KAMPALA — Africell Uganda is closing operations on October 7, the company has announced in a memo to employees.
The company, which is owned by Africell Holdings (53%) and Hits Telecom Holdings (47) is only seven years old in the country, but says the after effects of Covid have forced the decision.
Africell launched its commercial operations in Uganda in November 2014, having completed the acquisition of Orange Uganda earlier in the year.
Africell paid $12 million for that stake, inheriting an estimated 1,000,000 subscribers has been the third-largest telecommunications company in the country, by customer numbers.
“Africell UG will stop services on October 7, 2021 . The decision is being made in the long term interest of the Ugandan telecom sector,” the company announced on Thursday, citing a survey that revealed difficult times ahead.
“We believe that the opportunity to achieve this impact is increasingly limited. We have therefore taken the difficult decision to permanently end Africell UG’s operations in Uganda.”
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.
“As of September, 8, 2021, Africell UG is no longer accepting new customers. In the next month, we will be helping current customers switch to other operators,” the company said.
Africell says employees will keep getting their salaries until November 2021.
“In addition to a full salary and benefits during your notice period, Africell UG will offer you severance pay and payment of unused annual leave allowance,” the company told employees.
The company noted that each of the employees would be contacted by the human resource manager to explain their specific packages.
“Although Africell regrets the immediate impact this decision will have, we believe it is a justified long term transition and we are closely supporting affected employees and customers.”
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.
According to the website, Africell also has telecommunication operations in Gambia, Sierra Leone and DR Congo.
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.
