Interswitch Set to Offer Telecom Services in Nigeria

Interswitch, a well-known company in Nigeria’s financial sector, is expanding into the telecommunications industry with the recent acquisition of a Mobile Virtual Network Operator (MVNO) license from the Nigerian Communications Commission (NCC) in May 2023.

This move is significant as it could bring new competition, innovation, and potentially more affordable mobile services to Nigerians by disrupting the current market.

Understanding MVNOs: A Key Player in Changing Nigeria’s Telecom Sector

Unlike traditional Mobile Network Operators (MNOs) such as MTN and Airtel, MVNOs like Interswitch do not own their network infrastructure.

Instead, they rent capacity from established MNOs to provide competitive rates and tailored services to specific customer groups.

The NCC has introduced MVNOs in Nigeria to make the telecom market more competitive and open, with the goal of achieving various objectives, which include:

Closing the Digital Gap: MVNOs can reach more underserved areas by making it easier to join.

This helps them provide cheaper 4G and 5G services in far-off places, supporting the government’s aim of reaching 90% broadband coverage by 2025.

Boosting Creativity: When MVNOs are around, big MNOs have to come up with new ideas to keep their customers.

This competition is good for people in Nigeria because it gives them more options and could mean paying less.

Interswitch: Using Knowledge to Succeed in the Telecommunications Industry

Interswitch, well-known for its strong position in Nigeria’s electronic payment industry, is bringing its expertise and financial power into the telecommunications field.

By acquiring a Tier 5 MVNO license for ₦500 million ($1.08 million), the company is showing its dedication to establishing itself as an important participant in this expanding market.

Experts think that Interswitch’s move into the telecom industry offers various possible benefits, such as:

Cost-Effective Approach: By using current infrastructure, Interswitch can provide cost-effective services, possibly offering lower prices than established mobile network operators.

This may appeal to customers and businesses looking for affordable mobile options.

Service Integration: With its strong position in finance, Interswitch has a chance to merge its telecom services with payment solutions.

This could result in new package deals and better user experiences for customers.

Read More: Telecom Operators in Nigeria Prepare to Increase Tariff for Voice and Data Services

Challenges and What Comes Next

Interswitch entering the telecom industry brings about exciting opportunities, yet there are obstacles to address:

Dealing with Competition: Nigeria’s telecom market is already filled with established companies that hold a substantial share of the market.

Interswitch must create a strong brand image and attractive services to draw in customers and differentiate itself.

Dependence on Network Infrastructure: Being an MVNO, Interswitch’s service standard will rely greatly on the network framework provided by MNOs.

Any network issues or constraints could impede Interswitch from providing a smooth user experience.

The Changing Nigerian Telecom Sector

Interswitch’s entry into the Nigerian telecom industry is a big step forward.

The competition from MVNOs is set to bring new ideas, better services, and possibly lower costs for mobile users in Nigeria.

It will be interesting to observe how Interswitch tackles obstacles and uses its advantages to influence the future of Nigeria’s telecom sector.

In the upcoming years, there may be significant changes in the industry, giving consumers more options, better prices, and an enhanced mobile experience with the help of MVNOs.