2016 Wrap UP: Uganda Telecom operations overshadowed by Sale Rumors, Huge Debt, and Bad Press.

January 5, 2017

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HiPipo Digital Team.

If 2014 and 2015 were bad years for Uganda Telecom (UTL), then 2016 was worse. UTL’s under-performance continued in 2016.

This poor performance in the just concluded year was nonetheless unsurprising as UTL has been on a gradual decline since the unexpected overthrow of the Libya President, Colonel Muammar Mohammed Abu Minyar Gaddafi (RIP) in 2011 and the civil war that followed thereafter. At that time, most of UTL’s funding came from Libya and thus the overthrow of Gaddafi left a huge gap that remains unfilled to date.

UTL which was formally part of the Uganda Posts and Telecommunications Company Limited (UPTCL) is a joint venture owned by Libyan Post, Telecommunication and Information Technology Holding Company (LPTIC) also referred to as LAP Green of Libya – a company representing the Libyan Government and the Ugandan government with a reported shareholding stake of 69 percent and 31 percent respectively.

Sell Rumors: In 2016, there was unending talk that UTL was seeking new investors. Following failure by its shareholders to raise funds required to clear huge debts and disagreements on the recapitalization plan, the company was in 2016 seeking to sell off the 69 percent stake owned by LAP Green of Libya to investors from United States of America. According to a November report in the Daily Monitor newspaper; “the plan was to force the Libyan Post, Telecommunication and Information Technology Holding Company (LPTIC) out of UTL and allow a fresh investor to come on board.”

Huge Debt: Additionally, Daily Monitor newspaper revealed in the same report that UTL was also “indebted to a tune of about UGX 128 billion and also had unpaid arrears of more than UGX 60 billion to Uganda Communications Commission (UCC) and other vendors in interconnection fees.”

Bad Press: The bad media coverage received by UTL in 2016 was thanks to its failure to manage its issues. Many of the media reports on this telecom in 2016 were about failure to clear debts, failed sale, and staff anxiety over pending retrenchments plus funds embezzlement.

LPTIC chairman holds talks with President Museveni over UTL future: In the third week of November 2016, the Chairman of Libyan Post, Telecommunication and Information Technology Holding Company (LPTIC) Dr. Faisel Gergab was in Uganda and held talks with President Museveni focused on the “transformation plan to turnaround the Ugandan based telecoms operator UTL that would significantly boost the company’s existing Data Services.”

According to LPTIC Chairman Dr. Faisel Gergab, HE President Museveni reaffirmed the government’s willingness to work with LPTIC to transform UTL into a leading universal telecoms service provider plus providing suggestions for ways to implement the new plan that would ‘help turn the company around’.

“Following the meeting with HE President Museveni, all Parties are now confident that there will be real progress to quickly remove the obstacles that have blocked the implementation of the agreed plan, and clear the way forward to commence the execution of the UTL transformation plan,” a statement from UTL noted.

Uganda Parliament probes UTL: With matters seemingly running out of hand, the Uganda Parliament summoned UTL top management. This was after Budadiri West MP, Nandala Mafabi presented to Parliament a report showing several “flaws in the management and running of the company, in which government has a stake of 31 percent.” According to the New Vision; “Mafabi cited non-auditing of company accounts, lack of investment in the company and several court cases against the company as causes of the firm’s eminent collapse.”

Budadiri West MP, Nandala Mafabi presented to Parliament a report showing issues affecting Uganda Telecom. — Budadiri West MP, Nandala Mafabi presented to Parliament a report showing some of the issues affecting Uganda Telecom.

“Over the past few years, this company has continuously been on a free fall that has reached alarming levels. If nothing is done to rescue it, it could soon cease to exist,” Mafabi said as quoted by the New Vision newspaper.

Consequently, a seven member select committee was constituted by Parliament to undertake this activity. The parliament investigations started at the end of November with the seven member select committee given two months to investigate, present findings and recommendations. This is currently underway. By the end of 2016, several members of UTL’s top management team led by the managing director Mark Shoebridge had already appeared before the parliament select committee investigating the company. We now wait for the report expected early this year.

UTL’s top management team led by the managing director Mark Shoebridge had already appeared before the parliament select committee investing the company

Away from boardroom issues, UTL had a slow year in the market too. There were growing complaints about the scarcity of UTL airtime cards in different areas. Its sales team ought to do better.

Throughout the year, the telecom fronted several Voice and Data promotions; Kizze, Endobo, UGX 3 per second calls, Corporate Mega Bonus and New Sim Cards sales – ‘Talk More, Surf More and SMS’ on UTL.

Final Verdict: 2016 was a bad Year for UTL. In 2017, the telecom needs a committed savior to lead its recovery!

Happy New YEAR!

Content Director : Nicholas Kalungi.

CEO : Innocent Kawooya.