Code Division Multiple Access (CDMA), a second generation telecommunications standard pioneered by chip maker Qualcomm, uses spread spectrum techniques and is globally acknowledged as the better technology compared to Global System for Mobile Communications (GSM).

GSM, thanks to its wide adoption in Nigeria, Africa and indeed across the globe, gained critical mass subscription, out-edging CDMA and became the dominant standard for 2G telecommunications all over the globe and currently moving to 5G. But in countries like America and Japan, CDMA still managed to find a firm footing and they are better for it.

CDMA is preferred as better technology compared to GSM, given its inherent quality in terms of data speed and capacity. There is no gainsaying that telecommunications network providers are seriously focusing on data services hence the revenue shares from voice has reduced, substantially.

CDMA in Nigeria and Why they Failed
It is pertinent to note that CDMA as a technology managed to find a use case in Nigeria at the time it stood for wired landline connections. Recall, the first set of Private Telephone Operators (PTO) in Nigeria offered services via the CDMA technology. Multi-Links Telecommunications Limited was the first to begin operations in 1998 while the likes of VGC Communications, Intercellular, Mobitel and EMIS were the preferred networks of many Nigerians in the early days of the telecom revolution.

Then, a particular GSM entrant had exorbitant call rates with SIM cards being sold as high as N40, 000 upon entry. But, a number of issues worked against the spread of CDMA networks since the GSM licensing in 2001.

The inability to have the same interconnect charges and failure to convince investors in the interconnect space, that, since CDMA required lesser spectrum than GSM, they should be allowed to provide full fledged CDMA services on the spectrum they got for WLL. That is just one case out of many. Well, the recent acquisition of Visafone by MTN Nigeria may have sounded the long awaited death knell on CDMA operators in Nigeria.

Yes, MTN acquisition of Visafone, meant the services could be spread to a wider coverage area, using the spectrum (800GHz) on fourth generation equipment (4G LTE). However, it may not be yet uhuru. For instance, can you compare subscribing to CDMA broadband service for a year with that of the GSM? While the CDMA helps to ensure stability in your business which depended largely on internet access these days, tethering your phone in order to GSM phone internet connection would bill for every kilobyte and has proved to be a very expensive option. CDMA would have saved us some headache in this time of recession.

CDMA leverages several transmitters and can send information simultaneously over a single communication channel. It uses spread spectrum technology allowing many users to occupy the same space time and frequency allocations in a given band/space. Unlike GSM, CDMA does not assign a specific frequency channel or time slot to each user but instead individual conversations are encoded with a pseudo-random digital sequence.

It is widely acknowledged CDMA showcases better technology compared to alternative technologies such as GSM and is also believed to be more cost effective for operators as the CDMA capacity advantage leads to lower tariffs. Had it this been the case, the Minister of Communications, Barrister Adebayo Shittu and his lieutenants at the Nigerian Communications Commission (NCC), probably, would have had a safe-sail in pushing for increased data-floor which generated much debate late last year.

During its dominant era, the CDMA operators unleashed excellent voice clarity for both local and international traffics; clearly identified lines and locations, while their data quality were often been described as first rate.

Many are still at lost over the causes of CDMA demise in Nigeria. As we speak, they are at the verge of extinction with less than 1.5million subscribers in a market where there are over 216million connected telephone lines, according to NCC statistics, with about 154million active lines. Out of the number, GSM operators account for about 152million lines. Fixed wired/wireless operators have less than 200,000 lines.

A close look at the Nigerian Telecommunications industry, as an industry analyst would put it, “one can deduce that the business model of the average Nigerian CDMA operator made it unable to compete on the same platform with GSM service providers. Almost all the CDMA operators where locally developed, with no international investors or technical partners involved in the management of their service”.

This is backed up with the fact, GSM providers- MTN, Airtel (formerly Econet, Celtel), Globacom and Etisalat due to their size and international affiliations were able to attract financing and support from foreign banks and international finance brokers. The CDMAs’ woes reached the crescendo as, financial institutions repulsed by the companies’ stinking financial records, turned their backs, preferring to fund GSM operators with proven corporate practice.

Another factor that could have worked against the CDMA operators could be there network spread, most of them were located in urban cities like Abuja and Lagos, extending their services to other regions or cities meant going back to the regulator for additional spectrum which usually came at a cost. The guidelines on their licensing hindered their spread.

Others believe that market forces like stiffer competition and the tough business climate in the country made co-location impossible in the early day thus operators had to build and maintain their telecom infrastructure across the country. Unfortunately, the industry was skewed against infrastructure sharing, by that; they shot themselves in the leg. This singular act, it is believed, signaled the present NCC’s InfraCo arrangement, where issue around co-location is industry approved.

Simply put that the inability of CDMA operators to spread massively in the beginning compared to their GSM counterparts stifled innovation, and formed the major impediment to their growth.

Way Forward
The regulator seems to have created a monster (monopoly) that will, sooner or later, turn against the market. How do we mean? Pundits predicted that in the near future, mobile operators on different platforms including GSM and CDMA will migrate to the Long Term Evolution (LTE). With LTE operators will get a speed of up to 37.5MB per second on the device as against the 3.1MB that is currently available on the 3G networks.

It is no longer news MTN acquired Visafone to access the 800 MHz spectrum band, which enabled it launch 4G LTE services. Recall, in 2007, VGC Communications Limited (VGCCL), a Lagos-based Private Telephone Operator licensed by NCC to provide cabling and radio, telephone services nationwide and had laid extensive fibre optic cables, and Internet service provision, was bought by MTN Nigeria. In other words, MTN is in a position to be a single dominant player in the voice and data markets in Nigeria’s telecommunications industry.

The question in the minds of many in the light of recent developments is ‘how will the CDMA sector thrive if it is not proactively encouraged by the NCC to do so?”

There could be hope for CDMA, especially, if they are encouraged through the Universal Service Provision Funds (USPF) to deploy services in rural areas, because 3G technology performs better on CDMA. It will be a double-win for the government which is pushing for financial inclusion at the rural areas.

The CDMAs with best spectrum to reach the hinter lands can be very valuable in that regard. For those that will be stationed at the urban centre, they can help power the Point of Sale (POS) Terminals, the key driver of the Central Bank of Nigeria (CBN) cashless policy initiative; it works better with the CDMA technology than with the GSM technology.

Thus,  is it expected the government through the NCC can give the CDMA operators a favourable licensing environment so as to continue operations, because there have been at least six CDMA operators in Nigeria from Multi-Links to Starcomms who have either exited the market or folded up citing unfavourable business conditions as a cause. It is heartbreaking that in 2001, there were 12 CDMA operators in the country and at 2016 none is viable. Remember, the death of a CDMA operator implies job loss, revenue loss to the nation and in a move towards monopoly.