Africa's former telecom monopolies are banking on CDMA technology to spread connectivity to rural areas as universal service funds fail to provide support and development efforts shift to minimizing costs.Former monopolies such as Telkom Kenya, Telkom South Africa and Malawi Telecommunications had copper lines covering most of their markets, but the growth of mobile phones shifted business focus from fixed to mobile technology.The cost of setting up GSM (Global System for Mobile Communications) services in rural areas with low spending power has made major mobile service providers shy away, however, leaving the market to the former monopolies.

"Former government-owned telcos are usually faced with the impossible challenge of getting copper out to the masses as their mandate; this is a different primary objective than one finds with private mobile operators, which have a stronger focus on the health of their balance sheets," said James Munn, Qualcomm's vice president of business development for sub-Saharan Africa.

Now, African telcos are looking to draw on experiences and challenges from India and China, where CDMA (Code Division Multiple Access) has been used to push broadband to rural areas. CDMA’s coverage characteristics allow for fewer base stations, meaning lower capital and operating expenditures.

"The CDMA network infrastructure enjoys a unique characteristic in that (it has) the best coverage characteristics among all mobile technologies in the 800Mhz and 450Mhz spectrum bands whilst also offering the ability to provide data at 3G speeds," Munn said.

Telkom South Africa has the best-developed CDMA network, but Telkom Kenya and Malawi Telecom have also invested in the technology as a way to leverage existing legacy systems and compete with GSM companies.

"Telkom Kenya has close to 500 CDMA sites across the country, offering quality voice and data service and covering long distances, serving a wider population without incurring huge capex/opex costs," said Angela Mumo, Telkom Kenya's corporate communications manager.

Telkom Kenya faces stiff competition on its Orange GSM network, mainly in rural areas, but the company has also relaunched its CDMA service, hoping to capitalize on its competitive edge in rural areas.

"Telkom Kenya already covers a significant part of the rural areas with CDMA and [has] already engaged better ways of managing the costs of expansion and maintenance of this network, which will help in further bringing down the cost of service," Mumo said.

In Malawi, several CDMA networks are being rolled out.

"Both fixed-line operators are deploying fixed wireless access services in the 450Mhz band and 800Mhz band; the technology has just been rolled out in the rural areas and its impact is yet to be assessed," said Lloyd Momba, deputy director of spectrum management for the Malawi Communications Regulatory Authority (MACRA).

The creation of universal service funds was expected to help push connectivity numbers up through subsidies to telcos. However, most funds are not yet set up, and in countries where they are, they are shrouded in controversy. Uganda has the most developed funds in Africa and Tanzania is setting one up, while Kenya is yet to finalize preliminary studies.

In Malawi, the Communications Act is being amended to allow collection of the levies from licensed operators for a universal fund.

"Once finalized, the fund will serve the needs of the rural and under-served areas," said Momba. "However, in waiting for the fund to be fully set up, the government of Malawi has sourced funding from the World Bank and is currently running a pilot project targeting 10 out of the 28 administrative districts in Malawi; the fund will take over after the pilot project," Momba added.

Network expansion has been controversial in Africa as companies seek to recoup their costs as fast as possible. This has led to subscriber-base expansions that are not supported by investment in infrastructure, leading to network congestion, high call-drop rates and low call-completion rates.

Although many regulators in Africa have imposed targets on service level agreements (SLAs), only Rwanda, South Africa and Nigeria have reprimanded and fined mobile service providers for poor services. Kenya threatened to withdraw licenses if services do not improve, giving telcos up to February next year to correct service problems.

CDMA, however, operates in lower spectrum compared to other wireless services and is likely to handle more load in a dispersed population.

The new CDMA deployments will test the ability of regulators to measure and monitor network performance. The strength of ICT consumer associations, in any case, is likely to push the regulators to seek accountability and performance from service providers.