21 April 2014

Nigeria: Sharp Decline in CDMA Subscribers Worries Stakeholders

Operators of Code Division Multiple Access (CDMA) have continued to experience sharp decline in subscriber number, while their counterpart operators on the Global System for Mobile Communication (GSM) technology are experiencing steady growth in subscriber number.

The recent statistics released at the Nigerian Communications Commission's website, showed a steady and sharp decline in the subscriber number of most CDMA operators in the country.

From the statistics, the total CDMA subscribers in the country as at March 2013, was 2,703,604, but the number reduced to 2,567,177 in June of the same year. The number further reduced to 2,438,590 in September of the same year, and it again reduced to 2,404,777 in December 2013.

The statistics showed a steady decline of CDMA subscriber number from January to December 2013. In the first and second quarters of 2013, the percentage drop was 5.05 per cent, and in the third quarter, it was 50.01 per cent.

There was a sharp decline in the fourth quarter of the same year, recording1.39 per cent growth.

In January 2014, the total connected CDMA mobile lines was 7.7 million, but according to NCC, the active subscriber number was 2.4 million, an indication that over 5.4 million CDMA mobile subscribers may have dumped their lines and switched over to GSM lines.

The trend has become a source of worry to telecoms stakeholders, who see the steady decline in the uptake of CDMA as competing technology not boding well for service delivery and the growth of the industry.

President of the National Association of Telecoms Subscribers (NATCOMS), Mr. Deolu Ogunbanjo, told THISDAY that the situation was getting worse. He called on government and the NCC to intervene in order to save CDMA operations from total collapse.

The planned merger of Starcomms, MultiLinks and MTS First Wireless that was announced in 2012, had initially brought hope to Nigerians that the CDMA operations will pick up and even compete favourably with GSM. However, the continued delay in the merger process has further worsen the operations of the CDMA technology

The continued delay in finalising the merger process has stagnated the growth of the companies individually.

For instance, the NCC statistics showed that Starcomms had 81,015 subscribers as at March 2013, but the number dropped to 60,627 in June 2013 and in September of the same year, the subscriber number further dropped to 43,716. Again in December of the same year, the subscriber number further dropped to 36,631.

Starcomms, which used to be the largest and most vibrant CDMA operator in the country, started declining in subscriber number following the inconclusive merger with Capcom, which hitherto planned to buy the three CDMA operators and to merge them into a single, and strong CDMA operator.

Though the CDMA market is shrinking steadily, Visafone and 21st Century Technologies have taken advantage of the ugly situation of Starcomms, MultiLinks and MTS First Wireless, occasioned by the failed merger from Capcom, to grow their subscriber numbers.

Visafone for instance, has experience steady growth in subscriber number since 2013. According to NCC's statistics, Visafone had 30,222 subscribers on its network as at March 2013, but the number grew to 31,646 in June of the same year, and 35,443 in September same year.

The subscriber number also grew to 38,190 in December 2013. As at March 2014, Visafone subscriber number shot up to over two million. According to inside source, the company was able to record that much because subscribers from Starcomms and MultiLinks approached Visafone and their old CDMA lines were swapped for new Visafone lines, accompanied with mobile phones.

The statistics on Visafone showed a steady growth in its subscriber number. The same is applicable to 21 Century that is also showing a steady growth in subscriber number in 2013 and 2014, according to the NCC statistics.


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