Ugandans have been told that Libyan investors committed fraud and theft of money that led a mountain of debt weighed down Uganda Telecom (UTL), right?
Well that’s not the whole story. Not this time.
The company’s board chairman Stephen Kaboyo told Parliament’s select committee investigating the allegations of fraud and theft at UTL, that the firm’s debt exceeds Shs500 billion, much of which is owed to Airtel and MTN in unpaid interconnection fees.
Mr Kaboyo explained that with 700,000 subscribers, in many ways, bureaucrats rely on UTL as principal telecommunications services provider, and particularly State House and security agencies.
The ailing company is presently demanding Shs18b from government clients.
Top on the list of defaulters Uganda Police Force and the Ministry of Defence.
“UTL demands a lot of money in terms of services offered to government entities. We are now working with the Secretary to Treasury to start deducting this money at source and we shall also disconnect those who haven’t paid just like we have done to Uganda Police,” Kaboyo said.
The challenges facing UTL started years ago when the company’s market share started dropping in 2007, from about 30 per cent to below six per cent now.
Uganda Telecom Limited’s financial troubles came to the limelight when Nandala Mafabi, (FDC, Budadiri West) tabled a petition in Parliament in November 2016.
In the petition, Mafabi accused management at UTL of asset stripping, insider trading and failure to manage a skyrocketing debt eating into the company’s coffers. He queried why UTL did not heed advice to carry out a forensic audit by the Auditor General’s Office since any company in which government has an interest in terms of shares must be subjected to the audits.
Yesterday, the government announced that it had taken back the ownership of Uganda Telecom with immediate effect and will soon appoint new managers to the troubled telecom firm.
The government action follows the withdrawal of Ucom, a Libyan government-owned firm that held majority shares in UTL.
UTL’s biggest debts
Uganda Communications Commission (UCC): Debt demand letter of 1st September 2016 from the Executive Director of UCC shows a debt of U. Shs 22.244 billion with UCC, the Regulator arising from unpaid spectrum fees. The regulator is threatening to withdraw the frequencies which would in effect shut out all the services of the company.
Overdue Interconnection Fees owed to MTN: A debt of U. Shs 8 bn in interconnection fees (see letter of 8th April 2016 from MD MTN to CEO of UTL). Even with agreed installment payment, UTL has failed to service this debt.
URA Accumulated Tax Debt: Shs 58.424 billion in Pay as You Earn (PAYE), Withholding Tax (WHT}, Value Added Tax (VAT) and Excise Duty taxes owed to URA for the period May 2015 – Dec 2015. This debt is increasing.
Huawei Technologies Limited: Supplied equipment, spares and services to UTL under LAP Group totaling $ 7.06 million (U. Shs. 24.244 billion). The Commercial Court in a specially endorsed complaint drawn by M/S ENSafrica Advocates on 8th May 2015 under Civil suit 311 of 2015 (Huawei Technologies Co. Ltd Vs Uganda Telecom Limited) ruled that UTL settles this case with interest from the date of judgment. UTL has failed to pay.
