USSD Debt: Telcos may suspend service as NCC set to name defaulting banks

The Nigerian Communications Commission (NCC) is set to name 18 banks that have failed to settle over N200 billion debt owed to telecom operators for the use of Unstructured Supplementary Service Data (USSD).

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Sources with knowledge of the matter told PREMIUM TIMES on Monday that the network service providers may also effect the suspension of the USSD service soon.

The USSD debt has been accumulating since 2018, and despite a joint directive from the Central Bank of Nigeria (CBN) and the NCC, only four banks have complied with the payment requirements, sources told this newspaper on Monday.

The directive required banks to settle 60 per cent of outstanding pre-API (Application Programming Interfaces) invoices by January 2025, with payment plans to be negotiated between banks and Mobile Network Operators (MNOs).

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However, despite this deadline, several banks have failed to meet their payment obligations.

A notice has been issued for the suspension of USSD services, which will significantly disrupt banking transactions for millions of Nigerians, especially those in rural or underserved areas with limited internet access.

The NCC’s move to expose the defaulters is part of an ongoing effort to resolve the long-standing debt dispute between banks and telecom companies, which has been a point of contention for several years.

Telecom operators have expressed concerns about the impact of the unpaid debt on the sustainability of USSD services and also threatened to withdraw the service.

Sources familiar with the matter said that while banks have been reluctant to prioritise payments, MNOs have refrained from carrying out their threats of suspending the service due to the service’s critical role in the economy.

According to electronic payment statistics from the CBN, USSD transactions reached 252.06 million, valued at N2.19 trillion, between January and June 2024. The figures represent a substantial growth from the 2023 full-year data, where USSD transactions totaled 630.6 million, valued at N4.84 trillion.

Originating from telcos for airtime and subscription services, USSD technology has been extensively leveraged by the banking sector due to its ability to function without an internet connection.

Last November, the Chairman of the Association of Licensed Telecom Operators of Nigeria, Gbenga Adebayo, said that operators were seeing some progress in the repayment of the debt, with smaller banks beginning to settle their obligations.

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Sources told PREMIUM TIMES Monday that the number of defaulting banks reflects a mixture of both “small and big banks”.

“It’s a very painful decision…,” a source familiar with the planned suspension said, noting that the service is critical to the economy of traders, artisans, and others especially in rural Nigeria.

Efforts to reach some of the major banks on the plausible effect of the planned suspension of the service proved abortive Monday night as messages sent to spokespersons of some of the big banks were not responded to.