UTL to receive cash injection to end debt woes

16 Dec 2011

Uganda Telecom Ltd (UTL) will receive capital from the Libya Africa Investment Portfolio Green Network (LAP Green Network), which owns 69% of the telco, according to local news source The Observer. LAP Green Network’s new board chairman Wafik Shater said ‘We are currently looking at UTL’s critical funding need for the remainder of this year. After ascertaining the actual funds required, we will inject them into our operations here.’

UTL has suffered indirectly as a result of sanctions imposed on LAP Green Network by the UN during Libya’s civil war, worsening the telco’s already substantial debts. In March 2011 UTL’s network was disconnected from MTN Uganda over UGX20 billion (USD8.27 million) in disputed interconnection fees. The companies were able to reach an understanding, however, and service was quickly resumed whilst the disagreement continued in court. In September Airtel Uganda threatened to follow suit, over a further UGX10 billion in payments, though UTL and Airtel solved the matter without disruption to services. Addressing the issue of the accrued fees owed to rival telcos, Shater said that the debts had been rescheduled and the problem had been rectified. However, the damage to the company’s reputation had already been done. Shater continued: ‘I understand that there has been a negative impact from previous decisions and some of the problems the company has gone through have somehow tainted the way people view the company. However, we are a new management team and we cannot be blamed for the past mistakes. We seek to work on international corporate governance guidelines and to ensure that there is no future misrepresentation of the company.’

Going forward, solving its financial problems remains UTL’s biggest priority, however the telco is looking to improve its infrastructure and develop its portfolio of value added services (VAS) in the future. Regarding UTL’s plans for development Shater commented: ‘The telecom industry here has gone through a period of instability with new entrants slashing prices. But that period is over and we are looking at more sustainable growth in the future.’

The government of Uganda, which owns the remaining 31% of UTL and took control of the company during Libya’s civil war, is expected to continue its support for the telco and assist in the removal of remaining sanctions on LAP Green’s activities.

Uganda, LAP Green Network, Uganda Telecom Limited (UTL)