The Nigerian Communications Commission (NCC) is set to disclose the names of 18 banks that have failed to pay a combined N200 billion debt owed for the use of Unstructured Supplementary Service Data (USSD) platforms operated by Mobile Network Operators (MNOs).
According to sources within the telecom sector, only four banks have complied with the payment directive jointly issued by the Central Bank of Nigeria (CBN) and NCC in December 2023. The directive required banks to pay 60% of their pre-API (Application Programming Interface) USSD invoices by January 2, 2025, while also agreeing on repayment plans for the remaining balance.
Pre-API Disputes and Debt Accumulation
Pre-API invoices pertain to unpaid USSD service bills accrued before February 2022, when the API system was implemented to improve transaction transparency and accuracy. The earlier methods of managing USSD services were less standardized, leading to frequent billing disagreements between banks and telecom operators.
The NCC is prepared to suspend USSD services for the defaulting banks within two weeks. To minimize the disruption for customers, the commission plans to issue guidance for subscribers on switching to other banks to maintain access to essential banking services.
USSD Services at Risk
Telecom operators have voiced concerns over the financial strain caused by the unpaid debt, warning that the sustainability of USSD services is at risk. Though MNOs have previously threatened to suspend the service, they have held back due to its critical role in enabling financial transactions, especially for users without internet access.
The suspension could have far-reaching effects, as millions of Nigerians rely on USSD codes for banking operations, including fund transfers and bill payments. CBN data shows that USSD transactions between January and June 2024 totaled 252.06 million, amounting to N2.19 trillion. This reflects a substantial rise from 2023 figures, where 630.6 million transactions valued at N4.84 trillion were conducted.
Stakeholders Await Regulatory Intervention
Telecom operators have made some progress in debt recovery, with smaller banks beginning to settle their obligations. However, major tier-one lenders, responsible for the largest portion of the debt, have yet to make meaningful payments.
Gbenga Adebayo, Chairman of the Association of Licensed Telecom Operators of Nigeria, acknowledged the issue in November, expressing hope for regulatory intervention to resolve the deadlock. “The smaller players are making payments, but the big banks, which owe the most, are still lagging behind,” he said.
With the NCC now stepping in to publicly identify defaulters, the long-standing conflict between banks and telecom operators over USSD charges may finally see a resolution. However, the focus remains on ensuring that the millions of Nigerians who rely on USSD for daily financial transactions are not adversely affected by the impending service disruptions.
