NCC official says over-borrowing to blame for collapse of CDMA operators

22 Oct 2014

The executive vice chairman of the Nigerian Communications Commission (NCC) Dr Eugene Juwah has blamed Nigerian banks for the collapse of several CDMA network operators, local news outlet Leadership writes. The official said that the providers’ poor financial management was made worse by the substantial loans offered by Nigerian banks: ‘The CDMA operators [collapsed] because they borrowed heavily from banks and they could not pay back [the loans].’ The cellcos over-borrowed to expand their networks at a greater rate than their subscriber base could support, Juwah argues, with maintenance and financing costs rapidly outstripping turnover. TeleGeography’s GlobalComms Database notes that Zoom Mobile became mired in financial difficulties in early 2012, and was forced to sack staff and shut down swathes of its network across the country whilst it sought new investors to recapitalise the business. According to Leadership, Zoom Mobile has since ceased operations, as has fellow CDMA provider Starcomms, which encountered similar financial problems in 2012.