Uganda Telecom is one of the oldest telecom companies in the country and the third in terms of subscriber base now standing at less than two million out of the 22.97million mobile phone users.
The Government of Uganda took over the full control of Uganda Telecom (UTL) on February 25 after the majority shareholder, Libya government-owned UCom unilaterally pulled out of the struggling company.
“After this occurrence, UCom indicated to government that they would no longer fund the company and we realised that as the minority shareholder we were all left by ourselves. We had no choice but as government to take the decision not to let the company go down. We took over the mantle of managing the company in the interest of all stakeholders and Uganda at large,” explained Evelyn Anite, the state minister for finance in charge of privatization and investment.
Anite revealed that since taking control, government has evaluated and found that the telecom’s liability far outweighed its assets but has resisted a push to wind it up.
An audit by Pricewaterhouse Coopers has since established that UTL’s liabilities at Shs700B, runs past its assets which stand at a meagre Shs248B, painting a hazier future for the firm. Stephen Kaboyo, the board chairman of UTL recently put the debt at Shs500b.
According to the minister, placing UTL under an administrator will offer space for engagement with the debtors and creditors of the state-owned firm.
“Putting UTL under an administrator is the best news for subscribers,” Anite said, “I can assure that if you are a UTL subscriber, it will be here tomorrow and the day after, in fact I want to encourage more Ugandans to have UTL as their first line.”
Bemanya Twebaze, the Registrar General of Uganda Registration Services Bureau has been appointed as the administrator.
Top on Twebaze's agenda is to ensure that creditors get maximum returns and that debtors comply and pay what is due to UTL.
"As we speak, UTL is heavily indebted and my responsibility with the team is to ensure that we get out of this debt, that it survives but most importantly, that it runs as a going concern profitably," Twebaze said.
"I have no doubt in my mind that we shall achieve this as government is committed to ensure that UTL continues to trade profitably," he added while speaking to the press.
Part of UTL’s troubles can be linked to the 2011 political turmoil in Libya that saw the overthrow of President Muammar Gadhafi as well as the effect of UN and EU sanctions. Libya has lost control of its stakes in nine telecommunications companies in sub-Saharan Africa since the 2011.
Besides the debt, fat salaries and fraud that have crippled the company over the years.
UTL found itself in this situation after Ucom, the largest shareholder pulled out on February 25 this year, forcing five of its directors who were previously charged with managing the company to resign.
“We are going to do everything within our means to ensure UTL stays afloat. We want to appeal to everyone in relation with UTL to work with us to enable the company continue its operations. With all the planned government interventions, UTL will turn around in a bigger way and thrive beyond expectations,” Anite promised.