A naked giant in a perfect storm

I enjoyed constructing the title of today's offering. The image of a stoic titan leaning into a howling maelstrom of wind and rain, bereft of protective clothing, is a colourful one, not least on a rare day of hazy sunshine and light Spring breezes here in the north London suburbs (when I started this; the rain is now hammering down). I don't expect it's at all obvious what the title refers to, however. I just looked back at recent post headings and thought they've all been a little too prosaic. That Spring feeling just seems to have me waxing lyrical. Dont' worry. What follows is the usual sensible stuff... and the nude giant in the story makes an appearance before the end of this piece.

The giant concerned is South Africa's former land-line monopolist Telkom, which continutes to adapt to a range of changes in its home market. The managed liberalisation of the country's telecoms sector was catalysed by the Telecommunications Act of 1996 and the Telecommunications Amendment Act of 2001, which paved the way for a second national fixed-line operator. With the exception of full mobility, that second wireline player, Neotel, provides a wide range of products including basic voice and data services, high-speed Internet access, VPNs, and network management and hosting.

The new kid on the block, however, has not found competing with Telkom to be without challenges. South African telecoms and tech news portal MyBroadband yesterday picked up a newspaper article whose broad theme is that although the Neotel provides a "welcome" alternative to Telkom, "it doesn't quite offer all the answers."

Penned by Barrie Terblanche of the Mail & Guardian, the article focuses on particular difficulties faces by Neotel in the business telecoms market. Terblanche writes that "years after Neotel received its license to provide South Africa with an alternative to Telkom, by far the majority of small businesses are still forced to depend on the old behemoth for basic fixed telephony – even those businesses situated in the middle of Neotel’s coverage areas in Johannesburg, Cape Town and Durban."

One reason for this, argues Terblanche, is the lack of fixed-line number portability.

The country's telecoms regulator, ICASA, launched a Mobile Number Portability system in Q4 2006, the first instance of MNP on the African continent. This might have happened even earlier had South Africa's three mobile operators not twice asked the regulatory agency to postpone the introduction of the MNP platform. As my former colleague Matthew Reed (editor of Middle East and Africa Wireless Analyst) noted in a South Africa market update some months later, Cell C, MTN and Vodacom claimed more than once not to be "ready to implement portability" on the earlier scheduled launch dates of March and September 2006. This aroused the ire of no less an individual than billionaire industrialist Sir Richard Branson, whose Virgin brand is used by more than 360 companies worldwide - as I write this, I am still aching as a result of my most recent session in a Virgin Active gym and have yet to pay off the credit card bill for my recent trip to the USA on Virgin Atlantic Airlines.

Branson's interest in South Africa's delayed implementation of MNP stemmed from attempts of the country's Virgin Mobile-branded MVNO to carve out a share of the cellular market. Early last month, when discussing the prospect for MVNOs gaining traction in Africa and India, I observed that this has not been an easy task, noting that Virgin Mobile South Africa had signed up just 600,000 subs by end-2008, of which only 200,000 were active. Back on September 27 2006, a member of Matt Reed's MEAWA team quoted Branson as saying "South Africa's mobile players are dragging their heels on this issue, because it isn't in their best interests... they want to lock their customers in. You shouldn't be held hostage by your mobile phone company."

In the same article, this was refuted by a Vodacom spokesman, who said that the delays had been caused by "the technically complex nature of MNP, which requires new business processes to be designed and implemented."

The article, however, also contended that Cell C, then (and now) the country's third placed mobile operator had lobbied for MNP to be introduced more quickly but that Vodacom and MTN had insisted on a longer delay.

Whichever operator(s) may or may not have been behind any alleged MNP foot-dragging, the MEAWA article of the time raised the question of whether number portability would really have any very significant market impact. "Local analysts have played down the likely effect of MNP on the market," stated the article, which reported the view that fewer than half a million subscribers would be likely to change networks within a year.

I don't have to hand a detailed analysis of to what extent MNP may have driven customer churn in South Africa. There was, however, a little jostling in the year which followed the implentation of number portability. Market-leading Vodacom lost ground a little, but maintained a significant lead over it rivals. The bigger winner over that period Sept. 2006-Sept. 2007 seems to have been Cell C, though not to such a degree that the market changed dramatically. Cell C has, however, coninued to make up ground on its competitors since then - according to the World Cellular Information Service, the Oger Telecom-backed MNO now owns 13.80% of South Africa's mobile subscriptions, up significantly from the 8.61% logged in September 2006. I am absolutely not qualified even to speculate to what degree this is due to MNP. That said, my sense is that number portability has not massively changed the South African mobile market.

What, then, is behind Barrie Terblanche's claim for the degree to which the non-availability of fixed-line number portability has hampered Neotel's efforts to compete with the incumbent wireline opearator? He contends "that only business start-ups really have a choice between Neotel and Telkom, because established businesses can ill afford to give up an existing number."

Terblanche goes on to say that it is not only in the small business space that Neotel is finding the going tough. "Another huge hurdle in the full-scale adoption of Neotel by slightly larger businesses", he writes "is its lack of line-hunting facilities. This provides a business with one public telephone number linked to several lines in the business. When a customer phones the number, the exchange hunts for the first available line and puts the call through." The lack of line hunting, apparently to be solved in the next few months, "means that a business with a PABX still has to rent Telkom lines for incoming calls", continued this Tuesday's Terblanche article.

Tuesday was a good day for commentary on the South African telecoms market. Carried the very same day by MyBroadband was another article taken from the country's Financial Mail. This one, penned by a Duncan McLeod, zeroes in on the former fixed-line monopolist. While Barrie Terblanche contends that Telkom is better positioned than its rivals to compete in the enterprise telephony markets, McLeod constructs an interesting piece around the large number of challenges faced by the incumbent.

The article begins by noting that Telkom is soon to dispose of its 50% stake in market-leading cellco Vodacom, which, despite the advances of Cell C, continues to own slightly more than half of the country's mobile subscriptions. McLeod feels that "the divestiture will reshape SA’s telecommunications landscape for the better" and asserts that "it's sink or swim time for Telkom." Despite Neotel's struggles in the business telephony space, McLeod feels that the incumbent's fixed-line business "is going nowhere fast and, with new competition, it is going to have a hard time defending its top-line revenue and profit margins."

Given the powerful position of Vodacom in its home country, and given its valuable collection of subsidiary opcos in Tanzania, Mozambique, Lesotho and the Democratic Republic of Congo, why would Telkom seek to get rid of its stake in the business?

Let me turn once again to MEAWA's Matthew Reed, who in November last year wrote that the sale would free Telkom "from an unsatisfactory relationship with Vodacom." Matt stated "Telkom had hoped that Vodacom would help it to expand into the fast-growing mobile sector and into new markets in Africa, but it has been disappointed by the level of cooperation."

As Matt noted then, Telkom has begun a wireless play of its own. Earlier this month, as reported by TelecomPaper, the operator launched its new Mobi service, which offers mobile voice over a WCDMA network. The mobile service is currently available in Gauteng and Cape Town only.

My understanding is that the shareholder agreement with Vodacom prevents Telkom from building a national mobile network. Instead, to establish a nationwide presence, Telkom must sign a roaming agreement with with MTN and/or Vodacom. Cell C does not fit the bill, having not yet established a 3.5G network.

Beyond the home country, Telkom may also be working to find its own route into the mobile arena. Matt Reed observed in November that the operator had, in 2007, "acquired a 70% stake in Nigerian CDMA operator Multi-Links... and... is thought to have had separate talks with both Zain and Nigeria's No. 2 mobile operator, Globacom, about the possibility of forging partnerships."

Will Telkom's sale of its stake in Vodacom prove, then, to be a smart move? According to Duncan McLeod's article, one vocal supporter of the decision is the incumbent's CFO Peter Nelson, who has praised CEO Reuben September, saying "it showed a lot of leadership and courage... the new Telkom is standalone — I call it the naked Telkom."

This naked giant, McLeod contends, looks set to be caught in "a perfect storm" with the telecoms sector wide open to new competition. Cellcos MTN and Vodacom are free to compete in the wireline area, McLeod writes, also inviting readers to "consider also that new undersea cables will finally end Telkom’s control of international bandwidth."

McLeod reports that Mr. September is, however, "clearly relishing the company’s imminent divorce from Vodacom and the demands of a competitive market" and expresses admiration for the Telkom CEO's willingness to take tough decisions, such as shutting down Telkom Media, the pay TV unit for which a buyer could not be found.

Duncan McLeod wonders whether September will "take flak" for deciding to postpone a project that was set to outsource 19,000 jobs, questioning whether this has resulted from political pressure ahead of the country's elections. CFO Nelson, however, has defended the postponement thus: "We won’t outsource problematic and poorly engineered areas because what happens is you lock in inefficiency and you pay for it forever." McLeod conceded that this is a fair argument, going on to say that "Telkom is still SA's most important communications operator. It is critical for the economy that it doesn’t stumble and fall. Whatever South Africans might feel about Telkom — and it’s often not flattering — September deserves their encouragement."

A naked giant in a perfect storm

Are some African markets already contested by too many cellcos?

In yesterday's post, I tried to examine an idea articulated last week by MTN CEO Phuthuma Nhleko in an interview with the Financial Times - that there will be an African showdown leading to "fewer players with larger footprint, bigger balance sheets, more economies of scale".

Nhleko notes that 2008 saw more players entering the continent's smaller markets, some of which now have three, four or five competing operators in the mobile space.

One notable example must surely be Benin. The Francophone country ranks 31st in Africa in terms of the size of its population. Five mobile operators now compete in a market which is home to around 8 million people. The fifth entrant, joining the fray in June last year, is a subsidiary of Nigerian cellco Globacom. Yesterday I recounted some of the difficulties and delays faced by Globacom owner Dr. Mike Adenuga on the company's home patch. The Benin market has also presented challenges for the Nigerian company. A Wireless Federation article in September described how Globacom was protesting about radio spectrum allegedly withheld by the Beninoise Government. The article cited an anonymous Globacom insider who reported urgent appeals to the state to release spectrum by state-run MNO Libercom. "Sources," said the article "disclose that most of the spectrum released to Globacom so far was in the 1800MHz band but not the promised 900MHz band and this could disrupts the operator’s plan for expansion." Network expansion, in terms of capacity at least, might well be high on the agenda for Globacom's Benin operation - according to an IDG article published not long after the operator launched services, the Nigerian cello sold 600,000 SIMs in fewer than 10 days. By December Globacom Benin had around 700,000 subscriptions according to Informa Telecoms & Media's World Cellular Information Service, outstripping two much longer established operators - the aforementioned Libercom and locally-owned Bell Benin Communications. Presumably, in the consolidation scenario envisaged by MTN's Nhleko, it is these strugglers that would be more likely to fall by the wayside than Dr. Adenuga's Globacom Benin.

With four mobile operators serving a relatively small population, the Central African Republic, one of the poorest countries in the world and among the ten poorest countries in Africa, seems to me like another quite congested market. The country's 2007 census recorded a population of around 4.2 million, the 36th largest in Africa. Mobile penetration is very low, standing at just over 11% according to December figures from WCIS. This would suggest that, despite the rather limited overall market size, there remains a decent growth opportunity for each of the existing competing mobile operators. The likely ARPU from further waves of mobile service adopters, however, is surely very low: the CAR is heavily dependent on foreign aid and the presence of numerous NGOs which provide services that the country's Government is ill-equipped to deliver to the populace. The very presence of numerous foreign personnel and organisations in the country, including peacekeepers and even refugee camps, provides an important source of revenue for many citizens. While the country is self-sufficient in food crops, much of the population lives at a subsistence level. Political instability has also hampered development. As recently as 2006, over 50,000 people in the country's north-west were at risk of starvation due to protracted violence. This looks like a daunting set of trading conditions for the four mobile operators. Of these, the one to join the market most recently was France Telecom-backed Orange CAR, which has rapidly built a 25% share of the market since launching its commercial activities in December 2007.

Another well-funded later entrant in the CAR is the Moov-branded Atlantique Telecom operator, part of a group of African operations in which the UAE's Etisalat now holds a 70% stake. The CAR operation has been in business since 2005.

While the overall size of the CAR mobile market has grown quickly from a low base since the newer competitors set up their operations, with mobile penetration growing from just 1.30% at the end of 2004 to today's double-digit level, Orange and Moov have massively eroded the market share of the two longer-established MNOs. Of these, Telecel Centrafrique may now be in a better position to fight back, having been reacquired last year by Orascom Telecom.

If these two countries are truly representative, it would appear that MTN's Nhleko is quite right to contend that competitive conditions in smaller African markets may not be favourable for the support of as many competing MNOs as are currently in business. However, as last week's FT article noted, following the collapse of merger talks last year with India’s mobile groups, Bharti Airtel and Reliance Communications, Mr. Nhleko himself may be under pressure to prolong the whistlestop expansion of his six-year tenure. Mr. Nhleko acknowledges that "to maintain our growth, somehow we need to try and find larger markets". The FT piece insists that he appears focused on African opportunities, such as long-awaited new licences in fast-growing Angola and Ethiopia, one of the few countries that maintains a state-run monopoly. MTN’s balance sheet, says the article, "shows it is poised to pounce."

Let's see if further African expansion by MTN and other powerful groups this year drives the widely predicted wave of consolidation across the continent's mobile markets.

Are some African markets already contested by too many cellcos?

The going gets tougher in African mobile markets?

By writing here quite regularly about developments in Africa, I might have created the impression that I am a regular visitor to that continent. Not so. While it has been my pleasure to meet many telecoms sector executives who work hard to grow their businesses and widen the availability of services across Africa, these meetings have always taken place either on European soil or in the Middle East. Typing with crossed fingers might sound difficult (and painful), but that is what I need to do today because I am fervently hoping to avoid any last-minute problems which might prevent my finally correcting this glaring omission from my experience of world travel. All going well, I should soon be representing my company in Kenya on an admittedly too-short trip to the East African country.

With this in mind, it is perhaps understandable that one article which caught my eye around a week ago was a Financial Times piece about predictions made by MTN boss Phuthuma Nhleko. The influential South African businessman believes the continent will see a wave of telco sector consolidation in the next 1-2 years, and the article contends that this will result from both new entrants and more established competitors struggling to maintain healthy margins in increasingly crowded markets.

At first sight, you might think that there is plenty of room to play in Africa, where mobile penetration stood at just 37.75% by December 2008, according to the Informa Telecoms & Media-run World Cellular Information Service. The FT's Tom Burgis feels that this figure is "far lower than in all other regions." For me, the fact that WCIS logged just 44.64% penetration across the Asia-Pacific region suggests to me that while Africa does stand out, it is clearly not the only part of the world where further robust subscriber growth looks like a possibility.

Despite initially appearing to pick out Africa as the stand-out telco sector investment opportunity of 2009, the FT's Burgis first raises then dashes hopes of truly excellent growth prospects there, arguing that "all but the earliest arrivals in most countries have struggled to make inroads, despite often having to build infrastructure from scratch."

Does that claim stand up to examination? Let's take a look at Africa's most populous state, Nigeria. Here, the country's very first mobile operator is actually among the laggards: WCIS market intelligence suggests that M-TEL, the mobile arm of wireline incumbent Nigerian Telecommunications Limited, had fewer than 260,000 subscribers at the end of 2008, down from around 700,000 in December 2006. At the end of 2005, M-TEL subscribers numbered over one million.

So what has caused this alarming exodus of M-TEL customers? While the success of MTN and others has hurt in recent years, the arrival of the South African cellco's Nigerian subsidiary in 2001 did not immediately cause a reversal of M-TEL's fortunes. Quite the reverse, in fact. The country's first-to-market MNO continued to grow well when MTN and fellow 2001 entrant Econet Wireless Nigeria hit the local mobile scene.

Any subscriber loyal to the latter ever since its launch would be forgiven for having become a bit confused by regular branding changes. Econet was redubbed Vee Mobile in 2004 as a result of a protracted wrangle that I won't even try to summarise here. 2006 saw another rebranding when the MNO was acquired by Celtel International, another transaction not without twists and turns. A notable difficulty was the the last-ditch attempt by Econet Wireless to block the USD 1 billion acquisition. At the time, Informa's Global Mobile reported that Econet, as a co-founder of the cellco, had "long asserted preemptive rights" and was claiming to have "raised more than US$1.5 billion to acquire the company" while protesting that it had been "prevented from making payment."

By the time Celtel brand made its debut in Nigeria, the pan-African mobile group founded by Dr. Mo Ibrahim had already been acquired by Kuwait-based MTC, now known as Zain. In 2007, when MTC came up with the Zain brand, it was announced that the Celtel name would continue to be used across the group's African footprtint, at least for a while. As Global Mobile Daily reported at the time, the the decision to retain the Celtel name "was aimed at maintaining continuity", precisely because of how recently the operations in Nigeria and Kenya had been rebranded.

Fast forward to August 2008: after barely two years of operating with the Celtel name, the Econet-Vee Mobile-Celtel branding roadshow arrived at its most recent stop.

"Zain wants to be one of the top 10 mobile operators in the world within the next three years, and it has developed the Zain brand as the main vehicle for that global aspiration, because the company sees mobile telecoms as a commoditized business in which branding is one of a few important differentiating factors that are available to it," said my former colleague Matthew Reed at the time. Matt, the Middle East & Africa Intelligence Centre editor continued with words of warning: "Celtel is one of the best-known and most successful homegrown brands in Africa, and there are risks - as well as huge costs - in rebranding the Celtel operations. Zain also regards its One Network scheme as an important differentiator, but to some extent it can be copied by other multicountry operators."

The Nigerian market entry of MTN and Econet-Vee Mobile-Celtel-Zain (phew!) was enabled by the January 2001 auction of some GSM licences, with one reserved for existing player M-TEL, which up to then had run a TACS network used by around 40,000 subscribers. My understanding is that the Nigerian Government had intended to sell three licences in addition to the one put aside for M-TEL. One of these was not used.

One 2001 AllAfrica article that I found today tells the story of how Mike Adenuga, a billionaire businessman, banker and oil mogul had hoped to take part in the country's GSM revolution. His company, Communications Investment Limited (CIL), had emerged as one of the auction winners of the three slots auctioned by the government, but, the article states "barely a month later, things [had] turned sour for CIL and its quest for a digital mobile telephone licence." What went wrong for CIL, continues the article, "depends on who you talk to" with the the Nigerian Communications Commission saying that "CIL failed to pay for is licence in time" and CIL saying "it had demonstrated that it had produced the funds but was delaying the final stage of payment, because it was trying to clarify the status of the frequency it had been allocated."

"When you begin from day one with a frequency that is encumbered, that puts you at a disadvantage with your competitors," a spokesman for CIL told Allafrica at the time, adding that CIL "realised that the frequency given to it by NCC had previously been awarded to another company, and was the subject of a court case."

After this frustrating delay, Mike Adenuga finally got to compete in the Nigerian mobile arena in 2003, when Globacom launched services. Since then, the company has gone on to acquire over 16 million subscribers, including the roughly 30,000 that have been persuaded of the value of 3G services since Globacom's W-CDMA network launch in February last year. Going to market later than the 2001 auction winners does not seem to have prevented Dr. Adenuga's company from establishing a solid presence in the market, although it is worth noting that Globacom's market share has been declining fairly steadily since peaking at around 31% in the Spring of 2007. Globacom, now with a 25% share of the Nigerian market, has sought growth opportunities elsewhere in West Africa, rapidly establishing a solid presence in Benin and buying a mobile licence in Ghana, where sub-50% mobile penetration and a population of over 20 million may present a good growth opportunity.

Given the MTN CEO's comments reported by the Financial Times this week, it will be interesting to see if Globacom's foray into Ghana proves challenging in terms of maintaining decent margins. Back in Nigeria, we can watch how Etisalat manages to fare, having entered the market as recently as last year. Despite Globacom being pushed back in terms of market share over the last couple of years, with 16 million subscribers, it seems hard to argue that going to market later than its competitors has hurt the company badly in the sense of establishing a presence.

I will be interested to see how far an examination of further African markets in future posts will dig up evidence to support the notion that the going is about to get tougher for new entrants and established players alike.

The going gets tougher in African mobile markets?

CDMA alive and well in Nigeria?

ZTE last week announced that its CDMA EV-DO Rev. B solution will be available for commercial deployment in Q3 this year. Kevin Fitchard of Telephony magazine reports that the Chinese vendor claims to have demonstrated the viability of dedicating an entire CDMA network to 3G while still supporting both voice and data. ZTE talks up the advantages of having circuit-switched voice capacity replaced with VoIP, claiming that Rev. B will have both the capacity and low latency to support high volumes of VoIP traffic.

However, as Fitchard notes, CDMA operators are not rushing forward in great numbers to deploy Rev. B, with many of the major players having already committed to deploying LTE networks. Notable, of course, is US giant Verizon Wireless, whose LTE plans are at an advanced stage. Fitchard argues that LTE will not only give CDMA operators the same wide channels as Rev. B, but it is also a more spectrum efficient technology, going on to predict that CDMA operators are likely to bypass Rev. B entirely and focus their broadband strategies on LTE.

None of this is to suggest that the CDMA networks themselves are set to become a thing of the past any time soon. OK, in a recent post here I noted that India's Tata Teleservices (as has been the case with its rival Reliance Communications) is looking to migrate customers from a legacy CDMA to a newer GSM network. I also mentioned the case of major Brazilian cellco Vivo being further down that same migration path. However, I have also written here about new entrant Sistema Shyam Teleservices wanting to acquire other CDMA operators in order to gain better access to the Indian market. In the same article, I noted that the COAI, the Indian GSM operators' trade association, has been protesting about the possibility of being outpaced by CDMA operators in the race to deploy 3G services.

In India at least, there appears to be life in the CDMA camp. Another market where the same can be said would appear to be Nigeria. Some CDMA operators there certainly claim to be in rude health, not least Visafone, a unified service licence holder which had launched commercial services in over forty cities across twelve states, including in the capital Abuja, by early 2008. According to a year-old Global Mobile Daily report, the operator gained its license following its acquisition of CDMA operator Cellcom in June 2007, going on to grow by purchasing further CDMA players Independent Telephone Network and Bourdex Communications in November 2007 and January 2008 respectively. These acquisitions gave Visafone a subscription base of around 100,000. According to an article that I stumbled upon today, the unified service licence held by the company, which was founded by Zenith Bank International CEO Jim Ovia, allows the provision of both mobile fixed telecoms services. This followed the 2006 expiry of a five-year mobile market exlusivity arrangement enjoyed collectively by the country's GSM MNOs.

By July 2008, my former Informa Telecoms & Media colleague Matthew Reed, editor of Middle East and Africa Wireless Analyst, was writing about Nigeria's CDMA operators experiencing "strong growth". Matt noted that the unified licensing system had liberated the CDMA players by enabling them to offer nationwide services, and pointed out that Starcomms, then (and still) the country's biggest CDMA, operator had seen its subscription count grow 125.5% in the twelve month period up to March 2008. Matt also observed that Multilinks, which is controlled by Telkom, South Africa's incumbent wireline operator, had, over the same period, enjoyed at 49.2% rise in its subscription count. Other numbers reported by Matt last summer: Reliance Telecom had recorded growth of 54.84% in the 12 months to end-March, to 430,000 subscriptions, and Intercellular and Visafone had both seen their subs counts more than double over the same period.

Despite these strong growth rates then, as now, the big three GSM MNOs remained much larger players. That notwithstanding, Visafone CEO Thomas Ninan was keen to direct some highly critical comments towards his GSM rivals when profiled by Nigeria's Technology Times in November. Ninan alleged that Nigerian GSM subscribers suffer QoS issues because the operators "commit an inadequate portion of the revenue they yield from the nation’s mobile telephony market on network expansion." According to Ninan, states the article, "in a bid to gain maximum return on their investments, GSM operators only spend a relatively marginal part of their revenue to network expansion, a development that has seen subscribers... suffer... network congestion."

Ninan was quoted as saying that Visafone was "exploiting opportunities created by GSM operators that are short-changing their customers". This particular comment was made in Mauritius, where Ninan was attending the 3rd Global CDMA Operation and Development Forum, hosted by Huawei, Qualcomm and the CDMA Development Group. In that setting, I imagine that Ninan may well have got a fairly sympathetic reception for his strong words.

Ninan feels that the leading GSM players, MTN Nigeria, Zain Nigeria and Globacom have set their tariffs "very high", which opens "more space for price competition."

To some degree, it now seems that the Nigerian Communications Commission concurs with Mr Ninan's view that mobile subscribers in the country could be served better. Last month, Technology Times reported that the NCC has found it necessary to inaugurate a 12-man Industry Consumer Advisory Forum to protect the rights of consumers of telecoms services. Organisations represented on this advisory boady include the Nigerian Society of Engineers, the National Disabled Empowerment Forum, and the Consumer Awareness Organzation. The Association of Telecommunications Companies of Nigeria (ATCON) is also represented, presumably in the interests of balance.

In terms of securing better deals for customers, one area of concern, according to Muhammed Rudman, Managing Director of Nigerian Internet Exchange Point (NIXP), is the high price paid by end users of Internet services. NIXP is a neutral, not-for-profit Internet exchange committed to enhancing the exchange of traffic between networks through co-operative peering agreements. According to another Technology Times report last month, Rudman has urged the Government to mandate all service providers to connect to the nation’s exchange points, adding that a Government-mandated connection rule "is a last-ditch recommendation following the apathy shown by service providers". Rudman feels that all service providers connecting to the nation’s exchange points is a vital component of achieving "technical and economic gains for the Internet community in Nigeria."

In the mobile space, Visafone's Ninan has not been the only highly vocal booster for CDMA technology. Ninan's counterpart at Starcomms is the Lebanese-American Maher Quabain, who, in a March 2008 interview with ITNewsAfrica.com, insisted that CDMA "consistently provides better capacity for voice and data communications than other commercial mobile technologies, allowing more subscribers to connect at any given time."

Perhaps the most bullish words on the subject of the Nigerian CDMA operators' prospects come from Reliance Telecom, whose Executive Vice Chairman Ken Aigbinode, speaking last summer, set his company the target of having acquired 10 million subscribers by 2011. This does, perhaps, look ambitious. The company's subscription numbers surged from 415,000 to 752,000 in the period Dec 2007-Dec 2008, according to Informa's World Cellular Information Service. For me, 10 million still looks like a quite distant milestone. That said, there is room for growth in the Nigerian market. Mobile penetration stands around 40%, and the country currently has a population of around 148 million. However, with no fewer than eleven mobile operators currently competing, and with the GSM players still a long way ahead, I do wonder how far the CDMA MNOs can grow. Of the GSM group, the newest, Etisalat Nigeria, is presumably well-funded, given the deep pockets of its majority shareholder from the UAE.

There are not many markets worldwide still hosting a GSM-CDMA struggle. Nigeria's looks by some measure the most interesting.

CDMA alive and well in Nigeria?