Nigerian telecommunications operators have finalised their arrangements to disconnect banks due to an outstanding debt of N120 billion in unstructured supplementary service data (USSD).
The most recent action was taken subsequent to the endorsement by the Nigerian Communications Commission (NCC).
In 2021, mobile network operators such as MTN Nigeria, Airtel Nigeria, and Globacom initiated the disconnection of banks due to outstanding USSD debt.
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However, the dispute was resolved following the intervention of the Minister of Communication and Digital Economy, Isa Pantami, and the Central Bank of Nigeria (CBN).
According to Gbenga Adebayo, the Chairman of the Association of Licenced Telecommunications Operators of Nigeria (ALTON), mobile network operators will disconnect banks if they fail to pay their debt. He made this statement during a press briefing held in Lagos on Friday.
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According to Adebayo, the Nigerian Communications Commission (NCC) has granted approval despite the stakeholders’ efforts to resolve the dispute and prevent any impact on services.
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The individual recalled that there were prolonged disputes between the Mobile Network Operators (MNOs) and banks regarding the suitable pricing model for financial transactions via USSD, transparency of charges, collection methods, and responsibility for payment of the ongoing service fees owed to the operators.
The President of ALTON has stated that in 2021, Mobile Network Operators (MNOs) were unable to come to an agreement with banks regarding outstanding debts, resulting in the MNOs seeking to disconnect the banks. The unpaid debts at the time were reported to be N42 billion.
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Nonetheless, the Minister of Communication and Digital Economy, Professor Isa Pantami, interceded and instructed the Mobile Network Operators (MNOs) to refrain from disconnecting banks, as such an action would have adverse effects on the Federal Government’s digital and financial inclusion policy.
Regrettably, the minister’s and NCC’s patriotic intervention has been disregarded by the banks, as evidenced by their failure to sign a final agreement two years later.
It is noteworthy that the agreement between Mobile Network Operators (MNOs) and banks regarding the utilisation of USSDs for banking transactions was purely commercial in nature. MNOs had the freedom to discontinue the service if it proved to be unprofitable for them.
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Over the years, mobile network operators (MNOs) have made significant investments in expanding their systems to cater to the USSD requirements of banks, amounting to billions of naira.
As a consequence, a greater number of Nigerians were able to avail themselves of banking services, while banks were able to reduce costs by operating fewer branches to cater to their expanding customer base.
Regrettably, mobile network operators (MNOs) were not receiving compensation for their rendered services, resulting in a debt that escalated from N42 billion in 2021 to over N120 billion.
It is evident that the current level of debt is not sustainable, considering the significant expenses associated with the continuous upgrading and operation of the systems and infrastructure that support USSD transactions for banks.
Considering the aforementioned, if banks fail to fulfil their debt obligations, mobile network operators (MNOs) will terminate the USSD services provided to banks that are in debt.
