Ben Uzor Jr
The dominance of GSM operators
in Nigeria’s highly competitive telecommunications market will continue as
about four million telephone subscribers have abandoned the networks of Code
Division Multiple Access (CDMA) players in the past three years. For sometime,
CDMA operators, also known as private telephone operators (PTOs), have found it
difficult to survive the stiff competition in the industry. Industry analysts
told Benuzorreports that issues revolving around low capitalisation,
poor promotion of CDMA technology, subscribers’ preference for GSM, and
corporate governance have seen the fortunes of these PTOs dwindle over time.
Starcomms, Visafone,
Multi-Links and Zoom Mobile – are all CDMA operators. In the last three years,
the over four million subscribers on their networks also account for 53 percent
of the total subscribers on the networks. Moreover, subscriptions fell
significantly from 7.5 million in 2009, when the networks had the highest
subscriber base, to the current 3.5 million subscribers as at June 2012.
Furthermore, PTOs made significant headway in terms of growth in 2007 and 2008
as they grew their combined mobile subscriber base from 384,315 lines to over
six million during the period. Though this upward trend in subscriber growth
increased to 7.5 million telephone lines in 2009, the subscription growth
trajectory changed swiftly the next year, declining to 6.1 million lines at the
end of December 2010.
Further drop in subscriber
numbers was experienced in 2011 as challenges facing the CDMA operators
increased, making it extremely difficult for them to compete favourably with
their counterparts in the GSM sub-sector. By December 2011, the industry
subscriptions on all CDMA networks had declined astonishingly to 4.6 million
active subscriptions. The downward trend continued in 2012 with consistent
decline in CDMA subscription from January to June, when the Nigerian
Communications Commission (NCC) released the latest industry data. As a result,
with CDMA’s total active subscribers standing at 4.4 million in January 2012,
the figure dropped further to 4.03 million, 4.01 million in February and March,
respectively. In April, May and June, the number of connected and active
telephone users on CDMA networks fell to 3.9 million, 3.7 million and 3.5
million, respectively.
However, statistics from the
regulator showed that though the CDMA operators combined had upgraded their
networks to accommodate up to 17.2 million subscribers, only 3.5 million
telephone lines are active on their networks. This implies that they now have
redundant capacity on their networks, as over 13.7 million lines which their
networks can still accommodate, thereby improving their incomes, are currently
non-existent on their network. Analysts revealed that the CDMA segment have
lost about 53 percent of their total active subscribers between 2009 and June,
2012. However, a wind of change is blowing in Nigeria’s telecoms market which
has rekindled the hopes of CDMA operators, as Multi Links, Starcomms and MTS
look to conclude merger arrangements that would produce a strong network
operator to be known as CAPCOM.
The latest development
experienced a snag as shareholders have filed a suit seeking to stop the
merger/business combination. However, while the CDMA operators have continued
to record poor performance in terms of subscriber base, the GSM companies have
maintained impressive performance building their combined subscribers from
266,461 telephone lines in 2001 to over 102.3 million lines at the end of June
2012. In 2002, GSM operators increased their subscriber base from 266,461
telephone lines in 2001 to 1.5 million. In 2003, the figure rose to 3.1 million
while in 2004, it jumped to 9.1 million.
The GSM subscriptions further
increased significantly to 18.2 million lines in 2005; 32.1 million in 2005;
while active GSM subscriptions swelled to over 40 million in 2006 and further
to 56.9 million and 65.5 million in 2007 and 2008, respectively. By the end of
December 2009, GSM subscriber base climbed to 65.5 million; 81.19 million in
2010 and by December 2011, the subscriber base has increased to 90.5 million.
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