Recently, it was discovered that the Code Division Multiple Access (CDMA) mobile operators in Nigeria suffered a loss of 1.3 million subscribers within a year according to the statistics from the Nigerian Communications Commission (NCC).
As at December 2010, all the four mobile CDMA operators, namely; Starcomms, Visafone, Multi-Links and ZOOMmobile had 6,102,105 active subscribers. The CDMA mobile operators had 12,132,584 connected lines as at December 2010; they saw little improvement with their connected lines standing at 12,606,542 million in November 2011.
While the CDMA mobile operators have seen their fortune dip, GSM operators, namely; MTN Nigeria, Globacom, Airtel Nigeria and Etisalat Nigeria saw their connected lines grow from 96,648,272 million in December 2010 to 112,333,063 million as at November 2011.
Since 2001, CDMA networks had never had it easy due to a myriad of issues which includes absence of national roaming, lack of deep pocket to pursue rollout, low subscriber base, bad business models and high cost of acquiring state and regional spectrum for expansion. A section of the telecoms industry have called on the government to financially support the CDMA market financially or witness the gradual death of the CDMA players.
The bailout plea followed the disturbing news that some of them were not meeting their obligations in the areas of interconnection fee payments to other operators and the annual operating levy of 2.5 per cent paid to the NCC. The operators want NCC to develop an incentive-driven bailout plan for its members with difficulties in payment of their regulatory dues for the sustenance of the industry growth and protection of ailing networks.
Titi Omo-Ettu, President, Association of Telecommunications Companies of Nigeria (ATCON), said that the situation was so bad that a recent study revealed that about 45 per cent of companies operating in the industry have gone under in the last 17 years.
Mr. Gbenga Adebayo, Chairman, Association of Licenced Telecommunication Operators of Nigeria (ALTON), while calling for active stakeholders’ engagement to promote genuine peer review mechanism between operators and the regulator to actively shape policy, legislative and regulatory frameworks, said that unless NCC engages the operators proactively, the telecoms sector may collapse.
Mrs. Omobola Johnson, Minister of Communications Technology, identified one of the challenges CDMA operators faced as the cost of carrying bandwidth from the undersea cables to the hinterland which is very expensive. “Already, the sector is engulfed in crisis with interconnection fee indebtedness surpassing N6 billion,” she said.
Dr. Eugene Juwah, Executive Vice chairman of NCC, said that he was unaware of the calls for the bailout from the CDMA operators. “There has not been any official request from the CDMA community on any issue. I have always said that if the CDMA operators came together, we would look at it and if we thought that the case they have was genuine then we would forward it to the Federal Executive Council for consideration,” Juwah said.
As it stands, it may take more than courage for the CDMA operators to come forward and ask for financial assistance.
It is now left for them to put forward a proposal that can convince the government to inject cash into their ailing CDMA networks.