Painful Goodbye to CDMA, A Broken Promise

The recent acquisition of Visafone by MTN Nigeria may have sounded the long awaited death knell on Code Division Multiple Access (CDMA) operators in Nigeria.

The deal which was sanctioned late December 2015 by the Nigerian Communications Commission (NCC) allows MTN Nigeria to utilise Visafone’s 800MHz spectrum to launch fourth generation long term evolution (4GLTE) services.

Visafone until the deal, was the only surviving CDMA operator in Nigeria offering a number of services including voice, high speed data (3G), internet and other Value Added Services (VAS).

As Visafone managed to stay afloat, the other players’ closed shops or operated in fits and starts, no thanks to a number of factors which have conspired to ring them into obscurity.

To say that the CDMA sector is trouble, is stating it mildly; financial institutions repulsed by the companies’ stinking financial records have turned their backs, preferring to fund global system for mobile communications (GSM) operators with proven corporate practice.

CDMA, a digital wireless technology  uses spread spectrum techniques and is globally acknowledged as the better technology compared to GSM, given its inherent quality in terms of data speed and capacity.

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.

But it appeared the CDMA service providers were programmed to fail in Nigeria when the initial licensing regime gave it a regional outlook, rather than the universal for its GSM mobile operators.

However, it’s the CDMA which was ultimately responsible for their troubles with widespread corporate mismanagement, including, but not limited to its non-compliance with laid down internal controls and operation procedures, biased recruitment exercises and general lack luster management practices.

To make matters worse over the years CDMA operators have regularly and consciously ignored sustained and systematic red flags as their promoters and managers diverted funds meant for expansion into frivolous projects like manufacturing, oil and gas, elections, just to name a few.

To ensure that the faith which befell CDMA operators do not have ripple effect on the entire telecom industry, it is important to entrench transparency and adequate disclosure of information for the industry.

That is why we welcome the new corporate governance initiative recently introduced by the Nigerian Communications Commission (NCC) for the internal management of players in the industry.

Bu the commission should ensure tighter supervision of the management of the companies because the consequences of systemic failure in the industry will be far reaching.