Tanzania’s growing telecommunications sector is currently facing a regulatory challenge that threatens to hinder its growth and limit opportunities for local investors.

The Electronic and Postal Communications Act (Epoca) mandates that non-state-owned telecom operators list at least 25% of their shares on the Dar es Salaam Stock Exchange (DSE).

However, as of January 2025, only Vodacom Tanzania Plc has complied with this requirement, leaving other major players like Airtel Tanzania and Tigo Tanzania on the sidelines.

A Tug-of-War Between Regulations and Profitability

The reluctance of these telecom giants to embrace public listing results from a combination of factors. Concerns over potential dilution of ownership, vulnerability to market fluctuations, and the perceived need to maintain strategic flexibility are among the primary deterrents.

These companies are cautious of giving up control and exposing their financial performance to public scrutiny, especially in a sector characterised by intense competition and evolving technologies.

Missed Opportunities for Investors and the Economy

The failure of these telecom giants to list on the DSE presents a significant missed opportunity for both investors and the Tanzanian economy.

The telecom sector is a cornerstone of the country’s digital transformation, contributing significantly to GDP growth and employment.

Public listing would unlock significant value for investors, providing them with access to shares in high-growth companies with strong revenue streams and robust market positions.

Moreover, it would inject much-needed liquidity into the DSE, boosting its overall attractiveness and encouraging further investment.

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A Balancing Act for Regulators

The government’s desire to promote local ownership and participation in the telecom sector is understandable. However, it is crucial to strike a balance between regulatory requirements and the need to promote a conducive environment for business growth.

A rigid adherence to the listing requirement without considering the unique challenges faced by telecom companies could restrict innovation and discourage investment, ultimately hindering the sector’s development.

A Mixed Bag of Applications

While the Capital Markets and Securities Authority (CMSA) spokesperson, Charles Shirima, confirms that most telecom firms have expressed interest in listing, the reality is more complex.

Ownership complexities, particularly in the case of Airtel and Tigo, have significantly delayed the process. Court battles and intricate ownership structures have created roadblocks, hindering the smooth progression towards a DSE listing.

Beyond Local Ownership: The Broader Picture

Despite these hurdles, market players believe that a DSE listing offers substantial benefits beyond increased local ownership. Enhanced corporate governance and transparency are key advantages, fostering greater accountability and investor confidence.

A Cautionary Tale: Vodacom’s Volatile Journey

However, the experience of Vodacom, another major player in the Tanzanian telecom market, serves as a cautionary tale. Since its initial public offering (IPO), Vodacom’s share price has exhibited significant volatility, crashing from a high of Sh850 to a recent low of Sh170.

This volatility emphasises the inherent risks associated with investing in emerging markets and highlights the need for thorough due diligence and a long-term investment horizon.

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How to Invest in Tanzania: A Guide to the Dar es Salaam Stock Exchange and Key Market Insights

The Dar es Salaam Stock Exchange plays a vital role in Tanzania’s financial market, providing a platform for investors to trade and grow their wealth.

For those interested in understanding the DSE Tanzania share price, it is essential to stay updated on market trends and reports.

If you’re wondering how to buy shares in Tanzania, the process involves opening an account with a broker such as Tanzania Securities Limited and familiarizing yourself with the Dar es Salaam Stock Exchange listed companies.

Keeping an eye on the DSE Tanzania market report today can help investors make informed decisions, such as monitoring the CRDB share price today.

Additionally, learning how to buy shares in DSE is a straightforward process that opens opportunities in Tanzania’s growing economy.

The Road Ahead

The successful listing of major telecom companies on the DSE has the potential to inject significant liquidity and depth into the Tanzanian capital market.

However, addressing the ownership challenges and ensuring a transparent and well-regulated environment are crucial for realising this potential.