Telecom operators may have received the approval of the Nigerian Communications Commission (NCC) to disconnect some money deposit banks (DMBs) over their failure to comply with regulators’ directive to effect repayment of the N250billion that arose from the use of the Unstructured Supplementary Service Data (USSD), it was gathered on Monday.
According to industry sources, the suspension of the USSD service is expected to last for two weeks to enable the customers of the affected banks migrate from their non-compliant customers to the banks that are complying.
Recall that both NCC and the Central Bank of Nigeria (CBN), had last year, issued several circulars, directing the banks to pay their debts.
The most recent circular directed all banks to pay ₦212.5 billion, about 85per cent of a ₦250 billion debt as stipulated in a December 20 memo.
But as at January 1, only four banks had complied with the directive, while 18 others bluntly refused to pay, giving various excuses why they were not supposed to pay the debt.
Only four of the lenders have made substantial payments while 18 banks have not responded adequately.
Sources within the telecoms space said the two weeks is to prepare subscribers for the eventuality of the suspension of the service.
The sources, who were emphatic, said the NCC has already approved the suspension, stressing that if nothing happened after the suspension on the part of the banks, they will be severed from the platform.
It was gathered from a reliable source 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 the efforts by NCC in ensuring that the banks settle all outstanding debts by the end of last year. Although it was a tough decision to suspend and later withdraw the USSD service from banks that failed to clear their USSD debt, the measure became imperative to enable bank customers switch their services to other banks that have complied with the payment directive.
It was gathered that telecoms operators had even written off 40 per cent of the accumulated debt and asked the banks to pay 60 per cent of the debt, but the banks are still adamant, which may have prompted NCC to give approval for the suspension and withdrawal of the USSD service.
The memo detailing repayment plans comes after years of delays and disputes over USSD payments, which have led to the growing debt.
Despite regulatory interventions requiring banks to collect and remit the USSD fees since 2021, many banks have resisted. They argue that the charges are unfair and that USSD technology is outdated.
Specifically, former CBN governor, Godwin Emefiele described the cost incurred by telcos in putting the requisite infrastructure on which the transactions ride as “sunk cost”.
CEO of GTCO, Segun Agbaje, said all that was needed to be done was get the price of data reduced, arguing that USSD technology had become otiose.
Agbaje had said: “If you want to charge ₦20 for the service, go ahead. But collect it yourself. Don’t come to us.”
Similar concerns were raised by the late Group Executive of Access Bank, Herbert Wigwe, who questioned how telcos determine the fees. He argued that USSD is an outdated technology that will soon become obsolete.
These sentiments, widely shared among bank execs, have contributed to the growth of the USSD debt despite previous regulatory efforts. As of November 2024, telecom operators claim banks owe ₦250 billion for USSD services.
MTN Nigeria CEO, Karl Toriola, said the telcos would have no option but to seek the approval of the NCC to disconnect the banks from the platform.
Chairman, Association of Licensed Telecom Companies of Nigeria (ALTON), Gbenga Adebayo, said the huge debt has a significant impact on the finances of the carriers. While he said not all the banks CEOs were recalcitrant, he said smaller banks were paying indicating that the big lenders such as GTBank, Access Bank and others were deliberately refusing to pay the USSD debt.
The December 20 directive seeks to expedite debt settlement and enforce strict payment timelines. Under the new rules, banks must pay 85per cent of new invoices within one month of receipt. Additionally, by January 2, 2025, banks and telecom operators must agree on a payment plan to settle 60 per cent of all outstanding invoices before using any telco’s USSD platform.
Failure to comply with the directive will lead to sanctions, including fines, operational restrictions, or other regulatory actions designed to enforce compliance.
There are also incentives for banks to pay on time. If banks meet specified payment milestones, the NCC will begin the transition to End-user Billing (EUB), where customers—rather than the banks—would directly pay for USSD services. EUB is considered the long-term solution to the payment dispute but will only be available to compliant parties.
