Sudatel operates a 3-in-1 SIM for GSM, CDMA and 3G and Expresso will go GSM

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CDMA operators in Africa face a number of market difficulties and at least one major operator has considered switching to GSM. Only really in Nigeria has the market developed a sufficiently large and diverse ecology of users to succeed. In October 2009 Sudatel decided it was going to add GSM to its offer but has used a 3-in-1 SIM card to ensure that subscribers have the freedom to switch handsets in either direction.

The Sudanese mobile market is a three-horse race with the runners in the following positions: Zain (which will not pass over to Bharti as part of its acquisition); Sudatel’s Sudani (4.5 million) and MTN (4 million in its latest results). There is pressure on ARPUs as MTN’s latest results show it has only achieved US$5 this quarter, down 16%. This is down from an overall level of US$10-$15 in 2008 and will undoubtedly put pressure on all operators.

There are smaller operators in the south of the country but these are tiny compared with the national operators. Sudatel’s own fibre network is being extended to the south and will be completed in Q4, 2010.

Most operators believe that 40% market penetration is achievable over the next 3 years provided there is peace, infrastructure keeps getting extended and the cost of using that infrastructure comes down.

The second fixed operator Canar would like to get into the market but a fourth licence has not yet been agreed. This additional licence is likely to be in place by the end of 2010.

Sudatel originally launched its first mobile operation as a joint venture with Celtel but this was eventually sold off to Zain. In launching its second mobile operation, Sudatel has achieved two seemingly impossible things. As a historic incumbent telco, it launched a CDMA operation and managed to get enough subscribers to get into second place in the market ahead of MTN.

However, in October 2009 it decided to add GSM to its portfolio and in order to give subscribers a choice, it introduced a 3-in-1 SIM card from French company Oberthur that is able to handle, CDMA, GSM and 3G.

It had around 100,000 data subscribers in Q3, 09, the majority with a data card and a laptop. The mobile broadband is delivered either using HSUPA or EVDO Rev A which it launched in 2006.

Part of its rationale for making this move was that it wanted to be able to deliver its fixed line network through fixed wireless CDMA, particularly in remote areas. In these circumstances, CDMA provides many advantages in terms of coverage, fast deployment and a cost-efficient technology.

Sudatel has also set up a pan-African mobile operator called Expresso that has operations in Mauritania , Senegal, Nigeria and Ghana. The Ghana operation (branded Kasapa) was acquired from Hutchinson and was an existing CDMA operator as was its other acquisition, Intercellular in Nigeria.

It launched in Mauritania as Chinguitel with a 3G CDMA service but it has struggled to establish a foothold. But if things have gone less well than might be expected in Mauritania, its only Expresso branded operation in Senegal (which soft launched in January 2009) has barely got going. Having a CDMA network meant it made almost no dent in a market with two strong competitors in Sonatel (Orange) and Alize (Millicom). As a result, it has decided to introduce GSM in both countries in the near future.