Airtel Uganda has terminated its interconnection agreement with State owned telecommunications company, Uganda Telecom Limited (UTL).

The news was revealed on Monday January 30th in a statement released by Airtel officials.

In the new development, Airtel subscribers will not be able to make calls to or receive calls from UTL subscribers effective Friday February 3rd.

“Airtel Uganda regrets to inform our customers that effective Friday 3rd February 2017, our subscribers will not be able to make calls to or receive calls from Uganda Telecom Limited (UTL),” the statement reads in part.

“This is because the interconnection agreement and interconnection services between Airtel Uganda and UTL were terminated,” the statement further reads.

The news comes at the backdrop of recent reports that Airtel is at the verge of closing operations in Africa due to accumulated losses.

Airtel officials in Uganda have however trashed the news as false, calling on their subscribers to ignore them and consider them baseless.

UTL is equally wrestling with losses and debts that which have threatened its survival in the telecommunications market.

Among the debts UTL is struggling with include Shs 22.244 billion with regulator UCC arising from unpaid spectrum fees; Shs 8bn in interconnection fees to MTN; Shs 58.424 billion in accumulated tax to URA for the period between May 2015 – Dec 2015.

Also a total of US $ 7.06 million (Shs. 24.244 billion) is owed to Huawei Technologies Limited which supplied equipment, spares and services to the telecom under LAP Group.

Airtel Uganda is the first telecommunications company to terminate their interconnection agreement with UTL although more companies may consider taking the same path considering the economic struggle UTL is going through.