MTN Uganda has announced its intention to float 20% of its shares on the Ugandan Securities Exchange (USE), joining Safaricom as a publicly traded telco in East Africa.
Kenyans and other East Africa citizens will be able to purchase shares into a fifth of MTN Uganda, which has been the largest taxpayer in Uganda over the past 10 years.
MTN Group, the South African company under which MTN Uganda is a subsidiary, has a shareholding of 96% in the company.
To encourage and expand local ownership in the home market, the Ugandan government gave conditions for long-term renewal of operating licenses.
Among these conditions to MTN was floatation on USE.
“Over the last 23 years, the people of Uganda have embraced MTN as their own and given us the legitimacy to operate throughout this country. We are reciprocating by inviting Ugandans to share in the ownership of the success that we have built together.” MTN Group Vice President for Southern and East Africa said.
Conditions for the operation of telecommunication companies started in Kenya a few years back with the National ICT Policy that went into gazette in 2020. A clause in the policy provides for equity through enforcing local ownership in foreign companies that are setting ICT services in the country.
“It is the policy that only companies with at least 30% substantive Kenyan ownership, either corporate or individual will be licensed to provide ICT services.”
This year, Airtel got caught up in this condition by the ICT ministry, with speculations that they might leave the Kenyan market if it was no longer viable to do business and still give 30% of the company shares to locals. After weighing the market worth, they decided to continue operations.
The Initial Public Offering by MTN Uganda will be the second for telcos in East Africa after 13 years, since Safaricom was listed on the Nairobi Securities Exchange (NSE) in 2008.
The floatation will be delivered through a digital platform, a milestone for a public offering of shares in East Africa, and is expected to raise about KES 132 billion.
This amount could eventually make it the largest IPO In Uganda.
MTN Uganda offers voice and data connectivity to more than 15 million subscribers, in a country whose major demographic is the youth, with a growing mobile penetration covering 67% of the population.
