Down and out: Vodafone Uganda finally shuts down

- Advertisement -

By Moses Kaketo

Vodafone Uganda is no more. The once promising telecom company early this year obtained court protection against creditors after high operational costs pushed it into financial difficulties.

- Advertisement -

The management hoped to use this grace period to reorganize themselves. However, this has not been possible. This comes after the telco was reported to be in debt in excess of Ugx. 300 billion against an asset base of Ugx. 55 billion.
The company has since closed all her shops, offices and social media platforms.
Attempts to get a buyer failed since the company did not have a license. Sources say the investors who had earlier expressed interest in buying the distressed firm pulled leaving the administrator with no option but to close down.
Owned by Afrimax Uganda Ltd, Vodafone Uganda was mobile virtual network operator (MVO) using the network of struggling Uganda Telecomm Limited. With no operating license, it was difficult to find a buyer otherwise what are you buying?

The firm’s 40,000 fixed and mobile users gave it a tiny share of Uganda’s estimated 16 million internet users dominated by MTN Uganda and Airtel Uganda.
News reaching us reveal from Donald Nyakairu’s office, the firm court-appointed provisional administrator with interim protective order.” for three months (15th Feb. to 15th May ) reveals, Vodafone Uganda is now selling her assets like computers, vehicles, office equipment’s among others to recover some monies to pay off its creditors that include: government statutory bodies: URA, NSSF. Other creditors include, Landlords, employee salaries, among others.

According to the laws of Uganda; whatever the recovered, the first priority is government bodies. What is left is shared by other creditors.
Vadafone Uganda launched its 4G broadband internet service in 2014.
Vodafone’s financial problems begun around mid-last year, triggered by the high cost of rental payments for transmission infrastructure from bigger market players.

A year after its launch, Vodafone Uganda was recording monthly sales of about Ugx. 1.5bn. But as of 2018, the company could not realize sales of a Ugx. 150m per month.
While officials attributed the company’s poor performance of the economy, insiders blame poor management.
Senior employees says the company was doing well until management decided to fire most of its highly paid officials and experienced staff whom it replaced with poorly paid staff with no experience, as strategy to cut costs.

read: Will VG Somasekhar restore Airtel Uganda’s past glory?

‘ ‘So it hired a sales person at a monthly salary of Ugx. 20m with the hope of transferring skills to new staff. The model is said to have begun the company’s end times.It is said that the new marketing and sales officer David Nsiyona who had worked with Warid and later UTL. “Nsiyona was good but, did not know data business’’. It is said, he could have appointed his own suppliers, credit sales people who made the situation worse. Debt collection was a nightmare as these people did not remit sales cash to our head office on time, leaving the companies in huge debt’’ ChimpReport reported.

read: How Airtel Uganda ‘donated’ Mokash to MTN Uganda

- Advertisement -


Please enter your comment!
Please enter your name here

This site uses Akismet to reduce spam. Learn how your comment data is processed.