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CDMA Operators Battles for Survival amidst Low Revenue

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The number of active telecommunications subscribers on the various networks operating in the country as released by Nigerian Communications Commission for the second quarter of this year indicated that Global System for Mobile communications (GSM) operators have continued to make impressive additions to subscribers on their networks compared to Code Division Multiple Access (CDMA) operators.
In the report CDMA operators recorded a decrease on the subscribers to their network from 9,115,165 in April to 8,658,318 as at June this year. But, GSM operators within the same period recorded an increase from 58,063,300 to 59,194,972. The implication of this is that in spite of different network expansion plans embarked upon by major operators in this space as well as promotions, Nigerians still prefer talking on GSM platform.
The issue that arises, is how can operators in this space survive in terms of competition with GSM operators bearing in mind the harsh economic downturn facing the country? This situation may have informed the recent promo embarked upon by some operators on the CDMA platform to shore up their subscriber base. Visafone and Starcomms have launched their promo campaign while Multi-Links Nigeria CommunicationsWeek gathered is planning a similar promo. In the Visafone ‘Enjoy the N0.00 advantage’ new subscribers to Visafone network will only need to purchase and activate a Haier FM phone for just N3, 333 or a Huawei C2802 model for N2, 222. The subscriber will in turn get back the full cost of buying the phones in the form of free airtime worth N3, 333 and N2, 222 respectively in three months.
More so, a subscriber is expected to use at least N200 over a 30 day period to get N1,045 worth of free airtime with 15 counts of free On-net SMS on the Haier FM phones while subscribers who purchase, activate and use up to N200 on the Huawei C2802 will get N741 worth of free airtime with 15 counts of free On-net SMS in each 30 day cycle. At the end of a 90 day period, the subscriber participating in this package would have gotten back the full price of his phone.
The free airtime is automatically credited to the phone as soon as the subscriber uses up to a minimum of N200 in a 30 days circle.
In a similar promo, Starcomms is offering two categories of mobile telephone, the ZTE X175 and the popular Haier D920, in a promotion that ultimately gives back the purchase money to the subscriber.
This new 100% money back promo by the company allows any subscriber who purchases the ZTE X175 and Haier D920 to enjoy on-net bonus airtime covering the value of the purchased phone within 30 days of their activation. The ZTE X175 phone is priced at N1,999 and upon minimum first time recharge of at least N100 (one hundred naira), the purchaser will get automatic bonus airtime and the Starcomms customer would  be able to make free on-net calls to the tune of N1,999 within the first month of activation. The same token goes to the subscribers who buy the Haier D920 for the price of N2,299 and will be able to make free calls to any Starcomms line to the value of N2,299.
Starcomms in a statement acknowledged that the promotion is coming at a time when the purchasing power of many is generally dwindling and subscribers are keen to get adequate value for their money.
Speaking on the offer, Maher Qubain chief executive officer, Starcomms, said Starcomms acknowledges the adjustments people have had to make in the last few months of challenging economic situation. “It is therefore apt for us to respond positively, as we always do, to the yearnings of our subscriber, especially students and other people in the lower segment of the economy. We have therefore made it easy for people to join the Starcomms network without having to overstretch themselves financially. This is part of our strong resolve to always bring the best offer to the reach of our teeming subscriber,” he said.
The use of this free airtime can be enjoyed by Starcomms subscriber within only one month starting from the moment of first activation. The new subscribers will enjoy this offer alongside the value-added services like the missed call notification and the call waiting options.
The introduction of Unified Access License by Nigerian Communications Commission (NCC) in 2006 after the expiration of exclusivity right given to Global System for Mobile communication (GSM) operators was what Code Division Multiple Access (CDMA) operators needed to stamp their feat in the telecommunications industry. Before then, they were operating under limited mobile access license which restricted them from operating mobile service in unified manner. They as a result concentrated on offering fixed wireless and mobile service within the state they secured license to operate. More so, if any operator wishes to operate in another state outside its primary state of operation such operator would be required to apply for a license to operate in such location. This made it expensive to operate even as they were not required to offer roaming service like GSM operators. As a result of these, CDMA operators were mere local operators who concentrated their service in Lagos and Abuja commercially viable cities. They were struggling for subscribers with GSM operators that offered broader service, basically, because a GSM subscriber can take his or her phone outside Lagos and it works in as much as such network has coverage in the location, but mobile service rendered by CDMA could not offer this service, thereby giving them advantage over CDMA service. With the introduction of unified  licensing  regime, individual service provider is allowed to offer multiple services such as mobile telephony, fixed telephony, internet services and long distance services, there are over ten operators in this space. They included Starcomms, ZoomMobile, Intercellular, Multi¬-Links Telkom, Visafone, Rainbownet, Prestel, MTS First, among others. Under the current dispensation, CDMA operators that want to play in the big league are required to operate nationally, though there is choice of playing local but most see it as not economically viable to play local which has led to most of them going for national unified access license which is the prerequisite. Playing at this level entitles having foot print in almost every town in the country to be able to garner enough subscriber base which is the basis for profitability. To do this, they require strong financial base which most of these operators does not have. This situation changed the landscape of operation in CDMA space as they had to change their operational module to be part of the moving train in the industry and has ignited a contest for supremacy among them. This saw Starcomms selling some of its equity to Actis to raise money to expand its network, since then it has secured foreign loans in this regard making it to claim the biggest in the space. The company has already invested some US$800 million since it launched its network in 2002. It set for itself a target of reaching 2.5 million subscribers by the end of 2008, 5 million by the end of 2009 and a ten fold jump to 50 million by 2011. The company was listed on the Nigerian Stock Exchange (NSE) and raised around US$60 million. “We have always wanted two sectors of the economy, they are the oil and telecommunications sectors, represented in our market”, said Binus Yaroe, the NSE general manager of listing and quotations and a representative of the director general of the exchange. The stock market floatation raised funding for the company, while also allowing two investors, Actis and ECP to reduce their holdings.
Other operators did not seat to watch their Starcomms claim subscribers in a business they are also part of and equally have opportunities of playing big. Zoom Mobile, another contender had raised N25.9billion from investors through private placement. The company currently covers 62 cities and 350 villages and has a capacity for five million subscribers.
A foremost operator in that space Multi-Links deal with Telkom of South Africa, which saw the later acquiring 75% share of Multi-Links and later the remaining 25%, was what the company needed to re-launch itself into the market. Telkom has injected funds and managerial skills to make the business profitable; this is yet to be achieved as the company is yet to start making profit. Visafone, the youngest by name in the CDMA sector of telecommunications industry emerged from nowhere and is putting up an impressive performance having emerged as the fourth largest telecommunications operator in the country in two successive quarters. The company which is brainchild of Jim Ovia, a banker and industrialist has witnessed him bringing his managerial competence which he has used to make Zenith bank one of the strong banks in the post consolidation era to bear.
It has become worrisome to CDMA operators while some of them are being heavily affected by the economic meltdown, which calls for overhaul of business module and operational strategy. Against the backdrop of NCC’s planned introduction of Number Portability, CDMA operators’ faith of survival is hanging. Ken Aigbinode, executive vice chairman, Zoom Mobile, expressed fear on what will be the faith of CDMA operators when NCC introduces Number Portability. According to him, GSM and CDMA technology are two different technologies and that the GSM technology will play well with number portability than the CDMA because the CDMA technology is customized and fixed.
Possibilities of Survive
In spite of the wide differential in the subscriber base between CDMA and their GSM counterparts there are possibilities of surviving if they apply the right business model that is relevant to the operational environment. More so, the license they are operating with allows them to deliver service with their chosen technology without barriers. They need to adopt a cost effective way of rolling out service, such as sharing of infrastructure among others.
Gbenga Adebayo, chief executive officer, Community Network Support Services Limited, alluded to this when he cited situation in United States of America, where CDMA technology is the dominant while GSM operators are trailing behind. He said that what is happening in USA is possibly to play in Nigeria especially, when the right and quality of service is provided.

 


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X Suspends Twitter Account for Rules Violation

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X, the social media platform formerly known as Twitter, has suspended the @Twitter account, replacing its profile with a standard notice citing violation of platform rules.

X Suspends Twitter Account for Rules Violation

Musk

The action, which occurred on Sunday, January 11, left users encountering the handle greeted by a bold “Account Suspended” message on a black screen, with no details provided on the specific rules broken or the duration of the suspension.

The development has sparked widespread confusion and nostalgia among users, given that Elon Musk rebranded Twitter to X in July 2023, approximately six months after acquiring the platform for $44 billion in late 2022.

The @Twitter handle had remained dormant since before Musk’s takeover, serving as a legacy remnant of the platform’s original branding, and its suspension appears to mark the final erasure of the Twitter name amid X’s ongoing efforts to combat spam, impersonation, and rule violations.

X’s official statement on the suspended page simply reads: “X suspends accounts that violate our rules,” without offering an appeal process or further explanation, unlike standard user suspensions.

Public reactions on social media ranged from humorous laments of “RIP Twitter” to speculation that the move resulted from automated moderation or a deliberate cleanup of legacy trademarks.

xAI’s Grok AI described it as a purposeful retirement of outdated elements rather than a genuine infraction, while neither Elon Musk nor X spokespeople issued any comment as of Monday morning.

This incident underscores the evolving identity of the platform under Musk’s ownership, which also saw a domain shift to x.com in 2024, further distancing it from its Twitter roots.

Industry observers note that while the suspension aligns with X’s stricter enforcement policies, the lack of transparency has fueled debates on consistency in applying rules to high-profile legacy accounts.


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FG Plans to Invest $460m World Bank Loan in Fibre Infrastructure

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Federal Government plans to channel $460m World bank loan, representing about 92 per cent of a $500m, into the proposed fibre infrastructure company set up to deploy 90,000 kilometres of climate-resilient broadband fibre across the country.

This is contained in the Financing Agreement for the Building Resilient Digital Infrastructure for Growth project between the Federal Government and the International Development Association, the concessional lending arm of the World Bank.

Under the agreement, the World Bank approved a $500m concessional credit to support Nigeria’s drive to expand access to high-quality and climate-resilient broadband internet in unserved and underserved areas.

Of this amount, $460m is earmarked specifically for equity financing and capitalisation of a new Project Company that will drive the fibre rollout. The remaining $40m will cover goods, works, consulting and non-consulting services, training, operating costs, and the refund of a preparation advance used to develop the project framework.

According to the document, the proposed Project Company will be established “as an independent, majority privately-owned and managed special purpose vehicle-joint venture with the objective of the deployment of 90,000 kilometres of climate-resilient fibre infrastructure following a phased approach, limited to provision of wholesale, open access services to licensed telecommunications operators, and management of associated investments, including the carrying out of preparatory activities and provision of transaction advisory services, and provision of equity financing in and capitalization of the Project Company.”

The Federal Government will participate in the company as a shareholder through the Ministry of Finance Incorporated, which manages the government’s investment interests. However, the agreement explicitly caps the government’s shareholding at a maximum of 49 per cent, ensuring that the company remains majority privately owned.

The $460m equity injection is broken into four tranches, tied to strict performance and operational milestones. The first tranche of $150m will be released once the Project Company is incorporated as a joint venture with private partners selected through a process acceptable to the World Bank, and after its memorandum, articles of association, and shareholding agreement are approved.

A second tranche of $100m will only be disbursed after the company adopts fiduciary and administrative procedures approved by the lender and completes at least 5,000 kilometres of fibre deployment. The third tranche of $100m is linked to the completion of an additional 20,000 kilometres of network construction.

The final tranche of $110m will be released after the company launches wholesale open-access services through a published reference offer and completes a further 40,000 kilometres of fibre deployment, bringing the total rollout to at least 65,000 kilometres before the final equity drawdown.

Once each tranche is withdrawn, the agreement requires that the funds be transferred to the Project Company’s dedicated account within five working days, showing the equity nature of the financing rather than traditional budgetary spending.

The project will be implemented under the oversight of the Federal Ministry of Communications, Innovation and Digital Economy, and the Federal Ministry of Finance will receive semi-annual progress updates.

A dedicated Project Implementation Unit will manage day-to-day execution, with overall financial management handled by the Federal Project Financial Management Department in the Office of the Accountant General of the Federation.

Beyond the fibre rollout, the project also includes technical assistance to federal government agencies to support the use of high-quality broadband in targeted areas, as well as funding for project management, monitoring and evaluation, environmental and social safeguards, grievance redress mechanisms and independent audits.

The agreement places strong emphasis on environmental and social standards, requiring compliance with an Environmental and Social Commitment Plan. It also mandates the establishment of an accessible grievance mechanism for affected communities and strict reporting obligations to the World Bank.


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Court Dismisses N1Bn Suit against MTN, Awards N3m Costs

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A Federal High Court in Lagos has dismissed a N1 billion lawsuit filed against MTN Nigeria Communications Plc by Walls and Gates Ltd and Okechukwu Udeichi, its managing director, over alleged copyright infringement, breach of confidentiality, and trademark violations arising from MTN’s 20th anniversary promotional campaign.

Court Dismisses N1Bn Suit against MTN, Awards N3m Costs

Delivering judgement on Tuesday, Justice Ayokunle Faji held that the plaintiffs failed to establish any legally protectable right in their proposal titled “20 for 20”, describing the action as frivolous, speculative, and vexatious.

The court dismissed the suit in its entirety and awarded N3m in costs against the plaintiffs.

The plaintiffs instituted the action under Suit No. FHC/L/CS/1935/2021, alleging that MTN unlawfully used their “20 for 20” proposal, which they claimed to have submitted to the telecoms company on 17 September 2019, ahead of MTN’s 20th anniversary celebration in 2021.

They argued that MTN’s anniversary promotion, in which 20 sport utility vehicles were given out to subscribers, emanated from their proposal and amounted to infringement of their copyright, confidential information, and trademark.

Based on those claims, the plaintiffs sought N1bn in damages or, alternatively, an order directing MTN to render an account of revenue generated from the promotion and remit 50 per cent of it to them.

MTN denied the allegations, contending that the proposal was an unsolicited business idea that imposed no contractual or confidential obligation on the company.

The telecoms firm maintained that its 20th anniversary programme was independently developed and that the plaintiffs’ document was merely a general business concept not protected under Nigerian copyright law.

MTN further argued that the plaintiffs lacked a valid registered trademark and failed to demonstrate access to or copying of any protected expression.

In resolving the dispute, Justice Faji noted that the plaintiffs conceded during oral submissions that they failed to prove their claim of trademark infringement, leaving only the issues of alleged breach of confidentiality and copyright infringement for determination.

On confidentiality, the court held that no confidential relationship existed between the parties.

Justice Faji observed that before sending the proposal to MTN, the plaintiffs had already submitted it to the Nigerian Copyright Commission and relied on it for a trademark application, thereby placing the document in the public domain.

The judge further noted that after transmitting the proposal to MTN, the plaintiffs admitted circulating it to other organisations, which extinguished any claim to confidentiality.

According to the court, MTN had no obligation to respond to an unsolicited proposal in the absence of a contractual, fiduciary, or business relationship, or a non-disclosure agreement.

On the allegation of copyright infringement, the court held that registration with the Nigerian Copyright Commission does not confer copyright, stressing that Nigerian law protects expressions, not ideas or business concepts.

Justice Faji ruled that the plaintiffs’ “20 for 20 Millennium Promotion” amounted to no more than an idea of rewarding customers during an anniversary celebration and lacked the originality and intellectual effort required for copyright protection.

He described the proposal as a bare business concept devoid of original qualities capable of attracting copyright. The judge also held that MTN’s use of the phrase “MTN 20th Anniversary” was a natural description of an anniversary event and did not originate from any protectable work of the plaintiffs.

He further relied on evidence showing that MTN affiliates in other jurisdictions had implemented similar anniversary reward ideas before the plaintiffs’ proposal.

Justice Faji characterised the suit as a “gold-digging exercise” aimed at forcing a commercial relationship on MTN. He criticised the plaintiffs for using MTN’s trademark in their proposal without authorisation and then seeking to ground a billion-naira claim on the same document, adding that the case wasted valuable judicial time.

While affirming that citizens should have access to the courts, the judge stressed that such access must be limited to suits with prima facie merit.

He therefore awarded N3m in costs in favour of MTN, holding that costs must follow the event.

The court accordingly dismissed the suit in its entirety and ordered the plaintiffs to pay the awarded costs to the defendant.

Credit: Punch


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