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CDMA FORTUNES NOSEDIVE, AS SUBSCRIPTION DOWN BY 1,069,485 LINES IN 2011

By NBF News
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By Emma Elebeke
Indications have emerged that the total number of active telephone lines on the networks of the Code Division Multiple Access, CDMA networks operating in Nigeria has dropped by 1,069,485 lines in 2011.

According to Nigeria Communication Commission, NCC official report, the figure which represents a about 17 percent of the total number is said to have been recorded by the operators within a space of January through October, 2011.

The study has it that the CDMA operators comprising Visafone Communications , Starcomms, Multi-Links and Zoom Mobile lost a total of 1, 069, 485 telephone lines on their networks within the said period.

At the opening of business in January 2011, the CDMA networks had pooled together a total of 6,186,442 telecoms subscriber base from their various networks.

However, the figure kept experiencing consistent decline, slipping to 5,116,957 active lines at the end of October, 2011.

Experts said, the fall in subscriber base represents a loss of an estimated N10bn in revenues that would have accrued to the operators during the period under review.

The calculation is based on the Average Revenue Per User, ARPU in Nigeria currently put at N1000 by industry experts.

ARPU is the financial benchmark used globally by telecoms companies to measure the average monthly or yearly revenue generated from an average subscriber.

According to findings, with an average of N1000 spent by a CDMA subscriber on telecoms services monthly multiplied by the number of a million subscriber that had quit the networks, the operators lose N1bn monthly and this translates to N10bn for the 10 months.

However, while the CDMA operators continue to lose subscribers on their networks, it turned out to be a blessing to the GSM operators, whose subscriber base has continued to swell. This was evidenced by the increase of the subscriber base on GSM networks, comprising MTN, Globacom, Airtel and Etisalat to 93.9 million in October 2011 from 82.6 million in January of the same year, representing an increase of 6.1 per cent in subscriber base.

Over the years, the CDMA networks have been facing hard times, resulting in continual loss of customers on their networks, following their purported inability to compete with bigger players in the GSM segment.

Their challenges, according to authorities in the industry ranges from limited coverage occasioned by limited infrastructure deployment across the country because their underestimation of the Nigerian market, unlike the GSM companies that have their network almost everywhere in the country.

This limitation in network coverage, is said to have discouraged mobile telecoms subscribers from sustaining their patronage to a DCMA line for long. Despite the limitation of technology, inadequate financial muscle and low innovations in terms of offering value-added services to customers, CDMA operators are said to have ignored advice by experts and analysts to consolidate in order to remain afloat.

According to them, the merger idea would enable the operators compete more favourably in the competitive Nigerian telecoms market.