Influence of Mergers and Acquisitions on New Technology Adoption by Mobile Network Operators in Ghana

Abstract

The 1990s onwards recorded a wave of cross-border mobile network operator mergers across the world, including Vodafone Group's acquisition of majority stake in the state-owned Ghana Telecom (GT) in August 2008 and Bharti Airtel taking over Zain Ghana operations as part of its acquisition of Zain Africa in July 2010. The objective of this study was to assess the influence of mergers and acquisitions on deployment of new mobile technologies using two Ghanaian mobile telecommunication companies as case studies. The study adopted a qualitative research methodology involving the analysis of secondary data, mainly relevant news reports and company reports. The study identified five major themes which largely influenced their investment and technology deployment decisions. First, the need for market growth, revenue increase, and brand extension were found to be the primary motives for the acquisitions. Second, it was found that one of the Companies had to deal with political and legal uncertainties that characterised the acquisition of a strategic national incumbent, thus delaying new technology deployment. Third, the analysis revealed that one of the companies again had to embark on far reaching organizational change and restructuring processes in order to reduce cost as well as to position itself favourable for the competitive telecom market. Fourth, the study found that both companies following the completion of the acquisition and ensuing matters being addressed made significant investments to upgrade their network infrastructure and technology. Finally, the analysis showed the perception of the technology, company policy and other factors also influenced the pace of technology deployment. The overall conclusion of the findings is that the acquisitions provided incentives for the case study telecom companies to expand their network infrastructure and deploy new technologies.