Potential investors who were interested in buying Orange Uganda have pulled away after knowing that the telecom operator was about $200 million in debt and a fairly thin asset base, the underlying financial value is perceived as too small to justify the offer prices made to investors.
Orange sold 180 transmission masts to Eaton Towers Ltd, leaving the company with few core technical infrastructure units.
After failing to secure a buyer, Orange has employed a new strategy and is seeking a new minority investor to inject more than $41 million into network projects. The commercial option is expected to reduce recapitalisation pressures and raise the company’s capacity to satisfy changing consumer needs.
This strategy allows the firm to buy time before exiting, but the inability to secure a big buyer could put more pressure on the French owners to discount their offer.
The telecom’s key performance indicators remain weak. The company is yet to reap profits with net losses averaging between Ush50 billion ($19.6 million) and Ush70 billion ($27.5 million) per year since 2009, according to insiders at Ernest and Young, the firm’s auditors.
Its market share is valued at less than 20 per cent — a figure deemed too small for big investors. In spite of highly popular Internet and data products, Orange’s ability to grow revenues appears weak.
Telecom analysts say Orange Uganda’s customer base is not attractive to older rivals. Their total subscriber base is estimated at one million, compared with MTN’s 8.5 million and Airtel’s 7.2 million subscribers .
Source: The East African