CDMA: Africa’s Endangered Mobile Specie

Chairman Starcomms PLC, Maan Lababidi

Is the Code Division Multiple Access technology on the verge of extinction from the telecommunications ecosystem in Africa?  The question is posed in the light of the struggles by CDMA networks on the continent to strike a reasonable balance between a drastic increase in data traffic demand and the need to cut costs. What price their continued existence in this climate? Olubayo Abiodun, Clifford Agugoesi and Chimezie Ndubisi look at the current state of play

IN the mobile world there are two technologies generally being used for communication. One is the (GSM) Global System for Mobile Communications and the other is the Code Division Multiple Access (CDMA). The statistics and inherent qualities of CDMA make it an attractive technology choice for operators.  According to expert predictions, CDMA2000, for instance, will continue strong growth, accumulating up to 741 million subscribers by 2016. CDMA2000 technologies provide industry-leading network capabilities, low latencies, and RF propagation characteristics that enable operators to offer high-quality voice and robust broadband and multimedia applications very cost effectively in any topography or location.
The CDMA is the American standard for mobile services and it is the dominant network in the US. Most African countries have similarly adopted the CDMA technology because of its robust data capacity and strong voice clarity. But the GSM, which is the European Standard for mobile deployment, appears to have dwarfed the CDMA performance in Africa in terms of the quantum of market share, which is largely skewed in favour of the GSM technology.
Though in some countries GSM came into the market ahead of the CDMA technology, ironically in countries where the CDMA was the harbinger of mobile telephony services, the fortunes of CDMA operations have been on a sustained dip in terms of the revenue and market share. But in spite of the declining fortunes of CDMA operators, the technology remains unbeatable in the data service delivery to consumers on the African continent.
Before the advent of the GSM revolution in Nigeria in 2001, the CDMA ecosystem in Nigeria held sway in the market following the unprecedented liberalisation of the Nigerian telecommunications market in 1997, which hitherto, had the Nigerian Telecommunications Limited (NITEL) as the only operator serving a population of about 120 million at the time with just 400,000 connected lines.
When the newly licensed Private Telephone Operators (PTOs) injected a breath of fresh air into the telecoms market, the market began to blossom. In 2008, Multi-Links Telecommunications had a subscriber base of 1.9million, Visafone about 1.6million, ZoomMobile, 1.5m and Starcomms had about 2.5 million. This was, perhaps, the boom period for the CDMA ecosystem, with operators charging as high as N250,000 for the acquisition of a phone line.
In spite of the humongous cost of acquiring a telephone line and high tariff for airtime, the good thing was that subscribers could walk to the operators’ Customer Service Centre and acquire a line the same day without having to be on a waiting list, as the case was with NITEL, for in some instances a period over a year or more.