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Telcos vs Banks USSD debacle: N17bn debt is at stake – Danbatta



By Temmy Don

If nothing is done fast, telecom companies in Nigeria and their commercial bank counterparts are going to face a protracted debacle again over the charges on bank transfers done on mobile phones.

This is as the Executive Vice Chairman of the Nigerian Communications Commission (NCC), Prof. Umar Garba Danbatta has revealed that commercial banks in the country owe telecommunications companies over N17 billion following the suspension of Determination on Unstructured Supplementary Service Data (USSD) pricing last year.

The commission, in concert with the Ministry of Communications and Digital Economy, recently determined that Mobile Network Operators must not charge the consumers directly for the use of USSD channels for bank transfers. The NCC said that such transactions should not take end-user-billing method, but corporate billing method, which means that the transaction should be between the operators and the bank entities to which the service is provided to.

Mobile-Payment tools

The commission said it took the action after reviewing the protracted dispute between Mobile Network Operators and Financial Institutions on the applicable charges for USSD services and the method of billing.

According to Danbatta, in the interest of the consumers and other stakeholders, the Commission revised the Determination previously issued by removing the Price Floor and the Cap to allow Mobile Network Operators and the banks negotiate rates that will be mutually beneficial to all parties concerned.

Speaking at ATCON’s virtual forum on “Meeting the Interests of Government, Consumers and Telecoms Companies in the Era of Covid-19 and Post Covid-19 Pandemic for Digital Economy Development”, he however, noted that the Minister of Communications and Digital Economy, Dr. Ibrahim Pantami had already been briefed on the development with a view to ensuring a quick settlement of the debt.

USSD debt became a serious issue when in 2017, the telecom operators’ demand for a raise from 0.85k and N2 per 20-second session depending on volume of transaction; which was agreed with the banks in 2014, met a stiff resistance from the financial institutions.

Even when NCC, in a bid to intervene and provide a lasting solution to the issue implemented PriceWaterCoopers’ report on cost based study to determine a fair and appropriate cost for USSD, directed that the price floor for a 20 seconds USSD service is N1.63k, and price cap should be N4.89k, the banks refused to pay, making the USSD cost an issue still lingering till today.

It is apparently from that price cap that the commission has calculated the indebtedness of the banks to the telecom operators to the tune of N17 billion.

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