Africell to Exit Uganda, Unable to Compete with MTN & Others

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UK-based mobile tech firm Africell announced yesterday that it was ending its operations in Uganda, where it has been unable to supersede its competitors in the country, namely local units of massive telecom firms such as South Africa’s MTN and India’s Airtel.

“Africell … will end operations in Uganda on 7 October 2021,” the firm said in a statement, quoted by Reuters, adding that the decision to exit the country was “based on a careful assessment of the long-term commercial outlook for the business” as well as how Uganda fitted within its digital transformation strategy.

Africell entered the Ugandan market in 2014 after acquiring the local operations of French telecom firm Orange. At the time Africell already had operations running in a number of African countries, including the Democratic Republic of Congo (DRC), Gambia and Sierra Leone.

Since then Africell has struggled to expand against companies like Airtel and MTN Uganda, which has the highest number of subscribers in the East African country at more than ten million. MTN’s market share dwarfs Africell’s, which had around 2.3-million subscribers in Uganda according to the company’s website.

Continent-wide, Africell has around 12-million subscribers and is planning to launch operations in Angola by the end of 2021, according to Sam Williams, Africell’s communications director.

Africell had managed to secure a license to launch in Angola early in 2021.

The company’s exit is likely to benefit MTN, which is currently preparing for an IPO in which it intends to sell 20% of its shares to the Ugandan public. Uganda’s government last year mandated that all telecom firms operating in the country must list 20% of their shares as a way to allow the country’s citizens to share a slice of profits.

Uganda has been undergoing a steady exodus of foreign firms after many reported slow growth, exacerbated by the effects of the global pandemic. South Africa’s Shoprite Holdings recently said that it hopes to sell its assets in Uganda this financial year.

By Luis Monzon
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