KAMPALA (Reuters) – The sale of a 20% equity stake in MTN Uganda, the country’s biggest telecoms operator, will be restricted to citizens of the East African Community trading bloc, a spokesman for the sector regulator said on Friday.
The government is forcing all telecom operators, including MTN Uganda and the local unit of India’s Bharti Airtel, ( BRTI.NS ), to list a fifth of their shares on the Ugandan bourse to allow locals to benefit from the sector’s profits.
“The shares are restricted to Ugandans, and also citizens from the East African Community (EAC),” Ibrahim Bbosa, spokesman for the Uganda Communications Commission told Reuters.
The six members of the EAC are Burundi, Kenya, Rwanda, South Sudan, Tanzania and Uganda.
There was no immediate comment from MTN Uganda, but in January, its chief executive cast doubt on whether the government move to force foreign-owned companies to list on the local bourse would achieve its goal of boosting Ugandan ownership in the sector.
Stephen Kaboyo, the managing partner of Kampala-based Alpha Capital Partners, said the sale of the shares will galvanise the local stock market, adding he was confident the issue would get sufficient demand despite the government locking out non-East Africans.
“There is sufficient liquidity both at the institutional and retail level in the East African market,” Kaboyo told Reuters.
This month, MTN Uganda had its operating license renewed for 12 years after paying $100 million. It has been given two years starting this July 1 to list 20% of its equity on the Ugandan Securities Exchange.
It started operating in 1998 and it has more than 10 million subscribers.
Although relatively small, Uganda’s telecoms and data market is seen as potentially lucrative because a large proportion of the country’s 42 million people is young.