Africell Uganda has reportedly been battling with a hodgepodge of issues in order to stay afloat in Uganda’s telecom market. In a cutthroat mobile telecommunication sector that is currently dominated by MTN Uganda and Airtel Uganda, the company has been struggling with its own internal woes. Let’s take a deep dive into some of them.
Why former CEO Mr. Ziad Daoud left the company
A lot that seems to be a mess at the Lebanese-based telecom company at the Clement hill Headquarters offices, according to sources that preferred to remain anonymous, the telecom company’s former CEO Mr. Ziad Daoud was fired at the end of 2020 for reasons that still remain unclear but some say it was mainly due to abysmal performance. Our sources also indicate that he was allegedly a huge spendthrift when it came to his fellow countrymen. When speaking to this website, Edgar Karamagi Africell Uganda’s Public Relations Officer dismissed these allegations and confirmed that Mr. Ziad served his time and left the market for other ventures.
The employees we spoke to told Techjaja in confidentiality that Africell reportedly brought in Lebanese to do jobs that could be done by Ugandans, in fact, you will be hard-pressed to find a high-level manager with real authority within the company as all those positions are reserved for foreigners.
The repercussion of bringing many Lebanese “expatriates” to do the same work that could have been done by locals means the company has to pay out more on salaries and allowance to these experts which put a huge strain on the company’s revenues. Before he was sacked, it was alleged that the former CEO Mr. Ziad Daoud had threatened to downsize the company –a process that would mainly affect Ugandans — reportedly up to 10 Ugandans per department. The massive layoffs were supposed to occur in early 2021. Fortunately, these plans never came to pass as this was the same period the CEO was laid off and taken back to Lebanon.
The May Internet downtime debacle
On the 28th of May 2021, the Africell subscribers spent the better half of the day without any internet connectivity. With no remorse, even after the downtime issue was resolved, there was no official Tweet or Facebook post to apologize to their clients. When we spoke to the technical people in the know, we were reliably informed that there was a systems failure on their servers. Commenting on this internet downtime Mr. Karamagi said “That was a technical downtime which was communicated to our customers in the form of SMS. The downtime was resolved and everything is up and running.” As an affected Africell customer, I never received the said SMS from the telecom company.
According to sources, the company can hardly recapitalize and invest in its mobile network as it should have. It should be recalled that in 2018 American firm OPIC signed a $35 million (UGX 130 million) contract with Africell. The Overseas Private Investment Corporation(OPIC) at the time said that this was for value addition. OPIC was to invest a total of $59 million (UGX 220 billion) in Uganda’s economy through lending financial capital to private companies including Africell to promote value addition and increase their operational scope. By July 2019, CEO at the time Ziad Daoud, announced that Africell was set to invest in expanding its network and also growing its financial technology services like Africell money in Uganda and also its other African subsidiaries where it plans to spend part of a $100 million.
This fund was earmarked to help in infrastructure investments for its operations in Uganda, the Democratic Republic of Congo, Gambia, and Sierra Leone. Critics at the time came out to say that his money will not be enough if it’s shared among four countries including DRC which has one of their biggest subscriber base among the Africell Group.
It is still unclear how much money they invested in their network if any, as the company is tight-lipped when it comes to this topic, but sources familiar with the matter indicate that most of these funds were mainly used for capacity enhancement (network upgrades) rather than network expansion. When asked, the company PRO declined to comment on how these funds were spent.
Africell Uganda still heavily relies on the same infrastructure that they bought from Orange six years ago. By the time they acquired Orange Uganda, they inherited a 2G, 3G, and 4G LTE network. Since then, other telecom firms have already caught up at least when it comes to faster 4G-LTE speeds that Orange Uganda had been known for. Others telecoms have already teased plans to roll out 5G in the near future. There is no doubt however that Africell still remains one of the fast data mobile networks in areas where it has coverage.
Looming sell off rumors
It is not the first time a major telecom company is rumored or will be selling off in Uganda. In 2013– in what started as a rumor– the Uganda Communications Commission finally approved the application by Airtel to transfer Warid Telecom’s Public Infrastructure Provider (PIP) and Public Service Provider (PSP) licenses to Airtel Uganda. The Commission, upon receipt of the said application, gave no objection to the merger transaction of Warid Telecom and Airtel Uganda.
In November 2014, Africell Uganda acquired all assets and liabilities from French telecom company — Orange Uganda, which had been acquired from HITS telecom. Six years down the road, the Clement Hill-based company is also rumored to have been sold off or in the process of being acquired among other issues lurking around it. When asked about these rumors, the company’s Public Relations Officer was unaware of such claims. It is however not very easy to sell off a telecom company in Uganda without going through the due process set by the regulator UCC.
Top of the buyer’s list is Airtel Uganda which has been the most rumored company to be in the lineup to acquire Africell, however, we are also hard-pressed to see any significant value proposition for Airtel in such a deal. In fact, people in the know have informed Techjaja that the telecom regulator was not in support of an Airtel-Africell acquisition. The commission reportedly preferred a company that is not as big as Airtel to acquire the struggling Lebanese telecom operator.
No Operating license yet
UCC has already awarded other big telecom companies like MTN and Airtel Uganda with National operator licenses on top of floating 20 percent of their stock on the Security Exchange (USE).
In fact, Lycamobile recently became the 3rd telecom company to be given a National Telecommunication Operator (NTO) license. Africell doesn’t have any National Operator license, which is strange since it is the 3rd biggest telecommunication company in Uganda in terms of mobile subscribers. Edgar Karamagi the company’s Public Relations Officer, however, confirmed to Techjaja that “This is an ongoing process which can not be discussed with the media.“
