Uganda - Telecoms, Mobile and Broadband - Statistics and Analyses

Uganda - Telecoms, Mobile and Broadband - Statistics and Analyses

Uganda's telcos progress with IPOs

Under revised regulations governing Uganda’s telecom sector which were introduced at the end of 2019, telcos were to be issued with new licenses and be required to list at least 20% of their equity on the local stock exchange, This move was aimed at encouraging local ownership among operators in the sector.

MTN in March 2020 renewed its National Telecom Operating licence for a further ten years, paying $100 million. Under the revised licensing regime, Airtel Uganda also fell under the NTO license regime on the grounds that it provided two-thirds geographic coverage. Given that Airtel at the time was paying only $100,000 to offer services under the cheaper PSP and PIP licences (to its obvious advantage), MYN and Uganda telecom complained. To level the playing field, Airtel was moved to a 20-year NTO licence in December 2020 (effective from the previous July). As part of the licence terms, the company must provide 90% geographic coverage by mid-2025.

Lycamobile Uganda, which had launched services in April 2020 after having acquired the local TD-LTE operator Tangerine in the previous January, was given an NTO licence in May 2021, making it the fourth operator in the country so licensed. Similar to Airtel, Lycamobile must extend geographic coverage and must also list 20% of its shares on the local exchange by mid-2022.

In line with these licensing requirements, MTN Group completed an IPO for its Uganda unit in October 2021, though it only managed to sell 60% of the 20% stake on offer, raising UGX535.9 billion. As a result of the IPO, the Group’s interest in MTN Uganda fell to about 83%. In the following December, the Group proceeded with listing its 22.4 billion ordinary shares on the Uganda Securities Exchange.

While these events have been ongoing, the economic consequences of the pandemic contributed to the exit of Africell in October 2021.