Tanzania passes law to force local telecos to list in the bourse
DAR ES SALAAM (Reuters) – Tanzania has passed a new telecoms law making it mandatory for mobile phone companies to list on the country’s stock exchange in the next three years, a senior government official said on Monday.
Parliament approved the Electronic and Postal Communication Bill 2009 late on Friday, compelling telecommunication firms in the east African country to offer shares to the public starting from 2013. We have given mobile phone companies three years to make the necessary preparations for listing on the Dar es Salaam Stock Exchange,” Maua Daftari, deputy minister for Communications, Science and Technology, told Reuters.
The minister said the government would soon issue regulations on the amount of shares to be floated by telecoms firms on Tanzania’s small stock exchange.”It’s a win-win situation for both the government and the telecoms companies … The government doesn’t want any shares in these companies, we just want the public to own a stake in the firms,” she said.
In presentations to a Parliamentary Committee last month, mobile phone operators said they opposed the mandatory listing, saying the move was a setback to economic reforms in the country.”These telecoms companies have been in the market for more than 10 years. They can’t say they are not ready for listing … maybe they are just afraid of coming under scrutiny at the stock exchange,” said Daftari.
Analysts criticised the new law, warning that it could restrict future investments in the sector.”I don’t know what the government’s intention is — this law has come suddenly from nowhere … why are they only targeting mobile phone companies?” said Samuel Wangwe, an economic analyst.”The government should come up with a broader policy for economic empowerment of the people through capital markets, which should also look at other sectors such as mining.”
Tanzania, a nation of 40 million people, had 13.1 million phone subscribers at the end of 2008. This had jumped to 14 million by the first quarter of 2009, with 99 percent of them being mobile customers.
Mobile phone companies operating in Tanzania include market leader Vodacom Tanzania, a unit of the South African company and Zain Tanzania, part of Kuwait’s Zain.Zantel, majority-owned by Dubai-based Emirates Telecommunications Corp (Etisalat), Tigo, owned by Millicom Cellular and Dovetel Limited, trading as Sasatel, are also present.
The Dar es Salaam stock exchange (DSE) is home to 11 Tanzanian firms and four cross-listed Kenyan companies.