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Certainly, it is not because they possess inferior licences to operate in Nigeria, but because the CDMA technology which they operate is not as favoured in the country as is GSM. MTS also belongs in to CDMA category, but has a worse case. If active subscriber lines are what it takes to claim a company is alive, then MTS is as good as dead.
The three financially and managerially atrophied telecom companies recently stated that rather than continue to lie in state ahead of their final demise and possible burial, they had chosen to come together as one company and continue to live.
“This proposed merger, though desirable, is coming late,” said Mr Tayo Ekundayo, an erudite telecoms analyst. He went further saying, “If this had happened five or more years before now, the impact would have been phenomenal. With the level of penetration of networks in the country, it will be a huge task for the impact to be felt.”
He reasoned that the GSM operators have captured not just the marke,t but also its cream which they would not let go.
“Remember that people just don’t ditch their phones. GSM brand is now synonymous with mobile in Nigeria. Even if the merger sails through, they have a lot of work to do to be relevant in a market dominated by GSM,” he opined.
While expressing his belief that there are lots of economic gains to get from the merger if it eventually happens, Mr Ekudayo felt that the that “the problem with the CDMA operators was that they were unable to effectively cover the country like GSM operators, meaning that customers who travel widely within the country may not be able to use their CDMA phones in all places.” This is a great drawback.
However, in the merger, “they will be able to pull their networks together and cover the nation more effectively since they each have regions they cover more effectively. The merger will instantly make them bigger and wider in spread,” he explained.
What life would have been for CDMA operators in Nigeria could only be imagined had they been offered the universal licence they now have at the time their GSM counterparts were being licensed to operate all over the country. Their PTO licence restricted them to certain regions of operation and by the time the GSM operators rolled out across the nation they began to become irrelevant to many Nigerians who want to have their phones with them anywhere they go. The restriction was later removed through universal licensing, but they were too weak to catch up with the GSM counterparts.
So, a merger like this is an opportunity to try their luck. Mr Ekundayo said the merger “will certainly impact the cost of making calls in the country because customers are likely to be attracted to the CDMA networks that will possibly charge less than GSM operators seen by many as presently overcharging the customers.”
Furthermore, he said the economy will certainly be better for it considering the fact that there are still many more Nigerians out there not yet connected to any network because of high cost of making calls and service not being avail-able in their localities.
“If the cost of making calls drops, billions of naira will be available for other economic activi-ties. As a result of competition, operators would have to invest more in network improvement to ensure better network integrity as we all know that the level of service quality in the country is not good enough yet,” he observed.
He also stated that the $200 million planned to be injected into the yet-to-be born company could actually help it shake the market to some extent. “This is because all of them in the merger talks have some level of infrastructure deployed in various parts of the country and a share of the market. I know that one of them has a fairly large optical fibre infrastructure in parts of the country. What the money they will inject into the new company will do is to ensure a seamless connection between their networks as well as bring in new technologies in billing, transmission and so on. In a nutshell, what they will be pulling together is their strength.”
On his part, Mr Lanre Ajayi, President of the Association of Telecom-munication Companies of Nigeria (ATCON), described the merger as a good development.
“The three operators seem to operate on a low key which makes their unit cost higher and difficult for them to sustain. But when that merger happens, the unit cost will be lower as they would have moved away from a low key operation. There is going to be turn around for good and the result of that is lower pricing and good quality of service,” he said speaking in the same vein as Mr Ekun-dayo.
Speaking further on the possible benefit, he said one of the implica-tions is that “Nigeria is going to see a vibrant CDMA subsector that will compete reasonably with its GSM counterparts.”
He said there was no question of catching up with GSM operators because competing with those ones favourably depends on many factors including the financial muscle.
However, Ajayi stated, “Don’t forget that very soon, the dichotomy between the two technologies, GSM and CDMA, will soon be a thing of the past as both will evolve into LTE.”
Notwithstanding, he agreed that the new company that is coming out of those three “is surely going to be vibrant,” he concluded.
Also speaking on the development, the CEO of Telecoms Answers Associates and Cyber-schuulNews, Mr Titi Omo-Ettu, was optimistic on
the proposed merger saying that “those who chose to merge, I imagine, are the owners of the original firms you listed. If such experienced investors chose to pull together, I can only imagine them to have seen what to gain from it.”
He would not want Nigerians to expect a competition of techno-logies as a result of the merger but a competition of service providers. “There has never been any meaningful competition in the industry and it is bound to start one day. I do not know if we are there or not,” he added.
Speaking on the gains, Mr Omo-Ettu, who is also the immediate past president of ATCON, said, “any investment is a plus for the economy since it provides a push to the frontiers of solutions, empowerment and alternatives. It is only when it goes awry we start wishing it never really started.”
He said further that no matter what expectations of Nigerians would be, they should note that “a child, any child that is born is always a source of joy.”Share