Dar es Salaam. Another mobile phone operator, MIC Tanzania Limited (Tigo), has started the process of listing at the Dar es Salaam Stock Exchange through an initial public offering (IPO) just about two weeks before the deadline for mandatory listing of telecommunications companies expires.
Tigo said in a statement yesterday that it submitted its prospectus and preliminary application to the Capital Markets and Securities Authority (CMSA) and the DSE yesterday as part of the requirement before it starts the IPO and listing of its shares.
The issue of when the IPO will start will be known after the determination of the application.
Tigo is the second mobile phone operator to apply for the IPO after Vodacom Tanzania did so recently.
The mobile operators seek to abide by the Electronic Postal and Communications Act of 2010, which makes it mandatory for every the telecoms company to offload at least 25 per cent of its stakes to the public and list on the DSE.
Telecommunications companies, through the Mobile Operators Association of Tanzania (Moat), had, however, opposed the Act, arguing that forcing them to list on the DSE was contrary to the spirit of free enterprise.
President John Magufuli’s government brought back the law in the form of amendments (the Electronic and Postal Communications Act, Cap. 306) through the Finance Bill, 2016, which was signed into law in June. The government said the decision was aimed at ensuring that Tanzanians reap maximum benefit from the booming telecommunications sector.
Tigo’s Managing Director Diego Gutierrez said: “We are delighted with the submission of our prospectus to officially start the process that will offer our customers, employees and the Tanzanian public at large, the exciting opportunity to become shareholders in our company.”
The company chairman, Mr Ami Mpungwe, said the submission was a significant milestone in the history of MIC Tanzania and it is in keeping with their desire to provide Tanzanians an equal opportunity to be part of Tigo in the near future.
“We will work together with all relevant regulatory bodies to ensure a smooth process of going forward,” he stated.
Stock brokers are optimistic that the market will be more vibrant once all telecommunications companies register on the DSE.
However, the director of operations at Orbit Securities, Mr Juventus Simon, was of the view that there should be phases for the telecommunications companies to issue their IPOs.
“It is bad for all companies to issues IPOs at the same time, considering the thin market in Tanzania. I hope the regulators will put phases for them,” he said in a phone interview.
DSE has 25 listed companies, including seven which cross-listed from other exchanges with a market capitalisation of Sh19.3 trillion by the close of business yesterday, according to the bourse website.