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Telcos get NCC’s approval to disconnect banks over N120 billion USSD debt

Samson Akintaro by Samson Akintaro
May 12, 2023
in Sectors, Tech News
Telcos get NCC's approval to disconnect Banks over N120 billion USSD debt

MTN Nigeria, Airtel Globacom and 9mobile

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Article summary

  • Mobile telecom companies in Nigeria, including MTN, Glo, Airtel, and 9mobile, have received approval from the Nigerian Communications Commission (NCC) to disconnect Deposit Money Banks (DMBs) in the country.
  • The approval was granted due to the banks’ failure to pay debts amounting to over N120 billion for Unstructured Supplementary Service Data (USSD) services.
  • The Association of Licensed Telecommunications Operators of Nigeria (ALTON) stated that they will disconnect the banks if the debt is not paid, despite past interventions and efforts to resolve the situation by stakeholders, including the Minister of Communication and Digital Economy and the NCC.

Mobile telecommunications companies in the country, comprising MTN, Glo, Airtel, and 9mobile, said they have secured the approval of their regulator, the Nigerian Communications Commission (NCC), to disconnect Deposit Money Banks (DMBs) in the country.

They said the approval to disconnect was granted as the banks have refused to pay the debt owed to operators for Unstructured Supplementary Service Data (USSD) services, which amounts to over N120 billion.

In a statement issued on Friday, the operators under the aegis of the Association of Licensed Telecommunications Operators of Nigeria (ALTON) said that with the regulator’s approval, they will disconnect the banks any moment from now if they fail to pay.

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ALTON noted that despite the multiparty stakeholder efforts to resolve the situation and prevent any impact on services, led by the Minister of Communication and Digital Economy, Prof. Isa Ali Pantami, and including the NCC, the Central Bank of Nigeria, and MNOs and DMBs.

No cooperation from banks

While noting that the banks have refused to cooperate with the telecom operators over the payment of the debt, ALTON, in a statement signed by its Chairman, Engr. Gbenga Adebayo, said:

  • “The DMBs have continued to incur greater and greater debt, without making the commensurate payments. Every time some progress is made, the DMBs come up with reasons to take stakeholders several steps back, in this matter.
  • “Members of the public will recall that MNOs and DMBs have had protracted disagreements concerning the appropriate USSD pricing model for financial transactions, transparency of charges, mode of collection, and liability for payment of the outstanding and continuous service fees due to the MNOs (which currently stand at over N120 billion).”

Past interventions

Narrating the events that led to the current decision, ALTON said the MNOs in 2021 had sought to disconnect DMBs due to the unpaid debts, which stood at N42 billion at that time. However, the Minister of Communication and Digital Economy, Prof. Pantami, intervened and asked the MNOs not to disconnect DMBs as the action would negatively impact the Digital and Financial Inclusion policy of the Federal Government.

  • “The Nigerian Communications Commission (NCC), Association of Licensed Telecoms Operators of Nigeria (ALTON), Association of Telecommunications Companies of Nigeria (ATCON) and Deposit Money Banks (DMB) represented by the Chairman, Body of Bank CEOs subsequently met on 15 March 2021 to discuss indebtedness of DMBs to MNOs for USSD services. Further to the meeting, CBN and NCC issued a joint press statement on the agreement reached by all stakeholders
  • “The Honourable Minister of Communications and Digital Economy and the NCC have made several efforts to get the banks to show good faith and sign an agreement, in the national interest, based on the resolutions reached at that meeting. Unfortunately, the patriotic intervention of the Minister and the NCC have been taken for granted by the DMBs, as two years after, the banks have failed to sign a final agreement,” ALTON explained.
  • “It is pertinent to note that the contract between MNOs and DMBs on the use of USSDs for banking transactions is strictly commercial and MNOs are at liberty to withdraw the services if it is established that the transaction is unprofitable to them.
  • “MNOs have invested billions of naira in expanding their systems to accommodate the USSD needs of DMBs over the years. This has resulted in more Nigerians having access to banking services, in addition to enabling banks to trim costs by requiring less branches to service their growing customers. Unfortunately, MNOs are not getting paid for their services, and the debt that stood at N42 billion in 2021 has now risen to over N120 billion,” the telcos added.

ALTON said the level of debt is unsustainable given the time/value huge cost of the continuous upgrade and operation of the systems and infrastructure dedicated to supporting USSD transactions for DMBs. And in view of that they will be disconnecting the banks until the N120 billion debt is paid.


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Tags: 9MobileAirtel Nigeria NewsDMBsGloMTNNCC
Samson Akintaro

Samson Akintaro

Samson Akintaro is a tech enthusiast and has over a decade experience covering and writing about the tech industry. He is currently the Tech Analyst at Nairametrics.

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  1. ADAMU ABUBAKAR says:
    December 28, 2023 at 11:00 pm

    CANON

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