N42bn USSD Debt: Nigerian Telcos, Banks Set for Negotiation Today
Nigerians using mobile phones for bank transactions may likely suffer should there be no agreement on today’s (Monday) meeting called by the federal government to resolve the dispute between Nigeria’s mobile network operators (MNOs) and Financial Service Providers (banks).
The two parties disagreed over the appropriate methodology to use to charge for the Unstructured Supplementary Service Data (USSD) short code service used by banks.
The mobile network operators claim that banks (FSPs) owe them over N42 billion accumulated over the past eight months since the introduction of the new USSD Pricing determination issued by the Nigerian Communications Commission (NCC), the telecommunications industry regulator last year.
The banks on their part claim that the MNOs should have implemented the End-User billing method as agreed two years ago instead of the Corporate Billing method being forced on them.
Already, with the initial approval given the MNOs by the telecom regulator to begin phased disconnection of major debtor banks, the telecom operators has announced a phased approaching commencing Monday March 15th and ending Wednesday March 24, 2021.
Minister’s Letter to CBN
The Honourable Minister of Communications and Digital Economy had on March 3, 2021 written to the Governor of the Central Bank of Nigeria vide HMCDE/039/CBN/01 entitled ‘Implementation of USSD Determination Issued By The Nigerian Communications Commission (NCC)’, informing the apex bank that should there be no meaningful resolution over the impasse, the MNOs would be directed to begin disconnection of debtor banks.
The MNOs Strategy
On March 10, 2021, the Association of Telecommunications Operators of Nigeria (ALTON) in a reply to NCC’s March 8, 2021 letter to the MNOs, it unveiled a phased approach for the disconnection of the banks.
The ALTON reads in part: “Further to the Commission’s request for a detailed implementation plan flowing from its referenced Direction, we intend to commence withdrawal of USSD services to debtor Financial Service Provider’s (FSP) with effect from Monday 15th by partial withdrawal of service and complete withdrawal of service over a period of Ten (10) days.
“Please find attached (as ‘Appendix A’) a detailed implementation plan. Notwithstanding the above, we are prepared to negotiate and agree a suitable payment plan with debtor Financial Service Providers (FSPs). We are hopeful that the good faith we are showing in this regard will be reciprocated, such that we have the required comfort with due regard to managing the twin issues of consumer (end-user) protection and moderated or minimal service disruption.
“We put forward this plan for your kind consideration and endorsement, in line with the Commission’s directive on implementation of the USSD Determination and your direction to disconnect owing FSPs without delay. We appreciate the tone of urgency underpinning the Commission’s Direction following the directives of the Honourable Minister for Communication & Digital Economy (HMCDE). We therefore look to be able to implement this plan without delay.
APPENDIX A
ACTION TIMELINE
.Official communication to banks of the NCC directive ……Friday March 12, 2021
.Suspension of access to USSD channel for top owing Banks between the peak hours of0900 –1600hrs…………………………….Monday, March 15, 2021
.Total suspension of access to USSD channel for top owing Banks…..Thursday, March 18, 2021
.Total suspension of access to USSD channel for all owing Banks…Wednesday, March 24, 2021.
What the Banks Said
Meanwhile, in 2019 when this dispute began, the Body of Bank Chief Executives had proposed “an orderly implementation of End-User billing for bank customers, aligning with the standard practice for USSD billing,” adding that, “We will resist the move to reverse corporate billing by multinational telecom companies.”
The banks said “corporate billing will force us to pay N4.50k per session of 20 seconds amounting to around 450 per cent increase in tariff,” adding that “This is a cost that will destroy the financial inclusion strides made by the banks where we have included almost 20 more million citizens in the financial system by building services that run on USSD.”
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