Stiff competition and high indebtedness have forced Uganda’s third largest telecom service company by subscriber base, Africell, to quit the country.
The company says its services will stop on October 7, this year, according to a letter circulated to its employees, who will continue to be in employment until November 30.
Africell Uganda says its vision was to be a leader in mobile services and giving an impact in the digital transformation of the society.
The statement by management says that the stiff competition has made it difficult to achieve its business objectives, hence the decision to quit.
Africell launched its commercial operations in Uganda in November 2014 after acquiring shares of Orange Uganda earlier in the year for $12 million and inherited an estimated 1,000,000 subscribers at the time of its purchase.
However, Africell has been struggling having accumulated over UGX1.5 trillion in losses and UGX258.3bn in debts.
Some of the losses were inherited from their predecessors, Orange Uganda whose operations they took over in 2014.
“In Uganda – a country with a mature and competitive telecom sector – we believe that the opportunity to achieve this impact is increasingly limited. We have therefore taken the difficult decision to permanently end Africell Ug’s operations in Uganda,” the statement says.
The Lebanon-based Africell Holdings, entered the Ugandan market in 2014 by acquiring Orange Uganda, and has been mostly known for its affordable internet service packages, and relative network stability.
The Minister for Finance, Planning and Economic Development Matia Kasaija says it is sad that foreign companies are exiting the Ugandan market at this time, saying distressed companies should instead approach the government for advice or help before taking such a decision.
He says companies which quit in times of economic hardships lose their credibility as far as being
Africell’s departure follows the exit of Smart Telecom which closed operations in Uganda at the end of last month.