Mobile operator Africell, announced it was ending operations in Uganda where it has faced tough competition from the local units of African telecom firms MTN and Airtel Africa.
With operations in Democratic Republic of Congo, Gambia and Sierra Leone, Africell entered the Ugandan market in 2014 after acquiring the local operations of France’s Orange.
Since then, Africell has struggled to expand against South Africa’s MTN, which has the largest number of subscribers in the east African country at more than ten million, and India’s Bharti Airtel.
A statement from the company said, “Africell … will end operations in Uganda on 7 October 2021,” adding that its decision was “based on a careful assessment of the long-term commercial outlook for the business” and how Uganda fitted within its strategy of driving digital transformation.
According to the firm’s website, Africell had 2.3 million subscribers in Uganda. Continent-wide it has 12 million and is planning to launch operations in Angola by the end of this year, Sam Williams, the firm’s communications director told Reuters.
The news is likely to benefit MTN which is preparing for an IPO in which it intends to sell 20% of its shares to the public.
The government last year mandated all the telecom firms in the country to list at least 20% of their shares as a way to allow its citizens to share a slice of profits.
Slowing growth in recent years, exacerbated by the effects of COVID-19 has trimmed the east African country’s economic prospects and led to a steady exodus of foreign firms, including supermarket chains from South Africa and neighbouring Kenya.