Why MTN Uganda’s IPO has failed to beat its target

External Factors
- This IPO was forced by the govt MTN was initially reluctant and only did it as licensing renewal requirement.
- The Uganda bourse is small with only 42,000 investors, and its performance is also lacklustre
- Covid 19 pandemic market aftershocks (job cuts, reduced incomes etc)
- Negative and biased social media commentaries

Internal Factors
- The IPO campaign by MTN was also lacklustre and not visible enough to excite the masses
- The share price was perceived to be too high and it was not clear to the public whether Mobile money will be part of the deal

Lets wait to see how the market will react

Safaricom should enter the Ugandan market through acquisition of majority stake of UTL

The liabilities the government takes them similar to how Treasury took over Telkom Kenya liabilities during the privatisation.
Frequency spectrum will be part of the consideration that Safaricom will pay.
National optical fiber backbone is under NITA so Safaricom can lease for use,build its own or go wireless.
The cost of investment and modernization will be under Safaricom where they can negotiate on the price to be paid considering the costs they will incur to modernize.

Since Ethiopia has slowed down until they sort themselves out, perhaps Saf should look at Uganda. Suspend the dividend for FY22 to fund their expansion into UG while watching Ethiopia.