Vodacom Tanzania's Initial Public Offering (IPO) will close on 19 April, but analysts note that preference will be given to local shareholders as the company seeks to raise US$213 million and to comply with a directive that telecom companies list 25% of equity to broaden local ownership.

The prospectus for the IPO was issued recently and shows that as much as 560 million shares will be issued to the public. The prospectus was approved at the end of last month.

"Foreigners are able to participate in the issue, although we note that locals are given priority and foreigners can only buy if the IPO is not fully subscribed by local shareholders," said Binta Cisse Drave, Associate Director and equity analyst at Exotix Partners.

The Tanzanian parliament passed the Finance Act 2016 which stipulates that all Tanzania-based MNOs should list 25% of their authorised share capital through an IPO on the DSE (Dar es Salaam Stock Exchange) within six months of 1 July 2016.

It is expected that Tigo Tanzania, Airtel Tanzania and Zantel will all list on the country's stock market this year. The results of Vodacom Tanzania's IPO will be announced on 28 April, while listing and commencement of trading has been scheduled for 16 May.

Experts say Vodacom Tanzania is the leading telco in the country with about 31% market share and potential growth being driven by data and mobile money uptake and usage. It obtained its licence for the Tanzanian market in 1999, kick-started operations in 2000 and has about 12.4 million active subscribers, according to company data.

Research by Deloitte says telecommunications companies in Tanzania contribute about 3.1% to the country's GDP and about 11% to tax revenues.

Drave adds that the Tanzanian telecom sector is highly competitive and there are more downward pressures on tariffs in the short-to-medium term.

"Customer registration initiatives will put pressure on subscriber uptake in the short term, while regulatory risks and currency weakness could also negatively impact Vodacom Tanzania. Spectrum scarcity in Tanzania is negatively impacting operators and end users," she added.

Vodacom Tanzania managing director, Ian Ferrao, was quoted by Bloomberg saying "there is subscriber growth left in the market" and highlighting that "data will continue to accelerate as more customers continue to adopt data services" and get connected to the internet.