Interswitch Ventures into Nigeria’s Telecom Sector with MVNO License

Payments leader Interswitch is making a strategic move into Nigeria’s telecommunications sector. The company, known for its Verve debit cards, acquired a Tier 5 MVNO (Mobile Virtual Network Operator) license for ₦500 million ($1.08 million) in May 2023.

Interswitch plans to utilize a low-cost virtual telecoms model, combining its existing payment services with telecom offerings for businesses and consumers. This strategy capitalizes on their extensive customer base exceeding 50 million Verve debit cardholders.

By partnering with one of Nigeria’s established telecom providers, Interswitch aims to provide value-added services in underserved regions and potentially offer more affordable 4G or 5G connectivity to Nigerians. This move comes at a time when the Nigerian telecom sector is experiencing a slowdown in growth due to declining foreign investment.

The Nigerian Communications Commission (NCC) issued 25 MVNO licenses in 2023 to encourage competition. Nigeria boasts a population of 200 million, but only 60% have access to mobile connectivity. Expanding 4G and 5G access is also crucial, with current penetration rates below 5% and 0.8% respectively.

Interswitch’s success in this new venture hinges on several factors. They’ll need to offer compelling telecom services that improve upon existing options. Selecting the right telco partner will be critical in capturing market share within Nigeria’s massive mobile subscriber base exceeding 200 million. Additionally, introducing innovative communication solutions and value-added services will be essential for standing out in a competitive environment.

Interswitch’s foray into the telecom market signifies a bold move with the potential to disrupt the status quo and improve mobile network access and affordability for Nigerians.

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Ikenna Churchill

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