Is CDMA On The Way Out In Nigeria?

Before the advent of GSM mobile services in Nigeria in 2001, CDMA services (fixed and mobile) had been in operation. Multilinks was the first private company to roll out CDMA fixed wireless services on our shores back in 1997.

Even with the introduction of GSM in 2001, CDMA was still the preferred choice for a large majority of Nigerians. This was especially because of the astronomical tariffs that GSM services offered then.

Today, the story is different. CDMA subscription is going down, along with its fortunes. Reports from NCC show that CDMA networks operating in Nigeria dropped by 1,069,485 lines from January to October in 2011. That is a 17 percent drop.

The CDMA networks comprising of Visafone, Starcomms, Multilinks, Zoommobile opened business in January 2011 with a total number of 6,186,442 subscribers in all.

There Was A Rising Demand Once…

In 2008, it was reported that a survey was conducted in Abuja. This survey showed that there was a growing demand for CDMA despite the domination of the market by GSM technology.

Affordability of CDMA phones and clarity of communication when compared with GSM where cited for this rising demand. According to telecommunications consultants, CDMA technology has the capacity to provide quicker transmission of data and internet than GSM.

…Then The Killer

GSM has been fished out as the killer of CDMA in Nigeria. According to Mobitel’s boss, the pervasive nature of GSM and its allied data technologies like SMS, GPRS, EDGE, HSPA, all contributed to the decline of CDMA in the country.

While CDMA has being losing subscribers, GSM networks comprising of MTN, Globacom, Airtel, and Etisalat, have gained a subscriber base of 93.9 million at at October 2011 as against 82.6 million in January 2011.

CDMA networks are also losing money as the drop in subscribers represents a loss of an estimated N10bn in revenues that would have accrued to the networks during the period under review. This figure was calculated using the Average Revenue Per User ARPU which is pegged at N1000 in Nigeria by industry experts.

Is this the beginning of the end of CDMA in Nigeria? Only time will tell.

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16 comments

  1. The decline is due to the inability of CDMA companies to offer competitive prices coupled with the versatility of gsm nectwork….

  2. I remember these CDMA guys and their negative billing (Intercellular to be precise). Outrageous!!

    And then the hardware developed faults to which there seemed no way they could fix it . Lost my kind the moment Econet Buddie debuted.

  3. The decline in d subscriber base of CDMA networks is as a result of dearth of creative and innovative ideas in this sector.

    While CDMA operators are doing well in d USA and UK and provides a viable and sometimes better alternative in these countries,their Nigerian counterparts are not investing adequately in state-of-the-art infrastructure.

    Everywhere CDMA thrives its bcos they’ve focused on a particular section of the country and provided a quality service better than d GSM operators.Long and short is CDMA networks should specialize.

  4. I still believe its a management issue. Those companies are not properly managed.

    Verizon Wireless is competing favorably with AT&T in US.

    Someone should please tell this CDMA guys to go get BlackBerry, and other smartphones that have CDMA versions, they should go partner with CDMA operators performing well in other countries and stop putting the blame on GSM.

  5. CDMA used to hold some edge in pricing and call clarity but the GSM operators seem to have caught up in these areas and now have overtaken the CDMA operators in these areas too. I acquire a Visafone with the line (RUIM) sometime in late 2010 when they were offering a call rate of N17/min with a daily subscription fee of N20, I dropped the phone the moment GSM operators started better offering deals. The line is now expired and I’m ready to replace it if they come out with a competitive price to challenge the GSM operators.

    They are blaming GSM operators but what I understand is that they are blaming competition. If they must survive, they just have to compete at least in call tariff and if they can’t do that, then it is bye to CDMA operators.

  6. If they must survive, they just have to compete at least in call tariff and if they can’t do that, then it is bye to CDMA operators.

    I doubt if the few remaining ones will be able to compete on price.

    Too many of them are currently just struggling to stay alive, and being acquired left, right and centre..

    MOST CDMAs just do not have the coverage – economies of scale- to take on the GSM companies on voice.

    Data is where they can give the GSMers GOOD competition..

  7. “Data is where they can give the GSMers GOOD competition”

    Very true. But unfortunately, they are also messing up in that sector. Imagine me taking out a 3 month data subscription with Starcomms and couldn’t use the data for a total of one week throughout the 3 month duration. Very poor & slow data services when available at all.

    These CDMA guys are just not serious and not interested in improving their services. The only door open to them in this country is the Exit Door. I say good ridiance to a bad rubbish.

  8. Imagine me taking out a 3 month data subscription with Starcomms and couldn’t use the data for a total of one week throughout the 3 month

    Eeya !

    I have had such horrible data experience with these CDMAs in the past – that i would no longer touch any of them with a long pole. Not even on voice!

    Wheras the gsm operators are not saints-themselves- I would say i have got COMPARATIVELY better service from them, over the years.

    From the days of CellCom to InterCellular, from MuktiLinks to Starcomms, Reltel to Visafone it is one tale of woe to another.

    I have a friend running a cybercafe. He has tried out Starcomms, visafOne, mulilinks, DirectOnPC. He is now on Mobitel. All in about 8 months.

  9. If the CDMA provider still charge around N30 to GSM networks what do you expect. I remember when starcomms drop the call to N18 to GSM though on condition then nearly everybody in lagos own one. As at now nearly all the CDMA charges around N15 to their own network, while GSM with wider coverage and better service charge same or less to all networks. Let them reduce their tariffs to N10 per minute to all network and see if we will not go back to it.

  10. I think the better option for their survival is quality instead of price drop. Once the subscribers know that they will get value for their money,they will patronise them. The problem in the GSM sector is what they should strive to provide solution too. Stable and efficient network.

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