A point of sale terminal (POS terminal) is an electronic device used to process card payments at retail locations. A POS terminal generally does the

Is there a renewed battle between GSM and CDMA technologies in Nigeria?

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A point of sale terminal (POS terminal) is an electronic device used to process card payments at retail locations. A POS terminal generally does the following:

1. It reads a customer’s credit or debit card and uses wireless technology to check whether the funds in the card account are sufficient.

2. It uses wireless technology to debit the customer’s account and credit the retailer’s account.

3. It receives feedback wirelessly so as to record the transaction and print a receipt.

In Nigeria, the main wireless technology used by POS is GSM data, otherwise known as GPRS. Remember GPRS? It is second generation (2G) data from the early 2000s.

The Guardian has a report about how POS terminal operators in Nigeria are switching from GSM-based connectivity to CDMA. According to the report, this switching of technologies is because of the limited transmission capacity of GPRS compared to CDMA.

This limited transmission capacity of GPRS often results in failed transactions. I have no problem with that. What I am wondering about is why CDMA is the technology being switched to. Here are a few facts:

– globally, CDMA is dying off. There are very few CDMA networks left in operation. The US is one of the few countries still running large CDMA networks.

– in Nigeria, CDMA is all but dead. The last man standing is Vodafone with both a small geographical and subscriber footprint.

The above means that CDMA PoS terminals are not in great production any more and so will be more difficult and more expensive to obtain and maintain. It also means that deployment will be limited to certain locations where CDMA coverage is available.

Meanwhile, despite the touted claims of CDMA’s superiority to GSM data (GPRS), GSM networks have evolved into faster technology, namely UMTS, WCDMA, HSDPA, HSPA, etc. In other words, 3G and above. Even in the US, the CDMA networks have adopted 4G LTE which is more compatible with GSM for high speed data.

Why not switch POS transactions to these newer GSM-based technologies instead? GPRS is so 2005 and truly frustrating to use in today’s world of fast internet. Even basic 3G is extremely slow by today’s standards.

Or perhaps the references to CDMA in this report are actually a reference to WCDMA? If so, why not simply say that POS terminals are upgrading to 3G technology?

But CDMA? A renewed battle between GSM and CDMA is a fight whose outcome we know already.

You can read the Guardian’s report here.

PS: Industry persons are aware of the fact that WCDMA is based on CDMA technology, so 3G GSM is built on CDMA technology. Confused? Yes; it can be confusing. Just bear in mind that as far as terminologies go, advanced 3G GSM isn’t referred to as CDMA. It’s called WCDMA.

4 comments

  1. Edit: “Visaphone.”
    There’s no Vodafone in Nigeria. There’s Vodacom Business, which is offering VSAT, and Point to MultiPoint Broadband internet, and Wireless M2M connectivity. But, they do not operate anything close to a CDMA or GSM network.

  2. To clarify all a little, we had 2 major evolution paths after digitization of voice communications, that’s the 2G or 2nd generation telecoms. One was GSM and the other was IS-95. These two further evolved and d dudes that pushed for them also proposed their evolved forms as 3G or 3rd generation technologies. GSM was to evolve to WCDMA/UMTS and IS-95 to CDMA2000. Both promised improved data rate to cater for new trends in user demands. 2G had in-between evolution from GPRS to EDGE before WCDMA came. Current 2G POS use EDGE at best, and you rightly said that’s slow. However, I believe the CDMA POS would use CDMA2000 which was to kinda contend with the original WCDMA/UMTS. So in a sense, its far better than EDGE as it is a true 3G technology. WCDMA/UMTS however left it behind n sisters it by evolving to HSPA. But for low volume bursty transmission required by POS, CDMA2000 is more than sufficient.

    Summary: GSM/EDGE TO WCDMA/UMTS. IS-95 TO CDMA2000. Regular POS use 2G (EDGE), the other one would use 3G (CDMA2000). WCDMA/UMTS (another 3G tech) evolved to HSPA,and then to LTE and then LTE-Advanced(4G).

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