Telecommunication firms in Nigeria have issued a notice of disconnection to Deposit Money Banks (DMBs) due to an ongoing dispute over Unstructured Supplementary Service Data (USSD) service debt totaling over N120 billion. The telecommunications companies, including MTN, Glo, Airtel, and 9mobile, claim that the banks owe them N120 billion for utilizing their USSD infrastructure for financial services.
Consequently, the telcos have expressed their intention to disconnect bank customers from accessing banking services through USSD short codes. This disconnection notice follows the approval granted by the Nigerian Communications Commission (NCC) to telcos, after previous efforts by stakeholders, including the former Minister of Communication and Digital Economy, Isa Pantami, the NCC, the Central Bank of Nigeria (CBN), and Mobile Network Operators (MNOs) and DMBs, failed to yield results.
The telcos have emphasized that the contract between MNOs and DMBs for USSD banking transactions is strictly commercial, giving MNOs the freedom to withdraw services if they deem the transactions unprofitable. Gbenga Adebayo, the Chairman of the Association of Licensed Telecommunications Operators of Nigeria, stated that serving notices to the banks is part of the withdrawal process, clarifying that disconnections will occur if the banks fail to respond with payment within the agreed duration specified in the contract.
The disagreement between banks and telcos over who should bear the cost of USSD services dates back to 2019 when telcos claimed that banks owed them N32 billion for using USSD to offer financial services. Since then, there have been threats of disconnection, and the Federal Government intervened on one occasion when telcos disconnected banks’ USSD access.
USSD remains a vital financial infrastructure for many Nigerians, particularly those without smartphones, as approximately only forty-four percent of Nigerians have access to smartphones according to the Alliance for Affordable Internet. The Governor of the Central Bank of Nigeria, Godwin Emefiele, expressed concern over the potential impact on people if banks and telcos fail to reach an amicable solution soon. During the recent launch of SabiMoni, he emphasized the importance of resolving the issue to prevent users of the banking sector from suffering.
The ongoing dispute between telecommunication firms and Deposit Money Banks in Nigeria over USSD service debt underscores the need for a resolution that considers the interests of all stakeholders. The potential disconnection of bank customers from USSD services highlights the significance of finding a mutually beneficial solution to ensure the continued accessibility of financial services to the Nigerian population.