The Nigerian Communications Commission (NCC) has granted approval to telecommunications operators in Nigeria to disconnect banks due to outstanding debts amounting to over N120 billion in Unstructured Supplementary Service Data (USSD).
In an official statement signed by Gbenga Adebayo, Chairman of the Association of Licensed Telecommunications Operators of Nigeria (ALTON), the decision was disclosed on Friday in Lagos.
Adebayo highlighted that Mobile Network Operators (MNOs) would proceed with disconnecting banks if the debts remained unpaid. The approval was granted due to the persistent failure of banks to settle their debts, despite multiple attempts to resolve the situation and avoid any disruption in services.
The ongoing dispute between MNOs and banks revolves around the appropriate pricing model for financial transactions conducted through USSD, including concerns about transparency, collection methods, and liability for outstanding fees owed to MNOs.
In 2021, MNOs contemplated disconnecting banks due to unpaid debts totaling N42 billion. However, the Minister of Communication and Digital Economy, Prof. Isa Pantami, intervened and urged MNOs not to take action, as it would adversely impact the Federal Government’s digital and financial inclusion policy.
Unfortunately, the banks have failed to reach a final agreement, despite the minister’s and NCC’s intervention, thereby disregarding the patriotic efforts made to resolve the matter.
Adebayo emphasized that the contractual relationship between MNOs and banks for USSD usage in banking transactions is purely commercial, allowing MNOs to withdraw services if they prove unprofitable.
Over the years, MNOs have invested significant amounts of money to expand their systems to accommodate the USSD needs of banks. This has facilitated broader access to banking services for Nigerians while enabling banks to reduce costs by operating fewer physical branches.
Regrettably, MNOs have not been adequately compensated for their services, and the outstanding debt, which stood at N42 billion in 2021, has now skyrocketed to over N120 billion.
Considering the enormous costs associated with continuously upgrading and operating the infrastructure supporting USSD transactions for banks, the level of debt has become unsustainable.
Unless the banks fulfill their financial obligations, MNOs have made it clear that they will disconnect all banks with outstanding USSD debts.
