Uganda Telecom top managers fired

Launched on the back of the late former leader Muammar Gadhafi’s Libyan oil largess, UTL has been limping without funding since he was ousted and killed in 2011.

The takeover appears to have cut short plans by LPTIC to invest $34.6 million in fibre upgrade and expansion, unveiling of the 4G technology, and an upgrade of services.

Following the takeover, LPTIC which is the parent company of UCOM has told The Independent that they could contest the government decision if their rights as the largest shareholder in UTL are not respected.

“The decision to cease funding was not made lightly,” a statement sent from LPTIC in Tripoli on March 03 said in part, “It followed 14 months of intense engagement with the Government of Uganda to seek to agree on the terms of a Transformation Business Plan for UTL, which included an indispensable funding offer from the Majority Shareholder”.

LPTIC warned the Uganda government: “Moving forward and notwithstanding the decision to discontinue funding UTL, the Majority Shareholder expects the Government of Uganda to fully comply with applicable laws and best practice concerning the protection of its investment interests in UTL, including with respect to its rights as UTL’s largest creditor. As a Majority Shareholder, the Libyan Post, Telecommunications & IT Holding Company will contest any plans or efforts to undermine its position”

Meanwhile, UTL has sunk from the dominant position of major player in the nascent privatized telecom sector, to relegation as a cash-strapped company operating decadent 2G and 3G technology with the Uganda government as its main (non-paying) client.

Its forte has been the disused fixed line connection to government ministries, departments and agencies, with a significant fiber infrastructure and wireless broadband facilities.

The company has been unable to upgrade its technology to match competitors operating latest 4G technology.

This led to massive migration of its subscribers to other networks resulting into a sharp decline in its customers from approximately 2million in the 2000’s to 700,000 at the moment.

This represents only 3% market share of Uganda’s telecom industry, whose subscriber base now stands at 23million for both fixed and mobile.

Libyans pull out of UTL, Uganda Govt takes over https://t.co/ZTnBd1OTL2 pic.twitter.com/vXWTgaauzw

— The Independent (@UGIndependent) March 1, 2017

UTL needs Shs 170.8bn in new turnaround strategy https://t.co/kUAJ6ZDYbu pic.twitter.com/XbpPRVRQpq

— The Independent (@UGIndependent) March 5, 2017

UTL Milestones

• 1988- Government establishes Uganda Posts and Telecommunications Company Limited (UPTCL)
• 1998- Unbundles UPTCL into four companies – UTL, Posta Uganda, Post Bank and Uganda Communications Commission (UCC) during privatization period.
• 2000- UTL privatized with UCOM (a consortium formed by Detecon of Germany, Telecel International of Switzerland, and Orascom Telecom Holding of Egypt) owning 51 % shares and the Uganda government owning 49 %
• 2006-UCOM, increases its sharing to 69% and the Uganda Government retains the remaining shares
• 2007- Libya’s telecom investment arm, LAP Green acquires UCOM
• 2010- UTL unveils M-sente
• 2009-UTL introduces solar powered hand-held mobile phone called Kasana
• 2011-the Ugandan government seizes LAP Green’s 69% shareholding in UTL over UN sanctions due to political turmoil in Libya
• 2012- Government’s returns UTL’s shareholding to LAP Green
• 2012- Ali Amir appointed UTL MD
• 2015- Mark Shoebridge appointed UTL MD
• 2015- The Libyan Post Telecommunications and Information Technology Company (LPTIC) consolidates Libyan-owned telecom firms (UTL, GreenN Cote d’Ivoire, and South Sudan-based Gemtel) previously managed under LAP Green Network.
• March 1, 2017- Government reposes UTL

How the Uganda government took over UTL

• November 16, 2016-Nandala Mafabi, Budadiri West MP tables a report on UTL’s mismanagement in parliament
• November 18, 2016-Parliament slaps travel ban on UTL management
• December 01, 2016-Speaker Rebecca Kadaga constitutes a 7-member select committee to investigate the mismanagement of UTL
• December 15, 2016-Parliament begins probe into alleged UTL mismanagement
• December, 20, 2016-Parliament halts UTL financial transactions
• Jan 30, 2017-Airtel Uganda threatens to block calls to and from UTL over interconnection fees
• Feb 20, 2017- Uganda Parliament probe meets LIPTIC officials in Dubai
• Feb 25, 2017-LIPTIC Board stops further funding of UTL
• March 01, 2017 – Uganda government takes over UTL

****Additional reporting by ISAAC KHISA

editor@independent.co.ug