Just days after Airtel Kenya announced it had upgraded some of its sites to 5G, the government has put in place measures that will see the mobile service provider shade-off at least 30 percent of ownership in favor to local entities. The move is expected to take shape within the next three years, this is after the Cabinet secretary of ICT Joe Mucheru issued a licensing policy that requires local ownership of at least 30 percent in companies.
In the new licensing policy, telecommunications firms have up until 2024 to ensure they comply. 30 percent represents a slight increase from previous 20 percent that has been in place since 2008. As of now, a couple of companies including Telkom Kenya had been exempted from the requirement from the rule. Airtel was expected to sell-off some of its shares within this period to comply with the requirement.
According to a gazette notice issued by the cabinet secretary, firms which initially had been exempted are now expected to comply with the new policy requirement within the next three years. Accordingly, companies that had complied with the initial 20 percent requirement will also need to scale local shareholding to at least 30 percent.
On the other hand, MTN Uganda had opted to sell its stake directly to local pensions fund instead of listing its shares. As a result of the new policy, we expect deal making activities to start taking shape in the lucrative telecommunications sector that has for years been a key interest to foreign firms.