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DAR ES SALAAM, June 30 (Reuters) - Tanzania has lifted a ban on foreigners participating in initial public share offerings in the telecoms industry, the capital markets regulator said on Friday, a move that will widen the pool of potential investors for several major companies.
The removal of the restriction allows foreigners to take part in the IPO of Vodacom Tanzania Plc, a subsidiary of South Africa's Vodacom Group.
"The restrictions on participation of non-Tanzanian investors in the initial public offers of telecommunication companies have been removed," the Capital Markets and Securities Authority said in a statement sent to Reuters.
The issuer is expected to announce soon how it will conduct the IPO and provide information on the listing date, it said.
The Vodacom IPO was launched in March and initially only open to local investors, but take-up was slow. Vodacom Tanzania extended the offer period for its IPO in April by three weeks amid concerns about adequate liquidity in the local market.
The delayed results of the IPO have not been announced but Friday's announcement could mean the initial share sale was undersubscribed although more than 40,000 local retail investors bought shares.
Tanzania's telecom operators are required by law to have 25 percent local ownership via IPOs at the Dar es Salaam Stock Exchange (DSE).
The government hopes the listings will bring more transparency and offer the public a share in the industry's profits.
Two other major telecoms operators, Millicom subsidiary Tigo and a local unit of India's Bharti Airtel , have also submitted prospectuses to the regulator and are awaiting approval for their IPOs.
Tanzania posted a 0.9 percent 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 over the past decade, helped by the launch of cheaper smartphones.
Foreign-owned mining companies are also required to list a 30 percent stake on the local stock exchange by Aug. 23.
However, investors may be wary of a set of new laws expected to be passed by Tanzania's parliament next week that let the government tear up and renegotiate natural resources contracts.
The introduction of the draft laws on Thursday follow months of wrangling between President John Magufuli and mining companies, which produce 3.5 percent of Tanzania's gross domestic product. (Writing by Katharine Houreld; Editing by Keith Weir/Jeremy Gaunt)