KAMPALA: When Ugandan President Museveni publicly called on telecom operators to put their shares to the public, analysts were excited about the possibilities it could have for the country's economy. However, in recent days, operators appear unwilling to do just that, leaving many in the country wondering over the direction of telecom and the country's fast-growing economy. A ministry of finance senior advisor said that if companies continue to flout the local stock market, it could mean a downturn in the economic power for the telecom industry. He said that the ministry is currently holding discussions with the telecom operators in the country in order to develop a strategy to offer percentages of their stocks to the public. “We are looking to boost the overall local economy and one way to do this is to create a stronger stock market and this means getting locally operated companies to list on the exchange,” said the official, who was not authorized to speak directly to the media. MTN Uganda's President and CEO Sifiso Dabengwa, however, disagrees and said his company has no plans to put up shares to the public. “You go to capital markets for capital reasons not for regulatory reasons. You can have a political view about listing but listing is fundamentally a corporate finance decision,” Mr Dabengwa said at a news conference in Kampala on Wednesday. The MTN group boss was reacting to President Museveni's demand for all telecommunication firms to float shares through the capital markets so as to give Ugandans an opportunity to get a share of their profits. The President made the demand back in July while meeting members of the ruling National Resistance Movement caucus. Citing South African-owned MTN as an example, President Museveni argued that it is unfair that telecommunication firms are repatriating much of the “abnormal profits” they make. Going forward, he said, the mobile companies must declare the amount of money they make in each year so that the government makes regulations like setting threshold amounts they must invest within the country. But MTN remains obstinate over the idea, saying it would adversely affect their profit margins as price wars and increased competition hit their revenues. “That principle we support. But how you do it, I don't believe it should be regulated by the industry regulator. The regulator should concentrate on regulating the industry and not how we fund the business,” added the CEO in reference to calls from the government to allow the telecommunications regulator to take on an oversight role in stock listings. MTN is the most profitable telecom of all the major five telecoms including; Airtel, Uganda Telecom Limited, Orange and Smile Telecom. MTN supports the principle of spreading out shareholding of the firm but is opposed to the way the government wants it to be done. For now, it appears the stock listing idea has hit a wall, but this won't stop the finance ministry from attempting to persuade telecom companies to look closely at the future of their revenue. The senior advisor argues that in the long-run this idea will actually help boost their incoming revenue by listing on the fast-growing stock market in Uganda. “We have seen a lot of movement economically in the past two years and the telecom industry has been instrumental in all this, so why not give the opportunity to list and earn a profit from the listing,” he said. “There are a number of issues we must figure out, but hopefully in the near future we will have an even stronger economy and one that sees the telecom industry integral in this.” BM
