Political-Economic Trends

1. Mergers and acquisition
   • Horizontal mergers: this takes place between firms that are actual or potential competitors occupying similar positions in the chain of production.
   • Vertical mergers: this takes place between firms at different levels in the chain of production (for instance, between manufacturer and retailers). In telecom, an example of such merger will be the merger of a dominant local access provider with a major Internet Service Provider.
   • Other mergers, such as those that take place between unrelated businesses or conglomerates with different types of businesses.
     Acquisition process comes in different forms in the telecom markets: a corporation can acquire certain shares in a telecom or can ‘buy’ over another telecom corporation. For instance, MTN initially acquired certain operating shares in Camtel Mobile in Cameroon recently MTN has won the acquisition bid of Camtel Mobile in a privatization bid, which makes the company the 100% sole owner.
   
   One other trend that is driving the revolution in the global telecom sector is the wave of mergers and acquisition that characterized this sector. This trend has changed the global telecom market enormously. There has been a high rate of merger and acquisition activity in the global telecom industry in recent years (Intven et al 2000: 5-33). Intven et al 2000 note three types of mergers and acquisition:
2. Market integration
   Closely related to issue of merger and acquisition is the nature of market integration in the telecom market. Market integration is the character of business operation in the telecom market, it defines the manner in which one telecom company that operate in one segment of the telecom market extend its operation and integrate other segments of the sector. Market integration has enormously contributed to the revolution taken place in the global telecom market. Two main forms of market integration can be identified in the telecom industry
   • Horizontal Integration: This is when a telecom company extends its service provision to a competitive segment. When a fixed line (voice) operator extends its services into the mobile/cellular service market. This integration could be in a form of shares purchase or acquisition in cellular company or fixed line operator owning a cellular company. For example, Telkom South Africa owns 50% shares in Vodacom, a cellular service provider, while NITEL Nigeria, the fixed line operator also operate a cellular network.
   • Vertical integration: this takes place when a telecom firm in one market level of service provision extends its service to different market level in the chain of a telecom service provision. An example of such integration is a dominant local access provider which also acts as an Internet Service Provider by rendering service in the internet service provision market. For example Telkom South Africa owns the South African Internet Exchange (SAIX). An internet service provider.
3. Transnationalisation
   Transnationalisation in telecom industry is a global trend that is revolutionizing the global telecom market. It is a form of corporate extension and cross-border service extension. Telecom market today is characterized by corporations buying shares in telecom company in other countries or totally setting up a similar company in another country. Examples of this abound in Africa, see table below: