DTAC-True merger poses risk to growth

According to a study by the National Broadcasting and Telecommunications Commission (NBTC).

This would result in reduced GDP growth worth between 8.2 billion baht and 323 billion baht, based on the country’s GDP in 2021.

The study was conducted by the NBTC subcommittee charged with assessing the economic impact of the merger. It was presented yesterday at the third public hearing on the merger, organized by the NBTC. This session involved participants from academic fields.

According to the study, the merger could also raise the country’s inflation rate by 0.05% to 2.07%, depending on the degree of collusion.

As for the prospect of mobile service prices after the merger, they could increase by 2.03% to 19.5% if no collusion takes place, according to the study.

Pratompong Srinuan, senior economic expert and acting executive director of NBTC, said the framework of the study focused on post-merger market competition and efficiency. In terms of competition, the study examined the behavior of non-collusive oligopolies and collusive oligopolies.

The study applied two main analytical models – upward pressure on prices and merger simulation – which are essential tools used to analyze merger transactions in Europe and the United States. They can help shed light on the price effects due to a decline in competition.

The study also examined the post-merger efficiencies assumptions by classifying them into three levels – zero, 5% and 10% efficiencies. The efficiency gain refers to the percentage reduction in costs resulting from the merger.

A 10% efficiency gain is most likely from the merger, said Pratompong, who is also assistant secretary to the NBTC subcommittee studying the deal’s economic impact.

Assuming a 10% efficiency gain, post-merger service prices could increase in the range of 2.03 to 19.5% if there is no collusion, increase by 12.5 to 39 .8% in case of tacit collusion and increase by 49.3%245% if a cartel develops.

Pornthep Benyaapikul, a professor of economics at Thammasat University and a member of the subcommittee, said the study showed the merger could reduce the country’s GDP growth by 0.05% to 0.11%. if no collusion takes place.

A reduction in GDP growth of 0.170.33% could be expected in the event of tacit collusion, and a drop of 0.581.99% could occur if a cartel develops, he said.

The inflation rate could increase by 0.05 to 0.12% if there is no collusion, by 0.17 to 0.34% if there is tacit collusion and by 0.6 to 2 .07% if a cartel develops, according to the study.

According to Pornthep, many factors still affect market competition after the merger, including the number of major operators, the comparable size of the players, the similarity of their services and the burdens on new entrants.

Hearing participants expressed concerns about the lack of additional data in the study, including from other players, particularly National Telecom, which owns significant telecommunications infrastructure.

Some said the study did not touch on the top tier players, who now operate popular streaming platforms in the market.

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