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Africell confirms Uganda exit amid stiff competition from MTN and Airtel

By , Sub Saharan Africa Business, Tech, News and Development Journalist
Uganda , 08 Sep 2021

Africell has confirmed that it is shutting down its mobile network in Uganda, with President Yoweri Museveni’s government now scrambling to persuade the telecommunications company to rescind its decision.

MTN and Airtel are the other mobile operators in the East African country. Africell says that it will assist subscribers on its network to join these two.

“Africell Uganda is permanently ending all mobile network services in Uganda. By 7 October 2021, current Africell UG subscribers must close their accounts and switch to alternative mobile providers,” the telco said in a notice posted on its website.

Arthur Musinguzi, a blogger and general secretary for Top Bloggers Uganda told ITWeb Africa in an interview that “Africell failed to hack the market” after failing to withstand market competition.

“Their best business was data, but could not cut into the market share of Airtel and MTN when it came to other telecom services,” explained Musinguzi.

He added: “The impact is big especially for those that were directly working for it right from security guards as you enter the premises, to the land lords of the premises they were renting, to the customer care people, to the front desk workers and the entire management.”

Government officials in Uganda have reportedly been scrambling to persuade Africell to reverse its decision.

Uganda Minister of Finance, Planning and Economic Development Matia Kasaija was quoted saying he was “concerned” by the departure of Africell as it was a company that had been working with us and they have been employing” Ugandans.

“When they go, of course, we lose jobs, so definitely I am sad. That is why I'm saying please don't go, stay. Stay, we can work out some mechanism that can allow you to survive as the economy begins to pick up,” The Observe Uganda publication quoted him saying.

Africell also has operations in the Gambia, Democratic Republic of Congo and Sierra Leone. High indebtedness and stiff competition from rival operator, MTN have been blamed as the reasons that have driven down viability for Africell Uganda.

In a statement distributed to its employees in the country this week, Africell Uganda admitted that the market was now “mature and competitive” and that the opportunity to achieve its intended objectives within the country was now “increasingly” limited.

The company forayed into the Ugandan market in 2014 after acquiring Orange Uganda

“We have therefore taken the difficult decision to permanently end Africell’s operations in Uganda,” the statement to employees further says.

Local reports say Africell Uganda reported high indebtedness in 2019, with a significant amount emanating from legacy debts inherited from Orange Uganda.

“In addition to a full salary and benefits” during the notice period, Africell Uganda will offer its employees a “severance pay, payment of unused annual leave allowance, repatriation pay (where applicable) and training and support from a dedicated on-site professional”.

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