Barring any last minute changed of mind, three operators of the Code Division Multiple Access (CDMA) business of the Nigerian telecommunications sector may merge in a $200million deal that may revive the pioneer segment of the industry.
LEADERSHIP learnt last night that Multilinks, Starcomms and MTS could transform into a mega CDMA network operator with the name CAPCOM. Parties to the new deal indicate that about $200 million may be pumped in by the investors sponsoring CAPCOM.
?A top official at Starcomms, confirmed the development and said that arrangement was on top gear. “Yes, there is arrangement on that and we shall soon come up with more details on that. It is a merger arrangement”, the source stated. It was learnt that the emerging company has as its shareholders MBC, 53 per cent shares; Middle East Capital Group, 25 per cent shares while Helios Investment Partners holds 11 per cent shares. Others said to hold shares in the company include Oldonyo Laro Estate five per cent; Bridgehouse Capital Limited three per cent; Asset Management Company of Nigeria two per cent and Private Equity Investors put at one per cent.
A source at the Association of Telecommunications Companies of Nigeria (ATCON), also confirmed the development, stressing that the agreement was in final stage of completion.
?Before now, CDMA operators complained about lack of funding which dwarfed their expansion capabilities even with the Unified License granted them by the NCC.
Information has it that as at today, only Visafone, can be said to be providing services on a serious note, with Starcomms which at one time was the bride of the industry suffering serious decline in its voice subscribers, but with CAPCOM now in the offing, there is hope that the CDMA segment may bounce back.
The segment has witnessed massive churn losing subscribers on monthly basis in the past one year. Statistics obtained from the NCC website revealed that between January and June 2012, the CDMA operators combined lost about 868,786 active lines.
Specifically, at the start of the year, the operators combined had 4,410, 355. The figure declined to 4,013,820 in February and stood at 4,013, 698 in March. The figure fell drastically in April to 3,904,846 and in May it was 3,718, 153 and by June, it reduced further to 3,541, 355.
Stakeholders, including the former Executive Vice Chairman of the Nigerian Communications Commission (NCC) have clamoured for the resurrection of the CDMA sector, which fortunes have fallen drastically in the last five few years of operations in the country.
Indeed, going by the present Average Revenue Per User in the country put at N941 by Business Monitor International, a UK based research firm, the CDMA operators including Visafone; Starcomms; Multilinks and troubled ZoomMobile must have lost about N817 million within the last six months of operations in the country in 2012.
The former EVC had recommended mergers of the CDMA operators, stressing that if they must survive in a GSM thriving environment such as Nigeria, “operators in the CDMA business must come together as one.”
Other stakeholders, who canvassed new life line for the CDMA operator was the President of the Association of Licensed Telecommunications Operators of Nigeria, Mr. Gbenga Adebayo, who decried the huge decline in CDMA subscriber base, stressing that a bail-out option is inevitable for the CDMA segment. Adebayo said the bailout, would enable major operators such Starcomms, Multi-Links, ZOOMmobile and Visafone to deploy better infrastructure.
?According to him, the major problem bedeviling the CDMA networks in Nigeria was low access to capital, which, he said, can only be solved by the government to salvage the pioneer operators from imminent extinction.
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