Visa-backed Interswitch gets $1m MNVO license in telecom play
TLDR
- Interswitch diversifies into telecommunications with Tier 5 MVNO license acquisition from NCC for ₦500 million
- Company aims to merge payments and telecom services to meet demand for integrated offerings in Nigeria's vast phone market
- Opportunity for Interswitch to collaborate with telcos for asset-light services in underserved areas, expanding market reach and revenue streams
Interswitch, the Visa-backed Nigerian payments giant, is diversifying its offerings by venturing into the telecommunications sector after acquiring a Tier 5 MVNO (Mobile Virtual Network Operators) license from the Nigeria Communications Commission (NCC) in May 2023 for ₦500 million ($1.08 million).
With Nigeria being Africa’s largest phone market, the company's move aligns with the growing demand for integrated services. Interswitch aims to explore new opportunities by combining payments and telecom services for both B2B customers and consumers.
Operating under the highest tier license, Interswitch can collaborate with existing telcos and provide asset-light telecom services, particularly in underserved areas, thereby potentially expanding its market reach and revenue streams.
Key Takeaways
Interswitch's acquisition of the Tier 5 MVNO license presents an opportunity to address the telecommunications gap in Nigeria. By leveraging this license, Interswitch can offer more affordable 4G or 5G services to Nigerians, especially those in underserved rural areas. This move is particularly crucial given the decline in growth experienced by the country's telco sector due to reduced foreign investment and capital expenditure from existing telcos. With only 60% of Nigeria's population having access to mobile connectivity, and limited access to higher-speed networks like 4G and 5G, there is a significant untapped market for Interswitch to cater to. By providing value-added services through partnerships with existing telcos, Interswitch can play a pivotal role in bridging the digital divide and expanding access to telecommunications services across Nigeria.
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