INTERNATIONAL BUSINESS, SCIENCE

AND TECHNOLOGY UNIVERSITY

Faculty of Business & Commerce

NAME: ROLL NUMBER:

Lillian Kobusingye F18/154
Audrey Kukundakwe F18/55
Peter Mark Mukasa F18/162
Shaban Ssengendo F18/130
COURSE: MBA SEM 1
COURSE UNIT: MPOB
About Uganda Telecom Ltd

Uganda Telecom Limited (UTL), is an information and communication technology network

company in Uganda that was formed following the Ugandan Parliament's passage of the
Communications Act in 1997. The Ugandan parastatal Uganda Posts and Telecommunications
Company Limited (UPTCL) was divided into four entities:

 Uganda Communications Commission (UCC) - the communications industry regulator

 Uganda Post Limited - also known as Posta Uganda
 PostBank Uganda - a government-owned financial institution
 Uganda Telecom - an information technology and communication network company

In June 2000, UTL was privatized when the government divested 51 percent of its shares to
Ucom, a consortium formed by Detecon of Germany, Telecel International of Switzerland, and
Orascom Telecom Holding of Egypt. The Ugandan government retained 49 percent ownership
in UTL.

In March 2007, it was announced that Libya Africa Portfolio (LAP) Green-com had acquired
Ucom’s 51% stake, making it the biggest shareholder in UTL.

In a paper titled: “Analysis of the Acquisition Process of Uganda Telecom by LAP Green-

com” by Jonathan L. Muwonge and Dr. Emanuel Gomes of the Coventry Business School
Coventry University, the experts warned that the Libyan firm was engaged in so many activities
and would not take UTL as priority. “There is some potential for negative synergies because of
this potential lack of focus from LAP Greencom; being a large diversified group it may not give
priority to this new investment in telecoms,” they wrote in a paper in 2007.

In March 2011, the Ugandan government seized Lap Green's 69 percent shareholding in UTL as
part of sanctions against the regime of Muammar Gaddafi. After the end of the Libyan civil war
in May 2012, the shareholding was returned to Lap Green, ending a period of considerable
uncertainty for the carrier. Since then, UTL has undergone a major restructuring to revive its
fortunes.
In November 2016, the parliament of Uganda set up a select committee to investigate alleged
mismanagement at Uganda Telecom, including the allegation that UGX: 1.5 billion is missing
from petty cash through theft from long term staff in the finance department over a period of
many years. Many of the finance department staff involved have been dismissed, been
terminated, or have resigned since this fraud was uncovered in 2016 through audits conducted
by the new management. The committee's report was expected within two months.

In February 2017, UCom, the government of Libya-owned subsidiary unilaterally pulled out of

the struggling company, forcing the Uganda government to assume total sole control. In April
the same year, the Uganda government placed the telco under receivership.

In December 2017, Uganda announced plans to sell a majority stake in the troubled company.
Nearly a dozen investors from Europe, China, South Africa and the USA expressed interest in
acquiring a stake in UTL.

In July 2018, The East African reported that of the investors who submitted purchase
bids, Mauritius Telecom emerged as the only capable, credible, legitimate bidder, with a bid of
$45 million upfront, and another $100 million over the next 36 months, for a 69-31 majority
shareholding.

In a cabinet meeting convened on Monday 1 October 2018 and chaired by President Yoweri

Museveni, Taleology Holdings GIB Limited (THGIBL) of Nigeria, was selected to operate UTL for
the next 20 years. The deal includes UTL's total assets, valued at USh148 billion (US$39.5
million), tax waivers, an extended frequency and Uganda's national backbone optic fibre
infrastructure. In exchange, Taleology will make a non refundable US$7.1 million (USh27
billion), at signature of the paperwork and another US$63.9 million (USh240 billion) no later
than 60 days from that date, otherwise they forfeit the concession. With this joint venture,
THGIBL owns 67 percent of the company, and the Ugandan government, which owns the
remaining 33 percent.

Uganda Telecom is one of the oldest telecom companies in the country and the third in terms
of subscriber base now standing at less than two million out of the 22.97million mobile phone
users. The table below shows the number of subscribers according to the UCC Q2 report
release. It shows about three million subscribers that are unaccountable for and an opportunity
for vast growth and business potential for UTL.

  Sept'17 Dec'17 Mar'18 Jun'18

Mobile Subscribers 24,361,551 24,948,878 24,024,925 21,648,672

Scope of service

UTL is a leading total communications provider with a broad range of services in Uganda,
including:

 Fixed voice (copper, CDMA, fixed GSM)

 Mobile voice and data
 Dedicated circuits for data and internet (xDSL, FTTx, leased lines)
 Broadband services (3G, WiMAX, xDSL, FTTx, CDMA, Wi-Fi)
 Data centre services (hosting/housing/backup/failover)
In February 2009, UTL launched unstructured supplementary service data-based mobile wallet
service called "M-SENTE", using software purchased from Redknee Solutions Inc., a Canadian
information technology company. In September 2009, UTL became the first Ugandan provider
to introduce the solar powered hand-held mobile phone, locally called "Kasana". In July 2011,
UTL estimated their own market share of the Ugandan telecommunication industry at about 10
percent.

Leadership structure

Stephen Kaboyo has been the chairman of the board of directors since early 2014. The
managing director is Mark Shoebridge, who was appointed temporarily on 21 May 2015 as he
was leaving the company from his role as chief fixed services officer to lead operations in
Vodacom Nigeria. He was re-appointed effective 8 February 2016 upon his return to Uganda to
drive the turnaround of the struggling operator. The chief finance officer is James Wilde,
replacing John Sendikaddiwa who resigned suddenly in October 2016. The chief legal counsel
is David Nambale. The acting chief commercial officer is Ameer Kamal Arif. The chief human
resources & administration officer is Emmanuel Jones Kasule, who also joined the team in 2016.
Challenges of Uganda Telecom

From research, it has been addressed that UTL is facing currently the challenges below;

 Management problems which includes; frequent changes of top management In a

February last year, a number of its top employees threw in the towel.
These included: Gabriel Ewalu, who had been working as Interconnect Manager, Stephen
Kasumba, formerly National Sales Manager-Direct Sales, Ali Tamubula, formerly Regional
Sales Manager-East, Christine Kainamura, formerly Distribution and Logistics Supervisor,
John Sendikaddiwa, formerly Head of Finance, Catherine Alepus, formerly Cashier-Head
Office, James Mugombe, formerly Specialist NGN and John Magala, formerly Payments
Verification and Fixed Assets Accountant.

 Limited Resources (Capital) with high levels of indebtedness to service providers and
Uganda Revenue Authority. The debt includes statutory and trade creditors including
National Social Security Fund (Shs 16 billion), Uganda Revenue Authority (Shs 58 billion),
and interconnection fees for MTN (so far 88% has been paid) and the Uganda
Communications Commission (Shs 22 billion). This led to the sale of two properties that
is; plot 41-47 – 5th Street Industrial Area which was sold at $5 million, and Plot 1-7
Nsambya Yard, sold at US$1.75 million.
 Inequitable remuneration amongst staff and top officials. For instance, the wage bill for
four senior managers: managing director, chief human resource officer, chief legal
officer and chief finance officer totaled Shs 420 million. This represented a third of the
salary bill of UTL’s entire workforce estimated at 500 workers.
 Poor quality of service
 Absence of timely audited books of accounts. The last report was the 2015 audit report
which is still being handled by Ernst & Young and would be completed soon.
 Misappropriation of funds
 Technology and Coverage

According to analysts, UTL’s painful but slow decline was attributed to the entry of other mobile
telephone firms. “These firms came with wireless technology, were efficient, innovative and
could easily read the mood of the customers,” said one of the analysts who worked at a top
telecommunications company for eight years.
“UTL on the other hand dragged its feet and was bogged down by bureaucracies that
characterize government institutions. It could not make decisions fast.”

These bureaucracies haunted the firm when it joined the mobile phone market in 2001. UTL,
according to industry sources, had hoped to leverage on its existing infrastructure to outmuscle
the foreign firms.

Their calculation was that it was going to be expensive for other firms to roll out their networks
across the country. Yet what UTL did not realize immediately was the fact that a lot of its
technology was obsolete and needed a major revamp.

In 2004 after this reality dawned on them, UTL needed Shs 30 billion to revamp its technological
infrastructure and become competitive in the mobile phone industry. Then, two years after
launching, UTL had less than 50,000 subscribers falling behind its competitors MTN. As other
networks continued to grow, the slump at UTL continued.

Way Forward

From the above notifiable challenges, the suggested turn around strategies include:

1. Revision of Management structure

In order to reposition its image in the market, UTL must employ in new faces and top of
the class resources. It’s important that UTL doesn’t repeat the mistakes of the past.
2. Technology advancement

The Telecommunication industry has the highest innovation drive in the Technology and
with that the companies are always looking for the latest technologies as customer’s wants
and needs change. UTL should upgrade to the latest technology like Machine 2 Machine, lot
and IMS to meet the current trend instead of sticking to the old ways.

Also introduction of Innovation centers to stay on the over changing technology world.

3. Marketing deployment by employing correct marketing mix like Promotion and

Process ,
 UTL can revive its image and expand on the new market share. The market is already
having strong competitors and therefore the marketing strategies have to be highly
competitive.
4. Coverage expansion
By using the latest competitive technologies in the industry like Fiber and LTE UTL will be
able to reach a wide customer base for example some areas in Uganda still remain un
tapped and this can be a great competitive advantage for UTL over the other companies
5. Improvement of Human Resource policies
The success of any company depends on the employee and not the company , UTL
human policies should be made on this basis.
The employees should have a sense of security for motivation and productivity and also
the training policies should be high on the list to improve productivity which in turn will
cause a wide market share and growth

In conclusion UTL can and will provide an extremely profitable opportunity for you and
respective shareholders. The past mistake can be the stepping to the company’s greatness and
new image