Interswitch Secures $1.08 mn Tier 5 MVNO License in Nigeria

Editorial Desk
By Editorial Desk 3 Min Read

Visa-backed Nigerian payments giant, Interswitch has successfully obtained a $1.08 million Tier 5 Mobile Virtual Network Operator (MVNO) license from the Nigeria Communications Commission (NCC).

The acquisition dating back to may 2023 signifies a notable transition for Interswitch as it expands its operations beyond conventional payment services into the domain of telecommunications.

As per the company’s financial statement, Interswitch aims to utilize this newly acquired license to introduce an innovative approach in the telecommunications sector, amalgamating payment and telecom services tailored for both business-to-business (B2B) clients and individual consumers.

Interswitch seeks to address the connectivity gap in underserved regions while capitalizing on Nigeria’s extensive phone market.

Nigeria, recognized as Africa’s largest phone market, implements a tiered framework for granting MVNO licenses, specifying the range of services each tier is authorized to deliver.

Holding the highest tier license, Tier 5, Interswitch is well-positioned to engage in discussions with one of Nigeria’s four major telecommunications companies, enabling the provision of asset-light telecom services primarily in areas lacking adequate coverage.

Through a strategic partnership with its telco collaborator, Interswitch intends to leverage existing infrastructure to offer value-added services to consumer segments traditionally overlooked by mainstream telcos.

This will see the firm providing more cost-effective 4G or 5G services to Nigerians, addressing the critical need for telecommunications access in rural communities.

This initiative comes at a time when Nigeria’s telecommunications sector is witnessing its first growth decline in five years due to reduced foreign investment and subsequent capital expenditure by existing telcos.

In response to this, the NCC issued 25 MVNO licenses in 2023, with the objective of introducing fresh competition into the market and fostering innovation.

Despite Nigeria’s substantial population of 200 million individuals, mobile connectivity remains inaccessible to a significant portion, with only 60% having access to basic services, less than 5% enjoying 4G connectivity, and a mere 0.8% accessing 5G networks.

With an extensive customer base exceeding 50 million debit cards issued through Verve, Interswitch is poised to challenge the existing norms and present compelling alternatives in the telecommunications sector.

Nevertheless, to secure a notable market share, Interswitch confronts the challenge of delivering superior telecommunications services while strategically choosing the appropriate telco partner.

Amid an estimated 200 million subscribers in Nigeria’s mobile sector, competition is intense, necessitating innovative communication strategies and value-added services to captivate consumer interest.

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