MTN Uganda given two-year ultimatum to list
The Uganda Communications Commission (UCC) has given MTN Uganda two years to list a minimum of 20% shares on the country’s stock exchange or face sanctions.
An IPO on the Uganda Securities Exchange (USE) was part of the negotiated conditions for the operator’s 12-year new operating licence effective 1 July 2020.
MTN is the first operator to acquire the licence under the new licencing regime, according to which services providers have to guarantee network coverage to at least 90% of the geographical boundary of Uganda within five years from the effective date of the licence.
MTN Uganda was first granted a Second National Operator Licence for the provision of telecommunications services on October 20, 1998 for a period of 20 years.
However a government decision to increase the licence fee to US$100-million led to intensive negotiation between officials, the UCC and the company.
MTN’s licence officially expired in 2018, but the company operated on a temporary permit which had to be renewed every six months as the parties continued to negotiate after the government rejected MTN’s offer of US$50-million.
UCC acting executive director Irene Kaggwa Sewankambo said the UCC was empowered under the Communication Act of 2013 to grant an extension to the Second National Operator Licencee upon terms and conditions that reflected the prevailing circumstances of the communications sector in Uganda.
“Having conducted a performance assessment of MTN Uganda’s operations over the past 20 years, the commission came to a conclusion that MTN Uganda had substantially complied with financial and legal obligations as well as most of the technical obligations,” said Sewankambo.
MTN Uganda CEO Wim Vanhellpute affirmed underscored the company's commitment to the terms and conditions of the licence agreement, including the listing of shares.
“We believe this is an opportunity to enhance our relationship with our customers who will also be able to become owners in this venture within the next 24 months,” Vanhellpute said.
MTN is Uganda’s largest operator with 51% share of the country’s telecom market followed by Airtel Uganda with 33%.