Why Africell Group Decided to Close Operations in Uganda

Uganda Telecommunications Company Africell Uganda has announced that they will be ceasing operations in Uganda after failing to break even in the market for the past 7 years.

In the statement, Africell said that operations of the company will end on October 7th 2021 which will mark the end of their 7 year business journey in the 3rd largest economy in the East African community.

“Over the past several months, Africell Group has conducted a detailed assessment of the future of Africell UG, Africell strives to be a leader not only in terms of mobile services but also in terms of community impact and the digitally lead transformation of society.

“In Uganda – a Country with a mature and competitive telecoms sector -we believe that the opportunity to achieve this impact is increasingly limited” Africell UG said in a statement to its employees.

“We have therefore taken the difficult decision to permanently end Africell UG’s operations in Uganda” the statement continued.

“Leaving Uganda is the most sustainable way to fulfill our overall mission to advance the African telecoms sector through competition and innovation.”Africell added in a statement to media.

Africell Group, a UK based multinational company joined Ugandan market in 2014 after purchasing majority stake and taking over Orange Telecom’s 1,000,000 subscribers for approximately $12M. The company also has operations in The United Kingdom, The Gambia, Democratic Republic of Congo (DRC), Sierra Leone and is opening operations in Angola this year.

Over the next 7 years, the company has increased the customer base to 3,000,000 subscribers by April 2020, representing 9% of the telecoms market share in Uganda. Thanks to its focus on providing internet to individuals and corporate companies.

Africell will therefore effective today September 08 stop accepting new customers and has advised its existing customers to use up all their airtime and data bundles purchased by October 7.

“Africell UG is ending mobile services in Uganda on 7 October 2021. We encourage you to consume all your airtime balance by then” Africell message to its customers partially read.

Uganda’s telecom sector is highly competitive with Airtel Uganda and MTN Uganda enjoying 90% of the market share by 2018 which has made it difficult for other companies to take off in the market.

Africell commits to supporting its employees for the next two months after the transition and will continue paying their remunerations up to November 30th according to the plan developed by the winding company and approved by Ministry of Gender Labour and Social Development.

The company advised its customers to look for the best available alternative in the market. “Africell UG’s customers need to switch to alternative service providers after 7 October 2021. Uganda has an active telecoms market with several major operators and we are confident that customers will find good quality alternative providers which suit their needs and budgets.” The company told the media.

In the past few months, other than Africell, other two multinational companies Shoprite Super Markets and Game Stores have also announced exiting Ugandan market which has left questions as to whether Uganda’s economy is on a free fall or if it is the impact of COVID-19 on businesses.

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