The government of Uganda has mandated Telco operators within the country to list stakes on the Uganda Securities Exchange. The telcos have been instructed to list a minimum of 20% of their shares within the next two years.
Telcos will henceforth be required to share infrastructure such as fiber optics cables to eliminate duplication, lower the cost of the internet and other services. More Ugandans will hold shares in the listed Telcos and benefit from the distribution of profits in the nation. Listing on the stock market will reduce the pressure on the shillings and strengthen the economy.
The Ugandan Communications Commission went ahead to announce plans to issue out new licenses in the statement below:
“In 60 days we want to have issued new licenses and then two years from then, all the players should have listed at least 20% of their shares on the Uganda Stock Exchange (USE),” said Ibrahim Bbosa, spokesman for the Uganda Communications Commission.
See Also: MTN Nigeria Officially Lists on the Nigerian Stock Exchange
In January, a similar declaration urged Telcos to list a minimum of 30% on the stock market. The declaration was revised for Telcos to list a minimum of 20%.
There are only 18 companies currently listed on the USE. The larger market share of the telecommunication sector in Uganda is controlled by MTN and Airtel. Therefore, listing major Telcos like MTN and Airtel is expected to cause a foray of activities on the stock market.
The Uganda Communications Commission believes that the public listing will boost local ownership of the sector and reduce the repatriation of profits and dividends. The listing will become a licensing condition for existing and prospective telecommunication operators in Uganda.
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