MTN Uganda has in excess of six million subscribers, making it the largest operator in the country. Last week, it claimed that UTL owed it 20bn Ugandan shillings ($8.6m) in unpaid connection fees that had accumulated since 2008. The telco was threatening to block all calls to and from Uganda Telecoms from the 14^th of March if the outstanding bill wasn’t settled.

Last week, MTN Uganda issued a statement saying that “Uganda Telecom Ltd has unjustifiably and persistently refused to honour their business obligation and attempts to resolve the matter of outstanding unpaid dues, thus forcing us to take this unavoidable step,” adding that it believed that continuation of its agreement with UTL was “a business risk as debt continued to grow unabated.”

UTL is contesting the bill, telling Reuters that the outstanding debt is in fact 6.2bn shillings and that while the sum was being contested in court, “the rest of the money is just a matter of reconciliation between us.”  It has also been in dispute with Airtel Uganda and Warid Telecom over unpaid termination fees.

Uganda Telecom has over 2.6 million subscribers and is 63 per cent owned by the Libya Africa Portfolio, or LAP Green Network, which is a Libyan foreign investment vehicle that also holds stakes in Sonitel Niger and Rwandatel in Rwanda. East Africa’s telecoms sector is currently undergoing significant expansion, driven in large part by rural market penetration.

East Africa Com takes place April 5-6 in Kenya. Speakers include John Barorot, CTO, Safaricom

Zain outsources East Africa to NSN

African and Middle Eastern carrier Zain streamlined its East African operations this week, with the announcement Thursday that it has awarded three network outsourcing deals to Nokia Siemens Networks (NSN).

Under the agreements, NSN will pick up a five year management contract in Kenya, Tanzania and Uganda, with an eye to optimising, modernising and managing 3,000 plus multi-vendor mobile sites catering to nine million customers. Upgrades to energy efficient technologies and off grid power solutions will be a key component of the deal.

This contract marks NSN’s biggest multi-vendor outsourcing case in the region and is also one of the first such deals of its kind in Africa. As part of the agreement, approximately 350 Zain employees will be transferred to NSN.

The move should free Zain Africa up to focus on its core business in the region, where sub par performance is weighing on the group’s profits. Earlier this month Zain reported that net profit for the nine months to the end of September fell 17 per cent year on year to KWD195.7m ($677m), although revenues for the period were up 24 per cent year on year to KWD1.78bn. Africa is causing much of the company’s financial pressure, with the intensive expansion of Zain’s network in key operations such as Nigeria, Zambia, Sudan, and Iraq, resulting in increases in fixed costs from depreciation and amortization, with the company being further burdened by increases in financing costs.

Read our recent Q&A with Chris Gabriel, CEO, Zain Africa

In late September, confusion reigned as a consortium of buyers that included Indian operators BSNL and MTNL were thought to be carrying out due diligence on Zain in a bid to acquire some or all of Zain Africa. But nothing came of the supposed interest and at the recent Africa Com 2009 event in Cape Town, South Africa, Chris Gabriel, CEO of Zain Africa repeated a number of times that “Zain Africa is not for sale. We are focused on our objective to become a top ten player by 2011 and we still have an appetite for expansion,” he said.

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French carrier France Telecom has expanded its African footprint under a deal with Ugandan new entrant Hits Telecom.

Under the agreement signed at the weekend, France Telecom will take majority ownership of a new entity, Orange Uganda, which will control Hits Telecom’s existing GSM network and telecom assets.

Hits Telecom Uganda acquired a GSM 900/1800 licence for the country last year, with backing from International Investment House (IIH), an investment firm headquartered in Abu Dhabi. The company’s business model includes proposals for cellular, WIMAX, international gateway, MVNO and data transmission services.

The new firm, Orange Uganda Limited, will be 53 per cent controlled by France Telecom, and will absorb all of Hits Telecom Uganda’s staff.

France Telecom said that with a rapidly growing population of around 30 million people and a mobile penetration rate of less than 17 per cent in March, Uganda offers major prospects for growth.