True, Dtac Proposed Merger May Lead To High Degree Of Market Concentration In Thailand Mobile Market, Says Globaldata

Following the news that the shareholders of Thailand’s second and third largest telecom operators True Corp. and Total Access Communication (DTAC) approved the merger of their units: Kantipudi Pradeepthi, Telecom Research Analyst at GlobalData, offers her view:

“The merger would turn the Thai mobile market into a duopoly. GlobalData’s Thailand Mobile Broadband Forecast reveals that True and DTAC held an estimated 33% and 20% of the country’s total mobile subscriptions, respectively, at the end of 2021. The combined new entity NewCo is expected to lead the Thailand mobile services market both in terms of subscriptions and revenue and will surpass Advanced Info Service (AIS) which accounted for a 45% mobile subscription share in 2021.

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“Once approved by regulatory authorities, NewCo is slated to be listed on the Stock Exchange of Thailand in September 2022. It will have a greater capacity to invest in advanced technologies such as cloud computing, Internet of Things (IoT) and artificial intelligence, and contribute to the country’s digital transformation journey. The combined group will also be better equipped to allocate necessary capital and spectrum to build 5G networks and compete with AIS in the 5G service market.

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“While True and DTAC have maintained that their merger would help them provide stronger 5G infrastructure and enable technology-led disruptions for customers and enterprises alike, the proposed deal could still face regulatory hurdles on the grounds that it could turn the country’s mobile services market into duopoly. Thailand’s telecom sector is currently quasi-monopolistic. The merger of True and Dtac could lead to high degree of market concentration and restricted competition, with high chances of mobile tariffs too going up in future.”

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