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MTN Uganda set to reveal new growth plans, opportunities

The telecom firm plans to raise US$1.2bn in IPO

Kampala, Uganda | ISAAC KHISA | Uganda’s biggest telecom, MTN Uganda, is set to reveal its new growth plans and opportunities on Oct. 11 when it publishes its indicative price range ahead of the expected US$1.2billion initial public offering (IPO).

MTN Uganda plans to float 20% of its shares on the Nairobi Stock Exchange for investors in the East African Community to meet the government’s set condition for the recently renewed 12-year national operating license. MTN Group owns 96% of MTN Uganda and the rest of the shares are held by the local businessmen.

The company said on Oct.05 that it has already secured the required approval by the Capital Markets Authority and Uganda Securities Exchange. “The intention to float announcement is a major step towards delivering on our plan to list on the USE,” said Charles Mbire, Chairperson of the Board of Directors, MTN Uganda.

“It is a reaffirmation of our long-term commitment to expand investment opportunities for Ugandans and we look forward to continuing our engagement with the CMA and USE to take forward the IPO and the listing.”

“Over the last 23 years, the people of Uganda have embraced MTN as their own and given us the legitimacy to operate throughout this country. We are reciprocating by inviting Ugandans to share in the ownership of the success that we have built together,” MTN Group Vice President for Southern and East Africa Yolanda Cuba added. MTN Uganda will now become the third telecom company to list on the stock exchange after MTN Rwandacell that listed its shares on the Rwanda Stock Exchange (RSE) last May and Safaricom’s IPO on the Nairobi Securities Exchange in 2008.

MTN started its operation in Uganda in 1998 and now covers 97% of the country’s population. The telco also has more than 6,000km of fibre connectivity to provide the voice and data bandwidth connecting more than 15 million subscribers.

The company said it has also contributed to the growth in mobile penetration in Uganda from 0.27% in 1998 to 67% as of March 2021.

“MTN Mobile Money (MoMo) has also revolutionised the financial landscape. Formal financial inclusion has nearly doubled from 28% in 2009 when MoMo was introduced in Uganda to 58% as of 2018,” the company said.

“We are delighted to witness the honouring of this commitment by MTN,” said Irene Kaggwa-Sewankambo, the Executive Director of the Uganda Communications Commission.

Paul Bwiso, the Chief Executive Officer at USE said “this IPO gives Ugandans an opportunity to own a piece of the company.”

“This will potentially be the largest IPO on the Ugandan market and will be delivered primarily through a digital paperless/ green platform which is the first of its kind in East Africa,” MTN Uganda said in a statement.

Revenues maintained an upward growth trend

Last year, MTN Uganda weathered the storm of the coronavirus pandemic to record a 9.5% growth in revenue to Shs1.98 trillion citing a sharp growth in customer subscribers. Its revenues from voice services grew by 3.9%, data (up 27.8%) and fin-tech (up 11.8%).

Earnings before interest, taxes, depreciation and amortisation (EBITDA) margin expanded by 2.4percentage points to 49.5%, on higher revenue and effective implementation of cost efficiencies.

In pursuit of the company’s financial inclusion objectives and growth strategy, mobile money (MoMo) users grew by 14.4% year-on-year to 8.5million, spurred by the move towards cashless financial transactions to avert the spread of COVID-19 pandemic.

However, the growth in fin-tech revenue was moderated by reductions in transaction fees to support customers, lockdown restrictions on agents and a slowdown in economic activity.

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