A recent report by eShekels has identified the scale of the mountain the smaller unified licence players will have to climb if they are to meet their promises. To start with, all the PTOs plus NITEL have only 7 percent of the market according to a recent report by Nigerian telecom consultant, eShekels. It is difficult to see how these could compete with an MTN, which has a market share of 41 percent. Globacom has market share of 24 percent and Vmobile, 22 percent. Mtel's share is 4 percent.

It has been confirmed that the traffic exchange between the PTOs and the GSM operators is just about 3 percent. The most calls are from one GSM operator to another. Now, between them, the GSM operators have 93 percent of the market. It is difficult to imagine what kind of competition the remaining operators with a total 7 percent of the market could put up.

This Day found out in the course of writing this piece that a GSM operator, especially a big operator like MTN could actually offer call for as low a cost below N5 and still be profitable. Yes, the profit would not be the kind that would make investors trip over themselves to rush to Nigeria, but the company would not go hungry either. It would still break even.

The fact of that situation is frightening. It means that if these GSM operators or even one of them decides to offer his service for say N5.50 per minute national calls, then the game is over for the PTOs and all the noise about unified licencing bringing competition would be noise pollution. Remember the cheapest local call between one PTO to another is N6.50 per minute. Take notice also that this remains the only advantage the PTOs have over GSM. The only other benefit is on-net calls. That however is for those subscribers looking for glorified intercom.

If a Vmobile offers call for that low, Glo and MTN must necessarily follow suit. If that scenario happens, the communication authorities would probably first come out to say that is the result of competition they have been talking about; that unified licencing engenders competition. Before they would finish spelling MoC, the PTOs would be all dead. It may hurt them all in the long run, but the GSM operators would have succeeded in sending the small operators to their early graves. They would then start the difficult task of readjusting their tariffs upward again. In a country where the populace is already crazy about mobile phones, that task may actually not be as difficult as theorists suggest.

Or consider the volume. Can anyone compare nine million subscribers to 300,000? On what basis would a Starcomms, with the highest CDMA subscribers compete with an MTN with a subscribers' base in excess of 9 million and moving close to 10 million? Let's take an example. Nearly every Starcomm owner would call an MTN line. Half MTN users may not call Starcomms in a month. It then means that Starcomms makes more money for MTN in interconnect settlement than it even makes for itself. The situation is further worsened by the prevailing interconnect rates which is still skewed in favour of the GSM operators. Where then is the competition?

The current interconnect regime discourages investment in the PTOs. The foreign investors, and some say, even local investors, might not want to invest in the PTOs.

It might not be all gloom for the CDMA operators however if they could leverage in on data provisioning and if they do it well.

The eShekels report on 'Nigeria ICT Outlook and Forecast' referred to earlier reveal that Internet awareness is increasing in the country. According to that report, Internet users in the country now total 3.034 million. But that is less than a fraction of the population, or even the subscribers figure of about 29.3 million by year-end.

The PTOs could cash in on the superior data capability which they say the CDMA technology has. A few of them like MTS First Wireless and Starcomms who have good mobile Internet products have seen how great demand for such products are. That alone could keep them in business, if they do it well. But as for talk about competing on voice service, it might be better for them to allow people talk about other things. Analysts agree that some other things could help the PTOs. Their situation would become better if the NCC would put in place a more equitable interconnect regime.

The NCC should regulate an interconnect tariff that would be more equitable. A PTO described 'equitable' last week to mean that the big operator does not undergo punishment for being big, and the small operator does not suffer perpetually for being small.

Equally important for the PTOs, the NCC should go ahead to name who the dominant operator/operators is/are. Once, in this industry when NITEL was the dominant operator, it was well stated. At the time, government ordered that calls from growing GSM firms to NITEL go for N12 per minutes while from NITEL to GSM operators, it is billed N18 per minute. The smaller operators benefited from interconnectivity than the bigger operators.

The current situation is such that NITEL has become a minor operator. In a matter of few months, many of the PTOs would have more lines than NITEL's decreasing 400,000 lines.

To help the PTOs, operators say there is need to officially declare another service provider or providers as dominant operator(s). That way, the benefits which the GSM operators earlier enjoyed would also be enjoyed by the current small operators.

Then there would be something close to an even playing field. The PTOs may then also just be able to hobble along.

This Day