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The Ugandan government is currently in negotiations with potential investors to secure investment capital for the recently revitalized Uganda Telecommunications Corporation Limited (UTCL), previously known as Uganda Telecom Limited (UTL). The telecom underwent a rebranding process in August last year, transforming into UTel, following efforts by the Investment and Privatisation State Minister, Evelyn Anite, to salvage it from liquidation.
UTL had faced significant financial challenges, accumulating debts exceeding Shs500 billion, leading to nearly five years of administration processes. Under different administrators, the government endeavored to revive the telecom and ultimately regained control of it in November 2022.
Multiple government officials have confirmed ongoing negotiations with various companies, including Rowad Capital, regarding potential investment opportunities in UTCL. However, specific details of these negotiations and their timelines remain undisclosed.
Mr. Moses Kaggwa, Director of Economic Affairs at the Ministry of Finance, confirmed the negotiations but refrained from providing further details, redirecting inquiries to the Ministry of ICT, which oversees UTel’s operations. Despite attempts to reach ICT Permanent Secretary Aminah Zawedde for comment, no response was obtained by the time of press.
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UTel’s Chairman, Grace Ssekakubo, acknowledged discussions with Rowad Capital regarding a prospective investment opportunity but did not divulge specific terms or conditions being discussed. He emphasized that until the final decisions are made by the shareholders and Rowad Capital, the current status quo prevails.
UTel, a wholly government-owned entity, is divided between the Ministry of Finance, holding a 60 percent stake, and the Ministry of ICT, holding the remaining 40 percent. It operates as the successor company to Uganda Telecom Limited, utilizing the infrastructure previously owned by the latter.
The government has allocated Shs300 billion to kick-start UTel’s operations, aiming to re-establish its presence in the telecom sector. Ms. Evelyn Anite highlighted the significance of the rebranding, signaling the government’s commitment to revitalizing the telecom business amid the challenges posed by its previous debt burden.
Despite these efforts, UTel faces stiff competition from industry giants like MTN and Airtel, which collectively dominate over 95 percent of the market share. To address this, the Ministry of ICT plans to provide UTel with additional spectrum, enabling it to transition to 4G technology and compete more effectively in the market.
While the initial investment from the government serves as a foundation, there are plans to attract additional investors and partners to further support UTel’s growth and development. The government remains committed to ensuring the telecom’s success and enhancing its competitiveness in the telecommunications industry.
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