Final preparations are reportedly underway in Nigeria among three struggling Code Division Multiple Access (CDMA) operators to merge and form one large telecommunications firm called ‘CAPCOM’.

CDMA, which competes with the Global System for Mobile communication (GSM) technology, uses a “spread-spectrum” technique whereby electromagnetic energy is spread to allow for a signal with a wider bandwidth.

But CDMA operators Multi-Links, Starcomms and MTS have been battling with plummeting growth and profit figures in Nigeria, owing to the country’s preference for GSM services from companies such as MTN, Globacom, Airtel and Etisalat.

Other factors holding back growth for these operators are said to include low capitalisation, the poor promotion of CDMA technology, and corporate governance issues.

However, IT & Telecom Digest reports that these three CDMA operators are in the last stages of setting up a merger that could see $200 million invested by core investors into a new firm capable of offering 4G services.

A group of investors, who have acquired Multi-Links and MTS, are in the final stages of acquiring Starcomms to form CAPCOM, according IT & Telecom Digest.

IT & Telecom Digest says a Gibraltar-registered trust called MBC is set to own 53% of CAPCOM, while African investment firm Helios Investment Partners Plc is to hold 11% of the company. The Asset Management Company of Nigeria (AMCON) is to have a 2% stake; while leasing financial institution Middle East Capital Group is to hold 25%.

The remaining shares are to be held by Kenya’s Oldonyo family, in the form of the ‘Oldonyo Laro Estate’ with 5%; Bridgehouse Capital Limited with 3% and private equity investors with 1%.

And IT & Telecom Digest further says it possesses deal documents stating that the investors have the backing of the the Nigerian Communications Commission (NCC) and the Nigerian Stock Exchange, as Starcomms is listed on the country’s bourse.

Moreover, the publication adds that shareholders of Starcomms have given their consent for the deal.

According to the deal document in the possesion of IT & Telecom Digest, Starcomms is to be recapitalised with $90 million in addition to an injection of $110 miilion worth of assets.

“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,” IT & Telecom Digest quoted the deal documents.

The documents further say that the deal is to create 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.”

Investor, CEO, chairman and cofounder of companies in the property, industrial, retail, financial and tech sectors, Stefan Allesch-Taylor, is being touted as a possible candidate for chairman of CAPCOM.

Nigeria’s telco market has been booming, as the the West African country has overtaken South Africa to become the continent’s largest mobile market with almost 100 million subscribers in early 2012, according to BuddeComm research.