Yesterday, the former leader of opposition Hon. Nandala Mafabi in a report presented to the parliament recommended the current Uganda Telecom (UTL) management to step down citing mismanagement of the firm. Today, through a letter penned down by the UTL Board Chairman Mr Kaboyo Steven, the company has detailed the challenges it has faced and also refuted the contents of the published statements for being incomplete or factually incorrect.
According to the letter, the telecom carrier detailed the challenges it has faced for the past 8 years and despite these turbulent times, the shareholders and Board of Directors have “worked hard to sustain the business”.
As we recently reported, Uganda Telecom was out hunting for a new management team that has now been tasked to venture in new business and stir the company in a new profitable direction. Mr Kaboyo said;
“As part of any turnaround plan, all aspects of the company and its’ cost structure in fine detail are being analysed. As one would expect, this is never a popular task as it requires reducing non-essential operational costs. We are pleased to report that these efforts have already shown significant results, with our revenues having increased by 13%, our operational expenses have reduced by 8%, and our operational deficit has decreased by 23%; a position and overall trend the company has not seen for many years.”
The following allegations were raised by Hon Nandala Mafabi, and UTL has responded to each of them as follows:
The Audits:
Uganda Telecom as a private company say it has been audited each year by reputable firms such as KPMG and Ernst & Young. The last audit for 2015 is being undertaken by Ernst and Young.
Indebtedness
The company said that it does have significant levels of debt that will be addressed by shareholder capital. This includes statutory and trade creditors, including NSSF, URA, UCC, amongst others. Specific shareholder discussions have been held and are still ongoing. Among these;
– Eligible NSSF remittances have been resumed since February 2016.
– The HUAWEI claim was withdrawn from court in October 2016.
– UTL says that the Interconnect Debts to MTN have already reduced by 88% and an amicable settlement agreement is in place for the balance.
Sale of Non-Core Assets
The letter clearly empathized that there has been no asset stripping. Only two properties have been disposed of through proper governance and approvals from the Board of Directors and Shareholders.
In a nut shell, UTL said that there were many inaccuracies in what has been recently published. They claim that the initial positive results seen so far reaffirm efforts and demonstrate that the company is pointing in the right direction.
Mr Kaboyo concluded the later saying: “The Board of Directors and the Management Team would like to reassure its customers and partners that we are committed to delivering results and to restoring UTL to its full potential.”
