Dubai-based Company, Rowad Capital, is set to Invest $225M in Uganda’s UTel

Dubai-based Rowad Capital Commercial (RCC) is poised to make a significant investment of $225 million in Uganda Telecommunications Corporation Limited (UTel), marking a pivotal moment for the Ugandan telecommunications sector. 

This investment will allow RCC to acquire a 60% stake in UTel, which has been under the management of the Ugandan government since its establishment in 2021.

Investment Details

The announcement comes after a series of discussions between RCC officials and Ugandan President Yoweri Museveni, which began in October 2023. 

Aminah Zawedde, Uganda’s Minister for Information and Communications Technology, confirmed the investment but did not clarify whether the funding would cover the purchase price for the majority stake. 

The investment is expected to bolster UTel’s operational capacity and enhance its service offerings in a competitive market.

Background of UTel

Uganda Telecommunications Corporation Limited was established as the national telecom provider on April 8, 2021, following the acquisition of assets from the financially troubled Uganda Telecom Limited (UTL) in November 2022. 

UTel’s creation aimed to stabilize the telecommunications landscape in Uganda and provide reliable services to its citizens. 

Currently, UTel operates under the oversight of the finance and ICT ministries, which are tasked with ensuring its compliance with national regulations.

Regulatory Framework

In accordance with Ugandan law, telecom companies are required to list on the Uganda Securities Exchange. 

Major players in the industry, such as MTN Uganda and Airtel Uganda, have already complied with this requirement. 

UTel has a two-year window, starting from January 2024, to list at least 20% of its shares. 

However, this timeline may be adjusted based on the company’s progress in meeting the necessary listing criteria, as noted by Fred Otunnu from the Uganda Communications Commission.

Implications for the Telecommunications Sector

The investment from RCC is expected to have far-reaching implications for Uganda’s telecommunications industry. 

With the influx of capital, UTel can enhance its infrastructure, expand its service offerings, and improve customer experience. 

This is particularly crucial in a country where access to reliable telecommunications services is essential for economic growth and social development.

Moreover, the entry of a Dubai-based firm like RCC into the Ugandan market signifies a growing trend of international investments in African telecommunications. 

Such investments are seen as vital for bridging the digital divide and fostering innovation in the region.

Read Next: MTN Uganda Reports Significant Profits Caused by Data Boom

Future Prospects

As UTel prepares to integrate RCC’s investment, the company will need to navigate the challenges of a competitive market while adhering to regulatory requirements. 

The partnership with RCC could also pave the way for technological advancements and improved service delivery, benefiting consumers and businesses alike.

The Ugandan government remains optimistic about the potential of this investment to transform UTel into a leading telecommunications provider in the region. 

By leveraging RCC’s expertise and resources, UTel aims to enhance its market position and contribute to Uganda’s broader economic objectives.

Conclusion

Rowad Capital’s $225 million investment in Uganda Telecommunications Corporation Limited represents a significant milestone for Uganda’s telecommunications landscape. 

As UTel embarks on this new chapter, the collaboration with RCC may not only strengthen its operational capabilities but also stimulate growth and innovation within the sector. 

This investment is a promising development for Uganda, reflecting the increasing interest of foreign investors in the African telecommunications market and the potential for sustainable economic growth through improved connectivity.

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