By Emeka Aginam

NIGERIA’s robust telecoms sector suffered a setback last Monday when a CDMA operator, Multilinks Telkom announced that it is quitting business on the platform, saying the decision was purely a business imperative.

Vincent Raseroka, CEO Multi-Links Telkom (right) Zeona Jacobs Telkom spokes person and Ijeoma Abazie, Chief Corporate Affairs Oficer of Multi-Links during the press conference last Monday. Photo by Emeka Aginam

Giving assurances that the development will not affect existing customers and employees who are rendering the CDMA services, Multilinks Telkom Chief Executive Officer, Vincent Raseroka said Monday in Lagos at a press conference that  the Telkom Group Board mandated the management to review options for the exit of the CDMA business.

The company’s small market share in a challenging environment, little progress made in  reducing costs on long term contracts, lack of return on investment in its mobile business were part of the reasons influencing Telkom Board decision to exit CDMA business.

Although a number of expressions of interest from both local  and international industry players have been received, Raseroka noted  that “it is strategically, financially and commercially challenging for us to continue to do business in this segment.

“With a current market share of 2.6% in a market dominated by the GSM technology, it has become imperative that we explore other options and chart a new path to growth and profitability for ourselves as a business by utilizing our fixed infrastructure here in Nigeria.

“Additionally, a number of contracts have rendered Multi-Links Telkom’s CDMA business unprofitable and unsustainable,” adding that  the company was committed to reducing costs in a manner that ensures sustainable long-term benefits he said.

Even though the potential impact on staff will be known in the first quarter following conclusion of any potential transaction,  he assured that the company’s fixed line customers will not be affected as a result of the new development, adding that 11 expatriate staff will leave within the next month.

“For the time being, our CDMA operation will continue to run as usual. Multi-Links will work with NCC to find a solution. Once the decision is finalized, Multi-Linnks will notify customers acordingly with sufficient lead time

He further disclosed that  as Multi-Links Telkom commences an exit’ of its COMA business, existing customers and employees who are rendering the CDMA services will be protected. He disclosed that CDMA only has 10% market share in Nigeria, limiting the necessary scale opportunities for the CDMA players.

Speaking further on the decision of the board t exit the CDMA which is a huge business investment,  the spokesperson for the Telkom Group, Zeona Jacobs also revealed that the Telkom Group Board has mandated management to review options for the exit of the COMA business in Nigeria even as a  number of expressions of interest have been received from local and international industry players. She said that   expressions of interest  would be evaluated and quantified appropriately over the next quarter  before a final decision is reached on the myriad of options open to the company.