The Association of Licensed Telecommunications Operators of Nigeria (ALTON), which represents telecom operators, issued a warning yesterday stating that they had reached their breaking point with regards to the unpaid Unstructured Supplementary Service Data (USSD) debt owed to them by banks and that they were ready to cut off all bank customers who were currently using the platform.
ALTON claims that the debt has increased over time to N120 billion.
The Nigerian Communications Commission (NCC), which regulates the country’s telecom sector, has given Mobile Network Operators (MNOs) the go-ahead to disconnect Deposit Money Banks (DMBs) if they fail to pay the debt owed to operators for the USSD debt, which totals more than N120 billion, according to a statement issued and signed by ALTON’s chairman, Gbenga Adebayo.
The statement reads, “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.”
It continues by saying, “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 Federal Government’s policy on digital and financial inclusion would be adversely affected if the MNOs disconnected DMBs, therefore the Minister of Communication and Digital Economy stepped in and requested that they refrain.
“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 asserted that the NCC and the minister had made many attempts to persuade the banks to act in good faith and sign a contract in the benefit of the country based on the decisions made at that meeting. Unfortunately, he added, the DMBs had taken the minister and NCC’s patriotic involvement for granted because, two years later, the banks had still not signed a definitive agreement.
Adebayo pointed out that the agreement between MNOs and DMBs regarding the usage of USSDs for banking transactions was solely commercial in nature and that MNOs were free to discontinue the services if it were determined that the transaction was not profitable for 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.
Adebayo said, “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,”
He maintained that if DBMs didn’t pay their debts, MNOs would disconnect any banks that owed them money for USSD services provided.
