business merger (Ex Post)

a. Licensees arising from the business merger and controlled subsidiaries must be done so that MVNO licensees can use and interconnect with other licensees as themselves.

b. The MVNO licensee shall be entitled to use the spectrum in all regions of the business merger with both direct and derivative rights under the same technology standards.

c. Access to network services for MVNO licensees must be guaranteed in receiving services under the quality of service (QoS) in accordance with the service standards set by the NBTC.

d. Must not refuse service to the MVNO licensee due to reasons of inadequacy of the mobile network. or in accordance with the rules and conditions prescribed by the NBTC.

e. Must be available to the MVNO licensee requesting access to the mobile phone network. Service can be started within 60 days from the date of request for service.

f. TUC and DTN shall provide telecommunication network services with capacity of at least 20 percent of its total telecommunication network to mobile virtual network operators (MVNO) – that has no connection with TUC and DTN upon request for such service.

g. The rate of wholesale compensation for mobile phone service for MVNO service providers shall not exceed the Average Service Fee offered per unit of each service according to the usage rights of every promotion at a rate of not less than 30 percent of the Average Selling Price per unit of the retail price for the bundle package or the Average Unit Selling Price per unit for the actual active voice, data, SMS, etc. service (retail – 30%), that the licensee – or subsidiary controlled by the entity arising from business merger provide to end users.

h. The mobile network operator must not impose a minimum limit on the purchase of services such as voice, data, SMS, etc., services on the MVNO licensee. The service charge shall be based on the actual usage.

3. Mitigation measures regarding Service quality concerns
1) TUC Company and DTN Company must maintain the quality of service as follows:

1.1) The quality of the network in the service

TUC and DTN shall not reduce the number of cell sites of both companies, in order to maintain the quality and standard of services that the users receive. QoS must not be lower than before and must strictly maintain the quality and standards of the service according to the NBTC’s Notification Re: Standards of Telecommunication Service Quality.

1.2) Quality of Customer Service

TUC and DTN must prepare to support the number of customers that will increase from the business merger in order to provide service quality to users not lower than before, such as the number of staff that are sufficient to support the service both in regards of service center and call center staff, as well as the size of the customer service center that can support the incoming and outgoing calls of service users.

2) Network Coverage TUC and DTN must provide a telecommunications network for business operation with 5G technology covering not less than 85 percent of the total population of the country within 3 years and 90% of the total population of the country within 5 years from the date of business incorporation.

4. Mitigation measures for Spectrum ownership/Infrastructure sharing concerns
1. Spectrum holdings

TUC and DTN must comply strictly with the laws relating to spectrum usage in telecommunication business.  (The use of frequency spectrum under Section 41, paragraph four, Section 44/1 and Section 44/3 of the Spectrum Assignment Organization Act B.E. 2553 and its amendments)

2. Infrastructure Sharing

TUC and DTN are required to allow other licensees to lease their own telecommunication networks to operate their telecommunication businesses. and must strictly comply with the rules relating to the use of telecommunication networks of the NBTC.

5. Mitigation measures: Thailand’s Digital Economy Innovation and Digital Divide concerns

1. Network Coverage TUC and DTN must provide a telecommunications network for business operation with 5G technology covering not less than 85 percent of the total population of the country within 3 years and 90% of the total population of the country within 5 years from the date of business incorporation.

2. Provide promotional programs at special low prices for low-income earners and underprivileged people in society and provide thoroughly public relations for the target group.

3. (Digital Divide) Propose a concrete innovation development plan within 60 days after being notified of specific conditions or measures and start implementing the plan within 1 year. 

In addition the meeting agreed to:

1. Reporting on business results under the implementation of the period and conditions received from the NBTC every 6 months for a period of at least 5 years

2. After the business merger, if the NBTC considers or receives complaints that there are acts, behaviors or causes that monopolize or reduce or limit competition in the service, or there is a material change in the telecommunications business causing the specific conditions or measures to be inappropriate or ineffective, the NBTC may suspend, cancel, add or revise specific conditions or measures as appropriate and necessary.

3. The meeting also assigned the Office of the NBTC to discuss 3 issues with the NBTC’s legal advisory sub-committee, namely; The approval of a mechanism for selling shares and power to control the business.. Policy (Divestiture) on the business merger of TUC and DTN in the future and Complaints about the qualifications of the independent consultants. (Finansa Securities)

4. Assign the Office of the NBTC to study the 2018 business merger announcement and the 2006 announcement.

5. Agree on the principle of appointing a sub-committee to monitor and evaluate all business merger and acquisitions according to the 2018 announcements.

6. The Office of the NBTC and the business merger notifier, shall announce to the service users of the specific conditions and measures as approved by the resolution. In order to have an audit and have penalties in case of not doing so, such as a fine in the form of a percentage of revenue or tiers or the revocation of license.


Author: Allan Rasmussen
Managing director at Yozzo. Allan is a MVNA/MVNE/MVNO specialist with hands-on experience from more than 60 projects in both competitive and greenfield markets. His expertise includes business case development, execution, launch and growth strategies. Advisor and consultant to mobile network operators, MVNA, MVNE, MVNO, National Regulatory Authorities, Government Agencies, Broadcast Companies, TMT Industry Associations, Innovation and Investment Banks.
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