KAMPALA (Reuters) – Uganda has ordered telecoms operators in the country to list on the local bourse, part of a move to encourage local ownership of the sector, the regulator said on Wednesday.

The country’s operators, which are nearly all foreign-owned, have been given two years to list at least 20% of their shares. Firms include a local unit of South Africa’s telecoms giant MTN Group and a subsidiary of India’s Bharti Airtel.

President Yoweri Museveni has said the move could conserve the country’s scarce foreign exchange as a portion of the firms’ dividend payouts would remain in the country.

Ibrahim Bbosa, spokesman for the regulator Uganda Communications Commission (UCC), said they are now using a new licensing policy and existing operators would be issued with fresh licences with new conditions.

“In 60 days we want to have issued new licenses and then two years from then all the players should have listed at least 20% of their shares on the Uganda Stock Exchange (USE),” he said.

Under the new conditions, companies will have to share infrastructure such as fibre optic cables, which the regulator says will eliminate duplication and lower the cost of the internet and other services.

Uganda’s information and telecommunications sector has expanded rapidly over the last decade, fuelled by favourable policies and a young population hungry for online services.

The sector’s potential has drawn interest from American giants Google and Facebook who have both laid cables in the country.

Statistics from UCC show the country of 43 million now boasts an estimated 24 million mobile subscribers and 21.6 million internet users.

Bbosa said some telecoms firms were worried the local bourse might not be able to absorb a large volume of shares so rapidly.

“We told them they should discuss that with the exchange and see whether there’s a solution for that,” he said.

MTN Uganda has previously indicated it would prefer to sell a stake directly to a local pensions fund to meet local ownership demands rather than having to list shares.

USE is a small bourse of 18 companies and had its most recent listing in September last year after going six years without a single IPO.

“Considering especially MTN and Airtel are highly profitable companies … they would draw more than sufficient interest from both retail and institutional investors in an IPO,” said Enock Twinoburyo, a Ugandan economist based in Kigali, Rwanda.

Reporting by Elias Biryabarema; Editing by Omar Mohammed and Alexandra Hudson