By Dayo Oketola

Tuesday, 23 Nov 2010

The Code Division Multiple Access telecoms operators in Nigeria lost about N1.95bn in the first six months of 2010, investigation by our correspondent has revealed.

According to the subscriber data provided by the Nigerian Communications Commission, the CDMA operators – Starcomms, Multilinks, ZOOMmobile and Visafone – lost about 1.08 million active subscribers between January and July, 2010.

The National Bureau of Statistics put the Average Revenue Per User of telecoms services in Nigeria, including that of the CDMAs, at N1,800.

The ARPU is a financial benchmark often used by telecoms companies to measure the average revenue generated from an average subscriber. It is the revenue from the services provided divided by the number of users of those services.

Based on N1,800 per user, an average of N1.95bn must have been lost on 1.08 million subscribers by the Nigerian CDMA operators in the first half of the year.

According to NCC’s subscriber data, active mobile CDMA lines, which stood at 7.7 million in January 2010, dropped to 6.6 million in July, 2010.

The number of CDMA lines also increased from 7.77 million in January to 7.79 million in February, but dropped to 7.66 million in March. It, however, increased to 7.74 million in April, according to the subscriber data.

The active subscriber base recorded a sharp drop, from 7.49 million in May to 6.83 million in June and rose again to 6.69 million in July.

The most significant drop was recorded in June when the figure came down from 7.49 million in May to 6.83 million.

While the total connected GSM lines reached 91.6 million in July, 2010, the connected CDMA lines stood at 11.5 million. This means that the CDMA subscriber base in Nigeria is about 80.1 million lower than the GSM’s.

Experts noted that, while the GSM companies recorded excellent financial performance despite the challenges in Nigeria‘s telecoms industry, the CDMA operators had not really fared well.

In 2009, the CDMA players recorded huge losses amid the global economic meltdown and skyrocketing operating costs.

The Chief Executive Officer, Starcomms, Mr. Maher Qubain, said that the company‘s operating loss was N666m in 2009, 85 per cent lower than N4.49bn recorded in 2008.

Similarly, Multilinks‘ loss before interest, tax, depreciation and amortisation almost tripled to $88m in the 12 months, ended March 2009.

ZOOMmobile and Visafone were also reportedly affected by general poor fiscal performance that same year.

The Chairman, Starcomms, Chief Maan Lababidi, who expressed worry over the CDMA operators’ huge operating loss, said, “The capital markets across the world declined drastically as did the Nigerian Stock Exchange. Starcomms, as the only listed telecoms company on the NSE, felt this impact. The All-Share Index declined by about 34 per cent to close at 20,827. Total market capitalisation fell from N6, 957bn to N4.989tn in 2009.”

Commenting on the challenges facing CDMA networks in the country, the Treasurer, Association of Licensed Telecommunications Operators of Nigeria, Mr. Oladipupo Alabi, noted that funding was a major problem.

“The greatest problem confronting the CDMA companies in Nigeria is funding. The CDMA operators are not as highly capitalised as the GSM operators. So, they do not have the same level of coverage or reach” he said.

 

Source: Punch