DAR-ES-SALAAM, Foreign investors will be able to buy shares in upcoming initial public offers (IPOs) of telecommunication companies in Tanzania after amendments to the Electronic and Postal Communications Act, 2010 which had previously restricted foreign participation in such IPOs.

The Capital Markets and Securities Authority (CMSA) said in a statement Wednesday that it was finalising arrangements to enable foreign investors to participate in such future IPOs following amendments to the legislation contained in the Finance Bill 2017.

Appropriate arrangements to enable public participation in the IPOs as envisaged by the above-mentioned changes are currently being finalised, the statement issued by CMSA said.

East African citizens and companies as well as those operated by people from outside East Africa will now be able to buy shares in coming IPOs. This new development comes at a time when Vodacom Tanzania has yet to list its shares on the Dar-es-Salaam Stock Exchange after offering 560 million shares at 850 shillings (aboutabout 38 US cents) each in an IPO.

The company's plan to raise 476 billion shillings (about 213.45 million USD) in the biggest ever share sale was restricted to domestic investors. Shares sold through the Vodacom Tanzania IPO were first due to be listed on May 16, but this was postponed until June 12 following a three-week extension of the offer.

The country's other telecommunication firms are racing to comply with the law providing for mandatory listing of at least 25 per cent of their shares on the Dar-es-Salaam Stock Exchange.

Currently three other telecos -- Tigo, Airtel and Maxcom Africa -- have already presented their respective prospectus to the regulator for initial public offerings. The government hopes the listings will bring more transparency and offer the public a share in the industry's profits which is one of the fastest-growing sectors in the country.

Tanzania is the second largest telecoms market in East Africa behind Kenya with a penetration rate of 79 per cent of the total population in 2015 with 40 million users. Tanzania, East Africa's second biggest economy, posted a 0.9 per cent annual increase in the number of mobile phone subscribers in 2016 to 40.17 million.

As in other African countries, mobile phone use has surged in Tanzania over the past decade, helped by the launch of cheaper smartphones.