Editor’s Note: Oyek Dan is passionate about economics and technology, sees data as the meeting point of these two ends with a vested interest in how this interaction can best be protected. Hence, data security at the front and back end. You can follow him on Facebook, Twitter, LinkedIn, and Blog.
CDMA is a digital wireless technology that, using spread spectrum technologies, allows many users to occupy the same space, time and frequency allocation in a given band – thus allowing multiple users share the airwaves simultaneously unlike alternative technologies such as the GSM.
Greater spectral efficiency yields greater capacity where greater call volume and greater data throughput, if properly managed, can lead to reduced tariffs for voice and data services. A spectrum in a given sector can give nearly three (3) times the capacity allowance of GSM when using CDMA.
This has, however, not been the case in Nigeria as evidenced in the CDMA segment of her telecom sector. A quick peek into the history of this sector in comparison with its more vibrant competitor, the GSM, brings up some interesting facts.
At first, CDMA operators were granted regional based licenses unlike their GSM counterparts who were issued an open license upon their entry in 2001. As a result, while GSM operators could operate anywhere across the country, CDMA operators were limited to regions and had to purchase more spectrum every time they wanted to penetrate a new region. Expensive and cumbersome, right?
Next, there was the non-existence of the Unified Access Service License (UASL) for CDMA operators until late 2006 when the first UASL was issued, finally giving CDMA operators the privilege of national roaming. Prior to that time, all calls were regional, unlike the GSM operators who had unlimited national access from the onset!
And then, to cap it all, some years down the line, the NCC decided not to release any more spectrum for 5 years. So even if the CDMA operators had found a way around the past hurdles, they were stuck because there was no way to get any more spectrum till the year 2015 when the next official sale of spectrum would be commissioned.
All these, and many more, have led to a moribund segment in our telecom industry and in under ten years, we have the few CDMA survivors trying to survive the political, economic and market situation unique to this sector.
It is out of these ashes that a phoenix arises and a beacon of hope seems to shine upon the sector. This phoenix is CAPCOM, a CDMA operator to be born out of the injection of about $200million into the merger of Starcomms and Multilinks with MTS, all old players in the Nigerian telecom sector. To be owned by MBC (53%), Middle East Capital Group (25%), Helios (11%) and a number of Nigerian companies such as AMCON, CAPCOM is “set to merge the assets of Multilinks and MTS with Starcomms, thus forming a big and strong single CDMA operator …with focus on broadband delivery at its full capacity”.
With each of the merging operators already having their pre-assigned spectrum the simultaneous consolidation would create a single LTE broadband operator with 20MHz of bandwidth which is double the threshold NCC currently offers to any other operator in the country. This would position CAPCOM as the market leader in high speed broadband service until 2015 when all other operators would be back in the spectrum purchasing business.
With the support of the government, the goal of controlling 70% of the data market in Lagos will be highly feasible and will also present an extraordinary opportunity to target SMEs, households and consumer segments of the market.
Unfortunately, funding and mismanagement have always been the bane of many projects in Nigeria. Considering the high cost of deploying bandwidth and data from the undersea cables to the areas of need, one can only hope that the new management, under the proposed leadership of Stefan Allesch-Taylor (an experienced investor), will have the corporate strategy and skill set needed to maximally utilize every bit of funding injected into the consolidation and that an aggressive expansion policy would be adapted before stiff competition arises in 2015.
[image via Flickr/ indi.ca]