Interswitch, the Nigerian fintech behemoth backed by Visa, is set to make waves in Nigeria’s telecommunications sector. Acquiring a Tier 5 Mobile Virtual Network Operators (MVNO) license from the Nigeria Communications Commission (NCC) for ₦500 million ($1.08 million) in May 2023, Interswitch aims to redefine the telecom landscape.

The company’s financial report outlines plans for a capital-efficient virtual telecoms model, blending payments and telecoms services for both B2B customers and consumers.

Nigeria, boasting Africa’s largest phone market, operates a tiered MVNO licensing system, with Interswitch securing the coveted Tier 5 license. This enables Interswitch to collaborate with one of Nigeria’s four major telcos, leveraging existing infrastructure to provide telecom services, particularly targeting underserved areas.

Interswitch’s acquisition of the MVNO license occurred in 2023. The licensing system features five tiers delineating MVNO operations. The company plans to offer value-added services through its telco partnership.

This strategic move aligns with Interswitch’s goal of bridging the connectivity gap by offering affordable 4G or 5G services, especially in rural regions. It comes at a pivotal moment for Nigeria’s telco sector, witnessing its first growth decline in five years due to reduced capital expenditure and waning foreign investments.

In response, the NCC issued 25 MVNO licenses in 2023 to boost competition. Despite Nigeria’s population of 200 million, nearly 40% lack mobile connectivity, with a minority accessing high-speed networks.

Leveraging its extensive customer base—over 50 million debit cards issued through Verve—Interswitch aims to disrupt the telecom industry’s incumbents, offering a compelling alternative.

However, thriving in Nigeria’s fiercely competitive mobile market, with over 200 million subscribers, hinges on Interswitch’s ability to deliver superior telecom services and forge strategic telco partnerships. Innovative approaches and value-added services will be crucial in navigating Nigeria’s dynamic telco landscape successfully.