Trouble makes Thai allies.

In an effort to survive the Asian economic crisis, Thailand's two pay-TV companies, the UTV Cable Network and the International Broadcasting Corporation (IBC), have agreed to combine their businesses. The move was prompted by significant losses on both sides, which were due at least in part to high startup costs and investment expenses.

The two companies will retain their respective corporate identities, and the two will not be merged, since they hold separate operating concessions from the government and use different broadcasting technologies. UTV is a cable broadcaster with 250,000 subscribers, while IBC delivers programming to 160,000 subscribers via direct satellite.

While there is no official merger, the joining will result in the firing of at least 900 employees, or 40 percent of the combined staff.

By teaming up, UTV and IBC will eliminate competitive bidding for important basic channels like CNN, ESPN and HBO; they will now have a monopoly on Thailand's pay-TV market. They also hope to be in a better position to negotiate discounts from international program distributors.

The cooperation is unusual in that it allies two archrivals in Thailand's telecommunications industry: Shinawatra Computer, the majority owner of IBC, and Telecom Holdings, which owns UTV.

This un-merger involves no transfer of cash: IBC will buy 86 percent of UTV from Telecom Holdings with 237 million freshly issued shares.