*The Nigerian Communications Commission reportedly unveils plans to activate some proactive measures to end the lingering N250 billion USSD outstanding debt the Deposit Money Banks owe the Mobile Network Operators, and protect the rights and interests of telecoms consumers using the service in the event of imminent USSD suspension

Gbenga Kayode | 绿帽献妻

As part of regulatory measures to address one of the extant challenges in the telecoms sector of the economy, the Nigerian Communications Commission (NCC) is reportedly planning to take some drastic actions to end the lingering dispute resulting from the N250 billion Unstructured Supplementary Service Data (USSD) outstanding debt between the Mobile Network Operators (MNOs) and Deposit Money Banks (DMBs) in the country.

绿帽献妻 had reported how the NCC and the Central Bank of Nigeria (CBN), in a recent joint regulatory intervention, and other industry stakeholders have been engaging to find a lasting solution to the impasse.

Regulatory interventions in resolving banks’ USSD indebtedness

Specifically, the CBN and NCC, December 24, 2024, had directed mobile network operators and Deposit Money Banks to resolve the protracted debt conflict.

In their joint resolutions contained in a circular to the DMBs, the two regulators directed the banks to pay 85 percent of all outstanding invoices by December 31, 2024.

The circular also outlined several resolutions, including that 60 percent of all pre-API invoices must be paid as full and final settlement by January 2, 2025.

According to CBN and NCC, payment plans may be lump sums or monthly instalments to be completed by July 2, 2025.

DMBs are expected to pay 85 percent of outstanding invoices issued after the February 2022 implementation of APIs by December 31, 2024.

鈥淔uture invoices must be settled within one month of issuance,鈥� it stated.

The document as well noted that the NCC would initiate processes to revert to EUB for MNOs and DMBs fully compliant with the directives.

The circular stated: “Non-compliance will attract sanctions under the respective regulatory powers of the CBN and NCC.”

However, the regulators’ efforts at resolving the burning issue yielded little results, just as many as 18 Nigerian banks are yet to settle their USSD indebtedness till this day, according to report.

Despite the regulators’ latest intervention in resolving the USSD dispute, it was gathered the several banks have refused to abide by the directives outlined in the resolutions.

Against this backdrop, the NCC may suspend the USSD service, and also publish a list of defaulting commercial banks still owing Telcos for the service within two weeks, sources revealed.

Though it is uncertain when the telecoms sector regulatory Commission will announce the suspension of the USSD service, it is noted that the list of defaulting banks also might be published by the weekend.

Of USSD suspension, digital economy and financial inclusion in Nigeria

Amid the current uncertainty in regard to the imminent regulatory measure towards resolving the debt dispute, telecoms subscribers will not have access to the USSD channel, once the NCC applies the big stick against the debtor banks.

In effect, the USSD service will no longer be available for banking services in the West African country’s banking and finance ecosystem.

Industry watchers also believe the proposed suspension of the USSD service portends a danger for Nigeria鈥檚 financial inclusion drive.

Incidentally, the USSD initiative was originally targeted at “rural communities” where Internet penetration is comparatively low or non-existent and feature phone users.

The recent decline in digital banking service may have increased the USSD adoption rate among the general banking public in Nigeria, a report noted.

Dateline of banks’ USSD service accumulated debts

Reports indicate the lingering USSD debt has risen by 681.2 percent since 2019, compelling the MNOs to issue several threats of service withdrawal with the apparently uncooperative banks.

It equally recalled that the Nigerian Telcos, March 12, 2021, threatened to suspend the USSD service over N42 billion debt accumulated by banks, the amount which was N32 billion 2019.

However, Prof. Isa Alli Pantami, former Minister for Communications and Digital Economy, at the time intervened in the matter, and the telecoms companies halted their proposed action against the banks.

Again, the Telcos and banks eventually agreed March 16, 2021, to adjust the charge on customers to N6.98k for each USSD transaction.

The Association of Licensed Telecommunications Operators of Nigeria (ALTON) later disclosed the total USSD debt was N80 billion as of November 2022.

Nonetheless, November 16, 2023, the debt, rose to N200 billion, up from N120 billion in May of the same year, according to the MNOs.

Still, Gbolahan Awonuga, Executive Secretary of ALTON, announced that the outstanding USSD debt the banks owed Telcos had increased to N250billion as of October 22, 2024.

Earlier, Engr. Gbenga Adebayo, Chairman of ALTON, had confirmed the USSD debt dispute dated back to 2019.

Adebayo equally established that unresolved disagreements between the MNOs and DMBs arose over “who” should bear the costs of USSD service for financial transactions in the country.

The ALTON Chief further noted: 鈥淚n October 2019, banks proposed that Telcos adopt end-user billing, but Telcos opposed this, citing potential double billing and regulatory constraints.

“By August 2020, USSD debts owed to Telcos had grown to N17 billion, and have since ballooned to N250 billion by December 2024.”

DMBs, consumer protection and planned USSD suspension

As uncertainty looms large over the fate of millions of Nigerian telecoms consumers using the USSD channel in the digital banking space, as the Commission moves to suspend the service soon, a source reportedly revealed there are yet 18 banks still to pay their USSD service debt while four financial institutions have paid as of December 31 last year.

It was also gathered the Commission believes that the banks are treating the issue with levity.

Therefore, as the foremost telecoms sector regulator mandated to protect consumer rights and interests in the ecosystem, the NCC desires to keep the public informed of the imminent USSD suspension, stated a source.

In regard to publishing the names of indebted financial institutions, the source, who is privy to the Commission’s plans to address the USSD debt imbroglio, noted that the public notice with the title, “the underlisted banks are yet to pay鈥�, would be addressed to telecoms consumers.

Besides, it is noted that with the public notice, the NCC intends to give the consumers two weeks to explore alternative plans for making banking transactions in respect of the USSD channel, while banks would also be given two weeks to settle the outstanding debt or be disconnected after all the efforts.

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