Uganda’s telecommunications landscape is set for a significant transformation as the state-run Uganda Telecommunication Corp. (UTel) prepares to welcome a substantial investment from Dubai-based Rowad Capital Commercial (RCC) LLC. The $225 million deal includes RCC acquiring a 60% majority stake in UTel, marking a pivotal moment in the company’s development.
This investment comes at a crucial time for UTel, which was established in 2021 as Uganda’s national telecommunications provider. The company emerged from the acquisition of assets from Uganda Telecom Limited (UTL) in 2022, a move aimed at revitalizing the country’s telecommunications sector.
The agreement with RCC is the culmination of discussions that began earlier this year, following a meeting between President Yoweri Museveni and RCC representatives in October 2023. This partnership is expected to inject new life into UTel, which inherited the infrastructure, customers, and resources of the financially troubled UTL.
Uganda’s ICT chief, Aminah Zawedde, confirmed RCC’s impending majority stake acquisition, though details regarding whether the investment covers the cost of this share purchase remain unclear. The deal represents a significant step in Uganda’s efforts to modernize its telecommunications infrastructure and services.
UTel’s formation in 2021 was part of a broader strategy to improve telecommunications services for Ugandan citizens. The company took over UTL’s operations after the latter faced financial difficulties and entered receivership in November 2022. Since then, UTel has been working to upgrade and expand its services to meet the growing demands of Uganda’s telecommunications market.
Currently, UTel is under the ownership of Uganda’s finance and ICT ministries. However, this new investment will alter the ownership structure, with RCC set to become the majority shareholder. This change aligns with Uganda’s regulations requiring telecom firms to list on the stock exchange, a requirement already met by major players like MTN Uganda and Airtel Uganda.
Fred Otunnu from the Uganda Communications Commission has stated that UTel has a two-year window from January 2024 to list at least 20% of its shares. However, this timeline may be subject to change based on how quickly the company meets the listing requirements.
The investment from RCC is expected to play a crucial role in driving Uganda’s digital transformation and economic growth. It will provide UTel with the necessary capital to expand its network, improve services, and compete more effectively in the telecommunications market.
As Uganda continues to prioritize its digital infrastructure, this partnership between UTel and RCC represents a significant step forward. It demonstrates the country’s commitment to attracting foreign investment and leveraging international expertise to enhance its telecommunications sector.
