Telcos to suspend USSD services over N42b owed by banks

THE Association of Licensed Telecommunications Operators of Nigeria has said telcos will disconnect Financial Service Providers from Unstructured Supplementary Service Data services from March 15 until they pay their over N42bn debt.

This was announced in a statement jointly signed by Gbenga Adebayo and Gbolahan Awonuga, Chairman and Head of operations of the association respectively, yesterday.

ALTON said it had a partnership with financial service providers on bearing the cost of USSD access by end-users but the arrangement could not be sustained following the issuance of the USSD pricing determination by the Nigerian Communications Commission (NCC).

It further explained that with the issuance of the USSD pricing determination, the banks decided that they would no longer pay for USSD service delivered to their customers and requested the telcos to charge customers directly for use of the USSD channel.

The statement said, “It has been more than eight months since the NCC issued an updated pricing methodology for USSD services for financial transactions in Nigeria.

“The methodology explicitly restricts Mobile Network Operators from charging the end user for the services and mandates the banking sector to enter into negotiations to settle outstanding obligations and agree individual pricing mechanisms to be applied going forwards.

“During this time, MNOs have continued to provide access to USSD infrastructure and our members have continued to pay all bank charges and fees to access the banking industries assets and customers, despite the fact that obligations due from banks to telecoms companies for USSD services has reached over N42bn.”

The telecom operators said this was in consideration of millions of Nigerians who had become more reliant on accessing financial services through the USSD infrastructure due to the movement restrictions necessitated by the outbreak of coronavirus.

ALTON noted that due to the inability of the banks to agree on a payment structure, the government had been forced to intervene to ensure a sustainable cost-sharing solution was agreed that did not disadvantage the consumer in the long-term.

The association said the removal of the service fees by the FSPs would have meant that if bank customers were charged only the USSD costs communicated by telcos per USSD session, bank customers would be paying far less than what they were currently being charged by the FSPs, which in some instances were as high as N50.

ALTON said, “We deeply regret that we have reached a point where the withdrawal of these services has become unavoidable. However, we remain committed to working closely with the relevant ministries and regulators to resolve this issue as quickly as possible.

“To minimise the disruption to customers, and with the concurrence of the Minister of Communications and Digital Economy and the Nigerian Communications Commission on the huge debt to network operators; MNOs will disconnect debtor FSPs from USSD services until the huge debt is paid.

“Therefore, our members are initiating a phased process of withdrawal of USSD services, starting with the most significant debtors within the FSPs effective Monday March 15, 2021.”