VoIP dying like CDMA as apps dominate Nigeria tech market

Licensed Voice-over-Internet Protocol (VoIP) services in Nigeria are shrinking rapidly, following the same path to possible extinction that Code-Division Multiple Access (CDMA) technology experienced more than a decade ago, as millions of Nigerians embrace free messaging and calling apps.

Official data from the Nigerian Communications Commission (NCC) paints a worrying picture. The only active licensed VoIP operator, Smile Communications, recorded just 192,444 lines in March 2026, down sharply from a peak of 371,878 lines in October 2023.

Pioneer operator NTEL, formerly the state-owned NITEL, posted zero subscribers and missed its planned first-quarter 2026 relaunch target.

VoIP is a technology that allows voice calls and video calls to be made over the internet or any data network instead of traditional telephone lines or cellular voice networks. It converts voice into digital data packets, sends them across the internet, and converts them back to voice at the other end.

Abhulime Ehiagwina, Smile CEO explained the benefits clearly, stating “VoIP is still viable, especially for underserviced or non-serviced consumers. Your call rate is fixed. If you are in China speaking with somebody in Nigeria, it is that same N13 or N14. There is no change.”

He highlighted other advantages, stating, “On VoIP, once you are connected, you are connected, irrespective of how tiny the network is. As against internet apps where you will be looking at latency and lags.”

Additional benefits include free on-net calls and SMS (such as Smile-to-Smile), predictable costs, high reliability even on weaker signals, and integration with self-care apps for easy management of data and subscriptions.

This decline mirrors the complete collapse of Code Division Multiple Access (CDMA), an early mobile technology used for voice calls and basic data. CDMA entered Nigeria in the early 2000s through operators such as Starcomms, Multi-Links and Visafone. It promised clear voice quality and an alternative to the old NITEL monopoly.

However, CDMA suffered from regional licences that limited coverage, high operational costs, poor phone compatibility, and weak roaming.

Nationwide GSM operators like MTN and Airtel offered better scale, cheaper handsets, and broader reach. Subscriber numbers collapsed.

By 2019, the NCC officially recorded zero active CDMA subscribers. Most networks were shut down or migrated to GSM. The promising technology quietly died.

Licensed VoIP now faces a similar threat. While Nigeria’s broadband penetration has reached 53.86 percent and mobile internet users exceed 150 million, licensed VoIP subscriptions continue to fall.

Consumers prefer free or cheap over-the-top (OTT) apps such as WhatsApp, Zoom, and Google Meet.

Ehiagwina pointed to a fundamental difference. “In technology, there are hard-coded stuff and soft-coded stuff. Hard-coded stuff is hard. You have to pass wire here. You have to climb this mast. You have to tune your radio. Soft-coded things like WhatsApp are easy to navigate. When there is an issue, it is easy to quickly push an update.

“Most operators have seen that operating VoIP is capital intensive. That is why a lot of operators who started it have dropped it. The cost of running VoIP is really, really high.

Smile has stayed in the segment because it balances VoIP with broadband and still serves dedicated customers. We still have consumers that we service on our VoIP capabilities that we do not want to lose. At the end of the day, when we look at the bottom line, it is not a loss, even though it is not as profitable as it should be.

The only time a Smile will leave VoIP totally is when those kinds of things, like owning part of the app experience, are possible. Because I have a lot of consumers who do VoIP, even though it is not as profitable as I want it to be.”

Consumer behaviour has also changed dramatically. “The word loyalty doesn’t exist anymore. Everybody has two SIMs or more. Sometimes three or four. If I want to spend N3,000 with Smile and I am going to Owerri where Smile is not available, automatically I will give Smile just N1,000,” the CEO noted.

The NCC is taking steps to address the challenges. In February 2026, the regulator launched a comprehensive 26-year review of Nigeria’s National Telecommunications Policy, with particular focus on VoIP, over-the-top services, and infrastructure sharing. In March, it directed operators to compensate customers for poor service quality.

Ehiagwina welcomed engagement but called for stronger enforcement. “The big players in the industry are strangling everyone that are small. There needs to be fair play,” he said.

Licensed VoIP, which depends on expensive physical infrastructure and regulated international gateways often controlled by bigger operators, is losing relevance as consumers choose convenient apps.

Ehiagwina summarised the dilemma: “With 5,000 naira you achieve with VoIP what others deliver 25,000 naira value for using these other platforms. The demerit is the cost. But outside of that, it is a very solid service.”

Industry observers warn that without faster policy reforms, better infrastructure sharing, reduced right-of-way charges, and mechanisms for licensed operators to earn from the apps customers actually use, licensed VoIP risks repeating CDMA’s total disappearance.

For now, the combination of high costs, regulatory hurdles, and consumer preference for easy apps continues to squeeze the sector. Smile’s declining numbers send a strong signal: in Nigeria’s fast-moving telecom market, adaptability and consumer convenience are winning over legacy infrastructure models.