CDMA operators could not withstand the tough business terrain in Nigeria

Telecommunications ecosystem in Nigeria is dominated largely by two parallel operating network technologies. They are: Global system for mobile communications otherwise known as G.S.M communications and the Code Division Multiple Access communications otherwise known as CDMA communications. In comparison, it is obvious that G.S.M communications are thriving better than CDMA communications in Nigeria.Take for instance Etisalat that came into the Nigerian market a bit late, they have been able to find their feet, attracting their own loyal customers through unique promos and offers. Of recent it launched its easy flex promo whereby subscribers get up to 300% bonus plus a specified amount of data on all recharges from N300.00 and above. Offers like this has really helped the network to gain grounds and thrive.

However, the success of the GSM network can be attributed to their ability to cover vast areas within a short time while CDMA operators lack the capacity for wider coverage and found it difficult to cope with poor electricity supply, multiple taxation and harsh economic situation of the country. This affected their stability and threatened their very existence. The longer the distance a telecommunications signal can travel, the larger the users it can attract and the more the income it can generate. Most CDMA operators in Nigeria have fewer than a hundred telecommunications mast installations which is barely enough to circulate round. Consequently, their subscribers line is so thin and income generated so tiny when compared with expenses on maintenance, advertisement, salaries e.t.c. No company can thrive in this condition!

Even Visafone communications, a network that stole the heart of many Nigerians, consistently receiving laudable commendations for its efforts keeping the CDMA flame burning and competing favorably with its G.S.M counterpart suddenly threw in the towel to the surprise of everybody. Now Visafone is a property of a successful G.S.M operator which further confirms that G.S.M operators are thriving better.

Starcomms on the other hand was so determined to succeed when it came into Nigeria. But along the line, faced severe business challenges that led to a reduction in its network coverage areas. Consequently, this affected their service delivery and they lost a lot of customers in the process which led to their down fall. Today, starcomms is struggling to record up to a million subscribers line.

Multilinks from inception had never been comfortable with doing business in Nigeria. They never hesitated complaining how expensive doing business in Nigeria was and how low their profit margin had been. They always recall their struggles for survival in this harsh Nigerian business arena. On several occasions they had threatened to quit the country. 


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