Africell closing down in Uganda amid economic uncertainties
Africell Uganda Ltd is reportedly closing down operations in Uganda citing a difficult business environment among other things, the DailyExpress reports.
The telecom giant owned by Africell Holdings (53%) and Hits Telecom Holdings (47) is only seven years old in the country but seeks to exit the economy as the side effects of Covid-19 continue to bite.
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.
Africell has been the third-largest telecommunications company in Uganda by customer numbers with the company majorly specializing in offering 4G fast internet service and affordable data packages in the country.
“The employees know that they will have to go home and so some of them are consulting legal professionals on the way forward,” said a source, according to the authoritative CEO Magazine.
However, the regulator, the Uganda Communications Commission (UCC), said only in July 2021 that the “sector continues to demonstrate resilience as it weathers the storm driven by Covid-19”. It said subscriber numbers and revenue were both up in the first quarter of 2021 compared with the same period of 2020.
Industry sources confirmed the news of the Africell exit but said the company was playing its cards near the chest and that they were not sure of the exact date of closing.
When we contacted Africell for a comment, a top official who declined to named didn’t confirm or deny but said he was not the right person to communicate such a development.
According to the CEO Magazine, Africell has 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.
CEO Magazine also reports that Mr. Ziad Daoud, who came in June 2019 to stabilise the telecom, also quietly left the company in March 2021, under unclear circumstances.
He was replaced by Houssam Jaber the former Africell Sierra Leone Chief Operating Officer who only arrived in the country in November 2020 as the Africell Uganda COO.
Industry sources say Africell saw its market share decline since 2019, during the onset of the global pandemic.
They add that travel restrictions, “which have led to increased competition in the telecoms market, have largely benefited large operators such as MTN, Airtel, [and] Uganda Telecom. They had sufficient financial capacity to invest in strengthening and expanding their network to meet growing consumer demand across the country.”
The UCC said the number of customers in the country had grown from “27.7 million in December 2020 to 28.3 million accounts at the end of March 2021”, of which 21.5 million were broadband cellular subscriptions. Penetration is now almost 70%, said the regulator. The number of active mobile money accounts is now 20.3 million. Revenue was 7% up compared with the same period in 2020.
Africell also has telecommunication operations in Gambia, Sierra Leone, and DR Congo, the magazine further reports.
The storm of its Africell’s closure hints at the fact that the company has not posted anything on its Twitter page since August 12, 2021.
Africell’s imminent departure follows the exit of Smart Telecom which closed operations in Uganda at the end of last month.
Smart Telecom, owned by the Aga Khan Fund for Economic Development (AKFED), indicated that the effects of the Covid-19 was the last straw that broke the camel’s back.