Here on Mobility, we have reported speculations on mergers and acquisitions deals in the CDMA telecoms sector. Operators mentioned at various times have included Multilinks, Starcomms, Visafone and MTS First Wireless.
Perhaps there is some truth to the speculation of the Starcomms-Multilinks-MTS deal. According to CyberSchuulNews, “a merger of 3 CDMA operators and which surrounds the interest of Helios may be real if hints gathered on such a development are anything to go by.”
It is no secret that CDMA operators have hit bad times in recent years. Their subscriber base continues to deplete, and a number of them (including MTS First Wireless and ZOOMmobile) are off the radar already. Those still in operation are struggling badly to stay afloat. The story is that ATCON, the umbrella association of telecoms companies in Nigeria is not favouring the bailout option for distressed telcos. The merger seems the only way to go.
Industry watchers are however worried at the prospects of distressed companies merging. “It doesn’t make sense,” said one watcher who spoke under anonymity. We sort of agree too, unless some other measures will be implemented to change the direction that all three are headed. Insiders say that the merger may see new investors stepping in.
We also are of the opinion that a change of strategy is highly needed for CDMA operators to gain a footing. The flexibility of GSM mobile technology in terms of SIM and device acquisition will continue to give CDMA operators a headache. However, perhaps the data capabilities of CDMA technology needs to be turned into a unique selling point. Perhaps it is time that CDMA operators focus on and push internet services as their core services instead of voice.
Here at Mobility, we wish them success in their plans to turn things around. We would hate to see hundreds of direct jobs and thousands of indirect jobs go down the drain in an already stressed economy.
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