Nigeria: NCC Blames Bank Loans For CDMA Operators’ Collapse

Telecoms

The executive vice chairman of the Nigerian Communications Commission (NCC), Dr Eugene Juwah, has blamed the strings of bad loans from Nigerian banks for the collapse of several CDMA network operators in the country.

Juwah, who delivered a keynote address at the 2014 Telecom Executives and Regulator’s Roundtable organised by the Association of Telecommunications Companies of Nigeria (ATCON) in Lagos recently, said poor financial management occasioned by the huge loans sourced from banks led to the implosion among CDMA network operators.

He said:“The CDMA operators dying because they borrowed heavily from banks and they could not pay back.” Juwah said the operators over-borrowed, and most of the loans were effectively deployed to the growth of their networks orchestrating their eventual collapse.

LEADERSHIP had in February 2012, reported how a debt of N27 billion crippled the plans of ZOOMmobile (formerly Reltelwireless), one of the leading CDMA operators to return to full commercial operation. The operator was hindered by huge Interconnect, contractor debts and several months’ salary arrears.

The massive growth recorded in the Nigerian telecommunications space since the liberalisation of the industry which started with the return to democratic rule, has eroded as over a dozen telecommunication operating companies have virtually collapsed.

Apart from MTN, Globacom, Airtel, Etisalat and Visafone which added subscribers to their network in 2013 and 2014, most of the other telecom service providers have become inactive.

Starcomms and Reliance Telecoms (ZoomMobile) among other CDMA operators have ceased to operate their network thereby contributing nothing to the overall subscriber base in the last two years, while Multi-Links has moved away from voice telephony to wholesale data services.

Latest figures released by the Nigerian Communications Commission (NCC) on its website shows that smaller telecommunication operators have disappeared as stiff competitive environment, inability to access sufficient funds, technology obsolesce, and poor management has wiped them out from the telecom field.

The fixed/fixed wireless telecom operators who did not add a single subscriber to their network throughout 2013 and 2014 include Starcomms Limited, Multilinks, Reliance Telecoms (Zoom), Intercellular Nigeria Limited, VGC Communications which is owned by MTN, MTS 1st Communications, Disc Communications, WiTEL, O’Net (Odua Telecom), Rainbownet Limited, Monarch Communications, XS Broadband (also owned b MTN) Webcom, IPNX and NITEL.

Source: Leadership 21 October 2014