Tanzania expects mobile phone operators to list on its stock exchange next year under mandatory rules aimed at enabling its citizens to take a stake in one of Africa’s fastest growing industries.
Like other African countries, mobile phone use has rocketed in Tanzania over the past decade, with telecoms the fastest expanding sector in east Africa’s second biggest economy.
January Makamba, deputy communication, science and technology minister said the government was in the final stages of getting telecoms companies listed on the Dar es Salaam Stock Exchange (DSE).
“Listing is expected early next year,” Makamba told Reuters.
The government, which still has a relatively tight control over the economy, passed two separate telecoms and mining laws in 2010 requiring the companies to list on the stock exchange as it sought to boost the nascent bourse’s value and improve corporate governance and transparency.
The law required existing telecoms companies to list on its stock exchange by 2013, but officials said implementation of the legislation was delayed by legal and regulatory procedures.
Mobile phone operators in Tanzania include market leader Vodacom Tanzania, a unit of South Africa’s Vodacom; Bharti Airtel; Tigo Tanzania, part of Sweden’s Millicom; and Zantel, a unit of Etisalat [ETELZS.UL].
Major telecoms companies operating in the country said they were in talks with the government over the mandatory listing requirements, declining further comment.
“We are participating in the consultation process on the draft regulations being conducted by the Ministry of Communications. At this stage, we cannot comment further,” Vodacom Tanzania’s managing director, Rene Meza, told Reuters.
Tanzania’s mobile telecoms sector has grown rapidly over the past decade. The nation of 45 million people has 28.88 million mobile subscribers, representing a mobile penetration of 64 percent, the regulator says.
Under the 2010 law, new telecoms companies would also be required to list on the exchange within three years after acquiring their operating licences.
Tanzania granted a licence this year to Vietnam-based telecoms operator Viettel to build a third-generation (3G) mobile phone network in the country.
The chief executive of the DSE, Moremi Marwa, said the planned listing of telecoms companies would be a big boost to the exchange.
“The implementation … will result in more listings on the exchange, which will then increase the market depth and liquidity into our local exchange and hence generally help to grow our capital market industry,” Marwa told Reuters.
“This will also fundamentally allow for more transparency, good corporate governance and more accountability by telecoms.”
Tanzania last month also set aside a rule that barred foreign investors from buying more than 60 percent of shares in a listed company on its bourse.
Analysts said the move to open up the capital market was expected to lure more foreign investors to the exchange.
The stock exchange, which has a domestic market capitalisation of 10.4 trillion shillings ($6.2 billion) , currently has 13 domestic listed companies and seven dual-listed companies. Source: Share Net