Interswitch, the leading Nigerian payments giant, has made a strategic move into the telecommunications sector by acquiring a Tier 5 Mobile Virtual Network Operators (MVNO) license for ₦500 million ($1.08 million) from the Nigeria Communications Commission (NCC) in May 2023.
This bold step marks Interswitch’s foray beyond its traditional payments domain into providing telecommunications services, leveraging its extensive infrastructure and customer base.
The company’s financial report revealed plans to explore a capital-efficient virtual telecoms model using the acquired license, blending payments and telecoms services for both business-to-business (B2B) customers and consumers.
With the highest tier MVNO license in Nigeria, Interswitch is empowered to negotiate with established telcos in the country and offer asset-light telecom services, particularly in underserved regions.
Interswitch aims to utilize its telco partner’s infrastructure to introduce value-added services to consumer segments traditionally overlooked by mainstream telcos.
This strategic move aligns with Nigeria’s broader objective of increasing mobile connectivity, particularly in rural areas where access remains limited.
The Nigerian telecommunications sector experienced a slowdown in growth recently due to reduced foreign investment, prompting the NCC to issue 25 MVNO licenses in 2023 to foster competition.
Interswitch’s entry into the telco space could inject fresh competition and innovation, leveraging its vast customer base, including over 50 million Verve debit cardholders.
However, to effectively compete in Nigeria’s dynamic telco market, Interswitch will need to offer compelling telecommunications services and forge strategic partnerships with established telcos.
The company’s success in this endeavor will hinge on its ability to introduce innovative communication solutions and value-added services tailored to meet the diverse needs of Nigerian consumers.