End of the road as UTL hands over assets to UTCL, company to launch Ug-Sente, provide high-speed internet

End of the road as UTL hands over assets to UTCL, company to launch Ug-Sente, provide high-speed internet

Ms. Ruth Sebatindira (middle), the Administrator of Uganda Telecom handing over the UTL assets to the Minister of State for Investment, Evelyne Anite as Dr. Grace Ssekakubo, the Chairman Board of Directors – UTCL looks on (PHOTO/Courtesy).

KAMPALA – The Board of Uganda Telecommunications Corporation Limited – UTCL is set to implement a digital ecosystem that will give its customers a bespoke service but also to launch a mobile money platform, that will trade as Ug-Sente in the move to revive Uganda Telecom Limited – UTL which has for so long made loses.

The revelation was made by Dr. Grace Ssekakubo, the Chairman Board of Directors, UTCL, the newly formed government-owned telecom on Friday, November 18th, 2022 while taking over the assets from UTL Administration.

UTL was owned by the governments of Libya and Uganda with 69% and 31% shares respectively.

UTCL was incorporated on 8th April 2021 and on 23rd February 2022, entered into an Asset Sale and Purchase Agreement to buy the assets and not debts and or liabilities of Uganda Telecom.

Now, the company is a fully-government of Uganda owned with 60% owned by the Ministry of Finance, Planning and Economic Development (MoFPED) and 40% by the Ministry of ICT and National Guidance (MolCT&NG)

“As a Board, we are positive that ours will be a service that not only makes Ugandans happy but one that elates them, a service that not only satisfies them but one that leaves them ecstatic,” remarked Dr. Ssekakubo.

He noted that the Board that he heads was appointed 3 months ago, and it has worked relentlessly to put UTCL in a position to be able to receive the Assets and Business of UTL and ensure business continuity.

“I am privileged to lead this team of patriotic and dedicated Ugandans with a special assignment to deliver to Ugandans.”

“This Board knows what Uganda needs because we are the Uganda. We know what the public wants because we are part of the public. Uganda needs affordable and reliable access to secure telecom and related services across the country. The public wants value for money,” he added.

Mr. Chairman noted that as a company, they will focus on superior internet of up to 5G+ grade, bespoke digital services and safe mobile money services.

“Our service will be a safe space, a space you can trust – your space.”

Basing on the recent World Bank report that for every 10 percentage-point increase in high-speed Internet connections, there is an increase in the economic growth of 1.3 percentage points. Mr. Chairman pledged world-class internet service provision.

On how the company is ready to face the dominance in the sector, Dr. Ssekakubo said, “Well, the answer lies in the market realities today – in latest market performance report from the UCC, 232,000 new broadband subscriptions were recorded between April-June 2022, bringing the total broadband connections in Uganda to 23.7 million. In a year-on-year comparison, the 12 months ended June 2022 recorded 1.9 million new broadband subscriptions – an 8% year-on-year growth in broadband subscriptions. The 23.7 million broadband subscriptions translate into a broadband penetration of 55 internet connections for every 100 Ugandans. The broadband market is viable and growing.”

The company, he says will in the coming months work on various initiatives including; Investing in the latest technology-5G+ Attracting the best talent in the market and upskilling the internal staff they have inherited.

Dr. Ssekakubo, an ICT specialist and Head of Centetech, the ICT arm of Centenary Group will serve with other Board Directors including Mr. Jimmy Adiga, the former CEO of BRAC Microfinance, Mr Tom Sekakuto, a former technician with Uganda Posts and Telecommunications Corporation, Ms Maximilia Byenkya, a corporate lawyer, Ms Agnes Ojambo – an Auditor, Ramathan Ggoobi, the Permanent Secretary and Secretary to the Treasury (PSST), as well as Ms. Aminah Zawedde, the Permanent Secretary of the Ministry of ICT and National Guidance.

Ms. Ruth Sebatindira, who was appointed the Administrator of Uganda Telecom by the High Court on 2nd January 2020 revealed that during administration, creditors were stopped from taking action against a company, such as winding it up and forcing it into compulsory liquidation.

This is known as the moratorium whose purpose is to give the company that is in financial difficulty a breathing space to attempt to rescue it as a going concern and restructure, so that it can be returned to profitability.

She, however, noted that the Administrator was challenged with a responsibility to the commercial community to not continue trading while making losses.

“For various reasons, the revenues generated by the company could no longer support continued trading under Administration.”

Today, she notes that the company has a client base majorly Ministries, Departments and Agencies and a 9.13% shareholding in West Indian Ocean Cable Corporation (WIOCC).

“This has enabled UTL to buy internet at fairly favorable prices and be able to sell competitively in the market. About 75% of UTL’s revenues come from Internet Service Provision (ISP) services,” she noted.

According to Ms. Sebatindira the company’s debt is estimated at UGX Trillion Assets valued at UGX 250 billion with an average gross revenue of UGX 3 Billion per month, average operating expenses of UGX 4.5 Billion per month, average monthly deficit of UGX1.5 Billion and that 317 sites/masts countrywide out of 472 are non-profitable.

The Deal

On 23 February, 2022, the Administrator executed an Asset Sale and Purchase Agreement (APA) with the Uganda Telecommunications Corporation (UTCL) at a Consideration of UGX 256,892,142,642 and USD 15,643,151. These sums are to be applied towards some of the liabilities, namely: the Trade Development Bank loan, WIOCC investment, pension (Uganda Communications Employees Contributory Pension Scheme (UCECPS) & NSSF) and Administration debts. The last payment under the APA is expected by June, 2023, Payment of pre-Administration debts is in accordance with the ranking provided under the Insolvency laws,

Status of the Administration

The Administration has been extended by Court for only 8 months with effect from 2nd November, 2022 until June 2023 for only residual matters and to receive amounts that remain unpaid under the Asset Sale and Purchase Agreement. Once all sums have been paid in accordance with the APA, the Administrator will report to Court and seek that the Administration be terminated. The petition for winding up of UTL has to be determined.

Creditors Report

Verification of Creditors was carried out and a Creditors report has been sent to all Creditors. Creditors should address their concerns with the Administrator

Status of Employees

Effective 30th November, all employees shall cease to be employees of Uganda Telecom in Administration. They will all be employed by UTCL on fresh terms with effect on 1 December, 2022.

Source: PML Daily

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