The Nigerian Communications Commission (NCC) is set to publicly disclose the names of 18 banks that collectively owe a staggering N200 billion for utilizing Mobile Network Operators’ (MNOs) Unstructured Supplementary Service Data (USSD) platforms. This disclosure will occur this week, as the telecom regulator prepares to take decisive action against the defaulters.
The banks in question have failed to meet the payment obligations outlined in a joint directive issued by the Central Bank of Nigeria (CBN) and the NCC in December 2023. The directive required that 60% of pre-API (Application Programming Interface) invoices be settled by January 2, 2025, with the remaining balance to be addressed in an agreed payment plan. However, only four banks have complied, while the remaining 14 have yet to make any significant payments.
The pre-API invoices represent outstanding debts for USSD services used before the introduction of APIs in February 2022. Prior to the adoption of APIs, billing for USSD transactions was less standardized, resulting in disputes and reconciliation issues between banks and telecom companies.
With the unpaid debt continuing to mount, the NCC is considering suspending USSD services for the defaulting banks, which is expected to take effect within the next two weeks. The suspension could severely disrupt banking operations, particularly for Nigerians who rely on USSD for banking transactions, especially those without internet access.
In a statement, the NCC will outline instructions for affected subscribers on how to switch banks to ensure continued access to banking services without disruption. This move is part of an ongoing effort by the NCC and CBN to resolve the long-standing debt dispute between banks and telecom companies, which has been a source of contention for several years.
Telecom operators have raised concerns over the sustainability of USSD services in the face of mounting debts and have warned that they may suspend the service if payments are not made promptly. Despite these threats, MNOs have refrained from taking drastic action, recognizing the critical role USSD services play in the Nigerian economy.
According to data from the CBN, between January and June 2024, a total of 252.06 million USSD transactions worth N2.19 trillion were processed. This is a significant increase from 2023, which saw N4.84 trillion transacted through 630.6 million USSD transactions. The USSD service has become an essential tool for banking, offering a solution to millions of Nigerians without internet access.
Gbenga Adebayo, Chairman of the Association of Licensed Telecom Operators of Nigeria, expressed that while smaller banks have begun to settle their debts, the large tier-one banks responsible for the majority of the debt have been slow to comply. He added that the situation now requires intervention from regulatory bodies like the CBN and NCC.
Telecom providers have also expressed dissatisfaction with banks for not adequately compensating them for leased lines used to facilitate USSD services. Industry experts warn that failure to settle these debts could lead to widespread disruption in banking services across the country.
As the deadline for payment approaches, the pressure mounts on the remaining banks to fulfill their obligations or risk severe consequences.
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