The end of UTL?

Is it the Chief Executive appointed by the Board to deliver on their behalf? Or it’s the Board itself to keep an eagle eye on all the key business activities of the institution? What happens when one of the critical arms of the business is responsible for its failure? It is no surprise that Uganda Telecom Ltd (UTL) is in the news for all the bad reasons. As the new administrator, Twebaze Bemanya, plans to tackle UTL’s immense debts, there are huge setbacks ahead of him.

UTL doesn’t have 3G and you can imagine the demand in the market. Some of the telecoms are now offering 4G. UTL cannot be competitive compared to the private sector. It cannot match the pace of service delivery by the likes of MTN and Airtel. Most of UTL’s customers were and are still government Ministries and Agencies that take too long or never pay at all. This created a situation of insufficient funds to fully pump into operations. But even, the little that was collected from disciplined individual clients was spent on paying salaries of top management. This subsequently resulted into UTL’s failure to remit payments to solution service providers. Most of the telecom IT services are outsourced, and service providers respond to queries depending on the working relationship. If you don’t pay the bills, solution vendors only offer you basic service. Some operators can suffer to the extent that they cannot do basic reconciliation. I suspect UTL to have been doing badly when it came to settling solution vendors.

Staff managed UTL the way they wanted. There were regular salary cuts for operational staff so as to benefit top management. This demotivation further accelerated fraud since there was no tone from above.

Good enough, telecoms have been given enough time to clean their subscriber base and obtain enough data. Since internal focus is ranking clients in the order of revenues earned from each category, UTL can still gather her broken pieces and resurrect. Can UTL ever become profitable again? It’s a matter of time.

Pontian Kay, Telecom Risk specialist

pontian@summitcl.com

March 20th, 2018 | by

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