Duo cites previous mergers in support of the move
True Corporation and DTAC logos are seen in a department store in Bangkok. (Reuters photo)
True Corporation and Total Access Communication (DTAC) hit back and denied allegations of disrespect for the authority of regulators made by the head of their main rival, Advanced Info Service (AIS).
Earlier this week, Somchai Lertsutiwong, chief executive of AIS, insisted that the National Broadcasting and Telecommunications Commission (NBTC) had the legal power to approve or reject the True-DTAC merger.
True and DTAC said yesterday that mergers in Thailand’s telecom industry have been carried out consistently and continuously.
They cited at least nine merger cases that the NBTC had considered pursuant to the 2018 NBTC notification in issuing resolutions to acknowledge receipt of notification of such mergers.
“Since then, it has never decided to ‘approve’ or ‘disapprove’ of mergers and to adopt the 2006 NBTC Notice when reviewing merger cases. We believe the NBTC will abide by its principles of fairly and will apply the same standards as in previous merger cases without discrimination when considering the merger of True and DTAC,” the statement from True and DTAC read.
APPLES AND ORANGES
Mr. Somchai compared the NBTC to the central bank in terms of authority and argued that when banks express an interest in merging, they must first obtain approval from the central bank. The same goes for energy companies.
The AIS chief also accused True and DTAC of failing to submit any letter requesting NBTC clearance and claimed that, meanwhile, the True and DTAC chiefs continued to argue that NBTC had not no legal authority.
However, True and DTAC said it is inaccurate and misleading to refer to laws and regulations applicable to other industries to telecommunications mergers. This is because each regulated industry has a specific regulatory body and regulations to oversee mergers.
“For the telecommunications sector, the NBTC has the power to impose specific measures pursuant to NBTC Notice 2018 which is a specific regulation applying to mergers in the telecommunications sector. True and DTAC have fully complied with all procedures required under the proposed merger both governed by the NBTC and the Companies Act 1992,” the two companies said.
SUBJECT TO DIFFERENT RULES
As for the question posed by the head of AIS, asking why those behind the True-DTAC deal think they don’t need NBTC approval. When AIS announced it would acquire Triple T Broadband (TTTBB) and Jasmine Broadband Internet Infrastructure Fund (JASIF), AIS submitted its application for approval to NBTC, he said.
True and DTAC responded that their mergers and AIS’s acquisition of 3BB are not comparable because each is subject to different NBTC notifications.
They stated that the acquisition of 3BB by AIS is covered by the 2006 NBTC notification because it refers to the acquisition of shares or assets of another licensee, which requires the prior approval of the NBTC .
However, the True-DTAC merger should be viewed in accordance with NBTC Notice 2018 which specifically regulates the merger of telecommunications licensees or their controlling persons.
“The 2018 NBTC Notice has repealed the 2010 NBTC Notice. Therefore, referring to the 2010 NBTC Notice as a rule applying to mergers creates confusion because the 2010 NBTC Notice is no longer in effect,” the statement said. .
RESPECT THE LAW
Section 8 of the 2006 NBTC Regulations provides that the NBTC may prohibit commercial participations or impose specific measures to prevent or suspend commercial operations, acts or conduct which monopolize or lessen or limit competition in the services of telecommunications.
A 2010 rule created by the National Telecommunications Commission (NTC) required merger agreements to be approved by the regulator. The NTC was the telecommunications regulator before the establishment of the NBTC.
This authority was repealed by an NBTC regulation in 2018 which allows those wishing to merge to notify the regulator only to seek its approval.
True and DTAC ensured that the companies and their major shareholders conducted their business in strict accordance with the principles of corporate governance and ethical business practices, including treating business partners and competitors with respect, adhering to the pillars of fair competition and by complying with laws and regulations in all jurisdictions in which they invest and operate.
“We are confident that the new technology company resulting from this merger will deliver greater benefits and values to consumers, businesses, society and support the country’s sustainable development.
“The new technology company will allow Thailand to take advantage of new technologies such as artificial intelligence, 5G and the Internet of Things, and to provide new products and services through partnerships with global platform companies” , the statement concludes.