It’s the end of the road for Africell Uganda, on June 27th, 2021 we disclosed that the telecom firm was battling with a hodgepodge of issues and was struggling to stay afloat in Uganda’s telecom market. Today, the company has written to its employees informing them that they will be ceasing operations on 7th October 2021. This will be the last day for all Africell employees.
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“As of 8th September 2021, Africell Uganda is no longer be accepting new customers. In the next month, we will be helping current customers switch to other operators” the letter read in part. This means that no other telecom will acquire the 9% market share that is owned by the struggling telecom leaving the MTN and Airtel duopoly intact.
Why Africell Uganda is exiting the market
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.
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.
Investment issues
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 billion) 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.
Past haunts present
Over the past several months the company has been conducting detailed assessments of the future of Africell Uganda. They came to realize that the market was mature and very competitive, something they seem to have ignored when they acquired the firm from Orange Uganda in 2014.
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.
It is no wonder Africell Uganda was never keen on listing its shares on the stock exchange as proposed by UCC. The regulator 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).
What’s in for the employees
There is no doubt that the departure of Africell from Uganda’s telecom space means loss of jobs for the current employees. The company has promised to pay them full salary and benefits during the notice period. Severance pay, payment of unused annual leave allowance, repatriation pay, training, and support from a dedicated on-site professional are among the things the company will offer them.
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