More Africa NewsUganda: Smart Telecom ceases operations on August 31

August 18, 2021by myles0

The Ugandan telecoms market will be slightly more sparse from September 1, 2021 with the departure of one of its players, after 10 years of activity. Smart Telecom is packing up after two difficult years. Its market share has eroded, its financial power has also taken a hit.

Sure Telecom, operating in Uganda under the brand name Smart Telecom, announced last week its decision to end operations in the country on August 31. It therefore invited its consumers to take advantage of the transitional period granted to them to migrate to competing networks. The telecoms company has indicated that any prepaid purchase made by a subscriber and whose validity runs beyond August 31 will be refunded for the part not yet used.

Smart Telecom justifies the end of its Ugandan adventure by ”  the increase in operational challenges due to the coronavirus pandemic  “. The company saw its market share decline in 2019, during the onset of the global pandemic. Travel restrictions, which have led to increased competition in the telecoms market, have largely benefited large operators such as MTN, Airtel, Uganda Telecom. They had sufficient financial capacity to invest in strengthening and expanding their network to meet growing consumer demand across the country.

In this context, the market shares of smaller telecom operators such as Africell, Smile Telecoms or even Smart Telecom have only declined. The Covid-19 crisis also threatened the sustainability of the Smile Telecom group and the survival of its subsidiaries, in particular that of Uganda, in March 2021. However, the pan-African group was able to escape it in April thanks to the obtaining a refinancing of 51 million USD and a restructuring of its debt by its shareholders and financial partners. The Africell group, whose activities were not particularly in danger, however requested and obtained last June a syndicated loan of 105 million USD to strengthen its subsidiaries.

The exit of Smart Telecom from Uganda will certainly reduce the list of players competing in this market, but will not reduce the strong competition that prevails there. It is highly likely that the departure of Smart Telecom will greatly benefit MTN and Airtel. The two telecom operators are currently the market leader and second in terms of share, have greater network coverage and are more inclined to introduce new mobile technologies to the market. 

Source: Agence Ecofin

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