UTCL Revival Stalls As Investor Blames Government For Breach Of Agreements

By David Balinda

The government’s ambitious $225 million (approx. Shs 840 billion) plan to revive Uganda Telecommunications Corporation Limited (UTCL) through a private-sector partnership is facing significant setbacks, with key agreements reportedly being breached and bureaucratic delays undermining progress.

In December 2023, the government signed a Share Subscription Agreement with Dubai-based Rowad Capital Commercial LLC, aimed at injecting much-needed capital into the ailing telecom firm. The deal allocated $25 million for immediate operational needs and $200 million for infrastructure development.

Under a separate Government Support Agreement (GSA), UTCL was expected to take over the National Backbone Infrastructure (NBI) and manage E-Government services, consolidating Uganda’s digital infrastructure to enhance efficiency and reduce costs.

However, Rowad now accuses the government of failing to honor several provisions of the agreements, citing the following issues:

One key breach involves the Payment Services Agreement, which designated UTCL as the sole provider of government digital payments, including mobile money services.

Despite this, the National Information Technology Authority-Uganda (NITA-U) reportedly signed a competing deal with Alpha X to develop a Digital Wallet—an action insiders say violates the agreement. “This undermines UTCL’s revenue potential in a market dominated by MTN and Airtel,” a source close to the matter stated.

The scheduled handover of the National Broadband Infrastructure has also faced delays. The infrastructure was supposed to be audited and transferred to UTCL by May 12, 2025, but the verification process has been described as slow and lacking transparency. Instead of conducting a comprehensive audit, NITA-U is said to have opted for a “brief review,” raising concerns about accountability for the multi-billion-shilling asset.

Additionally, critical land parcels intended for telecom infrastructure remain tied up as collateral with the administrator of the defunct Uganda Telecom Limited. Although the Finance Ministry had pledged to settle the outstanding debt, the land titles have not yet been released, stalling infrastructure development.

In another blow to the project, the UTCL Company Secretary recently suspended board operations, reportedly on instructions from government officials. “This is sabotage,” a Rowad representative said. “How can we operate if governance is disrupted?”

When contacted for comment, the ICT Minister said the government remains committed to the UTCL revival but admitted there have been “procedural delays.” Parliament is currently reviewing a Shs 205 billion budget request to terminate existing contracts—funds Rowad argues are unnecessary under the existing agreements.

A revitalized UTCL has the potential to boost rural internet access, reduce dependence on foreign telecom operators, and streamline government digital services. But with mounting contract disputes, delayed audits, and governance challenges, the project risks becoming yet another stalled mega-deal.

Industry stakeholders are now calling for full compliance with the GSA, a transparent audit of the NBI, the release of UTCL land titles, and the resumption of board operations.

“UTCL can still succeed—but only if all parties act in good faith,” one expert said.