Telcos Move to Disconnect Banks over N120bn USSD Debt

Emma Okonji

Telecom Operators, under the platform of the Association of Licensed Telecommunications Operators of Nigeria (ALTON), yesterday warned that they have endured beyond limits the lingering Unstructured Supplementary Service Data (USSD) debt owed them by banks and that they were prepared to disconnect all bank customers currently using the platform anytime soon.

According to ALTON, the debt has over the years risen to N120 billion.

ALTON, in a statement released and signed by its chairman, Gbenga Adebayo, said the Nigerian Communications Commission (NCC), the telecoms industry regulator, has granted an approval for Mobile Network Operators (MNOs) to disconnect Deposit Money Banks (DMBs) if they fail to pay the debt owed to operators for the USSD debt which amounts to over N120 billion.

According to the statement, “The approval was granted because despite multiparty stakeholder efforts to resolve the situation and prevent any impact on services, led by the Minister of Communications and Digital Economy, Dr. Isa Ibrahim Pantami and including the Nigerian Communications Commission, the Central Bank of Nigeria, along with MNOs and DMBs, the DMBs have continued to incur greater and greater debt, without making the commensurate payments. Every time some progress is made, the DMBs come up with reasons to take stakeholders several steps back, in this matter.

“Members of the public will recall that MNOs and DMBs have had protracted disagreements 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, which currently stands at over N120 billion.”

The statement added: “Due to the inability of MNOs and DMBs to reach an agreement on the issues, MNOs in 2021 sought to disconnect DMBs due to the unpaid debts which stood at N42 billion as at that time.

However, the Minister of Communication and Digital Economy intervened and asked the MNOs not to disconnect DMBs as the action will negatively impact on the Digital and Financial Inclusion policy of the Federal Government.

“The Nigerian Communications Commission (NCC), Association of Licensed Telecoms Operators of Nigeria (ALTON), Association of Telecommunications Companies of Nigeria (ATCON) and Deposit Money Banks (DMB) represented by the Chairman, Body of Bank CEOs subsequently met on 15 March 2021 to discuss 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.”

Adebayo said the minister and the NCC have made several efforts to get the banks to show good faith and sign an agreement, in the national interest, based on the resolutions reached at that meeting. He however said unfortunately, the patriotic intervention of the minister and the NCC have been taken for granted by the DMBs, as two years after, the banks have failed to sign a final agreement.

Adebayo noted that the contract between MNOs and DMBs on the use of USSDs for banking transactions was strictly commercial and that MNOs were at liberty to withdraw the services if it was established that the transaction is unprofitable to them.

“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 less 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 of the huge cost of the continuous upgrade and operation of the systems and infrastructure dedicated to supporting USSD transactions of DMBs,” Adebayo said.

He insisted that unless DBMs met their debt obligations, MNOs would disconnect all banks indebted to them for USSD services rendered.