In a significant escalation of a long-standing financial dispute, major telecommunications companies in Nigeria have announced plans to disconnect banks from their Unstructured Supplementary Service Data (USSD) services due to an unpaid debt amounting to N250 billion. This move could disrupt banking operations across the nation, affecting millions of users who rely on USSD for basic banking transactions.
The USSD platform, which allows customers to carry out banking transactions like transfers, balance inquiries, and bill payments using simple phone codes, has become integral to Nigeria’s financial inclusion efforts, particularly for those without access to smartphones or the internet. However, the financial backbone of this service, provided by telecom operators, has been strained by non-payment from banks.
The Association of Licensed Telecommunications Operators of Nigeria (ALTON) has been at the forefront of this issue, voicing concerns over the years about the mounting debt. According to posts on X, telecom companies are set to suspend USSD services within two weeks unless the banks settle their debts, a deadline that has sparked widespread discussion and concern among users and stakeholders.
The debt, which has grown from an initial N42 billion in 2021 to the current N250 billion, stems from disagreements over the billing model for USSD services. Telecom operators argue that they have invested significantly in infrastructure to support USSD banking, yet banks have not remitted the due fees for these services. This has led to a situation where telecoms are essentially providing services at a loss, a scenario that’s no longer sustainable.
Efforts to mediate the dispute have involved several key players, including the Nigerian Communications Commission (NCC), the Central Bank of Nigeria (CBN), and even direct interventions from government officials. Despite multiple meetings and agreements, including one in March 2021 where a new charge of N6.98 per transaction was set to be implemented, the problem persisted, with the debt continuing to balloon.
The potential disconnection of USSD services by telecom operators could have far-reaching consequences. For many Nigerians, especially in rural areas or those with basic mobile phones, USSD represents a primary means of accessing banking services. The disruption could hinder financial inclusion efforts, affect the daily lives of many citizens, and potentially destabilize small businesses that depend on quick and easy banking transactions.
In response, there have been calls for urgent action. The CBN and NCC have issued directives to both parties to settle the dispute. As reported on X, these regulators have set a deadline for banks and telecoms to agree on a payment plan, with options for either a lump sum or installment payments, highlighting the urgency of the situation.
This standoff has also ignited a broader conversation about the sustainability of service provision models in Nigeria’s digital economy, the need for clear regulatory frameworks, and the importance of inter-sectoral cooperation to ensure that technological advancements benefit all stakeholders without compromising service quality or financial stability.
As the deadline approaches, all eyes are on the negotiations between the banks and telecom companies. The outcome will not only determine the future of USSD banking in Nigeria but also set precedents for how service debts and technological partnerships are managed in one of Africa’s largest economies. The public, meanwhile, remains anxious, hoping for a resolution that maintains access to the essential services they’ve come to rely on.
- Tags: Nigeria
