TOP STORY! How data and dividends powered Airtel Uganda’s IPO comeback

KAMPALA — Airtel Uganda has emerged as one of the strongest recovery stories on the Uganda Securities Exchange (USE), rewarding patient investors with a 50 percent capital gain from its listing price as growing data consumption and generous dividend payouts reshape sentiment around the telecom giant.

A new investor brief by Crested Research shows that Airtel Uganda’s share price has climbed to Shs150, up from its initial public offering (IPO) price of Shs100 in November 2023 and more than double the low of Shs58 recorded in January 2025.

The turnaround comes after months of scepticism from investors who questioned whether the telecom stock could deliver meaningful returns following a subdued market debut.

Instead, Airtel has increasingly attracted investors seeking reliable dividend income and exposure to Uganda’s growing digital economy.

The recovery has been supported by strong financial performance.

For the year ended December 2025, Airtel Uganda posted revenue of Shs2.23 trillion, representing a 12.8 percent increase from the previous year. Profit after tax rose to a record Shs446.9 billion, while earnings per share jumped by nearly 42 percent to Shs11.17.

The company also maintained one of the most generous dividend policies on the market, distributing virtually all its profits to shareholders.

Dividend per share increased to Shs11.15, translating into a payout ratio of nearly 100 percent.

The quarterly dividend payments have become a major attraction for investors looking for regular income at a time when interest rates and market returns remain closely watched.

At current market prices, Airtel’s dividend yield stands above seven percent, making it one of the more attractive income-generating counters on the local exchange.

Behind the financial performance is a fundamental shift in how Ugandans use telecom services.

Data usage has overtaken traditional voice services as the company’s primary growth engine.

The number of Airtel subscribers increased from 14.8 million in 2023 to 19.2 million in 2025. However, growth in internet users was even faster.

Active data subscribers rose from 5.7 million to 8.7 million over the same period, reflecting increasing demand for smartphones, social media, streaming services, digital payments and online business activities.

As a result, data and value-added services now account for more than half of Airtel Uganda’s revenue, while voice services contribute less than half.

This marks a significant transformation for a telecom sector that historically relied heavily on voice calls and airtime sales.

Analysts say the shift demonstrates how Uganda’s digital economy is becoming a more important source of growth for telecom operators.

However, despite the strong recovery in share price and earnings, several challenges remain.

One of the key concerns is the stock’s low trading activity.

Since listing, Airtel Uganda has accounted for a small share of overall market trading volumes, making it difficult for some investors to buy or sell large positions without affecting the share price.

Market participants believe liquidity could improve if additional shares are offered to the public, increasing the stock’s free float on the exchange.

Competition is another factor investors are monitoring closely.

The entry of satellite internet provider Starlink into Uganda’s telecommunications market has introduced a new variable into the industry’s long-term outlook.

While analysts currently view Starlink as complementary to existing telecom infrastructure, particularly in underserved areas, its future role in Uganda’s broadband market remains uncertain.

Traditional internet providers are also expanding their fibre networks and home internet services, increasing competition for customers and potentially placing pressure on future margins.

The regulatory environment also remains important.

Telecom operators continue to face spectrum licensing costs, regulatory fees and changing policy requirements that can affect profitability and investment decisions.

Even so, analysts believe Airtel Uganda’s strong market position, growing data business and consistent dividend policy have significantly strengthened its investment case.

The challenge ahead will be sustaining earnings growth in an increasingly competitive market while maintaining the shareholder returns that have helped transform the company from an IPO laggard into one of the exchange’s standout performers.

For investors who held on through the stock’s early struggles, the turnaround has already delivered a lesson in patience. For the wider market, Airtel’s recovery is increasingly becoming a story about the growing value of Uganda’s digital economy.