The Ugandan government is currently engaged in negotiations with investors to secure investment capital for UTel, the recently revamped Uganda Telecommunications Corporation Limited. Last year, UTel underwent a rebranding process after the government intervened to save it from liquidation. The telecom had faced significant financial challenges, with mounting debts exceeding UGX 5OO bn.
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After nearly five years of administration, UTel was returned to the government in November 2022. The negotiations with investors are ongoing, although specific details and completion timelines have not been disclosed. The Ministry of Finance’s Director of Economic Affairs, Mr. Moses Kaggwa, confirmed the negotiations but refrained from providing further information, directing inquiries to the Ministry of ICT, which oversees the telecom firm.
UTel’s chairman, Grace Ssekakubo, mentioned that discussions are being held with Rowad Capital for a potential investment opportunity. However, the specific conditions of these discussions were not immediately disclosed. UTel is a government-owned company, with the Ministry of Finance holding a 60 percent stake and the ICT Ministry holding the remaining 40 percent. The telecom operates on the infrastructure previously owned by Uganda Telecom Limited.
While the rebranded UTel was launched with a commitment of UGX 300bn from the government to kick-start its operations, it has yet to make a significant impact in challenging the market dominance of MTN and Airtel, which control over 95 percent of the market share. The ICT Ministry has expressed plans to attract additional investors and partners beyond the initial investment, with the goal of providing UTel with the necessary resources to compete with current telecom companies, including infrastructure for 4G and potentially 5G technology.
In conclusion, the government’s negotiations with investors for investment capital in UTel reflect its efforts to revive the telecom industry and provide a viable alternative to the existing duopoly.
