Nigerian Company Secures License To Begin Telecom Services, Moves To Rival MTN, Airtel, Others

The Nigerian financial technology company Interswitch has secured a license to begin telecom services, leveraging the infrastructure of the existing four telecommunication companies in Nigeria.

The company intends to service Nigeria’s under-served regions with minimal infrastructure.

Interswitch reportedly disclosed that it is investigating the launch of a low-level capital expenditure virtual telecoms model with the license, combining with payments and telecoms services to B2B customers and consumers.

According to reports, the Nigerian Communications Commission (NCC) began issuing licenses to Mobile Virtual Network Operators (MVNO) to bridge the gap between the underserved and unserved areas and populations.

MNVO is a telecommunications service provider using the infrastructure and capacity of fully licensed mobile networks to deliver products and services.

The implication is that although licensed companies offer the same services as MTN, Airtel, Glo and 9Mobile, they need more infrastructure.

However, they rely on the infrastructure of existing telecom providers to deliver their services to their consumers.

NCC licenses 23 new operators

Data from the NCC reveals that about 23 firms hold MNVO licenses to align with the objectives of the Nigeria National Broadband Plan (NNBP 2020-2025).

Per the NCC, the initiative aims to lead the industry to achieve a 90% broadband access rate by 2025, exceeding 50% by the end of the year. As of January 2024, due to the adjustment in Nigeria’s population figures, broadband access declined from 45.47% to 40.85%.

The development comes amid reports of FX losses by Africa’s leading telecom firm, MTN Nigeria.

The company recorded a foreign exchange loss of about N740 billion in its financial year 2023.

MTN said the loss impacted its performance negatively after it posted a pretax loss of N177.8 billion compared to N518.8 billion in the previous year.