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May 1, 2025

Banks complete N160b USSD debt payments to telecoms operators

By Upfrontdigital News 0 25 Views

By Favour Unukaso

THE protracted Unstructured Supplementary Service Data (USSD) debt imbroglio between the Deposit Money Banks (DMBs) and telecommunications operators appeared to have been totally resolved.

This was confirmed by Chief Executive Officer of MTN Nigeria, Karl Toriola, Thursday, when he featured on AriseTV to speak on the firm’s first quarter 2025 result, where the telecommunications company reported over N1 trillion revenue earnings.

Recalled that the USSD debt had been a major quarrel between the DMBs and telcos and had lasted for about five years. Third quarter of last year, the telcos had threatened to withdraw the service over the lingering debt, which was around N200 billion then. This threat led to the swift intervention of the Central Bank of Nigeria and the Nigerian Communications Commission (NCC) and agreement was reached on payment.

MTNN CEO

As of November 2024, the NCC puts the debt at N160 billion. However, earlier this year, when it appeared the banks were not forthcoming with payments, the NCC directed the telcos to withdraw the USSD services from debt-owning DMBs, where about 18 banks were listed.

This directive prompted the banks to look inward and started to comply with earlier circular signed by the CBN and NCC, which articulated the payment patterns for the debt.

So, on the television programme, Toriola confirmed that the matter has been fully resolved and that banks have made payments.

“I can confirm that the matter has been fully resolved. We have received payments in full. Special thanks to the CBN, NCC, the banks and other stakeholders that intervened in the matter,” the MTN CEO stated.

Last month, the Chairman of the Association of Licensed Telecom Operators of Nigeria (ALTON) Gbenga Adebayo, had said that the matter was receiving urgent attention from both parties, saying that there was light at the end of the tunnel for the matter to be fully resolved.

Adebayo however, said that telecom subscribers will soon be paying for the use of (USSD) with deductions from their airtime.

He said talks were currently at advanced stages between the DMBs and telecommunications operators to introduce an end-user billing system.

End-user billing refers to a system where the customer is directly charged for using the USSD service rather than the service provider being charged. This means the customer’s mobile account (airtime or direct billing) is debited for the USSD session, regardless of any subsequent charges the bank might apply. This is a change from the traditional corporate billing model where banks were billed for USSD usage.

Adebayo said discussions are on, and the modalities are being fine-tuned to suit subscribers, telcos and DMBs.

Adebayo said end-user billing, which the banks have been advocating for some time now, might help to guard against accumulated debts as witnessed in the imbroglio between the banks and the telecom operators.

“So, we have now commenced discussion to migrate to End-User billing without disruption to services by subscribers. Today, when you do USSD, the banks charge you and debit your account (Debit alert for the transfer). When the discussions are completed, banks will not debit again, but it will go directly from your airtime. Instead of the banks taking the money from your account, it will go from your airtime.

“The conversation has started; there is a migration process that we are going to agree with the banks. This will be the end solution to the issue of USSD debts, which is what the banks have been clamouring for. The discussion is one, but parties still need to agree that systems need to be upgraded and operations need to be transparent so that people are not billed for services they did not get. The conversation is on,” he stated.

Recall that in a letter addressed to ALTON by the Body of Banks’ Chief Executive Officers (BOBCEO), dated September 16, 2019, the bank chiefs had proposed an “orderly implementation” of end-user billing for bank customers, “aligning with the standard practice for USSD billing.”

In the memo to ALTON, the bank chiefs frowned at sharing the revenue from USSD transactions with the telcos as it claimed that the service providers, which provide the platform for the USSD service, had proposed to take a cut of N4.50k per 20 seconds from the charges paid by customers to the banks. The banks kicked against it, alleging that it would raise the cost by 450 per cent as of then.

However, the proposal at the time didn’t sit well with the telcos because of the dynamics, including the technology behind it. The telcos had rather insisted on corporate billing. In 2020, the telcos claimed that the banks refused to come to a roundtable to discuss the matter and put a final lid on it then.

As such, the non-conclusion of the matter five years back contributed hugely to the accumulated USSD debts, which are currently under a recovery mechanism. Subscribers are currently charged N6.98K for every USSD transaction; this took effect on March 16, 2021.

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