THE vision of Qualcomm of USA in 1985, when it first invented the Code Division Multiple Access (CDMA) technology, was for the technology to transform the face of global telecommunications, which it actually achieved. But the revolution brought by the Global System for Mobile Telecommunications (GSM) impacted on its fortunes and gradually the CDMA technology started losing growing steam and roll into extinction.

Indeed, CDMA actually made waves in the early 20th century, even in Nigeria, to the extent that the country had over 16 big players competing effectively, having close to 15 million subscribers. But its failure to reposition for growth, mismanagement, and lack of funds actually saw the GSM technology overtaking it and since then, it has been moving in fits and darts.

Currently, while the GSM technology controls about 98 per cent of the Nigerian market. The CDMA, on the other hand, controls 1.58 per cent market share, according to statistics from the Nigerian Communications Commission (NCC).

Besides, while CDMA technology, through the only surviving operator-Visafone Communications, which was acquired recently by MTN, can only boast of about two million customers, the quartet of MTN Nigeria, Globacom, Airtel and Etisalat, as at September 2015, enjoy the services of about 150 million connected subscribers.
While so many challenges, including mismanagement, paucity of funds and outdated technologies were identified as part of the challenges that negatively impacted on the fortunes of the CDMA players, industry watchers further traced the chief challenge to the doorstep of the NCC.

The CDMA operators alleged that the regulator over pampered the GSM service providers, whereas they were not protected.
They equally blamed government for its inability to provide the necessary infrastructure for the rollout of CDMA services, after collecting so much money from them as license fees.

In one of his interviews with journalists, the Chairman of the Association of Licensed Telecoms Operators of Nigeria (ALTON), Gbenga Adebayo, said that CDMA fortunes could be revived if driven by new policies, stressing that while the technology is very expensive, “telecoms business has become a volume business. The CDMA tries to compete with big players, which should not be.

Today, all our telecoms operators operate on a national basis, which to some extent shouldn’t be. If our policy encourages regional, state and local operations, there will be room for all players. Players will be more focused on their area of strength rather than concentrating totally on a national basis,” he stated.
While blames continued, in 2012, a special purpose vehicle, by an American investor-CAPCOM, came with the hope of reviving the CDMA segment.

The plan by CAPCOM was to merge Starcomms, MultiLinks and MTS, in a deal that was worth $210 million, but retained the Starcomms as the brand name.

CAPCOM had thought that the merger in the CDMA sector would enhance Starcomms’ position in competing strongly with operators like MTN, Globacom and Etisalat. But the ambition was later cut short as a result of the inability of CAPCOM to raise the required money to seal the deal and to move the new company forward.

The inability of CAPCOM to succeed in the merger of the three CDMA operators eventually led to the death of MTS and Starcomms, leaving Visafone and MultiLinks as the only surviving CDMA operators in the country. However, the survival of the operators continued to be threatened by market forces, as revenue and subscriber base dwindled every month.

Although, Starcomms was the biggest CDMA operator at that time, its survival was threatened by market forces and it was beginning to lose revenue and customers to GSM operators.

The challenges forced Starcomms to accept the sale offer from CAPCOM and the merger process was announced, but could not fly.

Giving an insight into how the CAPCOM deal became a flop, the Chief Executive Officer designate, who now chairs ConSol Limited, a contact management solution company, Ademola Eleso, said: “The vision of CAPCOM was to help merge the CDMA operations in the country and make them have strong financial base, hence it tried buying and merging Starcomms, MultiLinks and MTS. But as at the time I left them, which was in December 2014, funding was an issue. The funding from both local and foreign partners was not enough to realise the ambition of CAPCOM.”

While the industry continued to postulate on how to ensure this technology did not eventually collapse completely in the country, the Executive Vice Chairman of the NCC, Prof. Umar Danbatta, in his first interview with NCC’s in-house magazine, The Communicator, admitted that fixed networks have been neglected, stressing that nobody is interested in them despite the promises they hold.

According to him, operators are more interested in providing mobile services and the subscriber base by operator attests to this, with MTN having over 60 million subscribers, Glo and Airtel with over 30 million each, while Etisalat has over 21 million subscribers. Visafone has only about 2.5 million subscribers.
“If we can deliberately introduce incentives to any operator to come in and roll out fixed telecoms services we can do it. The commission is open to negotiations on how this could be done.
“We intend to convince the government to key into this important initiative of the Commission. Through this medium I send a message to operators who will be willing to buy into this important idea of availing themselves the opportunity to get the incentives that we intend to put in place in order to revive fixed telephony services.”, he stated.

What actually started as a rumour last May became a reality on January 5, 2016, when MTN, after several denials, eventually came out to say it has acquired Visafone, the last man standing in the CDMA sub-sector!

Announcing the acquisition, MTN said it was in line with the company’s determination to improve the quality of broadband services for its subscribers.
According to MTN Executive, Amina Oyagbola, the acquisition, which seeks to leverage resources for service enhancement, is also reflective of MTN’s concerted efforts to deepen the growth and rollout of broadband services across the country, in support of the National Broadband Plan for the benefit of Nigerians.
Visafone is one of the leading CDMA/ICT companies in Nigeria offering a number of services including voice, high speed data (3G), internet and other Value Added Services (VAS). Visafone also provides business solutions to small and medium sized companies and corporate organisations in Nigeria.

According to Oyagbola “we are committed to exploring avenues for meeting our customers’ increasing data needs in line with our vision to lead the delivery of a bold new digital world to our customers. As we work to maximise our data capabilities towards achieving broadband of international quality, our objective is to ensure that Nigerians experience a boost in the quality of broadband internet services translating to the much needed enhanced data speeds and value to enhance personal and business productivity.

The acquisition of Visafone highlights MTN’s commitment to Nigeria. More capacity will facilitate enhanced product/service offerings and experience in the data space to the delight of our valued customers. Voice is still King. However, data is becoming increasingly important in our everyday lives and our energies are focused on enhancing data and internet services to the benefit of our customers and the country at large.

Acquisition comes with hope of improved broadband access
While Danbatta admitted meeting an open access deployment model in place, which it described as a good one, having gone through it, he said every policy of the commission is well thought out and articulated from the relevant departments of the commission.  “You cannot just come in as a new Chief Executive and then just begin to change those policies until there are indications from the same departments that these policies should be reviewed. These policies are not defined and the dynamic nature of the industry dictates that policies are revisited if the need arises and we’ll do it that way. We’re not going to adopt a populist approach in order to attract publicity. We’ll ensure we do our work well, and be consistent with global best practices.”

In view of this, analysts believed that while the commission will not jettison the open access model, acquisition of Visafone by MTN would further give impetus to this drive.

MTN disclosed that it would retrain Visafone staff to roll out LTE 4G technology. The aggressive launch of 4G LTE services by the merged entity of MTN and Visafone is also expected to drive the broadband penetration in the country from under 10 per cent now to the targeted 30 per cent by 2018 as per the national broadband plan of the Federal Government and help meet the national broadband plan targets.

The 4G LTE technologies is particularly good for the country and economy because it will create a conducive platform for enhanced product/service innovation which will ultimately lead to the creation of even new jobs.

With the deal sealed, MTN is now expected to massively and aggressively leverage the CDMA pedigree of Visafone to roll out premium products that portend very good business opportunity for the carrier and Nigerians.
This is expected to ensure a high quality data services and improve mobile broadband experience for subscribers of Visafone and MTN.

The acquisition is expected to provide the much-needed relief to the booming Internet economy by making available quality mobile broadband services adopting the state of the art 4G LTE technologies during the year.

At present, majority of data users use 2G/3G technologies and it is estimated that LTE users will constitute 80 per cent of all data users by 2019.

Availability of 4G LTE mobile broadband services on a national scale, starting from 2016, is expected to act as a catalyst to many sectors of the economy like the booming e-Commerce, banking Insurance and financial services, Software and IT enabled services etc., and is likely to trigger widening of the revenue base of the federal government into non-oil sectors.

The market consolidation by the acquisition of the CDMA operator Visafone by the GSM operator MTN is the first in the history of telecom industry in Nigeria and is commendable in the larger interest of the country and the economy.