Vodafone network to be switched off as it starts bankruptcy process

A Vodafone shop in Kampala. Credit: Twitter (@VodafoneUganda)

Vodafone Uganda will start bankruptcy proceedings by switching off its network, the telecom company said in an email to customers on Thursday.

Directors at Afrimax Uganda Limited – which trades as Vodafone Uganda following a strategic framework agreement between Vodafone Group and Afrimax Group in 2014 – recently appointed a bankruptcy administrator, Donald Nyakairu.

A statement from the company said Mr Nyakairu is tasked with “restructuring and reorganising the company in a bid to improve commercial and operational efficiencies.”

This will result in “a temporary deterioration in the quality of our network services as the administrator implements the required changes and negotiates with suppliers,” the statement adds.

A company representative told Uganda Business News that the company’s network will be “temporarily switched off,” affecting both voice and data services. A timeline for its restoration was not given.

The telecom is said to be heavily indebted. Since last November, it has struggled with service outages and shuttered several of its outlets. Reports said it was having trouble paying bills and service providers.

Vodafone recently filed for bankruptcy protection, which gives it legal room to “restructure and reorganise” its operations so it can try to become profitable again.

As part of the process, the provisional administrator “is required to prepare, and present to the creditors for their consideration and decision, a proposal on how to conduct the administration”. The creditors then “decide to either execute an administration deed (in which case the company goes into administration), liquidate the company or end the administration (in which case the company transitions to liquidation)”.