2 April 2013

Nigeria: CDMA Crisis - 1.14 Million Subscribers Dump Lines in 12 Months

The crisis rocking the mobile Code Division Multiple Access (CDMA) business has continued to escalate as 1,140, 865 million active subscribers on the networks have dumped their lines for those of Global System for Mobile Communications (GSM) in the last 12 months according the latest statistics from the Nigerian Communications Commission (NCC), the regulator of the telecommunications industry.

Active CMDA operators in the market include Visafone, Multi-Links and Starcomms while ZOOMmobile packed up in the first quarter 2012. Two years ago, Telkom South Africa pulled out of the Nigerian mobile CDMA market after it sold 100 per cent stake in Multi-Links Telkom which it completed its acquisition in 2009 for $400 million to Helios Towers Nigeria for $10 million in controversial circumstances.

According to the latest figures from NCC, mobile CDMA operators' subscriber base plummeted from 4,031,820 million in February 2012 to 2,890,955 million in January 2013, leaving the CDMA business unsustainable. CDMA networks have continued to record decline in the subscriber base while GSM operators have continued to record subscriber growth from 92 to 111 million within the same period.

CDMA operators lost 1.3 million subscribers between December 2010 and November 2011. By December 2010, the four mobile CDMA operators namely, Starcomms, Visafone, Multi-Links and ZOOMmobile had 6,102,105 million active subscribers.

Already, the Nigerian telecom sector is engulfed in crisis with interconnection fee indebtedness surpassing N20 billion with CDMA operators and Nigerian Telecommunications Limited (Nitel) being the biggest debtors. Many of the operators will see their monthly average revenue per user (ARPU) dwindle starting from this month with the new voice tariff approved last month by NCC.

Mr Gbenga Adebayo, Chairman of the Association of Licenced Telecom Operators of Nigeria (Alton) said inability of the CDMA operators to have a level playing ground at the advent of GSM service put the operators in a tight situation coupled with lack of access to huge investment funding among other challenges CDMA operators face.

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