As the merger deal between Multilinks, MTS and Starcomms to form CAPCOM comes to a nearing conclusion, the new company is set to begin operations by November.
The merger of the Code Division Multiple Access (CDMA) operators which was made possible by a turn-around investment by an American core investor and others emerged from the $200 million (32 billion naira) deal.
Others with vested interest in the new CAPCOM include; Oldonyo Laro Estate with five percent share; Bridgehouse Capital Limited has three percent stake; Asset Management Company of Nigeria – two percent and Private Equity Investors with one percent.
However, to compete with other network in the Nigeria GSM dominated telecommunication market; new services offerings, especially in the voice services will be unveiled coupled with new data plans, which is aimed at repositioning the CDMA sub-Sector.
For a while now, CDMA operators have been at a disadvantage to compete with other telecommunication companies as a result of low capitalisation, poor promotion of CDMA technology, subscribers’ preference for GSM telephony, and corporate governance issues.
Nevertheless, as part of the investment deal, CAPCOM is planning “to invest $50 million in the equity of CAPCOM, transferable into the ordinary shares of Starcomms PLC—a 10-year established Nigerian telecoms mobile CDMA operator, with spectrum in the 1900MHz range—alongside $150 million of equity derived from CAPCOM’s existing shareholders.
“To simultaneously consolidate Starcomms with two other Nigeria CDMA—Multi-Links and MTS, which will see them creating a single national Long Term Evolution (LTE) Broadband operator with 20Mhz of bandwidth in the 1900Mhz frequency range, to build from an existing combined 2012 base of 160,000 data consumers each paying $24- $32 per month to a base of 2, 500, 000 data customers by 2016.”
“The $200 million investment funds the acquisition of Multi-Links and MTS; recapitalises Starcomms and provides it with sufficient capital and liquidity to finance its existing creditors and working capital; and permits it to expand its existing network through the introduction of 4G/LTE technology to become a major provider of Broadband services to Nigeria’s burgeoning consumers.”
Meanwhile, Nigerian newspaper, The Guardian, disclosed that a competent source in Starcomms told the paper at the weekend that top officers of the companies will be let off their post in post-merger transformation.
“A wind of change and a lifeline has come the way of the troubled CDMA sector. Multilinks, MTS and Starcomms are coming together to become CAPCOM, which is expected, against any unforeseen circumstances, to roll out services in November. All arrangements have been concluded. The sector would come back to live”, the source stated.
