Regulatory dilemma: Where are telecom listings on DSE?

However, despite this requirement, Vodacom Tanzania PLC is the only mobile network operator to have complied as of January 2025, leaving other major players unlisted amid scrutiny from regulators and investors alike.

The intent behind mandatory listing was to broaden local ownership of the telecommunications sector, allowing ordinary Tanzanians to benefit financially from the profitability of the firms and to bolster transparency through stricter reporting requirements.

Tanzanians currently have access only to Vodacom shares and are thus unable to invest in other major players such as Yas (formerly Tigo), Airtel and Halotel.

As a result, they are missing out on potential gains from one of the nation’s most profitable sectors.

The relevant legislation outlines specific public shareholding requirements for telecommunication companies operating in Tanzania.

Network facilities and services licensees are mandated to maintain at least 25 percent public ownership of their issued and paid-up share capital throughout their licence period.

The requirement must be fulfilled through a public offering as outlined in the Capital Markets and Securities Act.

Content service licensees are obligated to maintain a minimum of 51 percent local shareholding in their authorised share capital.

According to the 2022 version of the law, companies that held licences prior to July 1, 2016 were required to offer shares to the public and list on the local stock exchange within six months of that date. Conversely, companies granted licences after July 1, 2016 had a two-year timeframe to complete these obligations.

The legislation includes provisions for situations where a licensee fails to achieve the 25 percent public shareholding target after an initial public offering. In such cases, the Capital Markets and Securities Authority (CMSA), in consultation with the relevant minister, will issue directives on how the licensee can meet the required threshold.

According to the Act, the public shareholding requirements do not apply to licences wholly owned by the government, licences where the government holds 25 percent or more shares and licences specifically for the lease of towers.

Tanzania’s five major network operators — Vodacom, Tigo, Airtel, Zantel and the state-owned TTCL — dominate the market, but investors remain largely excluded from a stake in this profitable industry.

Stock market players and regulator say the market is ready for the telecom listing although the listing is delayed.

CMSA spokesperson Charles Shirima said almost all telecommunication firms had applied for listing but the process was affected by issues around ownership of the companies.

“Multiple events delayed the process but the law is still there that the telecoms companies are supposed to offload their shares through the DSE,” he said.

“The demand is very huge on the DSE. If you recall the previous IPOs and bond issues to the market, none of them had underperformed.

“As regulator, we only make sure that companies comply with the laws and rules of the capital markets before listing,” Mr Shirima said.

According to him, no active listing process is currently existing after the ownership challenges emerged.

Court battle over Tigo ownership

Some companies like Tigo and Airtel had begun preparing their respective prospectuses ahead of their IPOs. However, they faced ownership challenges before the processes came to an end.

In 2017, lawyers representing a British registered company associated with Yusuf Manji claimed in court that the billionaire businessman owned 99 percent of Tigo.

Brick House Law Associates sought the stoppage to the planned sale of Tigo shares on the DSE, terming the move illegal as their client was not consulted.

According to the law firm, Golden Globe International Services was the absolute majority shareholder of MIC Tanzania Limited with 34,479 shares of 34,480 shares. The remaining one share was shown as belonging to Shai Holdings.

However, MIC Tanzania challenged the matter in the court.

In 2015, MIC bought the majority shareholding of Zantel from the United Arab Emirates’ Etisalat Group. Consequently, the two firms merged, especially when Tigo was bought by Axian Group of Madagascar in partnership with local businessman Rostam Aziz.

Tigo Tanzania, which has a new identity as Yas, is owned by Honora Tanzania and the government of Zanzibar owns two percent.

The company said recently that it’s now in the process of offloading the shares to the public in order to comply with the regulatory requirement.

“We are currently evaluating available options before complying with the legal requirement to list on the stock exchange,” said Yas Tanzania interim chief executive officer Jerome Albou.

“We are looking at complying and in a couple of months, we will be announcing something,” he told The Citizen during the rebranding ceremony.

According to information from the Register of Company at the Business Registrations and Licensing Agency (Brela), Honora Tanzania Public Limited had 4.25 billion class ordinary shares worth Sh425 billion by August 2024. The firm had authorised share capital worth Sh816.36 billion by that time.

Govt ups stake in Airtel

In 2019, the government successfully negotiated a bigger stake in Airtel, raising its holding to 49 percent from 40 percent.

The announcement followed talks in Dar es Salaam between President John Magufuli and Bharti Airtel chairman Sunil Mittal to resolve a dispute over ownership of the Tanzanian mobile operator.

“We have in principle agreed to move forward with a new arrangement of shareholding where Airtel will now drop from 60 percent to 51 percent and the people of Tanzania through the ownership of the government of Tanzania will own 49 percent,” Mr Mittal said  then.

Contacted for comment, Airtel Tanzania did not respond to questions from The Citizen.

According to information from the Register of Company at the Business Registrations and Licensing Agency (Brela), Airtel had 250 million class ordinary shares worth Sh50 billion by August 2024.

‘Mandatory listing in force’

Tanzania Communications Regulatory Authority (TCRA) said is continuing to monitor the situation and enforce the law and urged companies to comply.

The regulator’s director general, Dr Jabiri Bakari, said the legal requirement for mandatory listing is still in force and that the companies were in different stages of the listing process.

“We aren’t compelled to ensure that a certain number of companies are listed on the DSE in a specific period, but we do exchange information and follow up to see what’s going on,” said Dr Bakari without giving much details.

The Minister for Communication and Information Technology, Mr Jerry Silaa, did not respond to questions on the delayed mandatory listing of the telecommunication companies.

Listing on the DSE could bring benefits beyond local ownership, according to stock market players who argue that transparency and corporate governance within the telecom sector would improve.

DSE regulations require listed firms to publish annual financial statements, enabling the government and public to better understand the companies’ finances.

Such visibility is crucial for fair tax assessment and compliance, ensuring a more equitable revenue system, said the chief executive officer of brokerage firm Zan Securities, Mr Raphael Masumbuko.

He said the essence of mandatory listing for telecommunications companies stemmed from the fact that their majority shareholders are foreigners, hence pushing for offloading shares through local stock exchanges for locals to also benefit.

“Listed firms can turn to be largest tax payers due to increased efficiency and transparency,” Mr Masumbuko said.

He said the market is waiting for the telecom companies to comply with the legal requirement and sell their shares to the public.

“It’s still relevant for the companies to list even today because there is high demand for equities to the public,” he said.

According to him, the frequent oversubscription of corporate bonds is a clear sign that more products are still needed on the Tanzanian stock market, as people look for investment avenues.

“Listing is a good thing and I think telecommunications and mining companies should list on DSE,” he said.

According to him, the experience of Vodacom Tanzania which listed in 2016 could have discouraged others to follow the suit.

Vodacom shares have not significantly gained in price although the company has offered dividends to shareholders several times.

A share was sold Sh850 during the IPO but there have been volatility of the price. According to the DSE market reports, the counter closed at Sh770 on January 10, 2025.