USSD Services: Telecoms firms set to disconnect banks over N120bn debt

*The Mobile Network Operators lament the commercial banks have taken for granted ‘the patriotic interventions’ of Prof. Isa Ali Pantami, Minister for Communications and Digital Economy, and the Nigerian Communications Commission for two years, as the financial institutions have failed to settle their indebtedness for USSD services

Isola Moses | ConsumerConnect

Following apparent disregard for all regulatory interventions, reminders and entreaties to make the financial institutions to offset their outstanding N120billion indebtedness, the Association of Licensed Telecommunications Operators of Nigeria (ALTON), has said it received the approval of the Nigerian Communications Commission (NCC) to disconnect the country’s Deposit Money Banks (DMBs) from its members’ Unstructured Supplementary Service Data (USSD) services.

Engr. Gbenga Adebayo, Chairman of ALTON, noted the telecoms operators in a recent statement issued in Lagos, confirmed that they had secured the necessary regulatory approval to disconnect the banks over lingering N120billion USSD debts.

The Telcos also said the NCC as the telecoms sector regulator, had granted an approval for Mobile Network Operators (MNOs) to disconnect the DMBs, if they fail to pay the debt owed to operators for the USSD services.

Engr. Adebayo also stated that the approval was granted because in spite of multiparty stakeholder efforts at resolving the situation and preventing any impact on services, the DMBs have continued to incur greater and greater debt, without making the commensurate payments.

ConsumerConnect had reported that Prof. Isa Ali Ibrahim (Pantami), Honourable Minister for Communications and Digital Economy, had led series of interventions involving the NCC, Central Bank of Nigeria (CBN ) along with MNOs and DMBs to resolve the matter.

However, ALTON said: “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 N120billion).”

Adebayo further noted that Prof. Pantami and Prof. Umar Garba Danbatta, Executive Vice-Chairman and CEO of NCC, had made several efforts to getting the banks to show good faith and sign an agreement, in the national interest, based on the resolutions reached at that meeting.

The ALTON President stated: “Unfortunately, the patriotic intervention of the Hon. 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.

“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 further explained how the “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.”

The statement said: “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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