Nigerian telecom companies have decided to disconnect banks that owe more than N120 billion in USSD (Unstructured Supplementary Service Data) debt.
The new action was taken after the Nigerian Communications Commission (NCC) gave its approval.
Before Isa Pantami, the minister of communication and digital economy, and the Central Bank of Nigeria (CBN) intervened and settled the conflict in 2021, mobile network operators like MTN Nigeria, Airtel Nigeria, and Globacom had sought to disconnect the banks over the USSD debt.
The mobile network providers will disconnect banks unless they pay the debt, according to Gbenga Adebayo, Chairman of the Association of Licensed Telecommunications providers of Nigeria (ALTON), who made this announcement to journalists on Friday in Lagos.
Adebayo said the NCC granted the approval despite efforts by stakeholders to resolve the dispute and prevent any impact on services.
He recalled that the MNOs and banks had protracted disagreements over the appropriate USSD pricing model for financial transactions, transparency of charges, mode of collection, and liability for payment of the outstanding and continuous service fees due to the operators.
The ALTON president said: “Due to the inability of MNOs and banks to reach an agreement on the issues, MNOs in 2021 sought to disconnect banks due to the unpaid debts which stood at N42 billion at that time.
“However, the Minister of Communication and Digital Economy, Prof. Isa Pantami, intervened and asked the MNOs not to disconnect banks as the action will negatively impact on the digital and financial inclusion policy of the Federal Government.
“Unfortunately, the patriotic intervention of the minister and the NCC have been taken for granted by the banks as two years after, the banks have failed to sign a final agreement.”
“It is important to note that the contract between MNOs and banks on the use of USSDs for banking transactions was strictly commercial and MNOs were at liberty to withdraw the services if the transaction was unprofitable to them.
“The MNOs have invested billions of naira in expanding their systems to accommodate the USSD needs of banks over the years.
“This resulted in more Nigerians having access to banking services in addition to enabling banks to trim down costs by requiring fewer branches to service their growing customers.
“But unfortunately, MNOs were not getting paid for their services and the debt that stood at N42 billion in 2021 had now risen to over N120 billion.
“It is obvious that the level of debt is unsustainable given the time or value of the huge cost of the continuous upgrade, operation of the systems and infrastructure dedicated to supporting USSD transactions of banks.
“In view of the foregoing, unless banks meet their debt obligations, MNOs will disconnect all banks indebted to them for USSD services rendered.”