Following the N42bn debt owed by banks, the Association of Licensed Telecommunications Operators of Nigeria has said they would disconnect Financial Service Providers from Unstructured Supplementary Service Data services (USSD) from March 15.
This development was contained in a statement titled ‘Withdrawal of USSD services to financial service providers due to huge indebtedness to telecom network operators’, and signed by its Chairman, Gbenga Adebayo and Head of Operations, Gbolahan Awonuga.
Withdrawing the service, according to the association, became necessary due to the lack of agreement on a payment structure with the banks that did not involve the end-user being asked to pay.
It noted that following the issuance of the USSD pricing determination by the Nigerian Communications Commission which resulted in a price review of USSD service by the telcos, the banks decided that they would no longer pay for USSD service delivered to their customers and requested the telcos to charge customers directly for use of the USSD channel.
The statement said, “It has been more than eight months since the NCC issued an updated pricing methodology for USSD services for financial transactions in Nigeria.
“The methodology explicitly restricts Mobile Network Operators from charging the end-user for the services and mandates the banking sector to enter into negotiations to settle outstanding obligations and agree with individual pricing mechanisms to be applied going forwards.
“During this time, MNOs have continued to provide access to USSD infrastructure and our members have continued to pay all bank charges and fees to access the banking industries assets and customers, despite the fact that obligations due from banks to telecoms companies for USSD services has reached over N42bn.”
The ALTON said this was because of the consideration of millions of Nigerians who had become more reliant on accessing financial services through the USSD infrastructure due to COVID-19 movement restrictions.
Noting that due to the inability of the banks to agree on a payment structure, ALTON said the government had been forced to intervene to ensure a sustainable cost-sharing solution was agreed that did not disadvantage the consumer in the long-term.
The association further said that both banks and telcos would be applauded for collaborating towards the financial inclusion objectives of the Federal Government.
The statement added, “We deeply regret that we have reached a point where the withdrawal of these services has become unavoidable, however, we remain committed to working closely with the relevant ministries and regulators to resolve this issue as quickly as possible.
“To minimise the disruption to customers, and with the concurrence of the Minister of Communications and Digital Economy and the Nigerian Communications Commission, on the huge debt to the Network operators; MNOs will disconnect debtor FSPs from USSD services until the huge debt is paid.
“Therefore, our members are initiating a phased process of withdrawal of USSD services, starting with the most significant debtors within the FSPs effective Monday, March 15, 2021.”
They encouraged subscribers to explore alternative channels with their banks.