In a deal that seems to have been finalised last week but has only recently been widely reported, Uganda plans to sell 60% of its troubled state-owned service provider Uganda Telecommunications Corporation Limited (UTel) to Dubai-based global contractor Rowad Capital for US$225million.
A complicated ownership history going back as far as 2000 finally saw the UTel brand introduced and UTel established as Uganda’s national telecom provider in April 2021. However, UTel soon faced financial difficulties. It relinquished its assets and operations in November 2022 and was placed under court-appointed administration. It is currently owned by the Ministry of Finance and the Ministry of Information and Communications Technology.
Despite its issues, UTel had an estimated 805,000 subscribers at the end of Q2 2024. That said, local press reports suggest that MTN Uganda has over 20.4 million subscribers and Airtel Uganda has nearly 18 million users.
It is evidently hoped that the planned substantial capital injection might enable UTel to enhance its infrastructure, expand its market share, make its pricing more competitive, improve its services, and generally drive innovation. But whether that will happen and whether UTel will now be able to compete more effectively with the market leaders remains to be seen, given the vast gap between UTel and companies that are, essentially, part of giant pan-African businesses.
More immediately concerned, however, will probably be Lycamobile Uganda, the smallest player with fewer than 82,000 subscribers, which could be affected by a revitalised UTel. For the moment, however, clear plans for UTel’s future have not been unveiled.
Rowad Capital Commercial LLC (RCC) is a leading global engineering and construction contractor established in Dubai. It claims to have over US$3 billion worth of successfully completed projects in various sectors.
