According to information obtained by Ireport247, telecom firms have requested permission from the Nigerian Communications Commission to phase out the unstructured supplemental service data provided to banks because doing so will cost them more than N80 billion.
The Association of Licensed Telecoms Operators of Nigeria Chairman, Gbenga Adebayo, said in an interview on thursday that the operators had applied for regulatory authority to implement a partial withdrawal of the USSD services. He explained that the disconnection would happen in stages, commencing with the biggest debtor as soon as they had consent.
He said, We have sought regulatory approval to pursue partial removal. We will start disconnecting those who owe us in batches; a highest debtor scenario. We dont know as regards the timing because we are required to get approval before acting. But we will certainly commence the process once it is approved. The amount is over N80bn, it is not yet up to N90bn, but it is up to that.
Also speaking with the media on the matter, the Head of Operations, ALTON, Gbolahan Awonuga, said the debt had become huge, necessitating the need for regulatory approval. Although he said he was not sure of the timeline for the removal, the gradual phase-out may occur around the first quarter of 2023.
He said: “the debt is a lot now. The banks are charging customers.We could do that but it will get to a time before we do that. Before we can do that, we need to get regulatory approval. I cannot give you a timeline. This could happen around the first quarter. This would affect the CBN’s cashless policy. How many people use Internet banking?
Since 2019, there has been a dispute about the non-remittance of USSD fees between Deposit Money Banks and telecom providers. In 2019, telecoms said that they could no longer supply the services for free and proposed to take a portion of N4.50k per 20 seconds from the fees that customers pay to the banks.However, the banks kicked against it, alleging that it would raise costs by 450 percent.
Telecom companies said on March 12, 2021, that they would stop offering the USSD service due to banks’ N42 billion debt, but Isa Pantami, the minister of communications and digital economy, intervened to stop them.Pantami, had written to CBN Governor, Mr. Godwin Emefiele, highlighting the impending danger of the disagreement and stressing the need for banks to pay the accumulated debt or risk suspension of the USSD code.
The banks, telcos, CBN and the NCC have had several meetings in the past to resolve the issue.
The ATCON chairman recently stated in a media report that the debt increased by 150% from N32 billion in 2019 to N80 billion as of November 2022.
Additionally, he had predicted that telecommunications firms will soon be compelled to stop offering USSD services because banks would not pay. USSD is a critical channel for delivering financial services; particularly for the underserved and the financially excluded, offered by telecom operators to banks.
Banks use different USSD codes to support the transfer of money through the use of mobile devices, without internet data connectivity.
Godwin Emefiele, the governor of the Central Bank of Nigeria, stated earlier this month that the country’s economy was ripe for a cashless transformation since the federal government had made enough investments in the necessary payment system infrastructure.
When contacted for a response on whether the CBN would intervene and resolve the debt dispute, the Director of Corporate Communications of the CBN, Osita Nwanisobi, told one of our correspondents on Thursday that he was on vacation and questions regarding telecommunication operators should be directed to the NCC.
Reuben Muoka, the NCC’s director of public affairs, could not be reached as of the time this report was filed, despite several attempts.