Interswitch, the Visa-backed Nigerian payments giant, has acquired Tier 5 MVNO (Mobile Virtual Network Operators) license by Nigeria Communications Commission for N500 million ($1.08 million) in May 2023. The payment startup, which reported $42 million in revenue for its financial year ended March 31, will be competing with four other telecommunications companies (MTN Airtel, Glo, and 9 Mobile) in Nigeria, Africa’s largest telecommunications market.
Nigerian Communications Commission offers MVNOs on a tiered basis, stating the level of services they can provide. Interswitch, having obtained highest tier licence—the Tier 5 (unified virtual operator) license— can partner with any of Nigeria’s four telcos and provide asset-light telecom services in underserved areas.
Interswitch will ride on the infrastructure of its telco partner to bring value-added services to consumer segments that have been ignored or underserved by the telcos.
The Tier 5 license will allows Interswitch provide cheaper 4G or 5G services to Nigerians or provide telecommunication services to rural areas.
Last year, the country’s telco sector witnessed a decline in growth—its first in 5 years— after foreign investment declined, which led to reduced capital expenditure from Nigeria’s existing telcos.
As of 2023, the NCC issued 25 MNVO licenses, a move to increase competition in Nigeria’s telco sector. Nigeria, a country of over 200 million people, only 60% of the population has access to mobile connectivity, while less than 5% have access to 4G, and 0.8% have access to 5G.
Interswitch is likely to leverage its large customer base to penetrate the Nigerian Telco industry and provide options to Nigerians in telecommunications. Interswitch, through Verve, has issued more than 50 million debit cards.