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25 Nov 2005

Industry

M&A: The Thai Telecommunications Business Trend

There have been considerable changes in the landscape of the global telecommunication industry, recently. Business mergers and acquisitions (M&A) among domestic telecommunication companies with foreign firms have taken place in several countries, partly driven by intensified competition in this sector. Characteristics of such competition include that it is rather dynamic in keeping pace with rapid technological changes, is competitive in pricing, and that it has become borderless, resulting in capital movements and acquisitions by offshore companies. Moreover, it has been projected that with the rapid growth recorded over recent years, the telecommunications industry is expected to post slower growth and declining turnover in the future.

As for Thailand, although mergers may benefit the telecommunication business and pave the way for more efficient use of available resources, business mergers tend to create less competition in the market, wherein mergers resulting in only a few players may lead to monopoly; thus directly affecting consumers. However, mergers can benefit consumers when there are preventative safeguards against long-term monopolistic practices, or if there is a supervisory body responsible for regulating and promoting competition in the sector. Over the long-term, mergers in the Thai telecommunications business will be in line with international trends. Fierce competition, rapid technological changes and offshore capital movements will be key drivers for these mergers.