On Their Reverse Gear

Fri, Jan 25, 2013

By publisher

3 MIN READ

The rapid increase in demand for GSM lines adversely affects the subscriber base of the Code Division Multiple Access operators

|  By Pita Ochai  |  Feb. 4, 2013 @ 01:00 GMT

THE rapid growth of the telecommunications sector in Nigeria, is yet to permeate the Code Division Multiple Access, CDMA, otherwise known as digital cellular technology phones. While the demand for active telephone lines in the Global System for Mobile Communication, GSM, has been on a sharp increase, that of CDMA has been on the decline. According to the subscriber data of the Nigerian Communications Commission, NCC, the total active subscriber base at the end of October 2012 was 109.4 million. The figure shows a 2.1 million increase of active telephone subscriptions from September to October 2012. As at September 2012, the active total subscriber base was 107.3 million.

An analysis of the data shows that the growth in the subscriber base was only experienced in the GSM sector. According to the statistics, while the GSM operators, including MTN, Globacom, Airtel and Etisalat increased their combined subscriptions from 103.6 million in September to 105.9 million in October 2012, the CDMA operators such as Visafone, Starcomms, Multi-Links, and Zoom Mobile experienced a decline in their subscriber base from 3.2 million in September to 3.1 million in October 2012.  Like the trend in the CDMA operations, the subscription base of wired and wireless networks also declined from 474,345 lines to 454,644 within the same period.

The poor performance of CDMA operators in the industry has raised the fear that their GSM counterparts could wipe them out of the Nigerian market in the nearest future. In June last year, when three of the CDMA operators started merger talks, subscribers of the network were relieved that there was hope of survival of the none-GSM operators. Consequently, Starcomms, Multi-Links and MTS Wireless, had agreed to merge to become more competitive in the industry. But the merger is yet to yield any fruitful result.  Currently, the CDMA operator that has the highest subscriber base in the country is Visafone with about two million lines, whereas, the lowest subscriber base GSM network is Etisalat with about 14 million active lines. Etisalat came into the Nigerian market about three years ago.

Grace Hammed, an operator of business centre, said that she had used a CDMA line for three years before she abandoned it for a GSM line. Her reason was that the CDMA line later became expensive to use especially when calling GSM lines. “When you make on-line calls to a CDMA, it is actually cheaper than GSM, and an off network call with CDMA to GSM is very expensive. The issue is that I don’t have much CDMA contacts; so I spend more in making calls to my GSM contacts. That is the reason I dropped my CDMA line for a GSM line,” she said.

For Adikwu Musa, a trader, the poor telecom services of the CDMA made him to stop using his CDMA line two years ago. To him, the evidence of call drops and the inability to connect to calls happen more in CDMA networks than in GSM. Gbenga Adebayo, chairman, Association of Licenced Telecom Operators of Nigeria, ALTON, attributed the dwindling nature of CDMA to the high cost of doing business in the country. To him, each of the operators spend millions of Naira on security of facilities, power generation, and pay multiple taxes to different levels of government in the country. “The total money spent on power and other infrastructures can be used in network expansion for the operators,” he said.