Since liberalization of the Nigerian telecommunications sector in 2001, the sector has unarguably become the most competitive in the entire sector of the economy. The four major GSM operators: MTN, Airtel, Globacom and Etisalat have since dominated the stage claiming over 90% of the entire market.
This is against the usual tradition when the Code Division Multiple Access, CDMAs and then national carrier, NITEL dominated the stage.
Today, the CDMA market which comprises players like MultiLinks, Reltel, Starcomms, GTE, Intercellular,and Visafone is today struggling to find its fit with les than three players in the ever competitive market already overtaken by the GSM operators.
The declining fortunes of the sector includes: falling average revenue per user, increase in the cost of operation, sharp drop in the subscriber base.
However, with the recent stakeholders approval of $210 million investment into the new bigger Starcomms by the CAPCON limited, it appears Starcomms is now ready fight a good share of the market.
The approval followed a court ordered meeting of the shareholders held in Abuja recently.
The company at the meeting also received 100% support of its shareholders present and voting at the AGM, on the various special resolutions authorized the Private Placement of 662.55 million new Starcomms shares to Capcom Ltd and related matters.
Capcom Limited is a special purpose vehicle established in 2012, for the acquisition of Starcomms shares and related transactions, with money raised from investment funds, hedge funds, family offices and industry partners around the world with years of commercial experience of emerging markets.
Its investors are interested in creating a national Broadband internet champion for Nigeria and have assembled an experienced group of telecommunications professionals as the new senior management team and an outstanding international Board to be the Directors of Starcomms on completion of the transaction.
Starcomms' Interim CEO, Olusola Oladokun said the company had received the necessary shareholder support for all matters relating to the proposed US$210 million investment by Capcom into the Company, saying that the shareholder approvals at the meeting would now require the High Court's ratification and the transaction thereafter remains subject to a number of conditions precedent as outlined in the Scheme Document including but not limited to final regulatory approval from the NCC, NSE and SEC.
"We are delighted that our shareholders have supported the Board's recommendation to approve the investment by CAPCOM and are extremely pleased that, subject to a number of conditions precedent relating to the overall transaction, Starcomms can look to the future with hope.
"The capital injection combined with the injection of new spectrum and the CDMA assets of Multi-links provides a sound base for continued operations as well as enabling investment in new technology that will position Starcomms for the future in a very exciting space in the market."
"Overwhelming approval from shareholders is a strong endorsement of our proposed business model for Starcomms. We believe that the combination of Starcomms' and Multilinks' existing infrastructure and customer base with access to 20MHz of spectrum and the latest 4G LTE technology positions the company perfectly to be at the forefront of Nigeria's data revolution. We look forward to rolling out the business model and to a bright future for Starcomms' customers and shareholders," he added.
Reacting to the challenges of the CDMAs in the sector, the National President of National Association of Telecoms Subscribers of Nigeria, NATCOMS, Mr. Deolu Ogubanjo attributed the declining fortunes of the Code Division Multiple Access, CDMA operators in the country to increased taxation by the Nigerian Communications Commission, NCC.
Olubanjo said that the attempt by the regulator to equate charges for CDMA operators tax with that of GSM operators from to N5 to N10 in 2006, eventually resulted into major albatross of the CDMS operators.
He said this situation is not sustainable anywhere in the world, as the CDMAs are usually classified as land lines and as such should be treated as such with lesser charges, to enable survive and remain competitive in the market.
He berated telecom operators for not offering poor quality of service to Nigerians and insisted that the regulator should compel the operators to pay for poor services by way of paying compensation to subscribers.
The NTCOMS President condemned the attitude of some state governments, which he said is inimical to the growth of the telecom industry by way of imposition of multiple taxations. This he said is antithetical to investors and urged them to abolish unfriendly laws which according to him stagnate growth in the industry.
On number portability, Ogubanjo urged NCC to speedy up action to be able to realize the goal in the first quarter of 2013 as promised by the regulator. This he said, would not only strengthen competition among operators but would offer subscribers the opportunity to make choice, especially during down times.
The NATCOMS President also accused the National Assembly of foot-dragging the passage of the telecoms infrastructure bill with them, which he said must be seen as part of national critical infrastructure for citizens and host communities to realize the need to protect them.
He noted that telecommunication had become so imperative in human life that it has become an indispensible in the transaction of day to day activities, including saving of lives.
In a recent Broadband Forum, industry leaders identified multiple regulation, high cost of power generation, lack of access to funds, high cost of spectrum, right of way as part of challenges facing the industry.
However, the Minister of Communication Technology, Mrs. Omobola Johnson, who acknowledged the challenges said the matter would be addressed by the proposed bill before the National Assembly.
The minister said the current level of interconnect indebtedness in the industry is unacceptable and has responded by modifying existing relations.
According to her, the new policy is expected to make it sanction-able for operators to avoid paying their bills as at when due and this she said will come into effect in the first quarter of 2013.
The Executive Vice-Chairman NCC, Dr Eugene Juwah, also at the event said the Commission had embarked on re-planning the 800MHZ and 700 MHZ bands for LTE, while also re-farming the 2.5GHZ band as part of its plans to create a more level playing ground and make the market competitive.