True-DTAC Merger: CP and Telenor Challenge Regulator

Heads of True Corp and Total Access Communication (DTAC) parent firms claimed that Thailand’s telecom regulator has no power to hinder their mobile business merger.

Although the National Broadcasting and Telecommunications Commission (NBTC) can impose conditions to govern the merger, the regulator can face legal action and be sued in the Central Administrative Court if it rejects the deal.

However, the two companies do not want to get to that point, said Suphachai Chearavanont, chief executive of Charoen Pokphand (CP) Group, the parent of True, and Sigve Brekke, president and chief executive of Norway-based Telenor, the parent of DTAC, at a conference on Friday.

True and TAC have also urged the NBTC to begin drafting measures to govern the deal. Both parties notified the regulator about their merging plan on January 25, Mr. Suphachai, who also chairs True, said.

A current rule by the NBTC requires telecom operators planning to merge to notify their intentions through an official report at least 90 days in advance. The deal was set to close in May but, at the regulator’s discretion, it was delayed due to changes in its board.

After a new board was established in April, the NBTC appointed four subcommittees to scrutinize the merger and held focus group hearings to gauge the deal’s impact.

Informed sources said at least two subcommittees oppose the deal, citing legal and consumer protection grounds.

True and DTAC also face pressure and difficulties, as they must compulsorily comply with a planned share swap by September in line with regulations imposed by Thailand’s Stock Exchange, Mr. Suphachai.

True’s chairman described the timeline as a “serious matter” as it could affect shareholders’ confidence.

Telenor and CP announced that they planned to merge their mobile businesses dtac TriNet and True Move H on November 2022, 2021. Back then, both companies said they would consolidate a new firm set to operate in the telecom industry and technological fields.

Mr. Suphachai insisted that the merger was a “genuinely equal” partnership, arguing that neither company planned to majority control the merged firm.

The shareholding structure and top management’s details can be later determined by both parties over the long term, he added.

Mr. Suphachai also reiterated that the NBTC must impose proper measures to govern the True-DTAC deal to protect the public interest and market competition.

On Friday, True’s shares on Thailand’s Stock Exchange dropped by 0.30 baht or 6.2% to 4.54 baht, while DTAC’s value fell by 2.50 baht or 5.3% to 44.75 baht.