The government of Uganda has issued an order to telcos operating in the country.
The order mandates them to list a minimum of 20% of their shares on the Ugandan Stock Exchange.
The move is a bid to promote local ownership of the telecommunication companies.
At the moment, all telcos operating in Uganda are foreign-based. Airtel and MTN Group have a larger market share in the country.
Uganda’s president, Yoweri Museveni, said the order will conserve Uganda’s foreign exchange as a portion of the firms’ dividends. Payout would remain in the country.
Ibrahim Bbosa, the spokesperson for Uganda Communications Authority said they would be issuing a new licensing policy. Existing operators would be issued with fresh licenses with new conditions.
The telecom companies should have acquired the new license within sixty days, and list the required share percentage within two years.
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According to the new conditions, telcos would be required to share infrastructure, such as fibre optics cables.
This, according to the regulator, eliminates duplication and would lower the cost of internet and other services.
Rwanda-based Ugandan Economist, Enock Twinoburyo, said that Airtel and MTN are highly profitable companies which would excite both retail and institutional investors with an IPO.
The Ugandan Stock Exchange is small with less than 20 listed companies
Majority of its 18 listings were made in September of 2018.
The listing of telco companies would bring some much anticipated activity to the small stock exchange.
