After what started as an illustrious reign in the Nigerian telecom sector in the early days of the telecom revolution back in the early 2000s Starcomms, whose original tag-line was “We Speak Your language”, has finally lapsed from its long coma into final state of complete silence.
Events within the past few weeks in and around the company’s offices indicate that Starcomms has finally closed shop as the once leading CDMA telecom company has succumbed to the raging assault of the GSM companies whose superior money power put at a clear advantage from the very beginning. Their network have since gone off and subscribers who visited the customer service centres to complain were shocked to discover that their doors have been permanently shut.
In 2012 Starcomms posted a loss of about 6 Billion Naira with huge bank debts hanging around its neck. Therefore when the news of the merger of the then surviving but struggling CDMA operators involving Multi-Links, MTS and Starcomms broke in August 2012, not a few hoped that they could finally take the bend into solvency and recovery.
Key stakeholders were happy, that at last, there was a respite for the dying segment of the Nigerian telecommunications sector as the merger held forth the promise of about $210million fund injection into the new company by a prospective new investor, Capcom. However by the end of 2013, there had been no deal while Starcomms had literally sold off or leased most of its base stations as it continued to reel in huge losses and debts.
The Starcomms exit will no doubt have a telling effect on the former employees, its dealers, its subscribers, its investors and Nigerian economy generally. With the exit of Starcomms, the Code Division Multiple Access (CDMA) operators in the country now has only one notable player Visaphone whose major source of income is in its data services.
Apart from management savvy a significant ingredient for success in the telecom sector is a readily available financial support base as the business is highly capital intensive if you want to remain relevant at the national level.
What are the GSM companies doing that the CDMA have failed to do?