NCC Approves Telcos’ USSD Shutdown Over N200bn Bank Debt

The identities of 18 banks that have not paid their due obligations for accessing the Unstructured Supplementary Service Data (platforms of Mobile Network Operators will be made public by the Nigerian Communications Commission this week.

Only four banks have fulfilled the payment conditions specified in a joint order issued by the Central Bank of Nigeria and the NCC in December 2023, impeccable industry sources informed The PUNCH in the early hours of this week.

Due to N200 billion in bank debt, telcos are reportedly planning to cease USSD services; if the problem continues, they will withdraw all services within two weeks.

The telecom regulator is getting ready to take action, including stopping USSD services for the defaulters, because these banks owe N200 billion in total.

There are numerous indications that telecom operators may have been given permission by the Nigerian Communications Commission (NCC) to suspend the Unstructured Supplementary Service Data (USSD) debt that Deposit Money Banks (DMBs) owe telecom carriers.

As of December 31 of last year, very few banks had complied with the payment directives, despite the NCC’s efforts to ensure that the banks settled all outstanding debts by the end of the previous year. According to one of the telecom operators who made this revelation to THISDAY news agency, the NCC will soon publish the list of banks that are still owed money by the telcos.

Only four banks have complied with payment, while 18 have outright refused to pay the debt, which has totalled more than N200 billion over the past four years, according to the telco.

The mandate required that banks and MNOs agree on payment plans for 60% of pre-API (Application Programming Interfaces) invoices that were due by January 2, 2025. The other banks have not yet met their payment responsibilities, though.

The unpaid debts for USSD services that were incurred before the adoption of Application Programming Interfaces in February 2022 are known as pre-API invoices.

Prior to the use of APIs, USSD transactions were frequently handled with antiquated or less standardized techniques, which occasionally resulted in disagreements between banks and telcos on invoicing and reconciliation.

In order to alert bank customers who continue to use the USSD code for their financial transactions, the NCC has approved a two-week suspension of the USSD service, according to Mr. Gbenga Adebayo, a spokesman for telecom operators and chairman of the Association of Licensed Telecoms Operators of Nigeria (ALTON).

He claims that telecoms will fully remove the USSD service from banks that might still refuse to pay off their debts following a two-week suspension.

Nigerians who depend on USSD services for banking transactions, especially those without internet access, may be greatly impacted by the service suspension, which is anticipated to go into effect in two weeks.

Although it was a difficult decision, THISDAY learned that since the outright service withdrawal will only impact banks that are in arrears, it became necessary to suspend and then withdraw the USSD service from banks that failed to pay their USSD debt. This allowed bank customers to transfer their services to other banks that have complied with the payment directive.

Subscribers to these services will receive instructions on how to transfer to other banks in the public statement that the NCC will make, guaranteeing that their access to financial services won’t be interrupted.

The long-running debt issue between banks and telecom companies, which has been a source of tension for several years, is being resolved in part by the NCC’s action to uncover the defaulters.

Telecom operators have threatened to discontinue USSD service and voiced concerns about how the unpaid debt would affect the service’s viability.

Last year, the Central Bank of Nigeria (CBN) and the NCC both sent a number of circulars requiring the banks to settle their obligations.

As of January 1, just four banks had cooperated with the most recent circular, which instructed all banks to pay off their USSD debt by December 31 of last year. Eighteen institutions, however, flatly refused to pay, citing a variety of reasons why they were not required to do so.

Telecom operators have even wiped off 40% of the total debt and requested that the banks pay 60% of it, according to information obtained by THISDAY. However, the banks are refusing to budge, which may have led the NCC to approve the suspension and termination of the USSD service.

Before the regulators intervened in response to complaints from bank customers alleging duplicate billing, the telecoms had created USSD codes in 2018 and were charging bank customers directly while the banks were charging their consumers as well.

Despite banks’ reluctance to prioritize payments, sources claimed that because of the service’s vital significance in the economy, MNOs had not followed through on their threats to discontinue it.

The CBN’s electronic payment statistics data indicate that 252.06 million transactions totalling N2.19 trillion were made through USSD between January and June 2024.

The regulators only permitted banks to charge consumers if they agreed to pay telcos N6.98 kobo for each USSD transaction.

However, since 2019, the banks and telcos have been at odds over the banks’ failure to remit USSD fees.

According to telcos, the total USSD debt as of 2019 was N32 billion. After rising to N42 billion in March 2021 and N80 billion in November 2022, the amount eventually reached N120 billion in June 2023 and more than N200 billion in October 2024.

In the event that the debt ligers, Telcos had threatened to discontinue the USSD service and to sue the banks in court.