The Nigerian Communications Commission (NCC) is set to name 18 banks that have failed to settle over N200 billion debt owed to telecom operators for the use of Unstructured Supplementary Service Data (USSD).
Report from AriseTV says, telecoms operators may have received the approval from the Nigerian Communications Commission (NCC) to suspend the Unstructured Supplementary Service Data (USSD) debt owed telecoms operators by Deposit Money Banks (DMBs).
A telecoms operators revealed that the NCC would soon publish the list of banks that are still indebted to the telcos, since very few banks have complied with the payment directives as at December 31 last year, despite efforts by NCC in ensuring that the banks settle all outstanding debts by the end of last year, hence, telecom is set to suspend the Unstructured Supplementary Service Data (USSD) debt owed telecoms operators by Deposit Money Banks (DMBs).
Chairman of the Association of Licensed Telecoms Operators of Nigeria (ALTON), Mr. Gbenga Adebayo, who confirmed the NCC’s approval to suspend the USSD service, said the suspension would be for only two weeks, designed to notify bank customers who still use the USSD code for their financial transactions, AriseTV reported.
According to him, after two weeks of suspension, telcos will completely withdraw the USSD service from banks that may still refuse to clear off their debts.
The USSD debt has been accumulating since 2018, and despite a joint directive from the Central Bank of Nigeria (CBN) and the NCC, only four banks have complied with the payment requirements, sources told this newspaper on Monday.
Reportedly, telecoms operators had even written off 40 per cent of the accumulated debt and asked the banks to pay 60 per cent of the outstanding pre-API (Application Programming Interfaces) invoices by January 2025, with payment plans to be negotiated between banks and Mobile Network Operators (MNOs), but the banks are still adamant, which may have prompted NCC to give approval for the suspension and withdrawal of the USSD service.
A notice has been issued for the suspension of USSD services, which will significantly disrupt banking transactions for millions of Nigerians, especially those in rural or underserved areas with limited internet access.
The NCC’s move to expose the defaulters is part of an ongoing effort to resolve the long-standing debt dispute between banks and telecom companies, which has been a point of contention for several years.
Telecom operators have expressed concerns about the impact of the unpaid debt on the sustainability of USSD services and also threatened to withdraw the service.
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Sources familiar with the matter said that while banks have been reluctant to prioritise payments, MNOs have refrained from carrying out their threats of suspending the service due to the service’s critical role in the economy.
According to electronic payment statistics from the CBN, USSD transactions reached 252.06 million, valued at N2.19 trillion, between January and June 2024. The figures represent a substantial growth from the 2023 full-year data, where USSD transactions totaled 630.6 million, valued at N4.84 trillion.
Originating from telcos for airtime and subscription services, USSD technology has been extensively leveraged by the banking sector due to its ability to function without an internet connection.
The telcos had developed USSD code in 2018 and were charging bank customers directly, while the banks were also charging their customers, before it was stopped by the regulators, following complaints from bank customers that alleged double charges.
The regulators only allowed banks to charge customers, with an agreement that the banks will remit N6.98 kobo to telcos for every USSD transaction.
But since 2019, the banks have been at loggerheads with telcos, over the non-remittance of USSD fees charged by the banks.
As at 2019, telcos said the accumulated USSD debt was N32 billion. The figure continued to accumulate to reach N42 billion as at March 2021 and N80 billion as at November 2022, until it rose to reach N120 billion in June 2023 and over N200 billion in October 2024
Last November, the Chairman of the Association of Licensed Telecom Operators of Nigeria, Gbenga Adebayo, said that operators were seeing some progress in the repayment of the debt, with smaller banks beginning to settle their obligations.
Efforts to reach some of the major banks on the plausible effect of the planned suspension of the service proved abortive Monday night as messages sent to spokespersons of some of the big banks were not responded to.
