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Telecoms operators threaten to disconnect banks over N120bn USSD debt

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Telecommunication operators in Nigeria are set to disconnect Deposit Money Banks (DMBs) from their service if they fail to pay the debt owed to operators for Unstructured Supplementary Service Data (USSD) services. The debt has mounted to over N120billion.

The Nigerian Communications Commission (NCC) has ordered members of the Association of Licensed Telecommunications Operators of Nigeria (ALTON) to disconnect banks if they fail to pay the N120billion debt owed to operators.

Despite multiparty stakeholder efforts to resolve the situation, led by the minister of Communication and Digital Economy, Prof. Isa Ali Ibrahim (Pantami), NCC, the Central Bank of Nigeria (CBN), along with Mobile Network Operators (MNOs), the DMBs have continued to incur higher debts without making commensurate payments. This has led to a protracted disagreement between MNOs and DMBs concerning the appropriate USSD pricing model for financial transactions, transparency of charges, mode of collection, and liability for payment of the outstanding and continuous service fees due to the MNOs.

Chairman of ALTON, Engr. Gbenga Adebayo, disclosed that all efforts to make the banks fulfil their obligations failed. Adebayo lamented that every time some progress is made, the DMBs come up with reasons to take stakeholders several steps back.

The NCC, ALTON, Association of Telecommunications Companies of Nigeria (ATCON), and DMBs represented by the chairman, Body of Bank CEOs, subsequently met on March 15, 2021, to discuss the indebtedness of DMBs to MNOs for USSD services. Further to the meeting, CBN and NCC issued a joint press statement on the agreement reached by all stakeholders.

“It is pertinent to note that the contract between MNOs and DMBs on the use of USSDs for banking transactions is strictly commercial, and MNOs are at liberty to withdraw the services if it is established that the transaction is unprofitable to them,” Adebayo said. “MNOs have invested billions of naira in expanding their systems to accommodate the USSD needs of DMBs over the years. This has resulted in more Nigerians having access to banking services, in addition to enabling banks to trim down costs by requiring fewer branches to service their growing customers. Unfortunately, MNOs are not getting paid for their services, and the debt that stood at N42 Billion in 2021 has now risen to over N120 Billion.”

It is obvious that the level of debt is unsustainable, given the time/value huge cost of the continuous upgrade and operation of the systems and infrastructure dedicated to supporting USSD transactions of DMBs. In view of the foregoing, unless DBMs meet their debt obligations, MNOs will disconnect all banks indebted to them for USSD services rendered

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