Why Airtel Uganda sacked Tom Gutjahr after one year in office

Down and out: Tom Gutjahr
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By Moses Kaketo

Airtel Africa views Uganda as one of the most promising entities on the continent. As such, Airtel Africa is not ready to ‘host’ anyone who messes up with Uganda. Mr. Tom Gutjahr was not exceptional.

Mr. Tom Gutjahr came in as Airtel Uganda Managing Director at a time when Airtel was closing in on MTN Uganda. In fact, Industry experts say, it was a matter of time before Airtel would take over Telecom giant-MTN Uganda. Was Mr. Gutjahr the right man to deliver the company the company to the Promised Land? Did he have the right personality and experience?

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It was obvious, Mr. Gutjahr had a huge task before him, not only maintain the momentum set by his predecessor V.G Somasekhar, but also take on the mighty MTN who had just reorganized their commercial department, the heart of the business.

The events before Tom Gutjahr

By early 2014, Airtel Uganda had reached 7.4 million subscribers while MTN had about 8.5 t million subscribers. However, the KYC (Know Your Customer) numbers differed slightly. The 7.5m subscriber numbers for Airtel were more refined than the 8.5m for MTN.

The gross-revenue parameter, a close look at the distributor purchase for MTN revealed, by early 2014, the telecom giant was doing Ugx. 80bn monthly. While Airtel was doing Ugx. 74 billion.

Late 2013, Bank of Uganda scrapped off the agent exclusivity. As such, early 2014, Airtel Money ‘burst’ , agents started spreading and Airtel’s revenues from Mobile Money grew.

Data front: Early 2014, the two brothers where neck-to-neck. The penetration for MTN data was about 30 percent. On the other hand, 25 percent of Airtel’s customers were already using Airtel internet.

Basing on the above parameters, one is right to say, the two brothers where neck-to-neck. However, a year later, the situation is that bad for Airtel, MTN has raced further while Airtel number have either declined or remained stagnant. (Do not mix full analysis of Airtel’s 2015 Financials coming soon). For this reason Mr. Gutjahr had to go.

Enter Tom Gutjahr

He joined Airtel in July 2014. Gutjahr previously worked as CEO for Millicom Paraguay, Tigo Millicom Rwanda, Millicom Chad and Orascom Algeria.

According to industry analysts, Mr. Gutjahr experience (having worked with smaller networks,) it was obvious he could not match his new role in the highly competitive telecom environment.-Uganda’s telecom sector is described as very competitive. There is believe that, by time he came in, Airtel’s problem was not network, but rather a clear marketing strategy to take over the market. Mr. Gutjahr is an Engineer by profession.

Nothing New

Ordinarily, leadership changes aim at bringing fresh perspectives at the top. However, for Gutjahr his reign was a tough time; high labour turnover, stagnate numbers an abrupt change from Tigo to Airtel model of operation, which failed miserably.

Inside sources told Newz Post that Mr. Gutjahr introduced nothing new for the time he spent at Airtel Uganda. ‘‘He has been riding on the momentum of his predecessor’’ said a source.

For example, by early 2014, Airtel had already signed an agreement with the Buganda Kingdom to sponsor the annual Kabaka Birthday Run. It is also true that by February 2014, Airtel had finalized the rolled out of the Kiosk project. Taken together, for the time he has spent at Airtel, Mr. Gutjahr introduced nothing new.

The challenges

The new MD started his reign by recruiting a team he thought who help him deliver-however the team seems to have failed him.

December 2014, he appointed Diego Javier Pacheco from Tigo Tanzania as the Chief Commercial Officer for Airtel Uganda. This was his first time to head such high office.

He had never been a customer care director, Mobile Money Director nor sales Director. His last deployment, he was segment head. This is the man Airtel put in charge to drive Commercial department- the heart the business. The challenge he faced or still faces is that the people who report to him are more experienced than him, something he might hate.

The worst part is that his management style and that of his Mr. Gutjahr where contrary to what Airtel staff had accustomed too. Airtel former managing Director-Mr. Somasekhar was a free man. He freely interacted with all employees, welcoming new ideas, guided the employees .He also gave them time and resources to execute their duties. The new management was the opposite.

What followed where voluntary resignations of key talents Mr. Somasekhar had single handily picked from UTL, Uganda Breweries and Warid Telecom.

Among the many who left is: Head of ridges. He is credited for improving Airtel’s brand visibility. Moses Musiime who was in charge of high value acquisitions crossed to MTN Uganda. While Nuyu Kanyike, the Mobile Money Director who is credited for revamping Airtel Money also left for greener pastures.

Others who left are Ivan Mugambe who was good in Trade marketing. He crossed to MTN Uganda while Aldine Kalesubulya, an expert in Mobile Money and the in charge of city Centre Airtel Money crossed to M-Posa Solar.

Around the same time, three old guards in the commercial department-The head of sales, Chief Commercial Officer and Head Airtel money were sacked by the new MD.

These employees had done a lot in pushing Airtel to level where it was almost taking over MTN Uganda. This was huge strategic mistake that new MD and his CFO did. They could only notice it later; however, it was too late. Now that Mr. Gutjahr has been shown the exit, will Mr. Pacheco survive?

From Airtel to Tigo

Having worked with Tigo Mr. Gutjahr thought, the Tigo model of operation was the best. He right away adopted it.

He sacked the top guns and replaced them with those from Tigo telecom. Tigo model of operation does not use a lot of money. The model employees more people on ground. In an attempt to go Tigo way, the CFO sacked a number of employees. The salaries of those employees who remained were cut while others were put on commission. This further killed the morale at Airtel. Airtel further lost some talents. The strategy failed miserably.

On the other hand, Airtel model of operations uses more of science. They first study the customers before introducing products that suit their needs.

It is for this reason that Airtel has net promotions every after three months-to keep the market engaged.

It is evident the sudden switch from Airtel-Tigo model was a disaster-the numbers failed and Mr. Gutjahr had to go. Who is next? Will the new MD save the people the outgoing MD recruited?

Resigned or sacked?

When things fail, the CEO’s of corporate companies, are always given a soft landing. They are given two options:either resign or face sacking. Remember, a CEO who ‘resigns’ can tell any story than one who is forced to resign.

After failing to deliver, Mr. Gutjahr had to go. While his predecessor, Mr. V.G Somasekhar was promoted to Operations Director SBUII, Gutjahr left to join a relatively smaller network in Algeria.

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2 COMMENTS

  1. This is all FAKE. None of these things are true. If you believe it, don’t. I know Tom personally and I know this is fake.He left because of something I don’t know if I’m allowed to say.

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