To Stay In Uganda, MTN Must List On Yet Another Local Exchange

Africa’s largest telecommunications provider, MTN, may have no other option than to list its shares on the Ugandan Stock Exchange in order continue operating in Uganda. The East African country’s government has mandated for the telco to list 20 percent of its shares within 2 years.

This July, MTN Uganda was granted a 12-year operation license extension, effective the beginning of the same month. The Uganda Communications Commission (UCC) first granted MTN a Second National Operator License for the provision of telecommunication services on October 20th, 1998, for a 20-year period.

The license, however, expired in October 2018, after which there were negotiations between the operator, the central government, and the UCC. The breakthrough was a license extension that came along with the quasi condition of a local listing on Uganda’s main bourse. Nevertheless, the telco will pay USD 100 Mn for the new license.

The telco, which connects subscribers in 22 countries in Africa and the Middle East, is Uganda’s biggest rival operator, rivaling Airtel Uganda and Africell. As of Q4 2019, MTN Uganda had 51 percent of the country’s wireless subscriber market share. By 31 December 2019, its customer base had increased to 12.6 million customers.

To keeping doing business in Uganda, MTN must also extend its network and service to cover no less than 90 percent of the country in the next 5 years. Judging from the fact that telecom operations have been brought under a magnifying glass across Africa and that MTN has been operating with a temporary license in Uganda for the past 2 years, the telco may give in to the country’s demands.

Since 2018, MTN has been renewing its Ugandan license every 6 months. The permit had to be extended to accommodate conclusion of renewal negotiations, which have been ongoing for the past 24 months. At some point, stocks were stalled when an initial USD 50 Mn offer made by the company was rejected by the Ugandan president, Yoweri Museveni.

MTN is listed on the Johannesburg Stock Exchange (JSE), Nigerian Stock Exchange (NSE), and Ghana Stock Exchange, while it started mulling to go on the Rwanda Stock Exchange back in 2019.

In 2019, it controversially listed on the Nigerian Stock Exchange, only listing units of ordinary shares of its existing shareholders without issuing new shares for public purchase as would have been the case if it was an Initial Public Offering (IPO).

MTN Uganda has recorded a 30.5 percent growth in revenue to USh 765.32 Bn (USD 7.1 Bn) for the first 6 months that ending June 30th, 2019. The jump is owed to the increase in demand for data and fintech services, according to its latest financial results.

Meanwhile, MTN is having a bit of a hard time operating in Ghana, as the government is looking into its dominance in the mobile money market. The telco is also on the cusp of a terrorism-shaped hole which it is being accused of digging.

Featured Image: Slim Emcee Via Unsplash.