In May 2018, the government through the Ministry of ICT and National Guidance shared an approved strategy to get Uganda Telecom back on its foot – in a bid to cope with the current technology trends and competition.
The strategy was meant to bury the past skeletons that came running after the telco as well as to find the company the best suitor to keep its operations going. However, more than a year later, business is still at an apparent stand still with lots of issues piling up every other day into a saga that has now become a public tale.
It started as a simple cry by the Investment Minister Hon. Evelyn Anite telling members of Parliament that government no longer had any control of UTL Operations and is now a war of letters, with various government officials exchanging letters with the minister on the way forward.
We need to note that President Museveni had asked that no action other than what was resolved by the Cabinet should be taken in regards to the revamping of UTL. He would later write to Minister Anite “to institute an audit in the activities that are going on in Uganda Telecommunication Limited” adding that he had “heard of some allegations”.
However, the period between then and now has not witnessed any progress and we are less likely to see any better because of some reasons we have pieced together.
Politics in the UTL saga
George Orwell stated it that we just can’t keep out of politics in this age. Much of the disorganization and mess in Uganda Telecom today is a result of political interference and it is not about to halt.
There seems to be a dire need for Minister Anite to have full control of UTL operations and she is firing at every block that comes her way. From the Registrar General Twebaze Bemanya, the official receiver of the telco, to Attorney General Willy Byaruhanga and his deputy Mwesigwa Rukutana.
These have been backed by Keith Muhakanizi, the Finance Ministry Permanent Secretary, who also directed that the audit be halted because there is an ongoing court process, something that Minister Anite has since countermanded.
As long as the egos of these politicians keep on a high, business at UTL will remain a laughing stock. It is highly likely that there’s a behind the scenes fight for control of UTL and we are about to see this go public.
Question of the law
The letters between government officials and UTL administrators aside, the law too has a hand in this. According to the Uganda Law Society (ULS) president, Mr Simon Peter Kinobe, apparently any audit into the telco can only be done by sanction of a court order and not by written directives by shareholders.
He was quoted to state that, “The aggrieved shareholder can file an application stating the reasons as to why audit should be done. In absence of this, such audit should not happen.”
In simple terms, for an audit to take place, a creditor – not shareholder or receiver – has to file a notice of motion arising from the main suit by which the liquidator was appointed.
Debts
In May 2017, when UTL went under Administration Deed, its debt portfolio stood at more than UGX 700 billion. At that time, it is reported that Uganda Telecom was so down that it could no longer even have working capital to run day-to-day operations.
The Libyans, who were in charge of the company before then with 69 per cent shares, were no longer willing to finance “an entity where the other shareholder was non-committal.” They blamed the government for failing to honor its debt obligations estimated to be about UGX 16 billion from the provision of services like data and fixed lines.
An interesting fact is that the Libyan contollers happened to be the largest creditors of the company because they had extended shareholder loans that have accumulated to over UGX 170 billion, an amount they expected to recover once the government brings in a new investor.
A new investor in Taleology Holdings GIB Ltd was actually found in October 2018, but has since failed to fulfill financial obligations for the acquisition, and the debts still stand.
UTL, a threat to national security
There have been complaints and talk of Uganda Telecom posing national security risk for failing to install a unit to enable government monitor communication on its network.
In a letter dated April 29th, Mr Godfrey Mutabazi, the executive director of Uganda Communications Commission (UCC), told the telecom administration that its failure to install Intelligence Network Monitoring System (INMS) rendered its network susceptible to abuse by SIM Boxers.
UTL had attributed its failure to procure the equipment to support connectivity to the INMS to cash flow problems.
Stiff competition
The competition in the telecom industry is very stiff and tight, and it is one of the reasons why UTL lagged behind. Even with attractive promotions, the company failed to level up to the trends that customers have interest in and there is a less likelihood that it can catch up.
Uganda Telecom was a king in the fixed land line and data markets, however, the increased adoption of mobile phones quickly ate up the need for land lines and the data rates are now affordable with easier access on
