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Leveraging CDMA

In the mobile world are two technologies generally being used for communication. One is the (GSM) Global System for Mobile Communications and the other is the (CDMA) Code Division Multiple Access.

Maher Qubain, CEO, Starcomms

Through the CDMA technology, Starcomms , Nigeria ’s triple play provider of mobile, fixed wireless and broadband services lead a revolution and rapidly became Nigeria ’s largest 3G CDMA operator. And as the obsolescence of the 3G technology inches near, with the (4G LTE) Long Term Evolution at the ready, the  4th largest telecommunications operator is poised to capture a good deal of  the emerging technology and CEO Maher Qubain  is quick to drive home the point:

“From a technology point of view, 4G LTE is really good news for us because within the next two years; the convergence of GSM, CDMA and other standards are going to come from the 3G to the 4G LTE. And this technology will allow us to leverage our experience of managing multiple offerings within a single company as opposed to the GSMs who’s traditionally done voice and then GPRS before subsequently adding the 3G technology”.

4G LTE, the last step towards the 4th generation and successor to the 2G and 3G standards provide a comprehensive and secure IP based solution where facilities such as voice, data and streamed multimedia are provided to users on an anytime, anywhere basis and at a much higher data rates than previous generations.

As the teleco company races to roll out its 4G network into the Nigerian market, its early success could pave the way for global recognition; but it may have to keep the momentum rolling by once again integrating Qualcomm’s assets in giving it the perfect launch pad into the early 4G Nigerian market.

Thriving on the CDMA platform, Maher Qubain holds strongly that the future of mobile communications lies in the revolution currently being led by his company’s segment of telecoms: “CDMA technology remains one of the fastest growing and most-advanced fixed wireless communication technologies.

And the total cost of operation maintenance over a five year period is more than thirty-five to forty percent more efficient than the GSM technology which is purely a voice technology. Added on top of that is GPRS for enhancement and which means additional infrastructure investment”.    With several unique features that makes it a cost-effective, high quality wireless solution, CDMA’s popularity has steadily risen over the past few years and is now being widely deployed such that estimates shows that over 50 % of Americans own a CDMA wireless phone:

“That’s the end of discussion”, enters Qubain. “And even though GSM has been around for  much longer time,  you‘ll find more CDMA users in the United States . And if you look at AT&T and Verizon; you’ll also find that they compete on value for money, coverage and quality. And by the way, Verizon is probably much bigger than AT&T and yet, they are on the CDMA platform. There’s a reason for it”

“Recently, Verizon announced that before the end of  last year {2009) they will be launching their very first 4G LTE network in the United States and then, what did AT&T do? Right after the Verizon announcement, they also announced that they were going to launch the 4G LTE. That shows that CDMA is leading the revolution”.

CDMA is a military technology first used during World War 11 by English allies to foil German attempts at jamming transmissions. The allies decided to transmit over several frequencies, instead of one, making it difficult for the Germans to pick up the complete signal. Because Qualcomm incorporated, the US based wireless telecommunications research and Deveopment Company, created the communication chips for CDMA technology; it was privy to the classified information.

Once the information became public, Qualcomm claimed patent on the technology and became the first to commercialize it.

In 1990 Qualcomm began the design of the first CDMA-based cellular base station based upon calculations derived from the CDMA OmniTRACS satellite system. This work began as a study contract from Air Touch Communications, an American wireless service provider which was facing a shortage of cellular capacity in Los Angeles. Two years later, Qualcomm began to manufacture CDMA cell phones, base stations, and chips.

In 1995 the CDMA technology was commercially launched for the United States PCS band and was standardized as IS-95.Shortly thereafter the technology was also launched in Europe, Asia and Africa. In 2002, twelve years after it started operations as a PTO in the Nigerian telecommunications industry,  Starcomms, Nigeria’s leading light in CDMA, deployed the world class technology and firmly established itself as the largest operator in terms of coverage, subscriber base, network quality and customer experience.

As a leading provider of 3G broadband services, the company has also seen its gross subscriber base rise to more than 2.9 million just as the company aims to further leverage on the CDMA platform to double its subscriber base to 5 million in the next 12-24 months and then go on to reach 10 million.

Recently, the company  introduced the growing global phenomenon of social networking sites; Facebook, Twitter, Hi5 and MySpace on its network: “The service is in line with what Starcomms has always delivered to its customers”, Maher Says, “and we are the first network to offer this service to subscribers as a means to keeping them in touch with modern trends”

In leveraging the merits of the CDMA, Starcomms have developed the right model for the rapidly growing Nigerian telecoms market and with the deployment of the CDMA2000 high speed data technologies, Starcomms have not only availed Nigerians to the state-of-the-art broadband internet service;  it has also brought about a technology that’s future proof, scalable and spectrally efficient  with a low Total Cost of Ownership: “As competition increases”, Maher notes,  “CDMA’s lower TCO to deliver voice, multimedia content and broadband data services makes it more attractive and economically beneficial to the company and customer alike”.

In the past 10 years, which is how old CDMA really is, from a mobile point of view, versus the 30 years of GSM; Maher finds that the growth of CDMA has doubled that of GSM: “That means it took us half the time to double our growth than it took GSM. And even though we have much more expensive handsets and difficulties in international roaming, I think we are still doing very well”.

In doing very well, Starcomms has continued to leapfrog along its CDMA path. The company currently boasts  a very wide coverage in 31 cities; 22 states and 170 towns. It has over 705 base stations across Nigeria offering the lowest drop call rates and best network quality as reported on the NCC website and by customer experience. It has also won numerous awards on its iZAP product and plans to come up with additional product offerings: “We want to continue to reinvent and bring innovative services because we believe that we have a moral obligation to bring about fundamental change to the way Nigerians live, talk and use communication generally.

That is what our brand values are: Innovativeness and Customer experience, Network quality and Value for money. These are the three strategies upon which we anchor”.

Coming on board Starcomms in 2002 with over 18 years cognate experience drawn from the international telecoms industry , working with big names like AirTouch, Vodafone, AT&T Wireless, Bell South and Later Ericsson, the story of the progress achieved by starcomms as the Nigerian pioneer of the CDMA technology would be incomplete without the mentioning of the Jordanian born American schooled Maher Qubain who started out as the company’s Chief Technical Officer and then rising to the high office of Chief Executive Officer in 2005. Now in his 8th year in Nigeria as a key player in the telecoms convergence arena, he thinks the ICT revolution is just beginning:

“ICT penetration is less than 5 percent”, he says, “and I think this country will have so much to offer in the next 3 to 5 years that it would become the Tsunami wave of telecoms. The Tsunami is here and we are still surfing it. And I don’t think it’s going to subside in the next 3 to 5 years.  So, the tremendous opportunities need to be viewed by investors from around the world so as to open their eyes to the fact that this is a tremendous country”

Even as he agrees that there are challenges he thinks “we are overcoming them nice and slow”.
From the telecoms point of view, Maher stresses that Starcomms is leading the change. “In the CDMA market, we are leading every effort because most of the other CDMA players copy exactly what Starcomms does. That is, for every offer we launch, they also copy and re-offer it into the market. So that makes them followers, meaning that they will do well in the short term but in the long term, it’s the one who’s leading and believes in the country that’s really going to make a change”.

Starcomms is one of the best run companies in Nigeria. This is made obvious in the company’s strict adherence to corporate governance. The company has managed to basically build a business that’s not only for “today or tomorrow” but for the long term future. The investments by Actis, the leading private equity investor in emerging markets alongside ECP Africa Fund I, another private equity investors, in January 2005, was a milestone achievement for the company: It remains the first and only time to date in the history of Nigeria that two blue chip private equity funds and their large portfolio of 8 Billion Dollars combined invest in a Nigerian telecom company.

Actis invested an undisclosed sum while ECP Africa Fund I invested the sum of US$ 34.3 million common equity and shareholders loan. In July 2008 Actis and ECP exited their interests in the company: “Their exits have only strengthened our belief in further investments in corporate governance because Starcomms truly believes and practice excellent corporate governance”.

For emphasis, he added that despite their exit, the company have been doing well financially and we has also improved its cash flow by turning bottom line positives. He thinks  this was done by managing “our various segments of Mobile, fixed wireless and Data business” and then hints that the company’s 2010 strategy is going to be a little bit different than 2009 because “it’s going to be a combination of growth and revenue enhancement”.

At a time when banks have no money to lend and also when outside countries have risk exposure limit to Nigeria, Starcomms Plc was able  to obtain a loan in the sum of US$ 93 million “at very good capital lending rate” from China Exim and Cynosure Bank for a 2010 bill plan. In retrospect, Maher thinks “That was a tremendous honor that we brought by way of foreign direct investment”.  One of Starcomms most exciting moment was on July 18th 2008 at 12.35pm when it listed public on the Nigerian stock exchange. “That’s for start ups”, Maher Qubain concludes, “and there’s going to be more to come hopefully soon”.


Disclaimer

Comments expressed here do not reflect the opinions of vanguard newspapers or any employee thereof.