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MTN Uganda to reveal new opportunities and growth plans

MTN Uganda, Uganda's largest telecom, is due to announce its new growth goals and possibilities on October 11 when it publishes its indicative pricing range ahead of its planned US$1.2 billion IPO (IPO).

MTN Uganda intends to issue 20% of its shares on the Nairobi Stock Exchange for East African Community investors in order to meet the government’s requirements for the newly extended 12-year national operating license. MTN Uganda is owned by MTN Group to the tune of 96%, with the remaining shares held by local businesses.

On October 5, the business announced that it had received the necessary approvals from the Capital Markets Authority and the Uganda Securities Exchange. MTN Uganda’s Chairman of the Board of Directors, Charles Mbire, said, “The intention to float statement is a big step towards delivering on our objective to list on the USE.”

“It’s a reaffirmation of our long-term commitment to expanding investment opportunities for Ugandans, and we’re looking forward to working with the CMA and USE to move the IPO and listing forward.”

“For the past 23 years, Ugandans have accepted MTN as their own, giving us the authority to operate across the country.” MTN Group Vice President for Southern and East Africa Yolanda Cuba added, “We are reciprocating by encouraging Ugandans to share in the ownership of the success that we have built together.” After MTN Rwandacell’s IPO on the Rwanda Stock Exchange (RSE) in May and Safaricom’s IPO on the Nairobi Securities Exchange in 2008, MTN Uganda will become the third telecom company to list on the stock exchange.

MTN began operations in Uganda in 1998 and today serves nearly all of the country’s residents. The telco also has over 6,000 kilometers of fiber connectivity to deliver voice and data bandwidth to over 15 million subscribers.

According to the corporation, it has also aided in the rise of mobile penetration in Uganda, which has increased from 0.27 percent in 1998 to 67 percent as of March 2021.

“MTN Mobile Money (MoMo) has changed the financial scene as well. “Formal financial inclusion has nearly doubled in Uganda, from 28% in 2009 when MoMo was introduced to 58 percent in 2018,” according to the business.

The Uganda Communications Commission’s Executive Director, Irene Kaggwa-Sewankambo, remarked, “We are thrilled to watch MTN honoring this commitment.”

“This IPO allows Ugandans an opportunity to own a piece of the company,” stated Paul Bwiso, USE’s Chief Executive Officer.

“This could be the largest IPO on the Ugandan market,” MTN Uganda stated in a statement. “It will be provided predominantly through a digital paperless/green platform, which is the first of its type in East Africa.”

The revenue trend remained positive.

MTN Uganda withstood the coronavirus outbreak last year, growing revenue by 9.5 percent to Shs1.98 trillion, reporting a strong increase in client subscribers. Voice services revenue increased by 3.9 percent, while data (up 27.8%) and fin-tech revenue increased by 27.8%. (up 11.8 percent ).

The margin on earnings before interest, taxes, depreciation, and amortization (EBITDA) increased by 2.4 percentage points to 49.5 percent, thanks to rising sales and efficient cost-cutting measures.

Mobile money (MoMo) users increased by 14.4% year on year to 8.5 million in support of the company’s financial inclusion goals and growth plan, fueled by the shift to cashless financial transactions to prevent the spread of the COVID-19 epidemic.

However, decreases in transaction fees to assist customers, tightening limits on agents, and a slowdown in economic activity slowed the growth in fin-tech revenue.


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